Observer Research Foundation Mumbai

Ideas and Action for a Better India

Smart like Hangzhou

By Sayli Udas Mankikar

Lu Lan, a 28-year-old resident of the scenic city of Hangzhou, 170 km south west of Shanghai in China, does not need to carry a wallet to survive. A plastic Hangzhou Resident Card, which resembles a credit card, is her lifeline. She swipes her card to do just about anything, from withdrawing money from the local ATM, renting a bicycle, hopping on to a bus, buying groceries, accessing libraries and gyms, to grabbing a meal, paying taxes and even booking her hospital appointment. “All our information is on the card,” Ms. Lu says, “even our health details. All we do is top up the money on the mobile application and we are set. It is most convenient for senior citizens, who find it easy to access any place in the city.”

About 21 million residents of Hangzhou enjoy 13 different services on this card. This probably makes it one of the highest information technology-regulated cities in the world. Hangzhou has been declared the biggest beneficiary of mobile internet social services through the Chinese government’s Internet Plus initiative for smart cities for 2016.

Hangzhou, known as the bicycling city of China, is the trade capital of the Zhejiang province, where e-commerce and data management giant Alibaba Group set up its headquarters in 1999. Alibaba and 13 other companies are now working with the local government on public private partnerships (PPP) to create smart service delivery systems for the city.

The giant in the room

Alibaba, which started out as a company with 18 employees in Jack Ma’s apartment in Hangzhou, is now a behemoth headquartered in Hangzhou, with over 9000 employees in its 1,50,000-sq.m. campus and revenues of $15.7 billion in 2016, overtaking Walmart, the world retail giant.

Alibaba pays its dues to the city by throwing open its campus to walkers and cyclists beyond working hours. But its role does not stop there. It is not hyperbolic to say that the Alibaba Group is the progenitor of this revolution that has changed the way this city looks, thinks and functions.

And the government has supported companies like Alibaba, not just by blocking global IT giants like Google from entering their huge market — China has 731 million internet users, according to data by the China Internet Network Information Centre — but also by including them in all their government programmes, like the creation of smart cities.

Lesson: Mumbai has no single giant employer which has changed the profile of the city. And while it does have a small technology industry, it has pretty much ceded the race to be a new economy start-up hub to Bengaluru, Hyderabad and Gurgaon. But it is India’s financial capital, headquarters to many corporate groups. The city, state and national governments need to do more to involve these corporate leaders in the bid to make the city smart.

Technology for the people

In Hangzhou, the smart city initiative runs the world’s largest smart-app-based public bicycle system, Hangzhou on Palm. The system has 38,000 bicycles stationed at 2,500-plus docking points. Last year, 100 new cycle docking stations were equipped with QR codes and bilingual instructions to enable foreigners to use them. And to support this, the city has barricaded lanes running across the city, and special lanes for mobility bikes used by senior citizens.

If all this seems mind-boggling, then the government’s new city project, Hangzhou City Brain, driven by the Alibaba Group, is set to redefine city smartness. It aims to use big data to help the city ‘think’ and make decisions, according to a statement released during its launch.

Under the artificial intelligence initiative to improve urban systems, it will help citizens find out about traffic trends and pre-book parking slots through the city app. There will be face-recognition systems and intelligent cameras that will automatically help deploy public resources and amend defects in urban operations.

Alibaba’s traffic control pilot programme, in the Xiaoshan district of Hangzhou, showed that by controlling signals and predicting traffic trends there has been an 11% increase in speed on a few road sections. This is soon to be extended to other public services such as water supply and garbage management. “In Hangzhou, we are working towards optimum utilisation of city urban data that we generate,” says Benny Chen, India-in-charge of the Alibaba Group ANT, at his Beijing office. “In China, data and information systems are used for chasing criminal vehicles, getting toll charges, among other things. We are working on eye-white recognition systems to achieve 100% security network.”

Lesson: Mumbai’s geography, as a narrow strip of land, brings with it its own unique problems. Biggest among them are lack of seamless public transport connectivity, traffic congestion, and parking scarcity. All these can be tackled through smart data solutions like Hangzhou has implemented. Mumbai already has its own CCTV network for safety surveillance; it could push its boundaries to introduce smart signalling and traffic surveillance and predicting systems, and the Hangzhou story could be a good reference point.

Simpler lives

Hangzhou has had to deal with imbalances in this e-services revolution, coupled with the growth of the IT giant in its metropolitan region.

