Besides, with the rise of cyber threats, there is growing calls to ensure a holistic cybersecurity approach is adopted to ensure better resiliency.

Avoiding Another White Elephant

What many parties do not talk about enough is the introduction of smart cities also requires re-visiting the way smart cities are funded. People often overlook that an integrated smart city program requires sizeable funding, and it can be in the millions to billions of dollars depending on the scale of the overall program.

The traditional means to fund city-level projects were traditionally on the onus of the government via government financing, and the reality is governments globally face limited resources to fund a wide range of policies related to social, health, and infrastructure. Another funding mechanism is institutional funding via the means of public-private partnerships (PPP) or international grants, for instance. Both government financing and institutional funding such as PPP end up being funded generally through taxes while international grants is dependent on the availability of such grants and generally has a limit. Private smart city initiatives typically can be found among larger-scale real estate developers. The costs of such initiatives are generally factored into the overall cost of the property, hence making the real estate more expensive.

Whether it is a public or private-led smart city initiative, the current funding mechanism makes it hard to be sustainable over the long term as the cost is either absorbed by the government or taxed or passed on to the residents. The primary reason many regional smart city initiatives including several countries in Asia which launched its ‘50 or 100 smart city programs’ have not taken off the ground as smoothly as it had planned is lack of funds. Similarly, passing the cost to prospective buyers makes it less affordable to own property; which is already a common challenge seen in the real estate market for all major cities in the region.

Due to funding restrictions, smart city initiatives could quickly stall and be sidelined all together if no proper long-term viable solution is found.

Looking at a Different Approach

Acknowledging that addressing the long-term sustainability of funding a smart city is the first step. Gamuda Land, for instance, is re-evaluating the business model to make it self-funded where possible to ensure its smart city ambition is not sidelined.

As a leading real estate developer in the region, Gamuda Land’s is looking at instituting on a city-as-a-service model when deploying its smart city plans for its projects. It is also exploring the ‘urbanization’ of various services required by its residents to manage the cost of running these solutions better. The medium to long-term strategy will focus on the 3R’s which are Recurring, Repeatability and Reproducibility as outlined in the diagram above. It will serve as the guiding principles for Gamuda Land, which ultimately looks at monetization of services that will make its overall smart township and city a sustainable vision.

A similar approach can be made even in governmental level smart city projects to make it more viable for the long term. Aided with a digital suite of offerings and where the Smartphone has become ubiquitous, stakeholders need to be more creative when looking at funding options and consider embracing a services-based model; whether pay-per-use or long-term subscription-based on individual needs will ensure continuous applicability of the smart city solutions.