Smart city sceptic finally sees the light

I must admit to having been sceptical about the “smart city” concept, seeing it as a gimmick for policymakers aiming at development and modernisation, but not really knowing how to deliver.

It’s easer to talk about “digitalisation” than it is to deliver infrastructure and facilities that directly improve the lives of citizens. A new hospital, or a new app promising better access to healthcare information? That seems like an easy choice, especially for governments who might be counting the dirhams in an era of low oil prices.

But after a couple of days at the Government Summit in Dubai, I am considerably less sceptical, and far more open to the argument that solid quantifiable economic benefits flow from a seriously planned “smart city” strategy.

For one thing, the upper echelons of Dubai Inc, who were represented in strength at the summit, are obviously convinced believers in the “smart” cause. When such hard-headed businessmen as, for example, Mohammed Al Gergawi and Ahmed bin Byat are wholeheartedly behind the “smart” strategy, there has to be something in it.

But it’s not just a case of being swayed by the believers. Accenture, the consulting firm, has produced some statistics to back up the belief.

A study, released at the summit, has uncovered clear links between digitalisation and growth, as well as other social and economic benefits.

“The level of digital maturity a country displays is seen to have a direct impact on growth, productivity, labour market prowess and entrepreneurship,” the firm concluded.

After research in 30 countries, and using tools developed by the World Economic Forum, Accenture rated the effects of digitalisation on three key areas of economic life: the impact on GDP, on international trade and unemployment.

In all three areas, a “smarter” approach to government and business leads to material economic and social benefit.

A 1 per cent increase in the level of digitalisation led to a 0.5 per cent increase in GDP and nearly 2 per cent rise in international trade, while a 10 per cent rise in digitalisation caused a 0.86 per cent drop in unemployment. These are real and tangible economic benefits.

So “smart” policies can be growth drivers too. But in the current state of the world, Accenture argues, they will become increasingly important because other factors which in the past have been driven global are beginning to decline in importance: ageing populations, less productive workforces, and constraints on traditional demand-side stimulus measures like increased government spending all mean that governments need another tool in the economic policy box to stimulate growth.

Digitalisation could prove to be this essential new tool.

So far into the digital age, it has been the private sector that has been the main instigator of change in “smart” thinking. Amazon was followed by Uber and Airbnb, but all were examples of private business encountering an opportunity in the new digital age and going for it as a profit-generating instrument.

These companies have “disrupted” the status quo in business — in retailing, taxi services and property letting — and others will surely come in other sectors.

But, Accenture argues, now is the chance for government to join the ranks of the disrupters, by encouraging and directing digital innovation, rather than inhibiting it, as some have tried to do with the cases cited above.

In the public sector, increased digitalisation produces an engaged citizenry, an entrepreneurial and performance-driven workforce, and resilient infrastructure. In the words of Accenture, “it is time for governments to offer the Amazon experience to their constituents”.

It is not quite as straightforward, of course. There is a financial investment that governments have to take on; existing technological infrastructure will have to be overhauled, and in some places scrapped, to accommodate the new vision; and ever-present fears about the vulnerability of complex technologies.

But the UAE has clearly decided the future is digital, the future is smart — and its case is increasingly compelling.

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