Why entrepreneurs need to look at the multi-crore opportunity in upcoming smart cities

Chaitanya Ramalingegowda

Manu Shrivastava

Why entrepreneurs need to look at the multi-crore opportunity in upcoming smart cities

Friday July 11, 2014,

6 min Read

Asia’s third largest economy India’s urban population grew from 290 million in 2001 to 340 million in 2008 and 377 million in 2011. Analysts project that it will touch 590 million by 2030, and more importantly, urban economy will provide 85% to total tax revenue which will play a big role in the fiscal development of the country. Various urban development initiatives have been planned by the Indian government to cater to this burgeoning urban population. One among them is the creation of smart cities – either creation of new ones or upgrading existing cities to this category with planned development activities.

The BJP election manifesto of 2014, under the leadership of the Honourable Prime Minister of India, had the following plans outlined for urban areas:

  • Look at urbanisation as an opportunity rather than a threat
  • 100 new cities – focused on specialized domains
  • Integrated habitat development – building on concepts like twin cities and satellite towns
  • Cleanliness and Sanitation prioritized – integrated infrastructure rolled out in Model towns
  • Wi-Fi facilities made available in public places and commercial centers
  • GIS-based mapping – for scientific, strategic and long term town planning

India already has a few well-planned cities like Chandigarh (serving as the capital for Punjab & Haryana) and Gandhinagar (serving as the capital of Gujarat). Countries like France and Singapore have offered to provide technological and infrastructure know-how to India in this planned creation of smart cities over the coming years.

Components of a Smart City

So what does make a smart city? What are its moving parts? There are various definitions worldwide, but we went deep to find the most important ones, especially given India’s context.

  • Traffic management: Smart monitoring of road systems will keep tabs of traffic patterns over a period of time and inform drivers about which route is best at any given time. Also, it will automatically manage the traffic signal system in order to reduce congestion to the minimum taking into account the traffic volume at certain times of the day
  • Smart urban lighting: Smart urban lighting will adjust the intensity of the light depending on the people who are around, time of day and the year. This will be focused on conserving energy but at the same time budgeting for well-lit streets for citizen security
  • Waste management: Not all places generate the same kind or the same amount of waste. With smart containers and a good fleet management system, the routes can be tailored to any situation. In addition to efficient segregation and collection, smart cities will have means for composting and managing bio-degradable waste better, so that the ultimate garbage output of the city is lower
  • City maintenance: Citizens will be able to rely on systems to notify the City Council of any damages in the urban elements through their smartphones. This could include sewage leaks, water wastage from main pipes, faulty billing systems, inoperative lighting and so forth. Citizen-corporation interaction will be transparent and seamless, providing for quick resolutions
  • Wi-Fi: A complete Wi-Fi enabled city to provide connectivity to all citizens. Various free models have been piloted across the world to ensure equitable bandwidth usage and fair distribution among citizens
  • Intelligent Transport System: A smart combination of Metro, Monorail and Bus Rapid Transit (BRTs) aim to drastically reduce usage of private vehicles. Coupled with sharing economy developments, this is aimed at reducing pollution levels in smart cities
  • Smart Grids: Grids which will be capable to optimize the transmission and distribution of power efficiently to reduce power leakage, power theft and allocate power dynamically as the needs change seasonally


Upcoming Smart Cities

There are various such cities planned in India:

  • Naya Raipur (Satellite city to Raipur) – The new capital of Chhattisgarh, Naya Raipur is planned to be a ‘green city’ with an emphasis on eco-friendly design in all its core elements. It has facilities for government offices, housing facilities, educational institutes and ecotourism with a planned capacity of 4.5 lakh people in a few years. Economic development investments for Software Technology Park, Business Offices, 7 and 5 star hotels and much more have been provisioned
  • Lavasa – It is a private, planned city being built near Pune, inspired by the Italian city Portofino (famous for its upmarket picturesque harbour). Lavasa is constructed by Lavasa Corporation, a unit of Hindustan Construction Company. It aims to be a self-sufficient entity providing living facilities, sports, education and resorts for vacactioners. However, Lavasa has been in the midst of controversies for reasons including procurement of land, environmental damage, and loans acquired through political corruption
  • Dholera – A proposed smart city in Gujarat, aiming to provide the strong economic base with globally competitive environment and state-of-the-art infrastructure to activate local commerce and attain sustainable development in the Delhi-Mumbai industrial corridor. Dholera will offer land for Resorts, Agriculture, Logistics, Solar Park and lot more. Considering the industrial sector Dholera is planning to provide land to IT/ITeS, Pharmaceuticals & Biotechnology. It will not only promote local industries, but FDI as well.

Why should entrepreneurs be interested in smart cities?

Considering that urban development and skill enhancement of youth are two primary goals of the new Modi Government, entrepreneurs can rest assured that these upcoming smart cities provide them with various incentives to set up shop. Many of these smart cities have a financial outlay of INR 1500 to 2500 crore and can provide benefits to entrepreneurs:

  • Inexpensive Real Estate: Most of these smart cities, in a bid to attract fresh investments and job creation, provide office space, incubation space, warehouses etc. at inexpensive rates
  • First Mover Advantage: Setting up shop in these upcoming cities and creating a brand as a good product / services organization and growing along with the city will provide long term prospects for business
  • Public Private Partnerships (PPP): If you are an entrepreneur providing infrastructure services, many of these smart cities are calling for bids for various development initiatives, which can provide recurring business
  • E-Governance: Many of these smart cities are looking for apps, software and other technology enabled solutions to put in place e-governance processes. Many startups are in this space and can be valuable pilot projects

Do you think there are any additional benefits for entrepreneurs to set up office in these smart cities? Share in the comments below!