Capital access and R&D incentives for entrepreneurs among key smart city incentives for Hong Kong and Shanghai, finds KPMG survey
Capital access and R&D incentives for entrepreneurs...
Asia Pacific survey of residents in Hong Kong, Seoul, Shanghai, Singapore and Melbourne seeks their opinions on smart city success factors and differentiators
Improved access to capital and incentives to start a business or invest in research and development (R&D) are among key smart city differentiators, according to over 70 percent of polled residents in Hong Kong and Shanghai, finds a new KPMG survey.
The report, titled Connected Cities – Citizen insights across Asia Pacific features findings from a survey of 4,192 residents in Hong Kong, Melbourne, Seoul, Shanghai, and Singapore. Published in association with CLP Holdings, JOS, Siemens, the Smart City Consortium and Wilson Group, the survey seeks their opinions on the smart city development areas that are most important to them as well, as what benefits they expect as their cities become ‘smarter’. It takes a detailed look at progress and key development actions needed in six key areas: transportation and mobility, building a future-focused workforce, living environment, healthcare, energy and resources and technology solutions.
Overall, residents across the five cities identified creating a better living environment with thoughtful urban planning and design as the number one most important development area, cited by 51 percent of those polled. This is followed by improving access and delivery of healthcare for residents as the second most important priority for cities’ development overall, named by 49 percent of respondents in the five cities (including 51 percent in Hong Kong). Transportation and mobility is the third most important development priority (cited by 43 percent of all respondents), closely followed by developing a future-focused workforce, also a leading priority for all five of the cities listed (40 percent overall).
Julian Vella, ASPAC Regional Head of Global Infrastructure Advisory and Co-Head of China Infrastructure, KPMG China, says: “The survey findings highlight that an overarching goal for smart development in Asia-Pacific cities is to improve liveability for residents. People don't just want a connected city, but a city that serves them well and able to handle the challenges it faces. Technology plays a vital role in this, and will do so even more in coming years as cities roll out digital solutions for everything from transport to payments to public services.”
Residents’ preferred measures to support entrepreneurs were largely consistent among the five cities polled; however, the cities differed in their top choices. In Shanghai, residents polled felt more strongly about the need to ease business registration processes to support the entrepreneurship ecosystem, with 70 percent citing it as a key area of improvement. In Seoul, 74 percent of respondents, a higher number compared to other cities surveyed, mentioned tax incentives to start a business as a key factor. Residents in Melbourne were more mixed about the key improvement needed, favouring access to capital, tax incentives and mentoring programmes as their top three choices. In Hong Kong, the standout action is improved access to capital and funding (77 percent).
To encourage an innovation culture, most respondents in Hong Kong and Shanghai indicated that education programmes that encourage independent thinking, creativity and risk-taking are key, in line with the other cities surveyed. This is followed by R&D incentives, and funding for science, technology, engineering and mathematics (STEM) disciplines.
“Fostering a culture of entrepreneurship and innovation, including a strong network of incubators, accelerators, and co-working spaces will help contribute to cities’ start-up ecosystems,” says Eric Yeung, President, Smart City Consortium. “The collaboration initiative of Greater Bay Area cities also gives Hong Kong entrepreneurs new opportunities to expand the market and further develop their business, especially for smart city related technologies. We are looking forward to more government policy to support Hong Kong young entrepreneurs developing and expanding their business to the GBA.”
Meanwhile, in order to build a better living environment, “availability of affordable housing” stands out as the No. 1 priority in Hong Kong (63 percent), almost double that of Shanghai (33 percent). In Shanghai, a large portion of residents polled mentioned the need for more parks and green space as well as improvement of recycling and waste management infrastructure. Singapore residents surveyed are especially concerned about making their living environment more accommodating for the elderly and disabled, while reducing pollution is a key concern for Seoul respondents.
In terms of preferred actions to improve living environment, Hong Kong respondents noted that improvements in land use are needed – including redevelopment of underused land and updating or renovating ageing buildings. In Shanghai, a key action mentioned by respondents is encouraging construction of green buildings and development of green building standards.
In addition, as populations age and workforces shrink, improving healthcare delivery and access is an increasingly urgent priority. In Shanghai in particular, 57 percent of respondents cited it as the most important development area for the success of a city, highest among the five cities polled. Across the board, respondents want to see a greater emphasis on preventative healthcare, such as check-ups, immunisations and health education. In Hong Kong, nearly half of residents polled cited the need for greater cooperation between the public and private sector on healthcare initiatives. Respondents in Singapore, Shanghai and Melbourne also listed this as a top priority. Shanghai residents also cited the need to improve predictive healthcare applications that can utilise data analytics and artificial intelligence to improve treatment.
