Smart city experts should be looking to emerging markets. Here’s why

From the crowded markets of Dakar and Karachi to the informal settlements of Addis Ababa and Rio de Janeiro, urban technology seems to be thriving everywhere. Whether used for hitching a ride and navigating grinding traffic or buying coffee and finding a date, smartphones and apps are ubiquitous. To many people living in the world's low and medium-income metropolises, tech companies like Waze, Uber and their local equivalents seem entirely native.

But there's a catch.

Many foreign technologies, companies and start-ups are still failing to address the most pressing needs of the majority of city residents in the so-called global south. Despite widespread adoption, they only really serve the needs of the elite, while leaving most of the urban poor in Africa, Asia and the Americas still struggling with basic issues ranging from safety to sanitation. This is not just a problem for low-income city dwellers. It is also a conundrum for the urban tech sector and global cities more generally.

There are several reasons why ‘smart city’ technologies rarely address the most important challenges of low and medium-income cities. For one, the overwhelming focus of the first generation of smart city vendors was on wealthy cities in mature economies. Early smart city champions like IBM and Cisco, two US corporations, focused initially on North American and European cities before spreading to fast-growing urban centres in East and Southeast Asia.

More recently, smart city technologies are being developed even more rapidly in emerging markets. Homegrown urban tech companies in fast-growing cities across China, India and Singapore, while less numerous, are adopting a similar approach to those of the US and Western Europe. This is not surprising: large Asian cities have the wealth, capacity and determination to take advantage of the latest innovations. They are also home to a surfeit of creative people thinking about how to solve municipal problems.

Not surprisingly, influential groups ranging from the Economist to McKinsey & Company routinely designate global cities like New York, London, Paris, Singapore and Seoul as the ‘smartest’ when it comes to the deployment of technology. The focus of most companies investing in smart city technologies, then, is on a narrow selection of between 300 and 600 developed cities driving the global economy.

The fact that smart city technology is purpose-built for wealthy cities partly explains why it is often criticized in the developing world. City officials and citizens in poorer cities (or in poorer neighborhoods of better-off cities) are frequently saddled with expensive systems supplied by foreign vendors. More often than not, these products are ill-suited to local realities. In some cases they can reinforce digital divides - benefiting the privileged minority with access to regular internet access.

More fundamentally, the traditional focus of urban technology companies on the wealthiest cities restricts the ambition and creative potential of smart cities. Technologists regularly espouse a focus on first principles as the basis of creative problem-solving and designing solutions. And yet technologies targeted exclusively for rich urban consumers may in fact be more evolutionary and less radical than widely assumed. This is because they are designed for and constrained by existing infrastructure, rigid institutions and a level of risk aversion that comes from citizens who generally have it pretty good.

By contrast, urban technologists designing solutions for emerging market cities could potentially change the game. Why? It´s simple: more pressing needs create better conditions for radical innovation and rapid scale. And the scale is breathtaking: more than 90% of all future urban population growth through 2050 will occur in Africa, Asia and Latin America, precisely those areas least serviced by today’s urban technologies. It is reasonable to believe that the next generation of ideas and products in urban technology will emerge from companies and think tanks solving complex problems in the cities of the global south.

The idea that a mature global industry could find fresh ideas in lower-income cities is hardly novel. Urbanists and urban planners have been here before. Take the case of Bus Rapid Transit (BRT), arguably the single biggest innovation in public transportation in a generation. BRT realizes the benefits of light rail transit at a fraction of the cost. Yet BRT is an innovation imported from Curitiba (Brazil) and further refined in Bogotá (Colombia). For decades, BRT was denigrated among western planners as a ‘poor man’s subway’. But today, from Los Angeles to Jakarta, BRT is regarded as an elegant and efficient way to do more with less – a demand facing every mayor.

There are limits to what technology can accomplish. Poverty, inequality, weak institutions and crumbling infrastructure cannot be solved by dashboards, sensors and apps. So how might we determine where the urban tech sector can make the biggest difference? We could do worse than take a fresh look at familiar urban priorities and solutions – but notice how approaches in one setting can mask very different needs, constraints, and potential solutions for others.

