JEDDAH – Urbanization remains one of the most potent demographic forces around the world – creating cities of unprecedented scale and complexity. According to the United Nations, more than half of the world's population currently lives in urban areas – the 50 percent threshold was crossed in 2008 for the first time. Estimates project that 70 percent of the world's population will live in cities by 2050. Although many of the fastest growing cities are in emerging markets, developed countries face a related set of problems due to urban sprawl. In line with this, management consulting firm Booz & Company has found that technology can help policymakers in the MENA region address these issues, through the creation of digital cities – which use advanced infrastructure and solutions to deliver services that meet the economic, social, and environmental challenges of urbanization. Digital technology gives policymakers the tools to better meet the challenges of urbanization. “The next step is to apply digitization directly to urban planning, with the goal of creating digital cities, or intelligent ecosystems that are better able to meet the challenges of growth and sprawl,” said Olaf Acker, a Partner with Booz and Company. “Unlike traditional cities, which have emerged haphazardly, digital cities are designed around a multi-tier infomation and communications technology (ICT) framework that uses integrated infrastructure to deliver value-added services such as e-health, e-government, and e-transport, among others.” He added “the aim is to enhance the lives of citizens and visitors and streamline the opertions of businesses and governments.” Key Benefits For city leaders in the MENA region, there are three key benefits to the digital-city approach: 1. Fostering Economic Development: Digital cities boost economic development by increasing the size of the economy and creating jobs in promising technology sectors. 2. Quality of Life: Digital cities improve citizens' lives in numerous ways – by providing them with the right platforms to gain direct access to a variety of services. 3. Environmental Sustainability: Digital cities apply technology to reduce the waste of resources such as water and electricity. The UAE's ‘Smart Dubai' initiative is a great example of this. The five-year plan aims to transform the emirate – using digital technology – and ensure that it could eventually provide a range of online government services to citizens, local businesses, and government entities. In addition to quality-of-life benefits, the project will add $5.5 billion to Dubai's GDP, along with 27,000 jobs. To become a digital city, governments in the MENA region will need an appropriate set of solutions that will help them advance to the next stage of ICT maturity. “The more a city takes advantage of the potential offered by ICT in terms of the provision of digital services and an integrated urban network, the higher its level of ICT maturity,” said Danny Karam, a Principal with Booz & Company. “In many ways, this is easier for newer cities in emerging markets, which are just now investing in urban infrastructure.” For example, Lusail City in Qatar and Masdar City in the UAE are making digital technology, networks, and apps a central part of how they operate and interact with citizens. By contrast, existing – or brownfield – metropolitan areas face clear challenges in moving up the ICT maturity ladder, as they need to modernize their existing infrastructure with embedded sensors and control systems and retrofit old buildings, which is a complicated and expensive process. To make digital cities a reality, local governments must first address critical aspects of urban planning with key stakeholders and partners – such as real estate developers and technology providers. “Although the precise role and influence of municipal governments will vary from one city to another, governments must start by defining several foundational elements: policy, regulation, sector development, and e-enablement,” said Acker. “They must set the parameters and ensure a level playing field, and then foster competition among private-sector operators to develop the best services, solutions, and applications.” Local governments must also select and prioritize specific services to deploy, carefully evaluate city infrastructure, and define a path that will push them up the ICT maturity curve. In advancing along this curve, governments must answer key questions, such as: • What are the triggers to advance from one stage to the next? • What level of investment is required? • How should the government moni¬tor the quality and operations of the digital services? In laying out the implementation plan, local governments must find capable and willing partners that can manage multifaceted interactions with a wide set of stakeholders, including city and municipal managers, policymakers, regulators, ICT service providers, tenants, and contractors. Local governments then need to work with partners to find an appropriate business model that ensures commercial longevity in the delivery and operation of digital city services. Although business models may vary depending on asset ownership, a common model is one in which the city contracts with master developers, which in turn contract with third-party service providers such as a capable ICT player or telecom operator. The third-party providers must be capable of delivering smart ICT, managing entertainment and telecommunication infrastructure, and interfacing directly with tenants to oversee services and collect revenue. This is the model that Lusail City recently used in its arrangement with Ooredoo Qatar (formerly Qtel) in Qatar. “Digital services will not achieve their desired benefits without mass uptake from citizens and organizations,” said Karam. “To drive engagement, particularly in the delivery of e-services, cities can learn from how game designers have successfully used “gamification” to engage with their users of varying age groups, demographics, and backgrounds.” Gamification, in the simplest form, is the application of game-design principles to real-world environments: providing a sense of achievement, applying status recogni-tion, and stimulating constructive competition. In the context of city service delivery, gamification presents promising possibilities that can help cities stimulate changes in citizen behavior, create engagement and a sense of community, and increase the use of services. Therefore, the value of digital cities is clear. Cities should define their paths to reach this objective according to their individual needs and current level of ICT maturity. Digital transformations are long, complex, and expensive. Given the political or economic obstacles that will inevitably arise, the process of transformation will require city leaders in the MENA region to ensure that all stakeholders agree on the right objectives and development efforts. Such stakeholder engagement, along with long-term planning and leadership commitment, will put cities on the path to digital transformation. — SG