Vella concludes: “To build a liveable smart city, cities must address long-standing problems, they should pay particular attention in putting liveability and quality of life at the heart of all smart city development and investment plans; expanding the use of data and analytics to improve the effectiveness and efficiency of service delivery; placing a greater emphasis on sustainability and resilience, and ensuring these are core parts of project planning and development.”
“Smart cities need smart governments that have vision, think long term, operate seamlessly across departments and respond rapidly as disruptions create both risks and opportunities.”
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About the survey
The report is published by KPMG in association with CLP Holdings, JOS, Siemens, the Smart City Consortium and Wilson Group.
KPMG commissioned YouGov to conduct an online survey of residents,18 or older, in the five Asia Pacific cities. It was conducted in November 2018, receiving roughly an equal amount of responses from each location. In terms of the analysis, for some areas - transportation and mobility, education system, living environment and healthcare in particular - we also measured residents’ opinion overall quality. Scores given for each are calculated on a five-point scale (1= lowest, 5=highest), based on an average of responses assigning numerical values to respondents’ feedback (5 = ‘Excellent’, 4=‘Good’, 3=’Average’, 2=’Poor’, 1=’Very Poor’). Survey respondents could choose among the above word-based definitions of quality only and did not have a numerical choice.
About KPMG China
KPMG member firms and its affiliates operating in Mainland China, Hong Kong and Macau are collectively referred to as “KPMG China”.
KPMG China is based in 21 offices across 19 cities with around 12,000 partners and staff in Beijing, Changsha, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Wuhan, Xiamen, Xi’an, Hong Kong SAR and Macau SAR. Working collaboratively across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong firm can trace its origins to 1945. This early commitment to this market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in KPMG’s appointment for multi-disciplinary services (including audit, tax and advisory) by some of China’s most prestigious companies.
About Smart City Consortium
Smart City Consortium (SCC) is formed by a group of professionals from different corporations and organizations to provide opinions and suggestions to the government for formulating related policies and standards in the development of Hong Kong as a world-class smart city. We encourage worldwide collaboration with different stakeholders to create the right ecosystem which fosters innovation and sustainable economic growth for Hong Kong.
Our vision is to build Hong Kong as the world’s leading Smart City to foster knowledge-based economy, enhance the quality of life and to create a vibrant ecosystem leveraging relevant Information and Communication Technologies and adopting effective resources management. We provide related opinions and suggestions based on our members’ professional knowledge for the development of Smart City in Hong Kong. We are the vanguard in creating smart living culture and collaborate with the Government in developing Smart City strategic plans.
In past years, with the continuous support of our members, SCC has successfully organized and supported over 280 local and international events and over 10,000 people joined us there. To facilitate the international exchange of experience and to accelerate business opportunities, we have signed 34 memorandums of understanding with worldwide Smart City organizations, with many professional views and ideas exchanged with the overseas experts during our visits. As we know that Hong Kong has all the elements to be the global and regional fintech hub, it is one of the international financial centres, the freest economy, rule of law, large talent pool, a strong legacy of trade and work ethic. Hong Kong is looking to capitalize on financial technology to keep its leading position as one of the world’s top financial hubs in the world. We believe that with the Alliance, we can play a more proactive role in this aspect.
At the same time, with the joint effort of SCC and the Smart City Development Alliance (SCDA) in mainland China, I would like to introduce you our international business matching platform under the theme of Smart City, called LinkedSmart. Along with the Alliance, it can provide more support to startups when they are ready to go for market or looking for investors. This platform aims at accelerating collaborations among strategic partnerships, startups and investors with the strong network of SCC so as to co-create a unique ecosystem for those innovative entrepreneurs in Hong Kong and around the world.
Connected Cities: Citizen insights across Asia-Pacific 2019 survey
About the survey
KPMG commissioned a survey in association with CLP, JOS, Smart City Consortium, Siemens and Wilson Group to track the current state of smart city development in five Asia- Pacific urban centres: Hong Kong, Melbourne, Seoul, Shanghai and Singapore. The survey, conducted by YouGov in November 2018, consisted of 4,192 residents aged 18 or older in the five cities, with a roughly equal number surveyed in each city. It takes a detailed look at progress and key development actions needed in six key areas: transportation and mobility, building a future-focused workforce, living environment, healthcare, energy and resources and the impact of technology.
- For residents in the five cities we surveyed, creating a better living environment with thoughtful urban planning and design as the number one most important development area, cited by 51 percent of those polled. Improving access and delivery of healthcare for residents as the second most important priority for cities’ development overall, named by 49 percent of respondents in the five cities. Improving transportation and mobility is the third most important development priority (cited by 43 percent of all respondents), closely followed by strengthening education and developing a future-focused workforce (40 percent).
