Saudi Arabia: ready to lead the world in smart city development?
As the Saudi Arabian government pushes ahead with is stunning plans for a new ‘smart city’ called Neom, the most advanced city on the planet, Abdul Latif Jameel assesses the future of smart cities: what are they, how do they work, what are the theories behind them, and why are they so important for our future health – both economically and physically?
The human population is growing faster than at any time in history. In 1960, the global population stood at a little more than three billion. Today, the figure has skyrocketed. The World Bank puts the 2016 population at 7.44 billion – a rise of almost 146% in just 56 years. In Saudi Arabia, the figures are even more startling. In 1960, the country’s population was 4.09 million. By 2016, it had reached 32.28 million – an increase of 689% over the same 56-year period.
With these rises comes a dramatic rise in demand on resources, from food and water through to energy, space, and clean air. Around the world, cities that were designed for yesterday’s populations, using yesterday’s technologies, are beginning to buckle under the strain of meeting the needs of today’s never-envisaged populations.
The challenge is increasing at a frightening pace. According to the Swiss-based international standards agency, International Electrotechnical Commission (IEC), “every day, urban areas grow by almost 150,000 people, either due to migration or births”.
Challenges of urban population growth
Facing a population growth on such an astonishing scale, cities face three sustainability challenges:
- Economic, in terms of providing citizens with the capacity to develop their economic potential
- Social, where opportunities, stability and security combine to affect the quality of life
- Environmental, either of the city’s own making or through weather or geological events.
A closer look at just one of these challenges – the environment – outlines the size of the task confronting cities around the world. According to the World Health Organization’s Global Health Observatory (WHOGHO), ambient air pollution contributes to 5.4% of all deaths. Currently, 92% of the world’s population lives in places where air quality exceeds WHO guideline limits.
In economic terms, the World Bank estimates that 75% of future GDP growth around the world will come from cities and towns. The UN says that for all countries, urbanization is driving economic growth, with higher per capita incomes and higher productivity being outcomes of urbanization and the process of economic agglomeration. However, the pressure to fulfil these expectations and deliver increased living conditions will only rise.
Solving the environmental challenge, while at the same time unleashing a city’s economic potential and delivering social justice, is a monumental test for authorities everywhere.
It is a test that many are currently failing.
Could the solution to these problems lie in the conception, development and advance of new smart cities?
Realizing the Saudi potential
In its Vision 2030 national development plan, the Saudi Arabian government sets out its ambition to have three Saudi cities recognized in the top-ranked 100 cities in the world. It also states:
“To ensure we can continue to enhance the quality of life for all and meet the needs and requirements of our citizens, we will continue to ensure high quality services such as water, electricity, public transport and roads are properly provided. Open and landscaped areas will also be developed further, to meet the recreational needs of individuals and families.”
Saudi Arabia is certainly well located for the creation of a new global city, sitting at the crossroads of three continents – Asia, Europe and Africa – and with half the world’s population accessible within a five-hour flight. The country is already a key state in the MENAT region, and its stock market, Tadawul, is the dominant market in the GCC with a market capitalization of US$ 466 billion.
Alongside its economic strength, Saudi Arabia also benefits from a young, tech-savvy population. Its changing demographics – about half of the population is aged under 25 – complement the reforming drive of Crown Prince Mohammed bin Salman. A nationwide push to deliver economic diversification, in line with the ambitions of Vision 2030, is being powered by the country’s rising education levels. And across rail, sea and air, investment in Saudi Arabia’s infrastructure has never been higher.
Beacon projects include the US$ 7.2 billion expansion of King Abdulaziz International Airport (KAIA) at Jeddah, the US$ 5 billion development of King Abdullah Port close to King Abdullah Economic City’s Industrial Valley, plus the plans of Saudi Arabia General Investment Authority (SAGIA) to invest more than US$ 141 billion on rail, metro and bus projects by 2024. These include high-speed rail links between Madinah and Mecca via King Abdullah Economic City, King Abdulaziz International Airport and Jeddah, and the Riyadh metro project.
Against this background of vision and progress, smart cities could be the logical, innovative next step in terms of creating environments that help address the challenges of our growing urban communities, rather than adding to them.
What are smart cities?
Smart cities are new cities specifically designed and built to capitalize on the full potential of technology to both address difficult issues traditionally associated with large urban development, including sustainability, congestion, transport and energy use, while at the same time improving the quality of life for inhabitants through benefits such as quicker access to healthcare, more integrated transport and less pollution.
