What’s the Real Value of Smart City Projects?

singapore at nightIDC recently released the results of a competition it ran to find the best smart city projects in Asia. As alluded to in my IDG Connect piece, I was keen to find out if these competitions, and the projects they seek to promote, are really very helpful at all.

My suspicion is that we can’t really use these competitions to judge whether one country is more “innovative” than another when it comes to IT. And I also have a feeling that in many cases, the smart city banner itself is little more than a handy, headline-grabbing way for self-aggrandising local and national politicians to attract foreign investment and talent, score geopolitical points and bolster their reputation as ‘visionary innovators’. It’s also pretty clear that Asia is far from leading the world when it comes to smart cities, despite pockets of excellence like Singapore.

IDC program manager for government insights, Gerald Wang, admitted that the picture was mixed across the region, and that the lack of legacy technology alone has not been enough to propel developing Asian countries forward.

“While it is true many cities in developing nations and emerging economies have  been able to leapfrog the digital divide to what IDC coins the ‘3rd Platform’ landscape, they also lack the long-term experiences required in managing enterprise-wide ICT solutions,” he explained by email.

“This means these cities have to tread very carefully with their investments into new (sometimes untested) territories without the proper governance processes and manpower talents in fund-seeking, information management, standardisation and consolidation expertise, and building resilient environments that that withstand cyber attacks, etc.”

Leading by example

Singapore is an exception of course, in Asia and the world. Its size, relative wealth and tech savvy administration have helped produce the Smart Nation initiative, launched last year. Infocomm Development Authority executive deputy chairman, Steve Leonard, told me the goal was to improve the quality of life and opportunities of Singaporeans, especially given the rapidly ageing populous.

But he was also quite open about the initiative’s role as a tool for attracting foreign investment.

“Singapore has the unique assets that makes it easier for tech start-ups and talent to build and grow their business from here to serve other markets. Working on big enough shared global challenges that make an impact to people’s lives will inspire more entrepreneurs and talent to come to Singapore to test their ideas, and more big corporates to set up their innovation labs or ventures here,” he argued.

“It starts a virtuous cycle – talent attracts more talent, more ideas and start-ups are established, the excitement builds on itself and we get more breakthroughs. Investment capital naturally gravitates to where there’s a high concentration of great talent and business opportunities.”

So smart cities in Asia could actually be good news for western tech investors, from start-ups through to large corporates. But what about the other way round? Are local leaders also signing off projects with a view to exporting technology and/or services one day? Not quite, according to Leonard.

“Our goal is for Singapore to be a node on the global network. Different countries are doing different things and we can all learn from each other’s experience,” he said. “The challenges we are working on in Singapore are not unique to us, other countries face similar challenges. We believe if you can make it work in Singapore, you can have the opportunity to adapt and apply to other contexts.”

Nice idea. But I’ve got a feeling that more countries will be learning from Singapore than the other way round over the next decade.

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2015: the Year of the Mobile Messaging Wars

whatsapp logoI’ve just finished another piece for IT Pro in Hong Kong covering the intensifying battle between WhatsApp and the slew of Asian mobile messaging firms in the chasing pack.

It’s shaping up to be an exciting 2015 for those in the space as these platform players look to differentiate in an increasingly crowded market, while the telecoms operators struggle to recoup the cash they’re losing from decreased SMS and voice call revenue.

Canalys analyst Jessica Kwee was quick to point out the pressure these traditional telecoms players are under.

“SMS/texting in the traditional sense has been impacted greatly, especially as people see more value in messaging apps – as in many cases they are considered ‘free’ as they are part of the data plans,” she told me via email.

“Plus, messaging apps are also more flexible and can handle more than traditional texting – no character limits, and on opposite spectrum, you don’t feel obliged to try to use up the character limit either, so it’s easier to text something very short and quick. Also, there’s the ability to communicate in groups, send pictures, videos, voice notes, emoticons, etc.”

However, there are some opportunities for operators.

“People will increasingly rely on an always-on connection and not be able to just rely on wi-fi at home or at work, as they will want to be connected all the time,” Kwee explained. “So even though it is much more difficult to get people to spend a lot of money on expensive data plans, especially in price-conscious markets, it could be a compelling alternative where telecoms provide cheaper data plans to exclusively use such apps.”

Frost&Sullivan principal analyst, Naveen Mishra, added that adoption of mobile messaging apps has soared over the past 12-18 months thanks to their added functionality and free price tag.

“Increasing smartphone penetration and growing internet adoption is driving this usage. Emerging markets like India, are growing extremely fast, both in terms of adoption and usage,” he told me.

“Between May 2014 and Oct 2014, WhatsApp’s monthly active users grew from 50 million to 70 million, which is 10% of the total user base. The next 3-5 years are also looking very promising, as key emerging markets have large opportunities of growth. In India alone, there are over 930 million mobile subscriptions out of which only 70 million are current WhatsApp users.”

As for the various market players, success will come down largely to innovating with new features.

“All the OTT application companies are constantly trying to innovate, however the success of the application largely depends on the value a new feature brings in,” he said.

“Line has tied up with LG Electronics, where through its chat session, LG appliances can be activated and controlled. On the other hand, WhatsApp is working on a voice calling service, which is expected to be launched in early 2015.”