Consider the following sectors:

Urban transit: Western cities are struggling to pay for their overburdened transit systems, to attract new customers and to mitigate the distortionary effects of ride-sharing. They generally view decentralized, private services with suspicion. Yet most low-income cities already rely on informal paratransit solutions that are financially self-sufficient and highly responsive to demand. Known by various names – matatus, combis, or peseros – these often complement fixed transit systems, reaching excluded and marginal neighborhoods. The problems they confront – safety risks, poor conditions and corruption – are also familiar to regulators in the global north. A company that developed a technological solution to organize and integrate informal transport in Africa, Asia and the America (a good example is the Digital Matatu project in Nairobi) could also help resolve microtransit challenges in wealthier cities (as groups like Chariot and CityMapper are attempting to do).

Walking and biking: Pedestrians and cyclists are still largely invisible in traffic management systems. Some wealthy cities have adopted a ‘vision zero’ plan to promote greater safety for pedestrians and cyclists. Even so, they are still far from systematizing the management of pedestrian and cycling traffic in the same way they apply to vehicular traffic. In low-income cities, this is an even more urgent issue. Take the case of Nairobi and Lagos, where more than 40% of the city's residents are on foot or use a bicycle. Yet the roads there are in no way managed to ensure their safe passage from one place to another. Well-designed technology could make a great difference here: a lattice of automated cameras and sensors could help generate data on pedestrian and cyclist mobility and build preventive measures to increase their safety, for example. In wealthy cities, this problem can be solved with adjustments to existing signal systems, as London is working on; but implementing such a solution in a low-income city will require easy-to-install, easy-to-operate and easy-to-maintain systems - unlike most modern signals.

Real estate transactions: Companies like Zillow, WeWork, and AirBnB have revolutionized real estate search and transactions across North America, Western Europe and parts of Asia and Australia. In scraping information from multiple sources and organizing it around existing listing services, they have dramatically reduced the frictions associated with finding property; these models have huge applicability in those parts of the developing world that are dependent on rental housing. But in large parts of Africa, Asia and Latin America, there are more fundamental problems when it comes to real estate - such as proving and tracking property rights in places with incomplete records and where informal settlements are the norm. Bitland, a company in Ghana, is one of several firms working to apply blockchain to property titles — which helps eliminate the risks of document fraud and poor record-maintenance. If successful, one of these companies could streamline the buying and selling of real estate by eliminating associated legal fees, unlocking markets everywhere from Accra to Los Angeles.

Construction: Developers everywhere struggle with the cost of construction, which is one of the industries least affected by technology over the last generation. While modular construction, for example, is widely discussed, it is seldom practiced on larger buildings and still carries a stigma in many wealthier markets. Building codes and customer expectations may make it difficult to innovate quickly in most American or European cities - but the imperatives of growth and cost reduction are many times greater in Africa, where up to 60% of a given city’s population may live in informal settlements. Companies like Mass Design are stepping up as an impact-driven architecture firm focusing on human-centered, participatory architecture, utilizing local materials and, above all, designing for the dignity of local residents. Innovators such as New Story are working on producing 3D printed homes in less than 24 hours for under $4,000 and, if successful, will need to navigate how to integrate with local construction industries rather than replace them.

Water supply: Virtually every city in North America and Western Europe has a functioning water supply that is sufficient to its task. Since they are costly to maintain, water departments in cities in North America and Western Europe see the need for innovation at the margins such as digital water metering, acoustic leak detection and repairing leaks in ways that reduce the need to tear up streets. But the needs of poorer cities are an order of magnitude greater. They suffer from water systems that are fundamentally under-sized due to breathtaking urban expansion rates; leakage rates in water mains can approach 50%; and the rapid replacement of public water supply with unregulated informal water distributors that create serious strain on local water tables. The development of new technologies such as sensors to track water use, robots to repair pipes from within, and the ability to safely decentralize the water supply even in arid conditions, holds great promise: once developed, these could easily be exported to the cities of North America, Europe and East Asia.