Precisely defining a smart city is difficult. The Smart Cities Council, a network of leading companies advised by top universities, laboratories and standards bodies, says: “The smart city sector is still in the ‘I know it when I see it’ phase, without a universally agreed definition.”
However, common strands apply across all of the world’s current smart cities. They share, according to a UK government smart cities report, a “process, or series of steps, by which cities become more ‘livable’ and resilient and, hence, able to respond quicker to new challenges.”
The same report suggests that smart cities bring together hard infrastructure, social capital including local skills and community institutions, and (digital) technologies to fuel sustainable economic development and provide an attractive environment for all.
Similarly, an IBM smart cities report says that:
“Cognitive computing and its capacity for building citizen engagement introduce fresh opportunities for government organizations to improve citizens’ lives and the business environment, deliver personalized experiences, and optimize program and service outcomes.” 
Whatever definition is given to a smart city, one core element is crucial: technology. The Smart Cities Council defines a smart city “as one that has digital technology embedded across all city functions.”
As processing power continues to increase at an exponential rate, and artificial intelligence, big data, cloud computing, and the Internet of Things reshape our lives, smart cities aim to harness these tools to transform their ability to meet the demands of 21st Century living.
Smart city ideas in practice
Elements of these theories have already been put into practice in several cities. In London, for example, the use of the SCOOT traffic system, where an online computer monitors live traffic flows from 15,000 detectors and optimizes signal timings across traffic lights, has reduced delays in the UK capital by 12%. The same system is now used in more than 250 towns and cities across the country.
Singapore, meanwhile, was ranked top in all four categories – mobility, health, safety and productivity – used in Juniper Research’s Top 20 Global City Performance Index 2017. A significant part of Singapore’s success is due to its holistic approach to becoming a world-leading smart city.
It has introduced smart technology to improve the flow of traffic while simultaneously using government policy to reduce the number of vehicles on its roads. It has also trialed smart video surveillance to detect criminal activity and used digital service platforms and remote monitoring devices to increase, and improve, access to healthcare, particularly among its older citizens.
Around the world, the concept of smart cities is gathering traction. Urban planners have long advanced the benefits of smart cities and, increasingly, they are finding common allies in local and national governments. As technological advances are uncovered, smart city frameworks are solidified, and investments secured, smart cities are expected to become the new standard for urban living around the world.
These new smart cities are likely to be powered, in large part, by seven technologies that The World Bank believes will disrupt and transform how cities deliver services to their citizens. These seven technologies are:
- 5G mobile networks, which are expected to be up to 60 times quicker than 4G networks and available by 2020.
- Blockchain, a financial technology that allows transactions to do away with intermediaries like stock exchanges that currently function as guarantors of a transaction.
- Artificial intelligence, which is already being used by Hong Kong, Shanghai, Sydney and New York to deliver smart parking and increased energy efficiency in buildings.
- Autonomous vehicles, which are set to have an enormous impact in the coming decades. Research has suggested autonomous taxis and rapid inter-urban rail systems could combine to reduce the numbers of cars in a city by up to 90%.
- Low-cost space exploration and micro-satellites, which will be the key element in powering the 20 billion connected things research firm Gartner expects to be in use by 2020.
- Biometrics, which could rapidly increase the number of people around the world who are able to prove their identity, thereby reducing fraud, waste and corruption.
- Drones, which when paired with artificial intelligence, could soon perform everything from parcel deliveries to hazardous jobs, such as maintenance checks on rooftops or towers
The ongoing challenges of urban living are already being considered across the Middle East, with Saudi Arabia playing a particularly prominent role.
In May 2018, it hosted The First International Conference on Humanizing Cities at Taibah University in Madinah. The conference was designed to look “at modern ways to develop public places, city centers and neighborhoods to improve urban spaces and the quality of urban life, so that cities are more friendly and comfortable places to live.”
Leading experts and academics from around the world flew to Saudi Arabia to take part in the conference. In the light of the NEOM announcement just seven months beforehand, it is not hard to see why.
Introducing NEOM – a Saudi smart city to lead the world
As Saudi Arabia pushes forward with its economic diversification and modernization program, one major project has attracted attention like few others. In October 2017, Crown Prince Mohammed bin Salman unveiled the country’s plans for the construction of NEOM – the world’s ultimate smart city.