- Less traffic congestion is the most expected benefit of a smarter city, mentioned by 54 percent of those polled. Others include economic growth (53 percent), improved delivery and management of public services (52 percent) and less wasted resources (51 percent).
- To better understand the impact of smart technology adoption, we measured residents’ awareness and perceived benefit of nine commonly-implemented technology solutions. Overall, we find that as resident awareness increases, so does their impression that these technologies have a positive impact. Residents’ views on whether specific technologies have a positive impact is also largely consistent across the five cities.
- In Hong Kong in particular, residents see availability of affordable housing as the most needed change to improve living environment. In Shanghai, a large portion of residents we polled mentioned the need for more parks and green space as well as improvement of recycling and waste management infrastructure. Singapore residents we surveyed are especially concerned about making their living environment more accommodating for the elderly and disabled. Meanwhile, reducing pollution is a key concern for Seoul respondents.
- In terms of preferred actions to improve living environment, Hong Kong respondents noted that improvements in land use are needed – including redevelopment of underused land and updating or renovating ageing buildings. In Shanghai, a key action mentioned by respondents is encouraging construction of green buildings and development of green building standards.
Transportation and mobility
- Across the five cities surveyed, two important priorities for development are improved walkability and safety for pedestrians and more rail and underground transport links. The desire for more rail links is especially strong in Melbourne, where it is mentioned by 73 percent of respondents.
- In Seoul, more infrastructure for electric vehicles and incentives to drive them ranked high among residents’ preferred areas for development. Meanwhile, Hong Kong respondents polled called for tighter regulation of private cars and vehicles.
Building a future-focused workforce
- A key priority for residents polled is supporting continuing education and life-long learning. This reflects people’s desires to retain relevant skills as technology disrupts traditional industries.
- Meanwhile, to build a stronger, more future-focused workforce, respondents prioritise education programmes that focus on creativity and risk-taking, and – especially in Hong Kong and Melbourne — more funding for education and research in science, technology, engineering, and mathematics (STEM) disciplines.
- To encourage entrepreneurship and innovation, measures that gain the most support across the five cities are improved access to capital and funding and tax incentives to start a business/invest in R&D, cited by 71 and 69 percent of respondents respectively.
- Across the board, respondents want to see a greater emphasis on preventative healthcare, such as check-ups, immunisations and health education.
- In Hong Kong, nearly half of residents polled cited the need for greater cooperation between the public and private sector on healthcare initiatives. Respondents in Singapore, Shanghai and Melbourne also listed this as a top priority.
- Shanghai residents also identified the need to improve predictive healthcare applications that can utilise data analytics and artificial intelligence to improve treatment.
Energy and resources
- Residents we polled felt especially strong about the need to improve energy efficiency and develop renewable energy sources in their cities, with 68 and 63 percent respectively citing these as key improvement areas.
- In terms of preferred actions to improve cities’ management of energy and resources, residents surveyed in Seoul and Melbourne ranked making renewable energy a greater percentage of their city’s overall power supply as their top choice.
- Meanwhile, in Hong Kong and Singapore, residents favoured incentives for residents to use energy- and water-saving home appliances. In Shanghai, respondents mentioned the use of technology to better manage the city’s power grid as the most needed action.
The impact of technology
- As residents’ awareness of these tech solutions increases, so does the perception that these technologies have a positive impact on quality of life. For example, 84 percent of respondents expressed awareness of electronic payment technology and apps, with 66 percent saying they find such apps beneficial. Interactive transportation maps and mobile apps also achieved a high degree of recognition (81 percent), with a similar proportion (64 percent) saying they improve day-to-day life. Similarly, as overall awareness decreases, so does perceived benefit among those who are aware of such solutions. In the case of smart parking, overall awareness amounted to 52 percent, with positive impact amounting to 38 percent.
- Comparing the five cities, Singapore showed the highest overall awareness of smart city technology solutions included in our survey. In contrast, Seoul residents are the least aware, with no single technology scoring more than 77 percent and three achieving 50 percent recognition or below.
- Gaps in awareness shown by the survey findings point to areas where cities could increase outreach efforts, particularly since these gaps often align with residents’ expected benefits from a smart city. For example, there was relatively low overall awareness of smart parking initiatives (Figure 7.1), despite the expectation that smarter cities will result in less traffic congestion. Similarly, interactive government self-service help centres and apps ranked second to last in terms of overall awareness; however, improved delivery and management of public services is a top-three expected benefit for smart city development.
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