The future of urban transformation in Asia Pacific

Amid a global landscape characterised by economic and geopolitical turmoil, the Asia Pacific region (ASPAC) has remained resilient, with growth rates on an upward trend.¹ Emerging economies like China, India, Indonesia and Vietnam are expected to fuel global growth over the course of the next two decades.²

At the heart of this economic growth story is the city, an epicenter of trade and commerce, diverse demographics, a growing consumer class and expanding digital adoption.^3  4Combine ASPAC’s 100 largest cities and you get the world’s biggest economy, a US$21.9 trillion behemoth featuring fast-growing cities like Bangkok, Bengaluru, Ho Chi Minh City, Hyderabad and Shanghai.⁵

In ASPAC’s biggest cities, towering offices sculpt the skyline while railways and thoroughfares ribbon the landscape — but, behind these impressive facades, the breakneck pace of urban development is testing (and sometimes exceeding) the limits of available transport, housing, energy and health infrastructure. In Bengaluru, for example, vehicular traffic costs the city an annual US$2.5 billion in weakened productivity and inefficiencies that constrain its growth potential.⁶

It is not just congestion that is lowering the quality of life in the region’s largest metropolitan hubs, but the combined impacts of environmental pollution, congestion, poor sanitation, social inequality and overpopulation. Despite expanding GDP, these conditions are stretching city infrastructure beyond intended capacities.

As urban residents demand a more people-centric approach to urban development, the challenge facing cities is how they can evolve into more livable, sustainable and equitable spaces. Governments, policymakers and urban planning stakeholders can catalyse this change through a blend of policy, partnerships and programming to transform the nature and capacity of city infrastructure.

A major challenge facing cities is the monocentric nature of urban development, with a disproportionate number of people drawn to a handful of neighborhoods, resulting in considerable congestion, income disparities and lopsided infrastructure quality. This is most evident in central business districts (CBDs), characterised by high levels of concentrated urbanisation compared to other areas.

Moving away this will require cities to transition away from single urban cores towards a “polycentric” model with multiple centers oriented around access to urban features and facilities. This approach not only supports the decongestion of CBDs but also brings the city closer to its residents. In a people-centric city, all of citizens’ work, leisure and public service needs are just 15 minutes away — not 30 minutes or an hour away.

Reorienting how cities are built could also create significant socioeconomic gains, a key consideration for governments given the rewards of urbanisation have not been equally shared across all segments of society. One need only look at the sprawl of slums and informal settlements in large ASPAC cities that coexist alongside wealthy districts and neighborhoods. The gulf between them is a tangible manifestation of urban inequality.  

A polycentric model could trigger the development of previously under-utilised urban spaces, allowing for the more equitable spread of wealth across a metropolis. Public authorities in ASPAC could also create an inclusive environment through ambitious policies like infrastructure reform, job generation, or digital technology investments.

Catalysing this change will not be easy, and the challenge may be even greater in older, well-entrenched urban centers, compared to Tier 2 and Tier 3 cities that may have broader flexibility in designing people-oriented infrastructure. Yet, there are already precedents for possible models, such as Sydney’s Parramatta Square and Singapore’s efforts to transform Jurong Lake District into a second CBD.7 8The success of Bangalore’s IT-focused Electronic City suggests that cities could also consider developing industry-specific hubs that can intensify economic growth in certain sectors.9

Digital technologies are, perhaps, among the most potent weapons at cities’ disposal. From easing traffic to reducing energy consumption, existing and emerging technologies can become effective levers to upgrade city infrastructure, and make urban centers more habitable, efficient and sustainable. For example, the city of Dalian in China has deployed cutting-edge energy storage systems to boost power supply reliability.10 Similarly, Singapore's “Smart City Technology” program deployed sensors, data analytics and Internet of Things (IoT) devices nation-wide to improve government-run services like senior and disability care, public transport and safety.11

Digital innovations are also enabling governments to deliver public services to a wider share of the population increasingly seamlessly and efficiently. Under the Digital India initiative, for example, the biometric ID program Aadhaar has helped expand citizens’ access to financial services and SIM cards.12 Across ASPAC, digital technologies are proving to be a valuable instrument in enhancing good governance practices and public service delivery, which will be critical to reducing poverty in the region’s busiest metros and beyond.

