Opinion: The future of the city is smart and sustainable
The march towards urbanisation is inexorable. COVID-19 may have dampened its pace temporarily, but cities continue to offer the most efficient means of organising societies, and serving up the best economic opportunities.
Yet, alongside the benefits of high density living are some very tangible externalities - congestion, transportation systems under duress, lurking security threats, proliferation of diseases and intense competition for utilities, to name a few. To address these issues, become smarter and greener, as well as enhance the overall quality of life for communities, cities around the world are rapidly adopting smart city technologies: solutions that enable societies toward a more connected, resilient and sustainable future.
The modern world is experiencing an explosion in bandwidth, reduced latency, and network coverage at lower cost per connection node. In the last decade, the cost of Internet of Things (IoT) sensors has fallen more than three-fold, leading to more wireless sensors being retrofitted onto buildings, critical and transportation infrastructure at a rapid clip.
These sensors detect and show what’s going on in real-time. Akin to MRI scans revealing parts of the anatomy inside the body, useful insights are derived to enable predictive maintenance and reduce unplanned downtime. It leads to improved public transportation efficiency and reliability, and reduced road congestion. Automation via robotics at workplaces and facilities such as hospitals also become viable. Complexities are more readily abstracted down to simple phone applications, be it for efficient utilities management, prompts for improvement actions by city councils, or even for scheduling and payments of seamless public transport journeys.
The proliferation of sensors, artificial intelligence, and data measurement platforms yield new benefits for security, bringing higher levels of situational awareness to cities. Remote surveillance and crowd sourcing, combined with sensemaking help detect anomalies and enable timely intervention. Even a humble but ubiquitous lamppost can be wired up to serve as a city sentinel, helping to monitor traffic, potential threats and environmental changes. In the current pandemic situation, smart city technologies offer increased and improved options for expeditious contact tracing and enforcement of safe distancing.
New combinations of connected technologies are driving greater efficiencies in utilities. Across various cities, utility systems are being retrofitted to move closer to net-zero outcomes. Intelligent power grids enable optimal injection of renewable energy. Smarter water grids reduce network leakage. On-demand lighting, air-conditioning and waste management allow the optimal matching of services and supply to human demand.
In land transportation, the need for car ownership is reducing gradually as more efficient and affordable, seamless end-to-end mass transit options are offered to commuters. Meanwhile, we have also witnessed a transformation with the rollout of shared and autonomous public transportation, facilitated by Mobility-as-a-Service applications, and a shift to electric transportation platforms, which significantly decrease traffic congestion, pollution and the carbon footprint of every passenger.
A trajectory of growth
Given these opportunities, it is not hard to see why a burgeoning spectrum of businesses, be they startups, technology giants, engineering powerhouses and real-estate developers, are all coming round and pivoting, to capture these abundant new opportunities.
ST Engineering has been in the smart city business for many years, with more than 700 projects in over 130 cities under its belt, including its contributions to Singapore’s Smart Nation efforts. However, against the backdrop of growing smart city opportunities and intensifying competition, the creation of Urban Solutions (URS) as a Global Business Area (GBA) to drive the Group’s smart city strategy and growth is timely.
In picking up the mantle as the go-to-business for the Group’s smart city initiatives, and the key account holder for cities around the world, URS will continue to help cities transform into smarter and greener spaces. Today, Urban Solutions has a good starting point with a comprehensive suite of solutions covering smart metro, intelligent road traffic management, fleet telematics, IoT and data platforms, alternative data connectivity, cloud-enabled smart buildings and estates, intelligent security systems, robotics for healthcare and even urban cooling innovations. We intend to pivot further and potentially bring forth new capabilities including digital mobility payments, electric vehicles, autonomous vehicles, intelligent energy management, and other digital offerings with a single-minded aim to move metropolises further along on their journeys to be smart cities. URS is well poised to help cities overcome key urban challenges and transform into connected, resilient and sustainable cities of the future.
