The world is witnessing the latest wave in a series of global migrations towards cities. Current projections estimate that by 2050, 70% of the world’s population will live in cities. That means finding space for an extra 2.5 billion city dwellers. For city planners, this presents countless challenges. For entrepreneurs and start-up founders with innovative property technology (PropTech) solutions, this opens endless opportunities for expansion into exciting markets from the United Arab Emirates.
The Abu Dhabi Economic Vision 2030 seeks to transform the emirate’s economy. The UAE capital was ranked as the smartest city in the MENA region for the second year running by the Smart City Index 2021, produced by Institute for Management Development and Singapore University of Technology and Design.
Masdar City in Abu Dhabi represents the first attempt in the Middle East to build such a truly sustainable city. Beyond the UAE, smart city developments in Egypt’s New Administrative Capital and Saudi Arabia’s ambitious giga-project NEOM provide regional expansion opportunities for start-ups.
Hub71, Abu Dhabi’s global tech ecosystem, is home to start-ups from the UAE and across the world operating in sectors including PropTech, CleanTech, FoodTech and FinTech that all contribute to creating future smart cities.
The age of the smart, green city
The challenge of how to organize and plan our cities now comes with a focus on limiting pollution and congestion. In a bid to ensure that cities are part of the solution, city planners have turned increasingly to technology.
According to GlobalData’s 2022 SmartCity Thematic Research: “Cities are the powerhouses of the global economy. In 2015, cities generated 85% of global GDP.”
Smart city design and development remains an important market that will continue to attract substantial investment. GlobalData research suggests that spending on global smart cities will grow from $221.1bn in 2019 to $442.6bn in 2025 – a compound annual growth rate of 12%.
In hotter climates such as the Gulf, where some 54 million people reside in the Gulf Cooperation Council nations, smarter cities are imperative.
In the UAE, a country that has pledged to become net zero by 2050, policymakers are taking significant strides to be home to smarter, greener cities by adopting smart technologies and innovative solutions. Already within the Hub71 community, start-up FortyGuard is developing street-level thermal maps of cities that can create historical, real-time, or predictive temperature benchmarks.
Abu Dhabi – a future-focused city looking to design the next 50 years
Launched last year, “Designing the Next 50” is a UAE government project that will engage all segments of society, including the private sector, in designing the next 50 years of the UAE. Specifically, the UAE is focusing on health, education, social development, economy, environment, housing, tourism, entrepreneurship, investment, skill development, societal values, culture, family relations, sports, youth, food security, science and advanced technologies.”
As part of this long-term plan for the transformation of the emirate’s economy, tech founders with a start-up that operates in infrastructure, housing or advanced technologies are invited to see the UAE, and Abu Dhabi, as a hotbed of innovation and collaboration. PropTech, CleanTech, FinTech and more are all essential for smart city development.
With excellent support, nurturing and development opportunities offered by Hub71, there are huge opportunities in the UAE.
This trend looks set to persevere. The opportunities for tech founders, and for those in PropTech, are opening up as construction spending in Abu Dhabi is expected to grow over the next five years.
Tech founders thriving in Abu Dhabi
While GlobalData predicts that major, city-wide infrastructure projects globally will continue to be dominated by large corporations, there are still plenty of opportunities for challengers and disruptors to offer new thinking and additional services. Start-ups that can offer smart city initiatives in the internet of things (IoT), 5G and AI are set to gain the most.
According to GlobalData, existing players will continue to provide the hardware including sensors and cameras, connectivity and data analysis capabilities, but nimble innovative start-ups are key to the city’s adoption of smart technologies.
Innovative start-ups already launching new technologies in the growing Middle East region include:
1. Transport and logistics start-ups
Smart cities are often painted as a domain for fleets of connected, self-driving cars. The work of companies such as Hub71 start-up Neurobotx will have a lot to do with getting these vehicles moving in a way that makes most sense for all users. Easing congestion and getting commuters to work on time in comfort can be solved many ways, including solutions offered by Hub71 start-ups Arcab, a small bus provider, and subscription commute start-up Volt Lines. Meanwhile moving parcels, rather than people, is being disrupted by last-mile innovators like Swift Box.
2. Cleantech start-ups
The main energy solutions will continue to be established by large providers, but there are multiple opportunities for CleanTech startups to deliver disruptive products and services, ranging from breakthroughs in green hydrogen to AI and data management solutions that help larger energy suppliers provide more connected solutions. Hub71 startups Sensgreen and Caddie Engineering are working to improve indoor air quality, the former through an AI-engineered software platform and wireless sensors, the latter focused on filters that capture air particles for R&D labs and other premises.
3. Smart buildings start-ups
A city is nothing without its buildings, and in today’s smart city those buildings need to also be connected and smart. The opportunities for property technology businesses are many, particularly as cities adjust and adapt to a post-pandemic world, where building use may have to alter as former single-occupancy workspaces start to open up as shared workspaces. The opportunities for companies such as Hub71 member business Letswork will only increase.
4. Food and retail delivery start-ups
The rise of the smart city is intended to bring about new lifestyles and habits. The rise of hyper delivery models and ultra-convenience shopping is one such change. Here, smart tech founders are building new business models and at the same time generating huge quantities of new consumer insights and data. Hub71 start-up Sauce Capital is building a platform for virtual brands to produce on-trend foods for delivery.
5. Fintech start-ups
The way city dwellers interact with each other and with organizations to earn, save, spend money and pay for goods is an area that has been massively disrupted. As we move away from traditional payment methods towards more models of connected and embedded finance the opportunities for fintech disrupters are huge. It is no surprise that Hub71 is home to more fintech start-ups than any other category of business.
To find out more about Hub71 and why Abu Dhabi is an ideal place for start-ups wanting to shape smart cities, download the free whitepaper below.
