Smart cities

Throughout most of history, the majority of the world’s population lived in rural areas and only a small proportion of people lived in urban areas. But this trend has changed significantly in recent year as now more and more people live in urban areas.

This trend of rapid growth is called urbanisation and there are a number of negative potential impacts as a result. Problems include unemployment, poor housing conditions, air pollution from increased traffic, crime and disease which all threaten sustainable development.

In the Caribbean, one of the problems cause by rapid urbanisation is a housing deficit that has caused a large proportion of the population to live in informal settlements and poor housing conditions, which hinders the economic development.

But in spite of these adverse effects, urbanisation and have a positive impact on economic development. Cities are often more efficient than rural areas and less effort is needed to supply basic amenities such as fresh water and electricity.

The development of the smart city is an important element in ensuring the sustainable urbanisation across the Caribbean.

But for this to happen, more focus is needed on strengthening accounting, financial management and governance, over and above just focusing on technology. This sentiment is echoed in a new report by ACCA (the Association of Chartered Certified Accountants) titled Smarter Cities, Simpler Cities.

Cities are defined as ‘smart’ not just by using technology, but in their ability to support an end-toend process that sees resources used efficiently to create viable outcomes that improve the quality of life for citizens.

There are many global smart cities including South Korea’s tailor-made Songdo to Amsterdam and Singapore. In India in particular, the government’s Smart Cities Mission has identified 100 smart cities to be created or retrofitted with smart attributes.

The rise of the smart city is coinciding with significant areas of technological innovation – such as the Internet of Things (IoT), Big Data analytics and open standards – and all this has the potential to revolutionise everything from waste management to traffic reduction. It’s necessary for smart principles to be embodied in the skills of key professionals, as much as in the city infrastructure itself, With the rise of smart cities, it has become vital for professions like accountancy, to adapt in an evolving age. There’s an urgent need for professional accountants to develop their own digital capability and understanding in order to provide the expert guidance (in areas like cost-benefit analysis for example) and strategic counsel necessary to shape the city of the future.

More broadly, in many cities across the world there is a move for decentralisation with more authority being transferred from central governments to the local governments. This has implications such as greater budgets and responsibilities for finance staff at city administration level, and accountancy capacity building in this space will be important.

Part of this capacity building will be the creation of ‘professional accountants’ who go beyond recording historical performance.

This involves various aspects, but having the ability to communicate effectively – which is critical to breaking siloes in an often traditional public sector environment; and, acting as the ethical conscience of the organisation with respect to managing public money in the public interest.

Investment in infrastructure in the Caribbean is hot the cards now more than ever, especially as The Inter-American Corporation for Infrastructure Financing (CIFI), a leader non-bank financial institution dedicated to run projects in Latin America and the Caribbean, has decided to move its headquarters to Panama City.

The objective of this decision is to enable its operations to be closer to the region to further boost its activity there and play a greater role in economic development in the region.

Across Asia and Africa, the development of the smart city is not a utopian ideal but a social necessity: rapid urbanisation is creating unique pressures on local economies, environmental impacts and the challenges of ageing populations. India alone expects to add about 300 million city dwellers by 2045. So as new centres of urbanisation emerge around the world – smart cities offer a ray a hope to ensure that the journey of many of these new urban centres can benefit from a planned, smart approach that safeguards living conditions for future generations.