Built on a 10,230 square mile plot stretching across Saudi Arabia, Jordan and Egypt (a site big enough to hold 37 Singapores), NEOM will provide a hi-tech hub for the world’s fastest-growing industries. Its strategic location is designed to take advantage of trade routes on the Red Sea, Gulf of Aqaba, and Suez Canal, while a new bridge – the King Salman Bridge – will create a direct link between Saudi Arabia and Egypt.
Even in its name, NEOM makes no secret of its ambitions: it is derived from neo, the Greek word for ‘new’, and mostaqbal, the Arabic term for ‘future’.
In June 2017 Klaus Kleinfeld, the former CEO of Siemens, was installed as NEOM CEO. He is credited with giving the project significant momentum before handing over to Nadhmi Al-Nasr in July 2018.
“We will build the city from scratch,” said Crown Prince Mohammed bin Salman. “It will be drone-friendly and a center for the development of robotics. We want to create something different. NEOM is a place for dreamers who want to create something new in the world, something extraordinary.”
Backed by US$ 500 billion from Saudi Arabia’s Public Investment Fund and a range of international investors, the city is one of the key planks of Saudi Arabia’s strategy to diversify its economy. The city will focus on nine industries:
- Energy and water
- Advanced manufacturing
- Media and media production
- Technological and digital services
- Living (housing, educating, healthcare, etc.)
By increasing Saudi Arabia’s strength in these nine sectors, official estimates suggest that NEOM can potentially contribute US$ 100 billion to Saudi Arabia’s GDP by 2030, while its per-capita GDP will become the highest in the world – thanks in part to the use of robots and automation to eliminate repetitive jobs currently completed by low-skilled human workers.
In a statement at the unveiling of NEOM, Crown Prince Mohammed bin Salman gave more detail about the way this futuristic smart city – which will be accessible by 70% of the world’s population in less than eight hours – will operate. He said:
“Future technologies form the cornerstone for NEOM’s development: disruptive solutions for transportation from automated driving to passenger drones, new ways of growing and processing food, healthcare centered around the patient for their holistic well-being, wireless high speed internet as a free good called ‘digital air’, free world-class continuous online education, full scale e-governance putting city services at your fingertips, building codes that make net-zero carbon houses the standard, a city layout that encourages walking and bicycling and all solely powered by renewable energy just to name a few.
All of this will allow for a new way of life to emerge that takes into account the ambitions and outlooks of humankind paired with best future technologies and outstanding economic prospects.”
How will NEOM work?
The ambition behind the plans for NEOM is without precedent. The city will be developed in its own free zone, giving it the power to set and regulate its own taxation, customs, and labor laws independently of the rest of Saudi Arabia.
This model has been successfully implemented elsewhere in the MENAT region, and NEOM will quickly become the largest such zone. This will give it the power and freedom to ensure “healthy growth and wealth for the region, investors and residents”.
With average wind speeds of 10.3 meters per second and abundant solar resources, NEOM will be a city powered entirely by renewable energy. Its transport systems will also be “100% green” and “automated”, while the city’s commitment to developing a world-class quality of life will spread to its education, housing and healthcare provision.
The concept for NEOM is built on six main pillars:
- Prioritizing humans: the city will aim to create an “idyllic society” with comfortable living conditions.
- Healthy living and transport: the city will be built to encourage walking and cycling, while advanced technologies will be used to create “an unprecedented transportation infrastructure”.
- Automated services: it will be the first to deliver ‘e-government’ – a fully automated system for government services.
- Digitization: it will provide high-speed internet access and online education – both completely free of charge – to all citizens through its “digital air” initiative.
- Sustainability: the city will use only renewable energy and its buildings will “have a net zero carbon footprint”.
- Innovative construction: it will encourage new techniques and materials to ensure it can meet its future requirements.
As emphasized by HE Crown Prince Mohammed bin Salman, there will also be an emphasis on artificial intelligence, robotics and drones, while supermarkets will not exist in their familiar form. Instead, automation will deliver items direct to people’s homes when they need them. All of these ambitions perhaps explain why leading tech analysts are already dubbing NEOM as “a smart city on steroids”.
Committed to advancing smart cities across Saudi Arabia
According to the Royal Institution of Chartered Surveyors, “important smart city sectors include energy, water and transport”. The vital industries are all part of the ‘infrastructure of life’ in which Abdul Latif Jameel has extensive and world-leading experience and expertise.
Omar Al-Madhi, Senior Managing Director at Abdul Latif Jameel Investments, believes these proven capabilities could play a crucial contribution as Saudi Arabia charts the next exciting phase of its development.
