Vietnam is considering smart city development as one of its key impetuses for economic growth in the years to come. Tran Quoc Thai, vice director of the Ministry of Construction’s Urban Development Agency, writes about the opportunities and hurdles in developing smart cities awaiting the country in the new year.

Tran Quoc Thai, vice director of the Ministry of Construction’s Urban Development Agency

In recent years, urban areas around the world are greatly tapping into their potential to develop into smart cities. Smart city investment seems to be boundless and can be seen in cities of different histories, sizes, and economic potential.

The application of urban city development solutions promises to bring in numerous benefits, helping data-driven decision making and urban governance while narrowing the gap between the public and authorities, and directly providing multi-dimensional information for the public.

Smart technologies allow better management and supervision over cities’ infrastructure, improving the quality of provided infrastructure services, and contributing to improving people’s livelihood.

Such applications even allow people of different ages and demands to directly compare the liveability of cities. A key point in smart city development is the promotion of innovation to improve cities’ competitiveness regionally and globally.

The application of the Internet of Things, big data, and other advanced technologies has created diverse options to improve people’s lives and economic transactions. Thus, smart city development has become increasingly important to all cities and nations.

Nations in the world have invested in building smart cities in different forms. For example, the United Kingdom supports innovation programmes via money from the UK Innovative Programme. In India, the 100 Smart Cities Programme deployed on a pilot basis in 20 cities has attracted the participation of 2,500 projects worth $29 billion, and 189 projects of which valued at $479 million have been completed, with equal investment from the central and local budgets.

Meanwhile, in 2012, China began to pilot the first 90 smart city projects. About 180 urban areas joined the Chinese programme in developing smart urban areas, with the total investment capital amounting to $79.5 billion.

In 2013, about 193 projects were approved. Ningbo city alone, with a population of over 7.5 million people, has designed a programme to invest nearly $6.5 million in smart city development.

In another case, last November, South Korea’s President Moon Jae-in commenced the ground-breaking ceremony of an ecological smart city project covering 280 hectares in a 1,100ha complex.

Not only using public investment for developing smart cities, many nations have also been using private investment for this purpose in many different sectors.

Quickening the application of smart cities will help boost the provision of sufficient information about cities in a more timely manner. This will enable enterprises and investors to better conduct research and analysis, and set up business strategies and plans based on the data acquired.

Prospects for Vietnam

If implemented well, smart city development will bring direct benefits to people of all walks of life, including the most vulnerable groups. Thus, in Vietnam, smart city development is considered one of the biggest priorities for the country to approach and promote the advantages of Industry 4.0.

At present, Vietnam has more than 30 cities and provinces which have been implementing plans on smart city development in different ways.

The southern province of Binh Duong, for example, has co-operated with Eindhoven in the Netherlands in order to implement a triple helix model, which there is co-operation among researchers, enterprises, and the state in developing Binh Duong into a smart city.

In 2018 and 2019, Binh Duong was recognised by the Intelligent Community Forum, a non-profit policy research organisation focusing on job creation and economic development in the broadband economy, as one of the 21 community regions with the world’s smartest city development strategies.

In Ho Chi Minh City, smart city development focuses on constructing a concentrated monitoring centre and a simulation and forecast centre which can bring about traffic benefits to the public.

A number of other smart areas have also been zoned and developed in Hanoi, the central city of Danang, and Ho Chi Minh City. Many localities are also investing in developing e-government and raising the use of online public services.

A resident in the northern mountainous province of Yen Bai said that previously, locals had to pay VND250,000 ($11) for conducting procedures, travelling, and meals when applying for a driving licence. However, now they can bring the necessary papers to the commune’s headquarters to conduct the procedures. When the licence is available, the commune’s staff will send it to them via post.

The prime minister has enacted three priorities in smart city development, including smart city zoning, smart city construction and management, and the provision of smart city utilities for organisations and individuals in the cities with the fundaments being urban infrastructure and ICT systems, including urban space database connections.

From the investment and business angle, it is clear that there are immense opportunities for investing in smart city development, such as the provision of services and solutions for sectors such as finance, healthcare, transport, traffic, culture, and tourism.

More opportunities can also be seen in supporting zoning activities and development orientation, and in the forecast of short- and long-term scenarios based on statistics.

Investors also pour money into managing and operating urban infrastructure systems.

However, to reach the targets on smart city development, there would need to be a proper hard and soft ICT infrastructure. This promises a big market for providing equipment, solutions, and maintaining services, as well as human resources for operating smart cities.

Vietnam currently has more than 830 urban areas, inhabited by over 38 per cent of the country’s total population. These areas grow by about one million people each year.

Infrastructure, human resources, and IT application are receiving heavy investment, which has made it more favourable for investors and enterprises to pour money into scientific and technological development, and put into operation development and innovation funds.

In addition, internet has been increasingly cheap in Vietnam, while the country’s golden population structure means it is rich in human resources, and leaders of the country and localities are paying more attention to the application of IT in the operation of their apparatuses.

Vietnam currently embraces key factors in order to successfully implement the goal of smart city development to create big breakthroughs in national socio-economic development.

Hurdles in the way

Smart city development in Vietnam is facing certain difficulties. Specifically, the country has yet to have any successful smart city development model. Almost all localities are in the first period of smart city development. Their urban databases are scattered in many sectors without consistency in information and data, making it quite difficult for smart city development initiatives.

In addition, investment in smart city development is a new area that will set high demand in many segments such as lighting equipment, surveillance, Wi-Fi, advertising, and sensors.

Intersectoral investment models are also in their initial stages, with difficulties in determining risks in investment, benefits, and responsibility for stakeholders. Meanwhile, the legal framework for smart city development is coming along slowly.

At the same time, rapid changes in technology make the selection of suitable solutions quite difficult. In this context, increasing co-operation and communication has become a common goal in the region and the wider world.

This year, Vietnam undertook its role as chair of the ASEAN Smart Cities Network, and this will be a strong opportunity for the country to boost both connectivity and co-operation with regional and international partners in smart city development. With its great potential and strong determination from the state, the business community, and people, Vietnam is on the right track to materialise its dream of building smart cities in the next decade of the 21st century.