Washington, DC – We recently returned from a research visit to Jakarta, Indonesia, with the Japan International Cooperation Agency’s Research Institute (JICA-RI). Our trip sought to understand the opportunities and challenges of turning Jakarta, a sprawling megacity of over 10 million people, into a “smart city.”

We met with representatives of the US Agency for International Development (USAID), the World Bank, JICA, multinational and local companies, nongovernmental organizations, the city government, and the winners of the 2015 Jakarta Urban Challenge. We asked these people what a “smart city” meant to them.

Here are some responses:

· Doing government the right way

· How to manage and make use of our resources to solve city problems in more expedient ways and avoid problems in the future

· Access to more information that one can analyze to provide insights for a city

· Smart planning and budgeting

· The best possible use of technology to enable good governance

· Applying technology to make cities more livable

· Using available innovations (this can include technology but does not have to be technology) that change the way people do things in a city

· One stop service centers—if you need anything from a city, you get it soon and in one place from common centers

· Cities that provide efficient and effective services

It is clear that there are various ways to think about smart cities, a concept that came into the modern consciousness in 2005, when the Clinton Global Initiative challenged Cisco to devise ways to use its technology to make cities more sustainable.

This challenge led to a $25 million Connected Urban Development Program. Cisco worked with Amsterdam, San Francisco, and Seoul on “using network connectivity for communication, collaboration, urban planning, and other activities.” Its goals included improving services delivery, traffic flow, and public transportation and ultimately reducing carbon emissions. After a successful five-year pilot, Cisco created its Smart and Connected Communities Division and worked to commercialize its products and services in this space.

IBM launched its own Smarter Planet Initiative in 2008 and a Smarter Cities program the following year. Smarter Cities works in locations around the world on using new technologies and data to improve the cohesiveness and functioning of a city’s operations, services delivery, and systems. Following the lead of these initiatives and others, “smart cities” has become a buzzword, one that most people immediately link with the application of high technologies.

New technologies are important—they bring benefits ranging from the improved coordination of traffic signals to reduced carbon emissions and energy cost savings for businesses. But a “smart city” doesn’t necessarily mean one that revolves around the most state-of-the-art technologies and smart phone applications.

There is a more basic definition—a city with capable public administration and effective services delivery—and this is the definition that is arguably most important to consider in developing countries. Cities that are not well managed and accountable to their citizens cannot be “smart.”

Jakarta’s city government opened an impressive Smart City unit in 2014 that focuses on collecting big data and analyzing it to drive the city’s decisionmaking. The unit builds on the city’s 1 million smart phone users and links them in a network that provides a new kind of accountable governance. The unit has a city monitoring system, displayed across several big screens and smaller computers.

This system can toggle between different programs that show traffic conditions in Jakarta, track government staff in the field, access “city feeds” (there are approximately 600 locations with government cameras), and monitor complaints from a smart phone application called “ Qlue.”

Qlue invites users to submit reports of anything ranging from potholes to bribery to broken streetlights. Complaints are funneled via the Smart City unit to the appropriate agencies, and then the agencies must provide photo verification through the application that the problem has been fixed.

Some stakeholders question whether the new technology has been matched by adequate capacity in the government to respond to complaints. However, the Smart City unit asserts that prior to Qlue, it took the government between three days and one week to respond to something like a pothole; now the response time is one day. We saw examples of how the city has used Qlue to paint over graffiti, pick up trash, and move a parked car that caused a traffic jam.

As demonstrated in the Jakarta Smart City unit, cities that seek to become “smarter” require new kinds of employees for jobs that did not exist 10 years ago. This includes data scientists and engineers who have the ability to innovate on the job. Developing countries may face challenges incentivizing and retaining talent for public service jobs and should devise approaches to make these positions attractive.

Jakarta’s momentum toward becoming a smart city comes on the heels of strong political will. Former Jakarta governor and current Indonesian president Joko “Jokowi” Widodo and Basuki Tjahaja Purnama “Ahok” ran together on a strong public service delivery platform for the governorship in 2012. Now-Governor Ahok is involved day-to-day in the oversight and accountability of the Smart Cities Unit and visiting parts of the city that need improvement. Ensuring a track record of effective services delivery will be critical for his reelection.

As Jakarta continues on its trajectory, national and city leadership will need to address shortfalls in water and sanitation, infrastructure, and slum prevalence and conditions. One chief complaint of its citizens is that Jakarta is a highly vehicle-dependent and congested city. A World Bank Urbanization Review of Indonesia speaks about huge missed economic growth opportunities due to the infrastructure deficit. JICA has funded the country’s first modern mass rapid-transit system in Jakarta that will become operational in 2018 or 2019. Another key issue is ensuring access to potable water and sanitation for all of Jakarta’s citizens. We asked a senior city official if he drinks the tap water; he said no.

Another important demand for cities of the future is energy. The demand for energy traditionally skyrockets as a city improves its economic standing, but it is difficult for governments to keep up.

JICA has a program in Indonesia and other countries called the Joint Crediting Mechanism (JCM), in which local companies partner with Japanese companies and receive significant subsidies on energy efficient machines. We visited four sites—ranging from a food refrigeration company to a textile factory—and each site demonstrated significant energy savings and reduced emissions. Companies said the scheme offered them additional advantages, including being able to market themselves as eco-friendly.

While important, donor dollars are not enough to achieve scale of these kinds of initiatives. Technology with improved energy efficiency can be as much as three times as expensive as existing technologies; it is important that financial payback from energy savings be achieved within a reasonable amount of time. National and city governments can play a role by enacting policies that incentivize the adoption of more energy efficient technologies.

We asked a senior public official in the Jakarta Smart City unit how bilateral donors and multilateral organizations could best support the city’s smart cities vision. He did not ask for money to build more infrastructure. Instead, he identified that the development community can be the biggest support to smart cities by developing global standards, or a “smart cities index,” that will help them benchmark their performance and measure their effectiveness with key performance indicators. This is an emerging area of opportunity and one to which actors such as the World Bank could contribute. This follows well on the successes of indices such as the Doing Business Indicators.

“Smart cities” is a concept that will continue to have more and more relevance in middle-income countries. As urbanization drives clusters of educated, middle-income citizens with access to smart phones and social media to cities, these people will vote with their smart phones. Jakarta’s governance has become more focused on service delivery as citizens have demanded these services. There is more pressure on leaders, and those who do not provide adequate services will be voted out of office in democracies. Additionally, as cities move up the economic curve, citizens will demand different kinds of services.

The stakes of “smart cities” could be high. In a global competition for talent and investment, leaders need to make their cities livable. People will leave cities that are congested or unfriendly to pedestrians or that do not offer the efficiency and reliability of services such as trash pickup, public transportation, and infrastructure maintenance. Ensuring strong political leadership and capable public administration is the first step for any city that seeks to become “smarter.” Then technology can be an enabler in meeting the future needs of cities.

© 2016 by the Center for Strategic and International Studies. All rights reserved.

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