The concept of a smart economy traces its roots to the “smart city”, a concept first talked about in the mid-20th century. Today, the Internet of Things (IoT) and data analytics have revolutionised what urban centres can be: more efficient, sustainable and responsive to the needs of their citizens.
Building smart cities is not just about linking digital technologies to improve resource management. By leveraging deep data-driven insights, they can reinvent how we approach transportation, energy provision and administration, and address future challenges such as ageing populations and shrinking labour forces. Smart cities could lead to the emergence of entirely new jobs and economic systems, laying the bedrock for a more sustainable approach to growth, while also opening doors for more inclusive, engaging civic life.
On 13 April 2023, Ella Arwyn Jones—managing editor of FinanceAsia—had an intimate fireside chat with Gabrielle Inzirillo, a financial regulator from the Abu Dhabi Global Market, an international financial centre in the United Arab Emirates (UAE). As the head of ecosystem development at the Financial Services Regulatory Authority (FSRA), Ms Inzirillo supports responsible fintech innovation by collaborating with stakeholders in government, industry and civil society.
The conversation took place at the 2023 edition of Hong Kong’s annual Digital Economy Summit jointly organised by the HKSAR Government and Cyberport, Hong Kong’s digital technology hub, and attended by over 4,000 participants from all over the world. The attendees included decision makers from the spheres of technology, business, government and academia from more than 40 countries. Key themes discussed at the Summit included (i) the potential of Web3.0 and how to harness it; and (ii) promoting new industrialisation and smart mobility. The event supports Hong Kong’s long-term vision to become an international innovation and technology hub.
The event was especially significant as it marked the summit’s first in-person edition since covid-19, and featured strong participation of delegates from China. Hong Kong’s chief executive, John Lee, opened the event.
Fintech’s expanding boundaries
To kick-off the conversation, Ms Inzirillo shared that the tech sector is subtly shifting away from viewing monetary aspects as limited to just fintech. “Ten to 15 years ago, people were excited about disrupting finance, but now we’re seeing that there are financial implications in technology that people are not even aware of,” she said.
As an example, she points to how video gaming companies have built entire financial ecosystems based on virtual assets and tokens that are tradeable between players.
“A lot of people might say that financial regulators should not be involved in the gaming industry, but if something looks and smells like a financial instrument, it might actually be one,” she said. “We are going to have a whole generation of people using these tools and not realising they are part of a financial ecosystem.”
Many in the tech sector may believe that the moment regulators enter a space, innovation suffers. However, Ms Inzirillo stresses that regulators are not looking to kill projects but to create opportunities to foster innovation in a safe manner.
“Sometimes we have to take a step back and see how a project might work for citizens. We’re civil servants, so we have to look at the benefits for people, but also the risks.”
The smart city’s sustainability proposition
When asked about factors that have supported Abu Dhabi’s initiatives to develop as a smart city, Ms Inzirillo talked about the possibilities its oil resources have generated. She spoke about how Abu Dhabi’s oil riches have enabled the city to invest in building a city that integrates smartness into an urban environment, with an eye on sustainability.
“We’ve been able to put a tonne of investment into really piloting sustainability and smart city projects. Abu Dhabi is using its richness from the round to disconnect from it,” she added.
One of the city’s major projects is the development of Masdar City, a planned city project in Abu Dhabi built “from the ground up” as a test bed to pilot smart city projects such as vertical gardens and new transport options. Successful use cases will then be rolled out to the greater UAE region.
Until recently, most smart city projects in Abu Dhabi were started in an industrial setting for specific purposes such as reinforcing the UAE’s food security. However, according to Ms Inzirillo, smart city projects are now gradually trickling out into the urban environment thanks in part to efforts by regulators to promote the use of technologies such as digital identity or know-your-customer (KYC) tools.
Leveraging IoT to empower and protect citizens
Digital identity, in particular, will be a key tool in developing smart city initiatives as they empower citizens with independence and access to public services.
“You don’t have to pull together a bunch of documents to access fundamental services,” she said, giving the example of how UAE citizens don’t need passports to fly out of Dubai. “It's about having this access to services that makes the city particularly smart—because it's working for its people.”
Similarly, blockchain could support more sustainable energy by leveraging smart contracts to manage solar utilities and easily arbitrate disputes. “The idea is that blockchain is fully transparent, so the community as a whole can self-govern,” she said. “However, we have to upskill people to be able to understand smart contract code.”
Ms Jones noted that as smart cities are highly dependent on the widespread use of IoT devices, there are increased security risks to citizens’ data and privacy. Ms Inzirillo agreed, saying that part of her work as a regulator involves educating and upskilling companies working on smart city innovations on data protection.
Building at home for the world
Closing the session, Ms Inzirillo talked about Abu Dhabi’s experience working with other emirates in the region, and some similarities in approach between the city and Hong Kong.
“Each emirate is trying to provide really good pilot projects to be adopted at the federal level, and I think Hong Kong is taking a similar approach as a testing ground for new technology for China but also the world,” she said.
“Both Hong Kong and Abu Dhabi are trying to build these sandboxes, to prove these technologies and send them out on a national and global level,” she concluded.
