Hong Kong is getting old, both in infrastructure and demographics. But how the city addresses the challenges these pose can help it to accelerate its smart city ambitions.
Julian Vella, co-head for China at KPMG China’s global infrastructure advisory practice, prefaced the discussion with the release of the Future Hong Kong 2030 report.
Vella noted the vital role of the government in driving the smart city agenda for Hong Kong. Part of the reason is that Hong Kong faces unique issues in terms of land use and housing.
“So it is no surprise that housing affordability is a top issue,” he said, adding that the survey highlighted the need for more efficient use of land and public space.
However, the report dug deeper into the idea of efficiency and found that it was not just about better planning but also better use of technologies. Vella noted that more needs to be done here, especially when “95% of the electicity is used by buildings in Hong Kong but only around 5% have intelligent building management.”
ESG becomes a smart city driver
The drive for sustainability has seen a spike in interest in environmental, social and corporate governance (ESG). Here, Vella acknowledged that HK companies are driving many ESG initiatives, but called for more “altruistic” approaches.
In a subsequent panel discussion, Dr. Saraansh Dave, head of new business development at CLP Holdings noted that there needs to be a balance between altruism and sustainability.
He felt that “conservation is already part of the energy industry.” “Altruism is great, but when you enter a difficult economic situation, it needs to be developed hand in hand with a sustainable business model.”
In the report, public-private partnerships can help to create such business models for smart city development. Vella noted that respondents “expressed a strong willingness to partner with the government” on key projects. However, in reality, only a few corporations are working with the government. Many point to a lack of opportunities.
But this is changing said Daniel Chun, chairman of the research and blueprint committee at Smart City Consortium. “We have slowly seen changes with the government and there are some success with partnerships.”
For example, during COVID-19, the Centre of Health Protection created a dashboard that is a private and public collaboration. “So, we are seeing some small success. Government is willing to open their different resources,” said Chun.
Vella questioned whether government bureaucracy and its risk aversion are to blame. “This risk aversion can lead to a prescriptive relationship.”
But Chun felt that it is something that the HKSAR government is already taking steps to address. He highlighted two bold steps as encouraging.
The first is the Office of the Government Chief Information Officer (OGCIO) starting the Smart Government Innovation Lab for collaborating with corporations and startups.
The second is the Electrical and Mechanical Services Department (EMSD) creating its online E&M InnoPortal to consolidate the technological development needs of various government departments, public bodies and the E&M trade, while working with startups.
Data sharing is key
Data will be crucial for Hong Kong’s smart city aspirations. It is here where the panelists noted that more needs to be done.
For their part, companies are helping to share more data. Dr. Dave highlighted CLP’s initiatives to introduce new ways to monitor and manage energy usage for citizens.
Jimalyn Yao, strategy and business development manager for Siemens Ltd noted her company is looking at ways to make “data to be shareable and available to all.”
But it is not enough. Yao called other corporations to create new ways of sharing data. These data sources can be used to create unique applications that smart city dwellers can use.
“For me [smart city development] is about accessibility. We have to make sure we create economic opportunities by making data and infrastructure accessible,” she added.
Panelists admitted that this is not going to be easy. There are also data privacy and security issues that need to be considered. But it must be addressed, said Chun.
“What is most important is to have a data layer standardized and accessible. But companies need to prepare for their data to be accessible and shareable,” added Yao.
The double-aging opportunity
Cities across the world are rebranding themselves as smart cities. So where does Hong Kong’s future as one lie? And how can it differentiate from other cities that are sprouting across the Greater Bay Area where its future is tied to?
Here, Chun highlighted the need to address “the double aging” issues that Hong Kong faces. It is where the building and the demographics are fast becoming old.
All participants noted that smart technology has a way forward. In fact, Chun and Yao felt that it offers Hong Kong a unique opportunity to lead in preventive maintenance and healthcare as a result of addressing these issues together.
While the opportunities are there for Hong Kong to seize, the city also needs to shift more investment into research and development. Vella quoted the report which showed that Korea and Shenzhen spend more than 4% of their GDP in R&D. Hong Kong spends less than 1%.
“This is a massive gap to fill,” said Vella.