China Daily Hastening 'smart city' drive via value creation and incentive alignment

By Christopher S. Tang and Kenneth S. Tang

The Hong Kong Smart City Blueprint 2.0 will be released soon, and the special administrative region government can make the city smarter and faster by engaging residents and companies.

In December 2017, Hong Kong leaders released smart-city blueprint 1.0. This grand plan entailed more than 70 initiatives that were intended to improve urban management, enhance the quality of life of the people, increase the competitiveness of Hong Kong and promote sustainable development.

Among different initiatives, there are three major infrastructure projects for “smart government” and “smart economy”, including iAM Smart (formerly known as Electronic Identity, or eID), smart lampposts, open government data, and new big-data analytics platforms to support the adoption of new government public cloud services.

Smart-city development is about creating social value for people and generating economic value for companies. To entice people and companies to participate, creating real value and aligning incentives are essential to drive rapid development of a smart city 

Billions of Hong Kong dollars have been allocated to support various smart-city initiatives. Moreover, the SAR government doubled its research and development expenditure and offered incentives to engage firms and universities to boost smart-city-related innovations.

These bold smart-city investments are welcome and needed to improve the quality of life of Hong Kong residents and to enhance the city’s competitiveness vis-a-vis its archrivals in Asia, including Shanghai, Shenzhen and Singapore. 

Hong Kong is ranked behind Singapore in various smart-city rankings (IMD smart city index ranking in 2019 and IESE Cities in Motion Index 2020) that are based on different parameters (mobility and transportation, urban planning, economy, and others). However, fair comparisons are well-nigh impossible. For example, Singapore started its Smart Nation initiatives in 2014, three years before Hong Kong. In addition, unlike Hong Kong, there is a well-established social contract between Singaporeans and their government — better quality of life in exchange for less privacy. This exchange, given that many Hong Kong residents face an impossible dream of ever becoming a homeowner, and the collective trauma from the economic and social disruptions caused by radical political activists, probably would be welcomed by many residents who now hunger more for a stable life. 

Despite a late start and setbacks caused by the social unrest last year, Hong Kong has the technical capabilities to support various infrastructure projects.

However, according to a survey of business executives, small and medium-sized enterprises, startups, government, nonprofit organizations and academia conducted by KPMG this year, there are persisting challenges: privacy, data sharing between private firms and government, and data integration of different government departments. These old challenges hinder smart-city development, but new perspectives can unlock the stalemate. We make two illustrative suggestions.

First, according to a survey conducted by the Chinese University of Hong Kong, 48 percent of surveyed patients had not joined the e-health record system due to privacy concerns. At the same time, 45 percent of surveyed doctors found the e-health system time-consuming. In the same vein, to address the concern over privacy, an advisory committee suggested that cameras should be removed from smart lampposts. 

Privacy concerns can be addressed if the public can understand what and how data is being collected and secured, and how the collected information can be used to create value that can improve their quality of life.

By using real case studies, open forums can illustrate how e-health records can reduce duplicated tests and improve health outcomes and how smart lampposts can reduce traffic jams and improve air quality. Seeing is believing.

At these forums, one can also solicit ideas from residents about innovative applications of the collected data. Doing so can gain support and earn trust from the residents and stimulate innovative business ideas for startup companies.

Second, all five bus companies and many transport infrastructure components such as parking lots in Hong Kong are privately owned, and the government cannot force these private companies to share data. Without data provided by these private companies, the government can only obtain “partial information” through smart lampposts, which can impede smart mobility.  

To entice private companies to share data willingly, aligning incentives across competing firms is necessary. By using a pilot study, one can show how data sharing among bus companies can create economic benefits for them and improve service quality for passengers at the same time. 

For instance, all bus companies can utilize the shared information to allocate their buses to different routes (or new routes) at different times of the day more efficiently. Also, they can create new routes by coordinating their bus schedules across different bus companies. By using the shared data in a smart way, bus companies can offer more services to passengers, improve cost efficiency, generate more revenue and avoid wasteful overlapping services by different operators. 

Smart-city development is about creating social value for people and generating economic value for companies. To entice people and companies to participate, creating real value and aligning incentives are essential to drive rapid development of a smart city. 

Christopher S. Tang is a university distinguished professor and Edward W. Carter chair in business administration at the UCLA Anderson School of Management. Kenneth S. Tang is chairman of the Spatial Data Infrastructure Committee, Smart City Consortium, and adjunct associate professor at the University of Hong Kong. 

The views do not necessarily reflect those of China Daily. 

Source from:

http://www.chinadailyhk.com/article/143832