epa06426200 A motorist drives his vehicle in front nof a poster showing the capital Kuala Lumpur's future city skyline at twilight, in Kuala Lumpur, Malaysia, 09 January 2018. Malaysia's gross domestic product (GDP) is expected to grow about five percent in 2018. Malaysia's gross domestic product (GDP) is expected to grow around five percent in 2018.  EPA/AHMAD YUSNI
A poster showing Kuala Lumpur's future city skyline in Malaysia. Smart cities offer opportunities for investors. EPA

Smart cities look well set to power global economy



Abu Dhabi and Dubai rank at the top of a list of cities in Africa and the Middle East with the most developed technology bases published by McKinsey Global Institute earlier this year.

But they still lag behind smart city leaders like New York City, Stockholm and Singapore. With the UAE’s government-led Smart City projects expected to drive regional Smart Citie spend to a record-high of $2.3 billion by 2021, this creates significant opportunity for investors who are informed on the trends driving this growth.

Cities may occupy just 2 per cent of the earth’s land surface but they are home to more than half of the world’s population and generate 80 per cent of all economic output. And their dominance is growing: by 2045, an extra 2 billion people will live in urban areas. This will no doubt place significant pressure on infrastructure, resources and the environment.

Encouragingly, those responsible for planning and building the urban centres of the future are up to the challenge. Worldwide, authorities are working closely with the private sector in an effort to make our cities safer, more sustainable and better connected.

In the development world, “smart cities” remain central to the United Nations’ Sustainable Development Goals (SDGs). Under SDG 11, the United Nations specifically calls for additional urban investments through to 2030 to “make cities inclusive, safe, resilient and sustainable”.

The UAE was an early adopter of the SDG agenda. Government-led strategies like Smart Dubai have made significant progress in using technology to create a more efficient and seamless environment, thanks the introduction of public Wi-Fi and electric car charging stations, as well as smart parking, live traffic monitoring and smart power grids. Last month at Gitex Technology Week, 59 government entities and private-sector companies in the UAE showcased new services related to smart cities - from blockchain business ledgers to billing and consumption services.

It is in response to these trends that Pictet Asset Management developed SmartCity, a strategy with the objective of investing in companies that we believe will ride the wave of urbanisation. The investment opportunities we see emerging can be split across three broad areas of activity: building the city; running the city; and living in the city.

When it comes to building cities, it is clear that more people need more buildings: houses; offices; schools; a and leisure centres. China and India alone require up to 2.8 billion square metres of new residential and commercial space a year.

The challenge is to design, plan, construct and finance these buildings in an efficient and sustainable fashion. Although there are efforts underway to build higher to save space and reduce urban sprawl, conventional towers tend to be very environmentally unfriendly both during construction and operation – which ultimately also makes them expensive.

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Added to this, what people want from buildings will also evolve as technology and demographics change. For example, the rise of the “Internet of Things” – with the number of connected devices forecast to reach 25 billion globally by 2020[ – will fuel demand for high-powered internet.

Next comes the running of cities. Sixty per cent of cities’ economic growth is coming from a growing population, and 40 per cent from improving labour productivity. To run efficiently, urban areas need better transport, water, energy and waste management infrastructure, logistics facilities and public services from healthcare to education.

Of the $81 billion that will be spent on smart city technology this year, nearly a quarter will go into fixed visual surveillance, smart outdoor lighting and advanced public transit, according to the International Data Corporation.

Eventually, this is likely to mean high-speed trains and driverless cars. Consultancy McKinsey forecasts that up to 15 per cent of passenger vehicles sold globally in 2030 will be fully autonomous, while revenues in the automotive sector could nearly double to $6.7 trillion thanks to shared mobility and data connectivity services.

At their smartest, cities will combine what is good for the planet with what is good for the economy. A recent report by the Global Commission on the Economy and Climate found that investing in lower-emission public transport, using more renewable energy and increasing efficiency in commercial buildings and waste management in cities could cut energy costs by about $17tn worldwide by 2050, as well as cut commuting times and improve general liveability.

Finally, as well as creating more efficient cities, we need to find new and better ways to live and work in them, not least in making people’s lives more flexible using innovative technology.

Flexible offices are a key growth industry. Globally, the number of people using co-working spaces has tripled over two years to 1.74 million and is forecast to reach 5.1 million by 2022.

McKinsey estimates that adopting a smart city concept can improve key quality-of-life indicators, such as health, safety and environmental quality, by 10 to 30 per cent. We think that embracing it is crucial for the future of our increasingly urban world, where efficiency and sustainability go hand-in-hand. There clearly should be, therefore, a sizeable investment opportunity with superior growth prospects.

Investors can benefit from it by helping to shape the smart cities of the future.

Ivo Weinoehrl is senior investment manager at Pictet Asset Management, in charge of their SmartCity strategy

COMPANY PROFILE

Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

Country-size land deals

US interest in purchasing territory is not as outlandish as it sounds. Here's a look at some big land transactions between nations:

Louisiana Purchase

If Donald Trump is one who aims to broker "a deal of the century", then this was the "deal of the 19th Century". In 1803, the US nearly doubled in size when it bought 2,140,000 square kilometres from France for $15 million.

