Hong Kong and other cities in the APAC are quickly transforming into smart cities. Source: Shutterstock

Hong Kong and other cities in the APAC are quickly transforming into smart cities. Source: Shutterstock

APAC to spend $35.4b this year in rush to build smart cities

SINGAPORE, Hong Kong, and Melbourne spring to mind when you think of smart cities in the APAC region.

A recent study by the IESE Business School (University of Navarra) IESE Cities in Motion 2018 evaluated cities around the globe on their progress towards becoming smarter cities and pointed out something interesting: In comparison to other parts of the world, cities in the APAC were much higher up on the technology dimension.

This is reflective of the efforts that the government is making to integrate technology into every aspect of the city’s infrastructure.

In fact, regulators in various government bodies and agencies are working on digitally transforming local businesses to help them make progress in the larger scheme of things.

Most recently, the HK government announced that it will provide e-ID to all Hong Kong residents to enable them to conduct online transactions via unique electronic identification, to promote a new economic service model directly to citizens, and to provide key electronic infrastructure for HK’s smart city project.

Although the value of the project wasn’t announced, it only goes to show how focused the governments in this region are on technology and their vision for how it will enable residents and businesses in the future.

According to IDC’s latest forecast, smart cities initiatives in Asia/Pacific excluding Japan (APEJ) will reach US$35.4 billion this year, a 16.8 percent increase over last year’s forecast.

In fact, analysts at IDC believe combined spending from smart cities programs from Singapore, Beijing, Shanghai, and Seoul are expected to hit over US$4 billion this year.

“IDC expects APEJ’s regional spending to accelerate during the forecast period, as more cities and communities start adopting the better equipped, connected and sustainable model of living,” said IDC Asia/Pacific Senior Market Analyst — IT Spending Swati Chaturvedi.

Hardware represents the highest spending, accounting for nearly 40 percent of the overall smart cities-related spending in 2019. Services is the second-largest technology group in terms of spending, followed by Software and Connectivity.

Interestingly, services spending is expected to overtake hardware spending by the end of the forecast with a five-year CAGR of 17.9 percent (2017-22).

Prior to 2018, cloud solutions dominated digital transformation imperatives for smart cities. As city governments shift from digitalizing siloed cloud-first endeavors, to integrated and cross-agency hubs, demand for interconnected ecosystems such as transport, and public safety have grown significantly.

The intelligent edge will also be a new phase of development for maturing smart cities.

As edge-based smart solutions gain stronger compute capabilities, cloud platforms can be leveraged as a grid computing architecture to fully coordinate and optimize the city’s disparate compute powers, thereby furthering automation within the city.

“Asia Pacific is an epicenter of innovation, and governments are finally realizing and focusing their energy and investments on smarter technological choices so that cities across the region can manage growth and ever-increasing market opportunities,” concluded Chaturvedi.