Mega Cities of the Future Key Challenge: Cyber Risk
According to global property consultant JLL's new report titled -- 'Clicks and Mortar: The Growing Influence of Proptech'
-- cities in Asia Pacific and worldwide are getting smarter, but they must be ready for the cyber security risks that accompany the growing adoption of tech-enabled real estate and infrastructure.
Commissioned by JLL and authored by start-up community Tech In Asia, the report analyses the convergence of real estate and technology in 13 markets across the region and the ways that emerging technologies are being applied to connect urban real estate, infrastructure and services.
Smart cities initiatives are being implemented worldwide with many high profile examples in Asia Pacific. India has announced its intention to transform 100 municipalities with its Smart Cities Mission and more than 500 cities in Mainland China have started their smart transformation, while Japan and South Korea have also boasted their smart city projects. Singapore is progressing its Smart Nation vision, which was launched in 2014, and Hong Kong has rolled out its Smart City Blueprint with development plans being mapped out for the next five years to enhance the effectiveness of city management. Last month, a US$23 million ASEAN-Australian investment fund was further announced to support smart cities in Southeast Asia.
Albert Ovidi, JLL Asia Pacific COO, says: "Property technology - or proptech - is a key tool in the future development of cities and we in the real estate business have a vital role to play, particularly in smart property development and management. Digital infrastructure investment is increasingly important for cities to create more livable environments and attract and retain the best talent."
"But considering the region's acceleration in the use of the Internet of Things (IoT) and high reliance on data collection and analysis, it's imperative for smart cities to develop effective safeguards against cyber risk."
Denis Ma, Head of Research at JLL in Hong Kong, adds: "Hong Kong's position as one of the region's most mature and liquid real estate markets offers great opportunities for the development of proptech in the city. In our opinion, the government's latest move to earmark HK$50 billion in the 2018/19 Budget to support innovation and technology in the city is a big step in the right direction and this will go a long way in helping Hong Kong develop as a smart city. However, to truly see this industry flourish, Hong Kong will also need to address its IT talent issues in a bid to ensure that it has the substantial pool of talent to augment the city's historical focus on trade and finance. This will require parents to change their mindset and encourage their children to consider careers as software engineers rather than in finance."Potential pitfalls
According to the report, as the real estate industry becomes more technologically advanced, it has increased exposure to such risks. Though many proptech start-ups service the residential market, the commercial sector is not immune. In fact, property owners and tenants face pressures due to the rise of smart buildings where they have building management systems on their smart phones.
"Many of the exciting innovations being developed in the proptech sector, such as smart home controls or drones for property management, have the potential to improve user experience, and save time, money and energy," explains George Thomas, JLL Asia Pacific CIO. "As a firm, we are committed to harnessing the latest technology to provide new products and services for our clients. But we also have to consider the implications of data security and privacy as the sector evolves."BIoT - a new technology to combat risks?
Along with the continued development of advanced proptech tools, cyber policy initiatives are underway across the Asia Pacific region, as governments work towards reinforcing domestic information systems security, collaborating with international partners for intelligence sharing, improving threat identification, and protecting critical infrastructure.
In what could be one of the most impressive tech trends in 2018, the convergence of blockchain and IoT (BIoT) may be one solution to combating cyber risks. BIoT is expected to unleash a new range of services and businesses, among which smart buildings and homes would benefit. BIoT would allow real-time access to data from sensors, with blockchain offering protection. Most importantly, it would build trust, reduce time and accelerate transactions.
"As the proptech space evolves there are huge opportunities for real estate owners and occupiers," concludes Mr. Ovidi. "Smarter cities and workplaces bring incredible prospective value. But in order to reap their full benefits, we have to prioritize systemic resiliency to ensure we manage the potential risks."