The Gulf is counting on its smart cities for a sustainable and profitable future

The Gulf region is charging ahead with smart city plans, fuelled by ambitions to become a trillion-dollar digital economy by 2025.  

As the Gulf Cooperation Council (GCC) looks to diversify its economies and forge a sustainable future, regional governments are enacting plans for smart mobility, smart infrastructure and smart buildings. 

Investment in Middle Eastern smart city infrastructure is rising – one report from IDC says annual Middle East investments in smart city technologies will reach $2.3bn by the end of 2021.  

The smart city approach has long been championed by Gulf nations as a means of rapidly addressing the region’s challenges of population growth and increased consumption, while unlocking economic and sustainability benefits. Abu Dhabi’s Masdar City – launched in 2008 as the world’s first sustainable smart district – has paved the way for a slew of smart city projects across the GCC. 

Billing itself as the “greenprint” for future cities, Masdar City offers a template for sustainable urban development. Its buildings consume 40% less energy and water than similar conventional properties, while power demand is offset by a 10MW solar power plant on site and 1MW of rooftop solar panels. By 2030, the city will be home to 50,000 residents and a base for 40,000 professionals and sustainability research students. 

The United Arab Emirates (UAE) is also home to innovative districts such as Sustainability City and Dubai Silicon Oasis, among others, which champion connectivity and sustainability as a way of life. Another notable upcoming smart district is Neom, Saudi Arabia’s $500bn zero-carbon city, which will cover an area the size of Belgium by 2025. 

The UAE will also soon be home to Desert Rose City, a city of 160,000 people that will produce 40,000 gallons of drinking water a year, as well as 40% of its own electricity. And the Dubai Expo, which runs from October 2021 to March 2022, aims to be energy-self sufficient and recycle all its waste from within the Dubai South smart city district. 

Mastercard, Smart Dubai and Expo 2020 Dubai recently jointly launched the Building the cities of the future report. The survey revealed that the top three resident expectations of a smart city were “environmentally friendly business practices, paperless government services, and fast, affordable, city-wide internet connectivity”.  

The majority (67%) of respondents said they expect their smartphones to be the primary channel to access city services. Respondents cited ultra-fast mobile connections, driverless taxis and virtual medical diagnoses from artificial intelligence (AI) doctors as the most exciting innovations in the cities of the future. 

More generally, Gulf governments have put the next-generation technologies that power smart cities – such as AI, blockchain and the internet of things (IoT) – at the heart of their national strategic visions. In 2019, the UAE achieved first place among Arab countries and fourth place globally for launching and deploying 5G networks.  

The Abu Dhabi Department of Urban Planning and Municipalities is nearing the end of a five-year pilot, launched in 2018, dubbed the Zayed Smart City Project. The initiative successfully manages large parts of the capital’s infrastructure through technology and IoT. 

And as a testament to their digital readiness and ambitions, both Abu Dhabi and Dubai led the Middle East and North Africa region in the 2019 IMD Smart City Index, which ranks 102 cities worldwide.  

According to Jebin George, senior programme manager, customer insights and analysis at IDC MEA, rapid urbanisation is a key trend in countries both regionally and globally. “Soaring urbanisation rates have major implications for society, the economy and the environment,” he said. “One of the major challenges nations face today is creating livable cities – making cities economic cornerstones, while also managing energy needs, pollution, traffic congestion and public safety.

“Today’s cities are relying on digital technologies to enable urban digital transformation and address pressing civic and environmental challenges.” 

George said GCC countries specifically would be relying on smart cities to generate “new value creation” as the region moves away from oil as its principal revenue generator. 

“There are numerous regional initiatives running to make existing cities smarter,” he added. “This kind of heavy infrastructure spending should be converted into GDP value creation and job creation. The impact will be most visible in sectors such as government, transportation and utilities.” 

It is estimated that by 2030, the world will have 43 mega-cities, each with more than 10 million inhabitants. According to Tariq Aslam, head of Middle East at software firm Aveva – which is working on several live smart city projects across the Gulf – converting existing infrastructure to smart infrastructure is the key to improving cities.  

“Smart cities enable leaders to better serve citizens and businesses, and enhance the quality of life for everyone,” he said. “Automation of resources with AI and IoT technologies utilised by smart cities reduce costs significantly, smart city sensors ensure resources are used efficiently, while robust connectivity serves to improve the city’s performance, which in turn can attract an inflow of talent and lead to the rise in overall economy of the city. 

“Digital capabilities are increasingly acting as a barometer for economic resilience in this ‘new normal’. With unified data and analytics, smart city operators are empowered with better information, which means they can make more informed decision to optimise operations for the new environment. Continuous learning is also redefining the city’s competitive advantage.”

Aslam said Middle Eastern countries have been deploying smart city technology for more than a decade, with Dubai leading the charge in implementing innovative and disruptive technologies as they become available. “Being a smart city has definitely helped Dubai and Abu Dhabi in their pandemic preparedness, compared to other cities around the globe,” he said. 

According to Hazam Galal, global lead for cities and local government at PwC Middle East, the UAE is the most advanced smart city pioneer in the region, but countries such as Saudi Arabia and Qatar are catching up quickly. 

“Abu Dhabi has been traditionally strong on security and mobility, while Dubai has pioneered in areas such as tourism,” he said, adding that the Gulf region has been quick to respond to Covid recording and vaccination management because its governments have a firm digital base. 

“All of the Gulf countries were quick to react to the pandemic – there are global lessons to be learned from them,” added Galal. 

In the past decade, the GCC and global countries have moved from a place of curiosity and awareness to the implementation and scaling up of smart city technology, he said. “The GCC aspires to become a fully fledged knowledge economy – which can only be built on talent and data. Data is another source of wealth – by understanding information, you can transform it into wealth.”