A walk in a smart city

Significant growth opportunity lies ahead as over 150 cities² around the world have officially adopted a ‘smart city’ strategy, tapping into technological innovation to make cities more efficient.

Smart solutions are not limited to installing digital interfaces in traditional infrastructure or streamlining city operations. It is also about using technology and data purposefully to make better decisions and to help improve the quality of life. And companies that are harnessing such smart technologies present long-term investment opportunities¹.

Cooling systems in a smart city

Centralised smart cooling systems could bring a new way of life to cities near the tropics.

Such smart cooling systems harness chilled water that is generated from highly energy-efficient chiller plants to produce cool air for homes and buildings³.

Government investments to upgrade city infrastructure present opportunities for companies to innovate and provide the leading-edge technologies for such systems. For example, some companies have continued to develop integrated solutions that can transform visually more comfortable smart lighting systems into a platform for data-driven applications. Powered by human-traffic sensors, these lighting systems know how to switch off automatically when public spaces are unoccupied, translating into energy- and cost-savings for a smart city⁴.

No more ‘jams’ in the city?

Traffic congestion is generally a major issue in most cities around the world, with increased use of vehicles on the roads. Still, smart technologies have started to transform the way people move around in cities.

Take Singapore as an example, real-time traffic data on bus arrivals, taxi availability, traffic conditions and carpark spaces are shared with residents to help manage, or even avoid traffic congestions.

Crowding issues on buses have been reduced by 92%⁵. Going forward, Singapore is also looking to adjust traffic light timings and provide traffic light priority for buses, allowing shortened wait and travel times.

Continuing advancements of autonomous driving technology are making good progress in improving the safety of semi-autonomous vehicles on the roads. Sensor technologies or advanced driver assistance systems enable the digitalisation of information for control and communication, and allow the automation of certain functions. For example, adoptive cruise control, parking assist and fatigue recognition are becoming more common fixtures in motor vehicles.

We expect mass market adoption of autonomous vehicles could markedly improve road safety and reduce traffic congestion and carbon dioxide emissions, enhancing the quality of lives of many.

Conclusion

AI, robotics and IoT are bringing rapid changes in smart cities and more governments are adopting new technologies to improve urban planning, and achieve a more sustainable living environment. Companies tapping into technological innovation that helps make cities more effective and efficient are presented with long-term growth opportunities¹.

This content represents our investment team’s current view and overall strategy provided for information only based on current market conditions not taking into consideration any specific investor’s investment objective and risk appetite. Not to be construed as investment recommendation or advice.

Diversification does not guarantee investment return and does not eliminate the risk of loss.

1. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions.
2. Source: Roland Berger “Smart City Index: Vienna and London lead the worldwide ranking”, 08.03.2019.
3. Source: “Fresh Water Cooling Tower Scheme”, Electrical and Mechanical Services Department, Hong Kong, 01.05.2021.
4. Source: “Smarter and More Energy-Efficient Street Lighting Systems by 2022”, Land Transport Authority Singapore, 03.01.2017.
5. Source: “Open Data & Analytics for Urban Transportation”, Smart Nation and Digital Government Office, Singapore. Data as of 31.05.2021.
6. Source: J.P. Morgan Asset Management, July 2021.

Investment involves risk. Not all investments are suitable for all investors. Past performance is not a reliable indicator of current and future results. Please refer to the offering document(s) for details, including the risk factors. Investors should consult professional advice before investing. Investments are not similar to or comparable with fixed deposits. The opinions and views expressed here are as of the date of this publication, which are subject to change and are not to be taken as or construed as investment advice. Estimates, assumptions and projections are provided for information only and may or may not come to pass. This document has not been reviewed by the SFC. Issued by JPMorgan Funds (Asia) Limited.