Why Are Smart Cities Booming in Asia Pacific?

Why Are Smart Cities Booming in Asia Pacific?

The promise of smart cities has been captivating the technology industry for more than a decade. The idea is simple – embed smart technology everywhere to make your city better and your citizens healthier, safer and more prosperous. While adoption has been slower in some regions, that has not been the case in Asia-Pacific (APAC). And, with recent shifts such as wider availability of low-cost internet of things (IoT) sensors, artificial intelligence (AI) and distributed hybrid multicloud IT architectures, smart city innovation in APAC continues to accelerate. What may not be as obvious is why APAC has embraced smart city technologies so fast.

Smart cities and interconnection in APAC

In their recent report, “Smart Cities: Shifting Asia”, UBS projects that APAC will account for 40% of the global addressable market growth for smart city projects, or $800 billion by 2025.i Unsurprisingly, interconnection growth in the region is expected to mirror that trend. According to the second annual Global Interconnection Index (the GXI), APAC will be the second fastest growing region for Interconnection Bandwidth, with a projected 51% CAGR from 2017 to 2021, reaching 2,220 terabits (Tbps) by 2021.

Source: The GXI, Volume 2 published by Equinix

The GXI, a market study published annually by Equinix, analyzes growth in Interconnection Bandwidth – the total capacity provisioned to privately and directly exchange traffic with a diverse set of participants at distributed IT exchange points inside carrier-neutral colocation centers.

Trends driving the smart city boom in APAC

What is driving the rapid growth of interconnected smart cities in APAC? There are a few key trends unique to the region:

1. Megacities swarm:
The world is flocking to cities, but the swarm is even more intense in APAC. Over half of the world’s population lives in APAC and the region is home to 60% of the world’s megacities (population > 10 million). That number is expected to climb to 62% by 2030.ii This rapid urbanization is driving IT buildout and Interconnection Bandwidth growth to sustain APAC’s expanding digital market. Asia is the fastest growing region in the global economy, with 51% of the world’s total online population according to the Digital Asia report by The Economist. Here are a few indicators:iii

  • More than 44% of the growth in the global digital video market by 2022 will come from APAC.
  • Demand for capacity growth in submarine cables for APAC has been above 40% since 2008, and investment in new cable construction is estimated at $7.6 billion between 2015 and 2020.
  • Data centers are on the rise in APAC and they are big – capacity is expected to double over the next three years, driven in large part by demand for hyperscale capacity.

Supporting this exploding urban demand requires proximity between digital services and users. Private traffic exchange enables businesses and smart city service providers operating in these megacities to overcome security challenges, as well as those related to latency, scale and availability. That’s why Interconnection growth in APAC is expected to remain strong, particularly for organizations that need to privately connect to Network, Cloud and IT Providers. As their customer base grows, APAC based ride hailing services such as Grab are challenged with increasing volumes of data from multiple sources at the edge. Data management services provider, iguazio, empowers these companies to manage their data intelligently and gain actionable insights for better efficiency and revenue growth. Vice President of Business Development, Steven Lund said, “Partnering with Equinix enables our customers to work with any cloud vendor, solution or location they choose. It provides us with the freedom to run with multiple service providers, on-premises, in the cloud or as a hybrid architecture out at the edge, anywhere in the world.”

2. Geographic and Environmental Risk:
Squeezing half the world’s population into just 30% of the global land mass brings its own host of challenges.iv More people, more cars, more trash are straining existing city infrastructures in APAC to the breaking point. And, typical big city challenges like pollution, energy usage, waste and natural disaster risk are significantly intensified due to finite resources. Consider these indicators:i,iv

  • 99 of the 100 most polluted cities in the world are in APAC.
  • Buildings consume 40% of energy in most countries, but in Asian metros like Hong Kong or Singapore, buildings consume up to 90% of the national electricity.
  • Over a 10-year period ending in 2017, Asia had the largest proportion of natural disasters (40%+), share of people affected (79.8%) and estimated damages (45.4%).

Smart city applications like smart grids and buildings, air and water monitoring, smart transportation, smart waste collection, disaster response and more are helping APAC cities manage their growth more efficiently, sustainably and resiliently. Sensors paired with AI algorithms provide a real-time view of conditions and usage patterns, enabling city systems to intelligently adapt to demand and respond to issues. Fast and reliable network speeds with minimal latency are key to solutions like this that need to collect, filter and analyze vast amounts of data from thousands of sensors and other data sources in real-time. But, for a region already facing significant environmental risk, fast and reliable also needs to be sustainable. Equinix is committed to operating responsibly and our green data centers in APAC have achieved notable recognition for sustainable practices such as LEED Gold certification, SS 564 certification (Singapore) for Green Data Centers and Frost and Sullivan’s APAC Data Center Services Provider of the Year for 2018.

3. Government involvement:
The twin pressure of rapid growth + environmental risk compels APAC governments to be acutely focused on smart urban planning and solutions that can help. Because of that, Asian governments tend to be more willing invest in smart city initiatives and partner with the private sector. For example, some of the goals for Singapore’s Smart Nation initiative, launched by the government in 2014, include reducing energy consumption and dependence on water and food imports. Other APAC initiatives include:v

  • China’s national smart city program: China invested CNY 500 billion (approx. $74.3 billion) in this program, and, by 2017, there were 500 smart cities in various stages of development leveraging IoT, big data, cloud computing and other smart systems.
  • Hong Kong smart city blueprint: The government launched this and invested HKD 50 billion (approx. $6.37 billion) for innovation and technology development.
  • South Korea decided to invest $350 million in 300 companies to help develop an IoT ecosystem within the country. A pilot is being launched in a town southeast of Seoul in partnership with Samsung Electronics and SK Telecom to setup IoT-based infrastructure for renewable energy, medical services and smart cars.

Each of these smart city initiatives in APAC may be pursuing a different mix of strategies, players and technologies. However, they all face a common goal of addressing immediate risks while planning ahead to manage their growth sustainably. A common design pattern for smart cities, leveraging Interconnection Oriented Architecture™ (IOA®) best practices can help accelerate the development of many different smart city applications using advanced technologies such as IoT and AI.

Watch the Interconnections blog for upcoming articles on smart city perspectives around the world. To learn more about digital economy trends in APAC, watch the IDC/Equinix webinar and read the Digital Asia report by The Economist.

If the topic of smart cities fascinates you, check out the whole series below (more to come!).

Part 1: Introduction -Build a Smart City in 3 Easy Steps

Part 2: APAC – Why Are Smart Cities Booming in Asia Pacific? (see above)



[i] UBS: Chief Investment Office, How big is the smart city opportunity in Asia?, UBS, Smart Cities: Shifting Asia, Mar 2019.

[ii] United Nations, The World’s Cities in 2018, [Chart: Population distribution by size class of settlement* and region, 2018 and 2030].

[iii] TechNavio, Global Digital Video Content Market 2018-2022, June 2018; TeleGeography, 2018 Submarine Cable and Capacity Pricing Trends in Asia-Pacific, Blog and Presentation, Feb 2018; Data Centre Dynamics, What to expect in APAC in 2019, Jan 2019.

[vi] United Nations Development Programme (UNDP), About Asia and the Pacific; Eco-Business, Of the world’s 100 most polluted cities, 99 are in Asia, Mar 2019; International Federation of Red Cross and Red Crescent Societies, World Disasters Report 2018.

[v] Innovation Is Everywhere, Asia-Pacific is paving the way for Smart Cities, Apr 2017; UBS, The need for smart cities in Asia; CIO, Top 10 Smart Cities in Southeast Asia, Mar 2019.



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