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What do Asean region cities want from tech startups?

Malaysia and Singapore seek to connect UK tech startups to their smart city plans

This article can also be found in the Premium Editorial Download: CW Asia-Pacific: CW ASEAN: August 2016:

Asean’s two biggest economies are looking for IT partners beyond their shores to support their smart city initiatives – and some UK-based firms have been given a grand tour.

From Dubai to Amsterdam, and from Manchester to Chicago, every progressive city on the planet wants to be a smart city, and the urban areas of Southeast Asia are no exception.

A smart city is predicated on the convergence of many things – the meeting of industrial IoT with consumer IoT, ubiquitous connectivity and mobility, big data-enabling contextual awareness, and governments collecting and providing IoT infrastructure (M2M) through sensors and data capturing and sharing. And all this alongside a thriving startup ecosystem.

At the core of it, smart cities are about improving quality of life and creating more opportunities.

In Southeast Asia, a new digital silk road is being carved out, dotted with ambitious cities such as Singapore, Kuala Lumpur and Johore in Malaysia, Manila in the Philippines, Bandung and Makassar in Indonesia, and Bangkok in Thailand, to name but a few.

This means opportunities for local and foreign enterprises and startups to help the region’s governments to build smart cities.

To learn more about such opportunities in the Asean region, a delegation of 10 technology companies from the UK recently toured Kuala Lumpur and Johore in Malaysia and Singapore to pitch to governments, the private sector and investors.

Organised by Innovate UK and UK Trade & Investment (UKTI), the Connected Cities Mission provides opportunities for UK SMEs to share expertise on how their innovative urban solutions can contribute to the smart city vision of Asean countries.

“These companies’ innovations are key to addressing the challenges that large cities face,” said Niraj Saraf, lead technologist for urban living at Innovate UK. “These challenges include growing populations, increased demand for energy and the integration of technology into citizens’ everyday lives.

“We believe these companies have huge growth potential and could become a vital part of the global connected cities industry in the near future.”

Read more about Asean smart city developments

Comprising 10 states, the Asean region is among the fastest-growing in the world, with a population of more than 600 million. Between 2007 and 2012, it recorded cumulative economic growth in the double digits, and has a combined gross domestic product (GDP) of nearly $2.8tn (2015 estimate).

People in the region are highly connected (360 million internet users by 2020), there is an emerging middle class, a young and educated workforce, and rapid levels of urbanisation.

One the region’s biggest strengths is its integration under the umbrella of Asean, and the Asean Economic Community (AEC) further strengthens its position. Singapore is at its heart and provides opportunities not just in the city state – which calls itself a ‘smart nation’ – but also beyond its shores.  

“The plan to establish Asean as a single, but diverse economic market presents a rare business opportunity over the next decade,” said Sonny Masero, founder of UK-based startup Demand Logic. “As one of the most developed countries in the region with low corruption, a government open to innovation and inward investment, Singapore is well positioned for foreign companies.”

Priya Prakash, founder of UK startup, D4SC, who was also visiting Singapore as part of a UK Trade Mission, added: “Singapore is the best place for any tech business to set up and get going at the speed it needs to compete globally, as well as with easy access to the Asean markets.”

Smart-city hub

As part of Malaysia’s ambitions to become a smart-city hub in Southeast Asia, the Malaysian government has been progressing on its own smart city concepts, especially in major cities, economic development zones and new urban housing areas throughout the country.

Several Malaysian government agencies, such as the Malaysian Industry-Government Group for High Technology (MIGHT), Multimedia Development Corporation (MDeC) and Iskandar Regional Development Authority (IRDA) addressed the UK mission to help the companies seize the opportunities in Malaysia.

“To ensure high success in the delivery of sustainable cities, the bridging of market, technology and funding is critical,” said Nik A Faizul Bin Abd Mallek, managing director of MIGHT Technology Nurturing (MTN), a subsidiary of MIGHT. “We have an important role in establishing future city needs through a five-year capital expenditure plan. This plan will induce partnerships for the city and new markets for the private sectors to invest.”

The UK is already a leading investor in Malaysia, with an estimated cumulative investment of $26.5bn over the past 30 years. Malaysia is the UK’s second-largest trading partner in Asean, and the two countries aim to double bilateral trade from $5.3bn to $10.6bn.

Philippines and Thailand

The region offers other opportunities beyond Singapore and Malaysia. The Philippines, for example, is developing its first smart city – Clark Green City, a 30-year development project spread over an area of 9,450ha. The city requires smart technologies for traffic signalling, e-parking, street lighting, energy and disaster resilience. In terms of infrastructure and public-private partnership opportunities, projects worth $2.2bn have already been rolled out in the country.

Similarly, Thailand, which is the second-largest buyer of ICT products in Asean, has announced a digital economy plan and is developing three smart city provinces – Phuket, Pattaya and Chiang Mai. According to Nipapat Hamilton of UKTI Bangkok, the Thai government has also announced an IoT City Innovation Centre, a National Innovation Agency and a Smart Thailand initiative.

Under its smart city development plan, the Thai government’s current focus is on developing Phuket Smart City. Hamilton said areas ripe for smart city technologies include digital infrastructure, e-commerce, e-governance, transport tech, e-health, agri-tech, education tech and cyber security. 

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