Florida Purchase Treaty

The US courted Spain for Florida for years. Spain eventually realised its burden in holding on to the territory and in 1819 effectively ceded it to America in a wider border treaty. 

Alaska purchase

America's spending spree continued in 1867 when it acquired 1,518,800 km2 of  Alaskan land from Russia for $7.2m. Critics panned the government for buying "useless land".

The Philippines

At the end of the Spanish-American War, a provision in the 1898 Treaty of Paris saw Spain surrender the Philippines for a payment of $20 million. 

US Virgin Islands

It's not like a US president has never reached a deal with Denmark before. In 1917 the US purchased the Danish West Indies for $25m and renamed them the US Virgin Islands.

Gwadar

The most recent sovereign land purchase was in 1958 when Pakistan bought the southwestern port of Gwadar from Oman for 5.5bn Pakistan rupees. 

How to help

Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200

THE SPECS

Engine: 1.5-litre, four-cylinder turbo

Transmission: seven-speed dual clutch automatic

Power: 169bhp

Torque: 250Nm

Price: Dh54,500

On sale: now

The specs

Engine: 6-cylinder, 4.8-litre
Transmission: 5-speed automatic and manual
Power: 280 brake horsepower
Torque: 451Nm
Price: from Dh153,00
On sale: now

Company profile

Date started: Founded in May 2017 and operational since April 2018

Founders: co-founder and chief executive, Doaa Aref; Dr Rasha Rady, co-founder and chief operating officer.

Based: Cairo, Egypt

Sector: Health-tech

Size: 22 employees

Funding: Seed funding 

Investors: Flat6labs, 500 Falcons, three angel investors

Friday’s fixture

6.15pm: Al Wahda v Hatta

6.15pm: Al Dhafra v Ajman

9pm: Al Wasl v Baniyas

9pm: Fujairah v Sharjah

.

The specs

Engine: 4-litre twin-turbo V8

Transmission: eight-speed PDK

Power: 630bhp

Torque: 820Nm

Price: Dh683,200

On sale: now

COMPANY PROFILE:

Name: Envision
Started: 2017
Founders: Karthik Mahadevan and Karthik Kannan
Based: The Netherlands
Sector: Technology/Assistive Technology
Initial investment: $1.5 million
Current number of staff: 20
Investment stage: Seed
Investors: 4impact, ABN Amro, Impact Ventures and group of angels

Major honours

ARSENAL

  • FA Cup - 2005

BARCELONA

  • La Liga - 2013
  • Copa del Rey - 2012
  • Fifa Club World Cup - 2011

CHELSEA

  • Premier League - 2015, 2017
  • FA Cup - 2018
  • League Cup - 2015

SPAIN

  • World Cup - 2010
  • European Championship - 2008, 2012
Company profile

Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices

The lowdown

Badla

Rating: 2.5/5

Produced by: Red Chillies, Azure Entertainment 

Director: Sujoy Ghosh

Cast: Amitabh Bachchan, Taapsee Pannu, Amrita Singh, Tony Luke

Company Profile

Company name: myZoi
Started: 2021
Founders: Syed Ali, Christian Buchholz, Shanawaz Rouf, Arsalan Siddiqui, Nabid Hassan
Based: UAE
Number of staff: 37
Investment: Initial undisclosed funding from SC Ventures; second round of funding totalling $14 million from a consortium of SBI, a Japanese VC firm, and SC Venture

The Prison Letters of Nelson Mandela
Edited by Sahm Venter
Published by Liveright

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

11 cabbie-recommended restaurants and dishes to try in Abu Dhabi

Iqbal Restaurant behind Wendy’s on Hamdan Street for the chicken karahi (Dh14)

Pathemari in Navy Gate for prawn biryani (from Dh12 to Dh35)

Abu Al Nasar near Abu Dhabi Mall, for biryani (from Dh12 to Dh20)

Bonna Annee at Navy Gate for Ethiopian food (the Bonna Annee special costs Dh42 and comes with a mix of six house stews – key wet, minchet abesh, kekel, meser be sega, tibs fir fir and shiro).

Al Habasha in Tanker Mai for Ethiopian food (tibs, a hearty stew with meat, is a popular dish; here it costs Dh36.75 for lamb and beef versions)

Himalayan Restaurant in Mussaffa for Nepalese (the momos and chowmein noodles are best-selling items, and go for between Dh14 and Dh20)

Makalu in Mussaffa for Nepalese (get the chicken curry or chicken fry for Dh11)

Al Shaheen Cafeteria near Guardian Towers for a quick morning bite, especially the egg sandwich in paratha (Dh3.50)

Pinky Food Restaurant in Tanker Mai for tilapia

Tasty Zone for Nepalese-style noodles (Dh15)

Ibrahimi for Pakistani food (a quarter chicken tikka with roti costs Dh16)


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