14 Jul 2020

How ‘Smart Cities’ are defending against the COVID-19 pandemic

How ‘Smart Cities’ are defending against the COVID-19 pandemic

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As part of our guest blog series on thematic investing, MSCI and Lukas Neckermann share their views on Smart Cities. The coronavirus crisis is testing the resilience of cities around the world, but ‘Smart’ cities such as Hong Kong and Seoul have adapted quicker than others, having already dealt with previous outbreaks (e.g. SARS). Learn why investment in smart infrastructure, connectivity and mobility could help mitigate the damages of the ongoing pandemic.

Smart Cities and pandemic resilience

In our first Thematic Insight on Smart Cities1, we emphasized the human focus of the theme: specifically, the focus on improving livability for residents. The corona virus crisis has become a profound global test of this: whether smart city technology may prove able to mitigate the worst impacts of the COVID-19 outbreak. 

As we outlined in that prior report, by definition, cities we would consider to be “smarter” are much more likely to have a preparedness plan, a resiliency plan, or an established crisis operations centre – especially one that is “connected” to a number of critical live data sources (sensors, cameras etc). Hong Kong’s Smart City Blueprint – written in 2017 – outlines its mission to make the city more livable, sustainable, resilient and competitive, and includes several digitalization steps that other major cities are only now scrambling to consider in the midst of the current crisis.2 In 2019, Seoul announced its plan to invest USD 1.2 billion into 18 strategic data and smart city projects, including over 50,000 Internet-of-Things (IoT) sensors. Infrared thermal screening has been commonplace at airports across China and Southeast Asia.

The experience with SARS helped shape this preparedness and foresight which allowed Hong Kong, Seoul, Singapore and Taipei, among other smart cities, to act more swiftly and effectively during the current crisis. We have seen that tracking, tracing and monitoring activity throughout cities appear to be important success factors during this pandemic. The ability to implement additional arrival screening, as well as enforce contact tracing quickly, for example, has helped keep Taiwan’s mortality rate low. While other European countries are still debating which system to use even now, Singapore’s contact-tracing app was built and rolled out in March. Smart cities are, by definition, more likely to have the tools, data and data analytics to act decisively.

Read the full Smart Cities insight by MSCI or find out more about MSCI’s thematic indices

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MSCI would like to thank Lukas Neckermann, Managing Director of Neckermann Strategic Advisors, for useful discussions and insightful analysis of this megatrend which have greatly facilitated the preparation of this article.

Lukas Neckermann is the author of three books: “The Mobility Revolution” (2015), “Corporate Mobility Breakthrough 2020” (2017) and “Smart Cities, Smart Mobility: Transforming the Way We Live and Work” (2018).

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1 “Smart Cities: Defining the trend, describing the transition”, MSCI, April 2020
2 https://www.smartcity.gov.hk

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