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“Development of the smart city is not a utopian ideal but a social necessity: rapid urbanisation is creating unique pressures on local economies, environmental impacts and the challenges of ageing population…”
The development of the smart city is an important element in ensuring the sustainable urbanisation of the world. But for this to happen, more focus is needed on strengthening accounting, financial management and governance, over and above just focusing on technology, according to a new report by ACCA (the Association of Chartered Certified Accountants).
The report ‘Smarter Cities, Simpler Cities – accounting for the city of the future’ examines the rise of the ‘smart’ city as the best viable path towards successful, sustainable urban centres in an age where two thirds of the global population will inhabit cities by 2045. Cities are defined as ‘smart’ not just by using technology, but in their ability to support an end-to-end process that sees resources used efficiently to create viable outcomes that improve the quality of life for citizens
It looks at a range of global smart cities, ranging from South Korea’s tailor-made Songdo to examples of how smart principles are applied to existing, developed cities such as Amsterdam and Singapore. In particular, the report features a spotlight on India, where the government’s Smart Cities Mission has identified 100 smart cities to be created or retro-fitted with smart attributes.
For report author Narayanan Vaidyanathan, who develops ACCA’s research and insights with a focus on the future direction of business and accountancy, Smarter Cities, Simpler Cities highlights the necessity for smart principles to be embodied in the skills of key professionals, as much as in the city infrastructure itself,
He said: “The rise of the smart city is coinciding with significant areas of technological innovation – such as the Internet of Things (IoT), Big Data analytics and open standards – and all this has the potential to revolutionise everything from waste management to traffic reduction.”
In this context, Vaidyanathan observes that the rise of smart cities is an example of how vital it is for professions like accountancy, to adapt in an evolving age:
“The discourse around smart cities talks extensively about the role of government and technology providers; but there is an important third leg in the picture which is the finance and accountancy community.
“This report highlights the urgent need for professional accountants to develop their own digital capability and understanding in order to provide the expert guidance (in areas like cost-benefit analysis for example) and strategic counsel necessary to shape the city of the future.
“More broadly, in many cities across the world there is a move for decentralisation with more authority being transferred from central governments to the local level. This has implications such as greater budgets and responsibilities for finance staff at city administration level, and accountancy capacity building in this space will be important.
“Part of this capacity building will be the creation of ‘professional accountants’ who go beyond recording historical performance. This involves various aspects, but a couple of particular relevance in this context are the ability to communicate effectively – which is critical to breaking siloes in an often traditional public sector environment; and, acting as the ethical conscience of the organisation with respect to managing public money in the public interest.
“This report should serve as an important reminder that ensuring a strong pipeline of forward-thinking and fully-trained finance professionals is integral to building resilience into cities of the future.”
According to ACCA, across Asia and Africa, the development of the smart city is not a utopian ideal but a social necessity: rapid urbanisation is creating unique pressures on local economies, environmental impacts and the challenges of ageing populations.
India alone expects to add about 300 million city dwellers by 2045. So as new centres of urbanisation emerge around the world – smart cities offer a ray a hope to ensure that the journey of many of these new urban centres can benefit from a planned, smart approach that safeguards living conditions for future generations.