Smart Cities and Logistics...

Ever since the Modi government came to power, there has been a lot of talk about Smart Cities. A total of 100 cities have already been identified which will be elevated to the status of smart cities soon. Why this urgency over the Smart Cities program, what it is about and how is going to make a difference overall? More importantly, what does this concept of Smart Cities in India mean for overall infrastructure in general and logistics infrastructure in particular?

Why Smart Cities are so important today?

Year 2014 happens to be an important year in the global process of urbanization because it is in this year that the world urban population will actually exceed the world rural population. The process of urbanization that began over 100 years ago is finally overtaking the original rural population. More importantly, over the next 30 years the global urban population is likely to vastly outshine the global rural population. Natural and logical as this may sound, it has some serious implications for infrastructure, urban planning and logistics networks. Let us understand a few such key challenges:

• Existing mega-cities will be just incapable of keeping pace with the growing urbanization. Most of the world’s large cities like New York, Tokyo, London, Mumbai, Sao Paulo, and Hong Kong are all thickly populated and are approaching their point of saturation.
• The need of the hour is to bring second-rung cities up to mega city standards so that urbanization can proceed smoothly.
• This mega shift from rural to urban segments will call for massive investment in infrastructure, logistics, connectivity and economic opportunities.
• Smart Cities are all about letting tier-2 cities catch up with the mega cities in terms of physical, economic and social infrastructure.
• What needs to be remembered is that 90% of the growth in urbanization will actually happen in emerging markets like India, China, Latin America and Africa.

India in a sweet spot on urbanization

Historical experience has shown that urbanization tends to be slow till the time the total urbanization touches 30% and then tends to pick up momentum till the time this urbanization stabilizes at around the 60% mark. With 31% urbanization in India, it is in a sweet spot as far as the big push to urbanization is concerned. That means the migration to urban areas is likely to explode in India over the next 25 years. This will be impossible unless there is a clear cut plan to equip India’s smaller cities with the right infrastructure, environment, logistics and opportunities so as to handle this rising tide of urbanization. It is in this context that the Modi Government has come with the idea of creating 100 “Smart Cities” to be ahead of the curve in this trend shift.

Understanding the soft aspects of “Smart Cities”

There are 3 key soft features which will comprise a Smart City. Firstly, Smart Cities will have to be globally competitive in terms of attracting investments and top-of-the-line professionals. The ease of doing business will also matter. Secondly, the smart city should be a sustainable model that would enthuse professionals to make a shift. Last, but not the least, the Smart City must offer quality of life in the form of safety and security, access to health and education services, quality public services and a higher level of transparency and accountability.

Understanding the hardware of Smart Cities...

• Smart cities are also defined in terms of the quality of infrastructure. Let us look at some of the key points here:
• Smart Cities pre-suppose quality physical infrastructure in the form of housing stock, efficient sewerage and sanitation system, effective energy supply and waste management as well as assured quality water supply.
• Smart Cities must also have institutional infrastructure to support. This includes transparency, quality governance, participatory approach to addressing civic issues, safety, security and maintenance of law and order.
• To attract quality talent, social infrastructure is a must. This comes in the form of quality primary and secondary education, primary healthcare services at affordable rates as well as leisure considerations that improve the quality of life substantially.
• Last but not the least, a key infrastructure requirement is the economic opportunities in the form of jobs, support services, quality banking, investment and insurance services, incubation centers for entrepreneurs, special zones for reskilling etc.

      Learning from other Smart Cities:

      There are some important Smart Cities in the world like Singapore, Seoul and Barcelona which were originally conceived as smart cities and have over the years emerged as important centers of trade, commerce and finance purely because they could attract quality talent and companies to do business through their transparency and business-friendly environment. Most of the smart cities had the following common features:

•         Focused on a mix of employment and entrepreneurial opportunities to give an opening to a wide spectrum of professionals.
•         Invested heavily in transport infrastructure of the highest quality including Bus services, train, metro and monorail services as well as efforts at decongestion of these cities.
•         Focus on public transportation and discouraging private transport.
•        Tweaking the road infrastructure through expressways, sub-ways, ring roads, by-passes etc.
•         High quality telecom and communication infrastructure in the form of high speed internet, telephone connectivity, IT infrastructure, physical movement of goods, posts etc.
•         High quality logistics infrastructure in the form of transportation, support services, trade support etc.

      Fine tuning the logistics infrastructure:

       The concept of Smart Cities will be pointless unless there is sufficient focus on the logistics infrastructure. There must be ease of moving goods in and out of the city; something that Singapore does so efficiently to emerge as one of the world’s busiest ports. Secondly, there is the need for a quality last-mile transport infrastructure which can be assured, remunerative and also efficient. Thirdly, there is the need for a network of warehouses for storage of goods in quality facilities as well as the ability to move them from point to point quickly in a cost-effective manner. One of the key things that the government will have to focus on is the quality of logistics infrastructure, especially the transport and warehousing infrastructure.