Hong Kong needs to get smart on smart cities in ASEAN
In recent years, the economy of ASEAN countries has been booming. With an average annual GDP growth of 5% in the past four years, Vietnam, The Philippines, Indonesia, and Malaysia have become growth drivers, turning ASEAN into the world’s 6th largest economy. However, economic development and urbanisation have also brought many problems to these countries along with huge business opportunities. Many nations around the world have noticed and are actively seeking to help these economies modernise, especially through the development of smart city infrastructure.
However, Hong Kong may be missing out.
Breakneck growth needs smart to start
In exception to Singapore, urbanisation in the other nine ASEAN countries are in their early stages of urban development. According to the McKinsey Global Institute (MGl), six ASEAN countries are less urbanised than the global average of 54% and China’s 60%. The lowest rate of urbanisation is found in Cambodia (21%), with Thailand (50%) and Indonesia (54%) in the middle range and Malaysia (75%) at the higher end. However, rapid economic development attracted many migrants to the cities, causing problems such as insufficient housing, poor water and air quality, a large income gap between urban and rural areas, poverty, and public security issues.
In addition, many low-lying cities like Bangkok, Ho Chi Minh City, Jakarta, Manila, and Yangon often have to endure natural disasters, such as typhoons and flooding. It is estimated that 115 million people are vulnerable to coastal flooding across these nations.
Local governments hope to use advanced technology and smart city solutions to address these problems, so as to improve the quality of living while increasing employment opportunities, especially for young people as 60% of the populations of these cities is under the age of 35.
As a result, there are huge business opportunities in building smart cities. For example, MGI estimates that private companies involved in mobile applications and the environment industry in ASEAN countries have US$96 billion (over HK$749 billion) of business opportunities in developing smart cities. Meanwhile, Southeast Asia needs some US$7 trillion (HK$55 trillion) in infrastructure, housing, and real estate investment to support sustainable growth.
Seizing the ASEAN opportunity
Many countries are ready to enter this huge market. Singapore and South Korea are the most ambitious countries, with the ASEAN Smart Cities Network (ASCN) and the Korea Smart City Open Network (K-SCON) formed in recent years to assist smart city development of the ASEAN countries. The United States, Japan, and Australia also participate actively in forming partnerships and seeking opportunities.
In the November of this year, China and ASEAN issued the ASEAN-China Leaders’ Statement on Smart City Cooperation Initiative. They announced that eight mainland cities, including Shenzhen, have formed alliances with ASEAN cities to facilitate their development. At the same time, Shenzhen and Singapore also signed a Memorandum of Understanding (MoU) on the Singapore-China (Shenzhen) Smart City Initiative to jointly build a new platform for cooperation.
Hong Kong’s record of building connections here is lacking. At the end of this year, Hong Kong and Thailand, one of the ASEAN countries, signed a MoU to strengthen economic relations between the two regions, but there was no mention of cooperation in smart city development. This is quite disappointing!
Hong Kong has always ranked highly among global smart cities. For example, in the IMD Smart City Index 2019 published by the International Institute for Management Development in Switzerland, Hong Kong ranked 37th, ahead of all mainland cities. Hong Kong should strive to partner with ASEAN cities, exchange and assist in the development of smart city standards, and promote the export of related solutions and services to find a new market for Hong Kong’s service industry and talents.
Developing Hong Kong as a smart city is only the first step – albeit a vital one. The crucial next step is to share what Hong Kong has learned with ASEAN neighbours lest the SAR miss the opportunities to make the most of its experience and to benefit the people of both regions.
Dr. Winnie Tang
Adjunct Professor, Department of Computer Science, Faculty of Engineering and Faculty of Architecture, The University of Hong Kong