Life did become simpler for citizens, and their quality of life indices went up, but the cost of living rose.

Alibaba created a job overload in the market that saw large-scale migration into the city and youngsters earning huge salaries. This once-sleepy town saw a spiralling increase in real estate rates due to the increase in demand for housing, leading to foreign direct investment in housing and other services. This has made it unaffordable for the working class to buy homes, which the government is trying to tackle on a war footing.

Reuters recently reported how prices of new homes in China have surged by 12.4% last year, the fastest rate since 2011. In August 2016, a month before the G-20 summit, the average new-home price in Hangzhou averaged ₹16,700 per sq.m., a 22% increase from the previous year during the same quarter. This has prompted more than 20 city governments including Hangzhou to introduce property curbs to cool the market. From March 3, 2017, the Hangzhou housing authority will not allow residents of Hangzhou to buy a third home. Also, non-residents who have not paid personal income tax in the city will not be allowed to buy a home at all.

Lesson: Mumbai has similar issues of hyped property rates and the government will need to act soon if it is aiming at making the city more liveable and seamless. In a raucous democracy, all of the measures taken in Hangzhou and the other cities in China may not be possible, or even desirable. But it certainly is worth our while to examine how our neighbour is dealing with similar problems.

Smart in India

India, with its Smart Cities Mission, is slowly moving the China way. Under the ₹48,000-crore project, it plans to initiate 100 smart cities in India by 2020. It has already commissioned 16 public-private partnership (PPP) projects worth ₹1,327.67 crore. About 24 PPP projects worth ₹2,588.73 crore are at various stages of tendering.

Mumbai, with a newly-elected civic team in place, will be soon embarking on its own smart city mission. The city has put forth a ₹1,118 crore project, which it is now implementing on its own due to the availability of funds through its internal deposits and through PPP. Chief Minister Devendra Fadnavis and his team are pushing for a Mumbai makeover, with new metro lines, a coastal road and an International Business Finance Centre at Bandra Kurla Complex (BKC) as a part of its planning.

“There are many cues that the Indian Smart City initiative can take from China’s initiatives,” says Dr. Kavi Arya, Associate Professor of the Department of Computer Science and Engineering, IIT Bombay. Dr. Arya has visited Hangzhou and studied the smart city model. “The key is to use this grand opportunity to empower local industry. This especially holds true in the face of traditional software markets in developing countries disappearing due to stagnating economies, increased protectionism and the roll-out of new technology making low-tech jobs redundant. Smart cities throw up a wide spectrum of opportunities.”

A smart city cannot be smart enough if doesn’t give you uber-smart services along with affordable homes and social stability. Indian smart cities of the future must ensure a balance of local economic prosperity, smart urbanisation and adequate social security. “This is a timely opportunity to utilise our demographic advantage of large numbers of youth to train them to rise to these challenges,” Dr. Arya says. “We have already honed our technology skills to develop the ‘advanced’ countries. Now it’s an opportunity to turn these skills homewards to build a better life for our own people.”

The biggest lesson for us in India could be that building a smart city does not mean creating gargantuan buildings and high technology, but using technology to make the lives of ordinary people simpler. It also means creating opportunities for local enterprises, helping them to become global behemoths, and furthering the dream of nation building.

What Mumbai could learn from Hangzhou

More than 10 years ago, Maharashtra’s then-CM, Vilasrao Deshmukh, spoke of turning Mumbai into Shanghai. Mumbai (and indeed Maharashtra and India) would be, perhaps, better advised to take a leaf from Hangzhou’s book.

Smart traffic management and predicting systems where a person knows what the traffic position of the route to his destination an hour in advance

Smart bicycling docks could be installed at service roads, and areas like BKC where cycling tracks can be demarcated

A common citizen city card to give a boost to the cashless economy drive, post demonetisation, where all services could be accessed

Being the financial centre of India, several corporates and Indian IT companies could be roped in to create our own indigenous smart data systems through the PPP model.

(The writer is a Research Fellow at Observer Research Foundation, Mumbai. Views expressed in this commentary are personal. Twitter handle: @saylitweets)

For reproducing this commentary, please contact sayli.mankikar@orfonline.org

This article was originally printed in The Hindu

 

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This entry was posted on 29/03/2017 by in ORF Mumbai, Urban Renewal and tagged , , , , .
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