Asia-Pacific seeing surge in cleantech-focused VC funds
Cleantech became one of the hottest investment sectors among VCs a decade ago with cleantech VC deal volumes doubling between 2005-2007, according to Brookings Cleantech Venture Capital report. And while the global recession in 2007-2008 halted many investments in cleantech, the sector has gained traction over the last few years.
Asia Cleantech Capital is an early-stage investment firm focused on clean tech projects and companies in the APAC region; DreamLabs Innovation is a US$50m fund established to invest in disruptive, scalable, people-focused companies in areas including cleantech and energy; and ENGIE New Ventures runs a US$61.2m fund dedicated to making minority investment in tech startups in sustainable energy including across Asia.
More recently, in 2021, in light of the pandemic and increasing focus on sustainability, there’s been a surge of cleantech-focused VC funds being set up both globally and across Asia-Pacific with the aim of supporting startups that are developing advanced technologies to tackle global problems, whether renewable energy or food waste.
Climate Solutions Partnership unveiled
Just last week, HSBC, World Resources Institute (WRI) and WWF unveiled their Climate Solutions Partnership (CSP), which aims to unlock barriers to finance for innovators developing climate solutions with a focus on startups in Asia developing carbon-cutting technologies, projects that protect and restore biodiversity, and initiatives to help the transition to renewable energy.
Backed by US$100m of philanthropic funding over five years from HSBC, and part of the banking giant’s climate strategy, this partnership will help identify future business opportunities for sustainable innovations, and mobilise finance, including helping startups and next-generation new sustainable approaches.
Spotlight on Japan and China
Set to launch this month is a new cleantech-focused fund targeting investments in Japan, Europe and the US. Sony Group, Suzuki Motor, Mizuho Bank and 15 other Japanese companies have joined forces on a startup investment fund focused on companies that are developing technologies related to digital transformation and decarbonisation.
The fund, set up by California-based VC firm World Innovation Lab (WiL) with a maximum fund size of US$911m and a lifespan of 10 years, will invest in 50-60 startups in the first 3-5 years. Focused on the environmental sector, the fund is set to invest heavily in companies with digital technology, such as software and data analysis tools that can help streamline the operations of large companies, and those developing advanced technologies to tackle global problems, from water shortages to development of plastics-free products.
And the recently launched TDK Ventures, the corporate venture capital arm of Japanese multinational TDK Corporation, is scouting for more industrial tech investments in Asia and especially China, following the recent close of its US$150m TDK Ventures Fund II. This fund is targeting early-stage, global investments in ‘hard tech’ spanning the advanced materials, industrial, robotics, energy, autonomous vehicles, electric vehicles, clean-tech and health-tech verticals.
“This new fund renews our commitment to supporting hard-tech entrepreneurs creating innovations for the greater good,” says Nicolas Sauvage, managing director, TDK Ventures. The materials science field has always been part of the technology sector’s foundation, and as such, it can help the sector address some of the world’s biggest challenges, including sustainability.”
ADB Ventures brings a more sustainable future to Asia
Back in March, ADB Ventures, the Asian Development Bank’s venture capital arm, announced its first two investments since its founding in 2020. ADB Ventures, which aims to pursue environmental, social and governance (ESG) investments in verticals such as FoodTech, AgriTech, HealthTech, FinTech and CleanTech, revealed two green investments, funding Indian electric vehicle manufacturer Euler Motors and Indian CleanTech startup Smart Joules.
The firm is currently partnered with the Ministry for Foreign Affairs of Finland, the Climate Investment Fund, Nordic Development Fund, Korea Venture Investment Corp., and Korea’s Ministry of Economy and Finance to help bring a more sustainable future to Asia.
Nordic Development Fund managing director Karin Isaksson says: “ADB Ventures represents a timely complement to traditional development approaches through the involvement of the private sector in addressing critical climate change challenges. We are pleased to be working with the ADB on this important initiative that has particular relevance in the post-COVID recovery.”
And finally, while not exclusively tech-focused, last month Singapore-headquartered global gaming firm Razer announced the launch of its new (and first) sustainable US$50m fund. The Razer Green Fund aims to invest in environmental and sustainability startups with up to US$1m funding for startups in the seed and series A stages.