Mr Al Madhi said: “For more than six decades, Abdul Latif Jameel has been at the heart of Saudi Arabian enterprise. Our business has evolved and diversified, and we now work across seven key sectors that contribute to the infrastructure of life. We have brought world-class knowledge and expertise to our home country, upskilled Saudi Arabian citizens, and significantly enhanced the quality of life of the communities we serve. We are immensely proud of these achievements and continue to strive to deliver a better future for all.
“Abdul Latif Jameel is fully supportive of the aims outlined in Vision 2030. NEOM has the potential to be amongst the ‘smartest’ cities in the World- and we are more than ready to play our part in helping to deliver such an exciting project.”
As well as delivering enormous benefits for its immediate vicinity in Saudi Arabia, Egypt and Jordan, NEOM will also create substantial opportunities for international investors as it draws in the practical expertise and technological know-how necessary to turn the vision into reality.
Mr Al Madhi added: “The diversification of Saudi Arabia’s economy is one of our country’s key developments in the coming years. International investors are already starting to see the vast potential of projects like NEOM, and Abdul Latif Jameel Investments is poised to help ambitious global companies understand the nuances and opportunities presented by a revitalized Saudi Arabian economy.”
One of the global organizations driving forward the vision for smart cities is the NewCities Foundation, a non-profit group that works to make “cities more inclusive, connected, healthy and vibrant”. They organize a rolling schedule of expositions, conferences and seminars across the world, bringing together experts and innovators from many of the leading-edge fields seen as fundamental to the smart city concept.
At the Foundation’s third ‘Cities on the Move’ event in November 2016, in Tokyo, Mr. Hassan M. Jameel said: “Urban mobility is incredibly important to enabling cities to become drivers of economic, social and environmental progress. Cities are built around transportation: how transportation works within a city, how roads are built, and how movements within cities are made. Urban mobility and safety is a key part of the focus on developing cities in Saudi Arabia.”
Today, these priorities are more important than ever. It is estimated, for example, that smart traffic technology could reduce traffic in NEOM by 25% and congestion by 40%.
By investing in its understanding of urban planning and key industries like energy, transport and water that make up the ‘infrastructure of life’, Abdul Latif Jameel is fostering relationships and building expertise that should bring best-in-class knowledge to Saudi Arabia and help to forge a vibrant, technology-driven future for its cities.
A trusted partner for a smarter future
Abdul Latif Jameel has long supported Saudi Arabia’s efforts to deliver economic diversification, sustainability and growth. For seven decades, it has worked to deliver a better future for all Saudi Arabian citizens, and its longstanding commitment to making cities more livable is clear.
The first phase of NEOM is set to be completed in 2025, and Abdul Latif Jameel is excited by the possibilities it will offer. Indeed, as Crown Prince Mohammed bin Salman said: “This project is not a place for any conventional investor… This is a place for dreamers who want to do something in the world.”
Through Abdul Latif Jameel Investments, its dedicated initiative to attract new private-sector finance into the Saudi Arabian economy, Abdul Latif Jameel is actively pursuing its ambition to become the most trusted investment partner in the country.
Omar Al-Madhi, Senior Managing Director of Abdul Latif Jameel Investments, said: “Abdul Latif Jameel Investments is committed to advancing foreign direct investment in Saudi Arabia’s infrastructure of life. By carefully selecting and advocating the key industries that contribute to Saudi Arabia and the wider MENAT region economically, socially and developmentally, Abdul Latif Jameel Investments can help to drive progress for the next 50 years.
“Our focus on sunrise sectors, where opportunities have sustainable scalability, makes us the preferred partner for any significant entity wishing to do business in this part of the world.”
By combining global experience and local expertise with its track record of success in transport, land and real estate, and energy and environmental services, Abdul Latif Jameel Investments is uniquely placed to help investors capitalize on the exciting developments in the country and maximize the potential of Saudi Arabia’s vibrant smart city ambitions.
To find out more, visit www.alj.com.
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 Smarter Cities: New cognitive approaches to long-standing challenges, IBM, accessed April 2018
 Definitions and overviews, Smart Cities Council, accessed April 2018
 Gartner Says 8.4 Billion Connected “Things” Will Be in Use in 2017, Up 31 Percent From 2016, Gartner, 7 February 2017
 KSA’s Madinah to host 4-day international conference on ‘humanizing cities’, Arab News, 26 April 2018
 Saudi Arabia seeks new economy with $500 billion business zone with Jordan, Egypt, Reuters, 24 October 2017