Resilient, not smart, cities are most important for emerging markets
Cities in emerging markets will benefit more from on-demand mobility apps than smart city grids powered by cameras and sensors
It is difficult to ignore the irony of the World Economic Forum’s launch of a new global "smart cities" initiative in Davos.
A wealthy village with 10,000 people, Davos is the polar opposite of the typical cities of the future, which will be dense, crowded and young. While urbanisation is a global trend — over two-thirds of the world population will live in cities by 2050 — the vast majority of growth is taking place in the Global South. The ten fastest-growing cities are all located in emerging markets.
Rapid urbanisation presents opportunities for countries across the Global South; large cities with concentrated human capital can boost productivity, attract foreign investment and spur innovation. Yet the combination of breakneck urbanisation and poor infrastructure, such as shoddy road conditions and congestion, could threaten the future prosperity of cities.
To counter the challenges of urban growth, cities in the US and Europe are resorting to “smart” technologies, such as AI and IoT-enabled sensors. But these solutions are not easily adaptable to the realities of cities in emerging markets.
Take high tech traffic management systems installed in cities in the US and Europe; they rely on connected networks of mounted visual and thermal cameras, thousands of electronic sensors and satellite imagery to identify and alleviate irregular traffic flows. In cities struggling to install even basic traffic lights and where traffic laws, if they exist at all, are rarely enforced, these solutions are at best impractical, if not impossible.
Cities in emerging markets do not need to become “smart” cities, relying on the latest state-of-the-art technologies. Rather, they must become resilient cities and be built on three pillars of frugality, flexibility and inclusiveness. Over the last five years, the spread of app-based mobility solutions has shown what is possible in advancing city resilience.
Mobility companies have taken off in emerging markets because they offer an affordable solution to transport. They depend on apps, a low-tech solution, and provide sharing options in order to slash prices. Over the last decade, as the prices of handsets decrease, smartphone penetration has surged in emerging markets. Mobility apps have piggybacked on the growing number of smartphone users, which has risen to 47 per cent, up from 37 per cent the previous year.
Because mobility apps are on-demand, they allow users to match supply with demand instantaneously, leading to reduced fares for commuters. This is important in emerging markets where taxis remain unaffordable for the majority of commuters, and where customers are price point sensitive. Local mobility apps are big on ride-sharing, which allows for even lower prices. For example, minibus ride-sharing apps connect riders travelling in the same direction while motorcycle sharing apps such as Indonesia’s Go-jek charges affordable rates as motorcycles can zip through bumper-to-bumper traffic.
Flexibility is also central to the success of mobility companies. Mobility apps must have a decentralised nature in order to respond to the needs of commuters. Cities in emerging markets lack centralised urban planning and infrastructure, leading to fragmented transportation markets. In a sprawling city like Lagos (population 20 million), commuters must often switch modes of transport 4 to 5 times. There is no “typical” pattern of transportation across cities in emerging markets; usage of cars, public transport, and non-motorised transportation varies widely, and patching together a trip using boats, tuk tuks and other unique forms of local transportation is common. Intermodal transport, which combines different transport modes to reduce transit times, will only become more common as megacities (defined as having populations of more than 10 million) spread out, particularly as they are prone to sprawl. Innovative mobility apps that leverage multiple modes of transport will become increasingly important as these cities become more decentralised.
Lastly, mobility apps promote inclusiveness and are grounded in the communities that they serve. The employment opportunities that mobility companies offer for young job seekers moving to cities cannot be overlooked. In emerging markets, youth employment has remained stuck over 50 per cent for the past decade, twice as high as the rate in developed economies. These young adults are concentrated in cities, where youth unemployment tends to be higher than the national average. Apps such as Go-jek, Nigeria’s Max Now and Max Go, which allow motorcycle drivers to switch between offering customers rides and serving as a last mile delivery service, provide valuable, immediate employment opportunities to thousands of young adults.
Make no mistake, mobility apps are far from a cure-all. Efforts to build new infrastructure and formalise city landscapes always occur in parallel. But for the time being, emerging markets need technologies that fit their existing realities, not aspirational ones.
Mobility apps show a path forward. They illuminate how the world’s megacities, predominantly in the Global South, can become resilient to take on the challenges of rapid urbanisation. Resilient — not smart — technologies can help.
Mostafa Kandil is the co-founder/CEO of Swvl, an Egyptian mobility company connecting commuters with high-quality buses
Published: September 17, 2019 08:00 AM