The sustainability case for urban tech

Digitalisation could also be instrumental in cities’ sustainability goals, especially given the significant threats posed by climate change to urban infrastructure, power grids, housing, livelihoods and public health. In Guangzhou, China, green solutions are being employed to boost the efficiency of existing energy stations, while smart water and electricity meters are an increasingly common sight at commercial as well as residential units alike. Security cameras and IoT-enabled traffic monitoring and emergency response systems are common at bus stations, highways, city intersections and passenger terminals. These, among other green interventions, are helping the city optimise utility consumption, provide necessary inputs for design and planning of sustainable infrastructure, and provide ability to respond on real time basis.

Indeed, sustainability solutions are often found where data and decision-making intersect. Data harvested from new and emerging technologies can provide governments and developers with accurate insights to manage the impact of urban activities on the environment, and ensure their sustainability efforts are responsive to on-the-ground realities. In Thailand, for example, the Air4Thai project by the government deploys IoT sensors to monitor air quality data for pollution control and mitigation.13

Tipping the scales towards social equality

Investing in digital technologies can also generate significant socioeconomic benefits. For one, digital financial services have helped expand financial inclusion to unbanked and underbanked populations. In Indonesia, for example, government efforts to drive the adoption of e-money are helping bridge gaps posed by its challenging geography and under-developed banking infrastructure.14 In India, artificial intelligence (AI) is changing how people even in rural areas access and utilise banking services. AI-powered technologies like chatbots and virtual assistants are making banking more convenient, customised and efficient.15

Importantly, improved access to digital technology is linked to better poverty reduction outcomes as it broadens access to formal and informal services for the poor, and introduces new avenues for job creation, the most effective way to address economic inequality in our cities.16 The digital revolution in work has strengthened remote employment, effectively bringing jobs beyond the previously-untested bounds of urban hubs and opening up income generation opportunities for people who live in less developed parts.

However, the benefits of national-level digitalisation drives are contingent on effective implementation and strong data privacy legislation, which cannot be overlooked. The presence and commitment of government to invest in digitalising cities and urban innovations will be integral to overcoming systemic barriers, socioeconomic realities and entrenched mindsets.

In some ASPAC cities where development challenges persist, there may be limited budgets for urban digitisation and innovation as public authorities focus on other immediate, seemingly unconnected priorities such as poverty reduction, education or healthcare. Yet, governments and policymakers must come alive to the fact that digitisation can help address challenges in all these areas over the medium to long term. It is not a zero-sum game.

Shifting this mindset could require cities to experiment and get creative with their solutions, though some authorities might be reluctant to invest funds without a big picture perspective on what is possible. Developing tangible, easily replicable use cases for digital technologies at the national level — such as the National Smart Cities Mission of India — could be critical to helping get local governments onboard.17 These could be leveraged in concert with novel financing frameworks that can minimise the cost component of investing in urban digitisation and rejuvenation, especially where cities face multiple, competing priorities.

Governments could also explore opportunities to pair incentives with rigorous regulatory mechanisms to incite further change, especially when it comes to issues like sustainability. In Australia, for example, the Victoria government’s Solar Victoria program addresses climate change by subsidising solar power generation, even as its Gas Substitution Roadmap phases out new residential gas connections. 18 19

While a few ASPAC cities have grown and modernised rapidly, others have fallen behind, nagged by lingering socio-economic and development issues. This diversity of these experiences could open a doorway to collaboration among the region’s governments and urban planners. Each city faces a unique set of circumstances and there is no panacea.

Instead, the region’s economies must engage with one another to share best practices in city development, and exchange insights and resources that can result in better urban management. This dialog is already happening more frequently.

Cooperation to strengthen tomorrow’s cities is not limited to intra-regional collaboration, but also with stakeholders domestically. Across ASPAC, governments are being challenged to relinquish their traditional monopoly on decision-making. The public sector must partner proactively with business and industry, academia, civil society and citizens’ groups on urban planning and development.

Cities, after all, are cradles of collaboration, so their growth must be similarly powered by cooperative efforts.

Today, as the world grapples with the cascading impacts of a changing climate, geopolitical tensions, and economic uncertainty, we are entering an age of transition. From how we source our energy to how we engage in trade or with technology, the underlying infrastructure of society is being tested and reshaped by multiple factors and forces. Myriad trends are emerging, that have the potential to shape the world of infrastructure.

As we look ahead, all stakeholders should have a voice and say in making their communities livable and sustainable, so that meaningful and inclusive progress can be imagined — and realised — for all.