Indonesian ICT initative to transform major urban areas


As residents move away from rural areas, cities in Indonesia are increasingly feeling the pressures of urbanisation. To improve quality of life in increasingly congested urban centres, the government has adopted the 100 Smart City Movement, an initiative that aims to establish 100 technologically advanced cities across the archipelago by the end of 2019. The movement is set to transform urban planning – and, by extension, the real estate sector – by adopting ICT solutions to promote a high quality of life and sustainable living. The success of the initiative will rely on the deployment of advanced data analytics to develop green energy solutions for buildings. On the back of this initiative, some aspiring smart cities, including Jakarta, Bandung, Surabaya and Makassar, have prioritised digital platform development in government services. Supporting these platforms, ICT solutions will be used in resource management, transportation and waste management.

ASEAN Movement

Indonesia’s smart city efforts will form a part of the wider Smart Cities Network, a platform launched in 2018 under Singapore’s ASEAN chairmanship, which aims to synergise the development of smart cities across the bloc. “Smart cities are about making life easier, for instance, by allowing customers to book a parking space at a mall in advance,” Michael Widjaja, group CEO at Sinar Mas Land, told OBG. “Today’s consumers are used to everything being digital and fast-paced, so if we do not foresee emerging demands, we will have more work catching up later.”

One example of a tech-based initiative is the recently announced series of collaboration projects between Sinar Mas Land and the ride-hailing app Grab to develop innovative mobility solutions in Bumi Serpong Damai (BSD City). BSD City is an ongoing development in Greater Jakarta by Sinar Mas Land to become a digital technology hub, combining houses, businesses and commercial properties that are integrated with hightech solutions. Given the complex challenges associated with the increasing number of urban dwellers, such as congestion, environmental degradation and public health issues, governments across the region have begun to implement smart city methodology in a bid to mitigate social problems. However, making any city more smart is not an easy task. In Indonesia’s case, the challenges facing the 100 Smart City Movement are considerable. According to a study by US urban and climate strategist Boyd Cohen, there are six broad dimensions that determine a city’s success in enacting smart city policies: smart governance, smart economy, smart citizen, smart mobility, smart environment and smart living. By most accounts, Jakarta and other municipalities across the country continue to experience issues with chronic traffic congestion and inefficient public services, meaning the authorities have a long road ahead to achieve their goals.

Smart Move

In addition to focusing on digital platforms, a major component of smart cities includes urban planning, with infrastructure primarily focused on human settlement. To achieve the high level of living standards that are associated with smart city developments, South Korea’s Ministry of Land, Infrastructure and Transport is working with the Ministry of Public Works and Housing to develop smart living solutions and transit-oriented infrastructure.

Under a bilateral agreement, development will take place over three stages. Between 2015 and 2025 the primary objective is to promote efficient public services, such as access to drinking water, sanitation services and the construction of slum-free residential areas. During the second phase, running from 2025 to 2035, the primary objective will be the construction of green cities. In the third and final stage, which runs between 2035 and 2045, the two government ministries will go one step further in transforming the so-called green cities into smart cities that offer resilient and sustainable living environments.

The concept of green buildings already appears to be taking off in the domestic real estate market, albeit slowly. “The Indonesian Green Building Council has been quite progressive, and some developers are really taking the initiative to implement green standards, for example by properly disposing of construction debris in landfills and by using more environmentally friendly construction materials,” David Cheadle, managing director of commercial real estate services company Cushman & Wakefield Indonesia, told OBG.

Access to Services

A major benefit cited in the reasoning behind the development of smart cities is the improved capacity of city governments to provide access to public services. With this in mind, efforts have begun to ensure that public services are more efficient, innovative and available to all. As such, connecting underserved pockets of urban populations is one of the key goals of the Smart City movement.

In September 2018 the International Organisation for Migration (IOM) and John Snow International (JSI) Research & Training Institute held a workshop in partnership with the Indonesian Municipality of Makassar. As part of the Smart City initiative, the IOM and JSI collaboration aims to improve the quality and access to public services in the eastern municipality. A key objective will be to help speed up the collection of data and promote sustainable urban planning. Funded through the multi-country Building Healthy Cities initiative, the project is expected to assist the port city of 1.6m people to become a smart city and improve the efficiency of public services.

Three draft studies conducted in early 2018 by JSI, the US-based think tank Urban Institute and IOM were presented to stakeholders at the workshop. Among the stakeholders were public and private sector agencies, as well as representatives of special needs populations within the municipality. The studies revealed a number of operational challenges and opportunities for the city to improve its public services via data-driven technology. One of the biggest challenges identified was the development of public services and improved access to underserved segments of the municipality.

Resource Management

The use of ICT-enabled platforms in urban planning is gaining traction around the world. In Singapore, Dubai and Berlin, smart solutions have eased traffic congestion and promoted more efficient public services. These kinds of solutions will be particularly valuable in enabling Indonesian cities to better manage key resources, particularly energy and water. In the years to come, ICT-enabled systems should be able to reduce waste by increasing efficiency and resilience. Given the amount of natural disasters that Indonesia has witnessed over the years, the tech-based management of resources could prove to be particularly valuable during energy and water shortfalls brought on by climate change or extreme climatic events. Smart grid solutions are expected to lead to an uptake of renewable energy and a reduction in the country’s carbon footprint, although coal will continue to play a leading role for power initiatives until cleaner solutions come on-line.

If successive governments can stick with the current trend of technology adoption, homeowners will be able to sell the energy they produce from solar panels back to the grid. While there are many benefits to embracing e-governance, major infrastructure investment will be required to ensure that the smart city movement can be sustained, particularly with regard to ICT systems. Given the expectations of robust coverage, communication service providers, businesses and property developers will need to collaborate to improve connectivity and achieve the 100 Smart City Movement goals.

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The Report: Indonesia 2019

Construction & Real Estate chapter from The Report: Indonesia 2019

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