SINGAPORE – Mention “Smart City”, and those of us old enough might recall The Jetsons cartoon, with its Google-style city architecture and homes with space age push-button conveniences.
One need not look at the reel world to see a smart city these days. In the real world, Singapore is ranked the smartest Asian city, and the seventh smartest in the world, according to the 2023 Smart City index by Swiss business school Institute for Management Development, which ranked Zurich as No. 1.
The rise of these smart cities presents investors with opportunities.
According to consulting firm McKinsey, a smart city is one that “puts data and digital technology to work to make better decisions and improve the quality of life”.
Citizens and businesses can then benefit from improvements in air quality and energy efficiency, a more convenient transport network and a healthcare ecosystem which propels innovation and promotes economic growth.
In smart cities, major market-changing participants – from the government to industry leaders, banks and even investors – play a key part in delivering an ecosystem for healthier living, a smarter transport network, an upgraded water supply and an efficient use of energy.
For instance, HealthCity Novena is a master plan for 17ha of community-focused healthcare space. Slated for completion by 2030, the integrated precinct extends beyond healthcare to include a holistic ecosystem made up of health services, research and education, commercial, leisure and public spaces.
Tech and energy efficiency
One may uncover bright investment opportunities in the sectors that help improve the quality of life in urban areas.
Technology companies specialising in Internet of Things (IoT) devices, big data analytics, artificial intelligence and other smart city technologies are likely to be the biggest beneficiaries.
According to Fortune Business Insights, the global IoT market is projected to grow at a compounded annual growth rate of 26.1 per cent – from US$662.2 billion (S$896 billion) in 2023 to US$3.4 trillion by 2030.
Cities that seek to tackle pollution and reduce their carbon footprint will typically look to cut energy usage and electricity consumption. Demand for solutions in energy efficiency, storage and infrastructure will see positive knock-on effects.
Hydrogen may be the future solution for heavy-duty commercial vehicles that need to travel long distances, according to McKinsey. Britain will have a nationwide network of hydrogen refuelling stations operational at the end of 2023, with trucks and buses as the priority. Wind and solar energy adoption rates set record highs in 2022 in both Europe and the United States.