In 2016, the ruler of Dubai, HH Sheikh Mohammed Bin Rashid Al Maktoum, came up with a new mission statement for SmartDubai. He no longer wanted to create the smartest, most connected city on earth: he wanted to build the happiest – technology was just the tool to achieve it.1

    The simple fact that city dwellers must be happy if our cities are to thrive economically often gets lost in the debate around climate change, transformational tech and green investment. It overlooks the fact that smart cities represent a fundamental shift in the social contract between citizen and state as well as between the actors – financial, corporate and local government – involved in organising it.

    Thanks to the ubiquity of smart devices2, every individual – no matter their wealth or status – has the power to influence change like never before. In fact, the technology being hardwired into tomorrow’s cities depends on it. The challenge is to motivate people to engage with it.

    ‘One of our big areas of focus is how do you unleash the potential of millennials,” says Dr Daniel Klier, Group Head of Strategy and Sustainable Finance at HSBC and a speaker at the recent HSBC Cities of the Future Conference. “Technology is often a way to bring people in to society rather than pushing them out. It allows us to break down the barriers that we see in current systems and allows citizens to participate in what is happening in their cities.

    “Remember, smart cities also include smart governments. Very often people who aren’t willing to participate in the normal political system can be brought back into it with technology.”

    This democratisation of our urban environments is already playing out in some of the most forward-thinking cities on the planet, from Dubai to Barcelona… and even Milton Keynes.

    Britain’s most ambitious ‘new town’ in 1967, it was derided for decades for an overcomplicated traffic system and having ‘less culture than yoghurt’. Now thousands of citizen activists are using smart technology to futureproof their town and make it work for everyone. From ideas for using off-grid electricity to light homes, to a trial using Bluetooth ‘beacons’ to help visually impaired people navigate the shopping centre, and producing an age-friendly digital map of the town for elderly residents, the MK:Smart project is demonstrating that smart can equal good.3

    The city council believes that putting digital technology in the hands of citizens will be key to managing population growth, which is predicted to take Milton Keynes’ headcount to 325,440 by 2031 – bigger even than Newcastle.3

    “Cities are both the problem and the solution,” says Cecile Maisonnneuve, Chairman of La Fabrique de la Cite, a Paris-based think-tank working on urban innovation around the world. “This is why we have to work in a new way – in a more partnership-oriented way – to solve these problems.

    “Everybody has a part to play in sustainable growth. I don’t believe speeches change behaviour: they’ll change thanks to the digital revolution, but we have to make people understand there is another way of doing things. This also means the other players – companies and public services – have to revolutionise the way they are organised. Silos are over.”

    Emmanuel Francoise, President of the Smart Building Alliance for Smart Cities, believes there are easy wins to made in reducing global energy consumptions and emissions if citizens are incentivised to act.

    “We are entering a hyper-connected world where technology is a tool,” he says. “We should use it to get citizens to become more responsible, aware of and connected to their environment.”

    But incentivising good citizenship, can be a minefield of unintended consequences for policymakers, warns Charles Simpson, Partner, Head of Mobility 2030, KPMG. Falling back on traditional instruments for influencing behavioural change – particularly fiscal ones – could put social cohesion at risk.

    Norway is often held up as something of a poster child (for smart cities), certainly around the adoption of electric vehicles. When you unpack that story a little more, it’s effectively ended up as one of tax subsidies – through the acquisition of the vehicles themselves but also bridge and road toll exemptions – for what it transpired was predominantly owners of Teslas. The immediate consequence of that is that you’re effectively giving tax breaks to the top 20 per cent of what’s already a very wealthy country.

    “We’re seeing some backlash in Norway against this already. When you translate that concept into post-industrial cities in the Ruhrgebiet in Germany or in the West Midlands in England, if this is positioned as essentially tax breaks and toys for the wealthy, this is potentially some significant barriers and politically damaging consequences.

    “Our view is that one of the success factors here as politicians position future transport solutions into the market, is that they have to be at a price point and at an accessibility level which looks like a solution for all citizens.”



    For more insights on Future Cities, please read For a city to be truly smart, it needs vision and resources.

    Join the conversation?

    Join our Linkedin group to get an unparalleled view of macro and microeconomic events and trends from a bank that is a leader in both developed and emerging markets.