The latest update from the United Nations on global urbanization trends is a powerful reminder of the most important of all drivers for smart city development: population growth. World Urbanization Prospects, the 2014 revision reaffirms the core findings of previous studies but also further highlights the dramatic changes that will occur over the next 3 decades.
Today, the world’s urban population is close to 3.9 billion. It will reach 6.3 billion in 2050, by which time two-thirds of the world’s population will be living in cities. Nearly 90% of the increase in urban population will occur in Africa and Asia, and three countries alone – China, India, and Nigeria – will account for 37% of the 2.5 billion new urban dwellers. Although more than half of the world’s urban citizens live in Asia today, the continent is only 48% urbanized and only 40% of Africans live in cities. By 2050, Africa will be 54% urbanized and Asia will have reached 64%.
Percentage of Population in Urban Areas: 1950-2050
(Source: United Nations)
China and India Focus on Urban Infrastructure
China’s response to these pressures has been well-publicized. The central government plans to invest up to $1 trillion in urban infrastructure during the 12th Five-Year Plan. China’s Ministry of Housing and Urban and Rural Development (MOHURD) is currently assessing plans from 193 cities that are competing for up to $70 billion in investment to smart city development programs. In March 2014, the Ministry of Finance released details about the National New-type Urbanization Plan (2014-2020). The government has stated a desire to develop a more inclusive path to urbanization that will benefit more citizens, improve the quality of life, and reduce the environmental impact of new developments.
India has taken longer than China to embrace urbanization as part of national policy. As a result, despite the rapid growth of cities, like Mumbai and Delhi, and the global role of Indian technology suppliers, investment in the urban infrastructure has lagged economic development. After decades of attempts to hold back the tide in favor of the traditional role of rural communities, there is a now a greater focus on the needs of the expanding urban population.
100 New Cities
India’s main smart city initiative to date has been the Delhi Mumbai Industrial Corridor (DMIC). The development is intended to spur manufacturing and urbanization across a broad swath of northern India, with seven new cities planned and a total investment of $90 billion. The new Indian government elected in May 2014 has put urban development at the core of its program and declared a target of building 100 new cities by 2022. It has allocated around $1 billion for the program in its first budget. According to M. Venkaiah Naidu, the new urban development minister, the planned cities will employ the latest technology and infrastructure, including advanced waste management and transportation systems.
The vast expansion in the urban population and growing expectations among city dwellers for better quality services and infrastructure will drive demand for smart city solutions across Asia Pacific over the next decade. Navigant Research’s latest Smart Cities report estimates that a total of $63 billion will be invested in smart city technologies in Asia Pacific between 2014 and 2013, more than one-third of a global investment of almost $175 billion.