Across the globe, populations are increasingly shifting from rural to urban centres, creating larger cities with more inhabitants than at any time in history.
As a result, the world’s urban population is growing by around 6 million every month – to put this in perspective, that’s equivalent to almost twice the population of Dubai.
This has resulted in the creation of flourishing urban areas, which are serving as hubs of global economic growth, collectively contributing over 80 percent to global GDP. With the wealth of opportunities available, it’s clear why relocating to a metropolis has become an attractive proposition for people today and based on current trends, the Organization for Economic Co-operation and Development (OECD) has forecast that more than 70 percent of the world’s population will live in urban areas by 2050.
In the Middle East and North Africa (MENA) as well, there has been a rapid rise in urbanisation over the last few years. In fact, the urban population in the region is expected to more than double by 2050. Consequently, governments are recognising the importance of ‘smart cities’ as key enablers and growth drivers of national economic transformation plans and have intensified their efforts on building the cities of tomorrow.
‘Smart city’ agendas are, therefore, attracting massive investments, with the overarching objective of improving and enhancing people’s quality of life and enabling easy and safe access to everyday services.
At the same time, rising populations – coupled with the high expectations of residents – have presented a complex set of challenges for city leaders. These include pressure on limited resources, ageing infrastructure, shifting demographics in the labour market and the rise of economic inequality. The rapid growth of cities also comes with an environmental cost, with congested urban areas responsible for more than 70 percent of global CO2 emissions.
Partnerships between the public and private sector have long been championed as central to solving the deep-rooted and systemic issues facing urban areas. Yet too often, solutions offered by private enterprises focus on fixing a specific problem, resulting in a lack of interoperability and no sustainable business model for future use.
“At Mastercard, we believe that the development of smart cities in the Middle East and North Africa will depend on three main factors: effective partnerships between various industry players to drive a collective impact, provision of digital identity, and of course, technological innovation. But, as more and more companies enter the smart cities space, it is important for us to never lose sight of the main purpose of our ‘smart’ tech, which is to advance more inclusive, prosperous and liveable cities for our communities,” says Khalid Elgibali, Division President, Middle East and North Africa, Mastercard.
“This is why stakeholders who are working on these solutions should always be in conversation with one another to adopt a more holistic approach to problem-solving – one that places ‘people’ at the centre of innovations.”
While many countries such as the UAE are leading the ‘smart city’ movement in the region, 86 percent of the population in MENA is still unbanked and lacks access to even basic formal services. Providing a digital identity can serve as a critical first step towards helping governments pave the foundation of ‘smart cities’ by including underserved populations into the formal fold.
“Countries like Egypt are achieving this by partnering with us to link citizens’ national ID to the existing national mobile money platform, which has enabled 54 million Egyptians to contribute to the formal economy, approximately 65 percent of the population,” adds Elgibali.
It is also important to remember that by 2025, MENA is expected to have 1.1 billion Internet of Things (IoT) connections. However, at the same time the lack of digital identity prevents public sector from leveraging the power of the IoT revolution for the greater good. A secure digital identity will allow citizens to quickly connect with a range of essential services – from public transportation to health.
The development of ‘smart cities’ in the region also relies on the successful implementation of the ‘Public-Private-People (3P)’ model and data analytics, which are key enablers of the technologies that will open doors to the cities of the future.
Take, for example, Mastercard’s City Possible programme that connect cities with academia and businesses and identifies common challenges that can be best addressed through collaboration. Dubai has already become a founding member of the programme that builds on the idea that multiple innovative parties must co-develop solutions to the biggest challenges facing our urban environments. No one company or one city can tackle these issues alone.
The next stage of the City Possible model empowers partners to pilot solutions in regional labs around the world, where stakeholders will build, test, and pilot products that answer the crucial urban challenges of our age. After a solution has been piloted in a specific location, learnings from that experience will be used to further the success of future projects elsewhere.
This knowledge-sharing process saves critical time, energy, money and resources, which can subsequently be channelled into other endeavours.
All of these examples have one thing in common – innovation. Innovation across industries will be key to catalysing the development of these cities of tomorrow that will shape our tomorrow. Most importantly, technological innovation will be central to ensuring that our communities can truly benefit from the rapid pace of progress the world is enjoying today.
By putting technological advances to good use, governments can effectively respond to urbanisation at a time when digital transformation is changing the present and future of developing and underdeveloped countries.
Therefore, economies that can think ‘smartly’ about this transformation are the ones that can best turn people’s necessities into innovations.
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