ASEAN - The future starts here

South-East Asia is getting “smart” with urbanisation

By Kelvin Tan

Chief Executive Officer, HSBC Thailand


Apart from being a tourist hub, Phuket - in southern Thailand – is a classic example of the opportunities - and challenges - that come with the rapid urbanisation that is taking South-East Asian economies by storm. Increased population and inbound tourism is pushing its infrastructure to the limit.

Cities all over South-East Asia – from Jakarta, to Manila to Ho Chi Minh – are on a similar growth trajectory. Rapid urbanisation means that between 2015 and 2030, about 100 million people in ASEAN are expected to migrate from the countryside to cities.

While this is exciting from an economic point of view – urbanisation generally means improved productivity for companies, and better incomes and access to education, healthcare and transport for millions of ordinary citizens – the rapid growth of towns and cities also presents its own set of challenges.

It is clear that the process of urbanisation must be handled wisely and “smartly”.

Enter the concept of “Smart Cities.”

This involves trying to integrate information and communications technologies to improve operations in everything

Done right, the smart use of data and digital technologies can significantly alleviate some of the challenges of urbanisation.

The good news is that ASEAN countries are recognising the potentials that come with “smartening” cities.

For example, Phuket is Thailand’s first Smart City with pilot projects such as free Wi-Fi in public spaces, expanded CCTV, and a new bus app for public transport being introduced to improve the living community. Thailand also plans to transform its economy into a digitally-powered ecosystem, and is aiming to create no less than 100 “Smart Cities” over the next two decades, from seven pilot smart cities currently.

But if the ASEAN integration ideal is to be realised, such individual country programmes need to be linked, and best practices and successes shared.

That is what makes the ASEAN Smart City Network (ACSN) – which includes regional capitals like Kuala Lumpur, Ha Noi, Bangkok, Manila, Jakarta and Singapore, but also smaller cities like Johor Bahru and Phuket – so important.

Agreed at ASEAN leaders summit, in Singapore in late April, the ASCN will be a platform for each of the region’s countries to share best practices, link member cities with private investment, and secure funding from multilateral funding institutions.

Through the network, the various ASEAN country initiatives will become greater than the sum of their parts, catapulting the region into the upper echelons of Smart City advancements, globally.

The implications for this are manifold and extend beyond South-East Asia.

Smart Cities in general, and the ASCN in particular, will be fertile ground to cultivate and galvanise a lot of global collaboration around innovation.

One area of focus will be in smart mobility, particularly around electric vehicles and ride and car sharing. Another will be in connectivity of payments and trade digitisation.

Climate change and urbanisation are global phenomena, and Smart Cities’ emphasis on innovative, sustainable technologies will open up new opportunities for companies and investors and open up new avenues of investment – through sustainable financing - as projects and schemes are rolled out.

“Smart” technologies will help alleviate the challenges that accompany the rapid expansion of towns and cities across Asia.

Smart Cities will be good for citizens, good for business, and good for the planet – to boot. At its core, the focus is about seeking optimal business models for ‘Smart City’ development which will strike a balance between public good for the citizens and economic benefit for the private sector. The formation of the ACSN is an excellent start and governments, regulators, city planners and companies need to be on the right side of the innovation equation.

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