Security: Most city governments around the world are investing in a suite of new technologies - from real-time crime mapping platforms and predictive analytics to gunshot detection systems, AI-assisted biometrics and smart cameras - to improve public security and safety. Companies like Nest and online communities like Neighbor.ly have found a domestic market in the US for increased surveillance. They are the 21st century equivalent of home security systems, but rely on responsive police departments and reliable legal systems for their impact. But in low-income cities, policing is often less reliable. The rich pay private security companies, while the poor pay local self-defense groups and even street gangs for protection in informal settlements. New approaches that use technology to provide physical safety would likely be readily adopted, and easily transferred. There is already an explosion of so-called ‘civtech’ in crime-affected cities of the global south. Because they are low-cost, secure and easy to deploy, many solutions such as CrimeRadar and ISPGeo in Rio de Janeiro or Monterrey´s Centro de Integracion Ciudadana have real potential in both upper and lower-income cities.

Corruption: While North American and Western European cities are hardly immune to corruption, the unfortunate reality is that it tends to be more pervasive in low-income settings than in wealthier ones. The move among police departments across the global north to deploy body cameras is driven largely by concerns with the excessive use of force and corrupt practices. Many of the first providers were large incumbent companies who provided expensive, purpose-built systems; but CopCast, developed in Rio de Janeiro in partnership with Alphabet’s Jigsaw, allowed a simple Android phone to be used, at a much lower cost than the usual hardware; it’s now in use in Florianopolis, Cape Town and Jersey City.

The potential to use technology to document how public officials perform their duties is tremendous, and it faces its greatest challenges in places where those officials are the most corrupt. Any technology that will document corruption, identify trends in bribe-taking and protect citizens from fabricated accusations and reprisals will have massive impact in local markets, but it will also find real applications in the global north. A great example of the latter is Brazil's Detector de Ficha de Politica, an app that tracks corrupt elected officials.

So how might the world of urban tech turn its focus to these challenges, with the potential not only to address the developing world but also to throw up new solutions that could be relevant to the planet’s wealthier cities?

The reality is that large urban tech companies are unlikely to take the leap on their own. Incumbents will face what Clayton Christensen calls the innovator’s dilemma, since they have large and profitable product lines that are tailored to the circumstances (and budgets) of wealthy cities. Rich-world innovators may try to develop solutions for the emerging market cities, but they are unlikely to get it right: it’s hard to find product-market fit in Lagos or Dhaka from an office in London. Cities like Bogotá and Addis Ababa have local talent with great insight and experience, but these entrepreneurs often lack access to the talent, capital and global connections that their peers from Palo Alto to Singapore take for granted. And even when they are locally successful, their track record at scaling across similar cities is, thus far, disappointing.

More likely, successful urban tech innovation will emerge from a new hybrid model. Perhaps a venture capital fund will emerge in the US that focuses on urban tech in emerging markets; it would be a commendable use of some of the impact capital that funds and philanthropies are eager to deploy. It could also emerge as a loose network, inspired by (or perhaps associated with) groups such as the C40 Cities or Global Parliament of Mayors, inter-city networks focused on fostering urban innovation. Or it may be a series of investments and mergers, wherein large companies of the global north acquire start-ups in the south; or it may yet see the emergence of a few global south innovators who find ways to expand on their own into the markets of the north. It might start out of a think tank or a B Corp with a foot in Silicon Valley and another in Africa.

Whatever form it takes, technologists, investors, and philanthropists would do well to focus on the problems of the fast-growing, low-income, low-infrastructure cities sooner than later. They have an opportunity to nudge urban technology development toward the first principles of progressive urbanism. Freed from the constraints of powerful firms, existing infrastructure, and risk-averse stakeholders, urban technology may well discover its most profound innovations in the global south.