This document discusses smart city investment and economics. It covers key areas of investment for smart cities, including land, power, water, highway/road connectivity, and fuel pipelines. It then discusses various economic models related to local economic development, including prehistoric, conventional linear, pre-industrial, and technopoles models. It also covers principles of competitiveness in new urban economies and the relationship between urbanization, cities, and economic growth.

1. SMART CITY: UNIT V
SMART CITY INVESTMENT AND
ECONOMICS
Dr. Pallavi Badry
(Associate. Professor)
Civil Engineering Department
Vidya Jyothi Institue of Technology, Hyderabad ,
INDIA
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2. UNIT V
Smart City Investment and Economics: Land, Power,
Water, and Highway and Road/ Rail Connectivity, Fuel
Pipe Lines – economics
SMART CITY : SMART CITY
INVESTMENT AND ECONOMICS

3. CONTENT
 Introduction
 Smart City Investment
 Land,
 Power
 Water
 Highway and Road/ Rail Connectivity
 Fuel Pipe Lines
 Economics
 Smart city with economical aspect
 Local Economic Development Models
 Principles of Competitiveness in New Urban Economies 3

4. AREAS OF ECONOMIC DEVELOPMENT
 Governments undertaking to meet broad economic objectives
such as price stability, high employment, and sustainable
growth. Such efforts include monetary and fiscal policies,
regulation of financial institutions, trade, and tax policies.
 Programs that provide infrastructure and services such
as highways, parks, affordable housing, crime prevention,
and K–12 education.
 Job creation and retention through specific efforts in
business finance, marketing, neighborhood
development, workforce development, small
business development, business retention and
expansion, technology transfer, and real estate development.
This third category is a primary focus of economic development
professionals.
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5. SMART ECONOMY
 Cities are able to perform the multifarious functions as they
proclaim to have better infrastructure and services (compared to
their rural counterparts), which aids their agglomeration
economies and related creative and technology-driven
production processes.
 City dwellers with comparatively higher Human Development
Index of tomorrow can only survive if they are on the path of
continuous learning, and can become never-exhausting
storehouse of superior creativity and innovation to compete with
their better-quality products and services around the world.
 It is due to all these factors that in recent decades cities-led
economic growth has featured prominently in the national
economic policies of many countries .
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6. CONSTANT URBANIZATION

7. SMART CITY INVESTMENT
 Land
 Power
 Water
 Highway and Road/ Rail Connectivity
 Fuel Pipe Lines
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8. SMART CITY INVESTMENT
 Building the smart city required smart way of funding.
 In the conventional approach the government provides the
funding for infrastructure and manages the administration by
collecting property taxes.
 For a smart city we devised a new avenue of funding and
administrative setup.

 Investment of Rs 25Billion (2500Cr) was required for setting
up smart city.
 That included the cost of land acquisition, water storage and
supply, electricity generation and supply and a raod link to the
individual corridor.
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9. LAND
 For the land as a recourse the available land for the
future development of smart city is 12 sq. Km has to be
procured.
 Land owners had to be paid at a good rate, well above
the market rate , say 5 million per hectare. Estimated
land cost is Rs 6 billion (600 Cr).
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10. Power
 The Major source of the power is rooftop photovoltaic
installations.
 About 516 MW power is generated by solar.
 This not only satisfies the residential as well as commercial
power and energy requirement of the smart city, but the power
required by industry also.
 However, the problem with solar generation is that it is available
only during daytime.
 The electricity board will be convinced to receive this power
daytime and give equivalent power during the evening and night
time so they're in no additional investment required.
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11. Water
 Residential water requirement would be satisfied by
rainwater harvesting, but industrial and commercial
requirement will need to be satisfied by external dam
water.
 A dam of storage capacity of 3 million liters will be built
for this purpose at a cost of 9 billion.
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12. Highway and Road/ Rail Connectivity
 According to NHAI, the cost estimate for 4 lane highway
is Rs. 125 million per km (12.5 Cr /Km), while the
planning commission is estimated the cost as Rs. 96
million per Km.
 These are 2010 costs, considering inflation and rise in
prices, the cost of highway is Rs 120 million per Km.
 Also, since the smart city will be situated 50 km away
from the existing road network, the cost of the road link
is 600 Cr.
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13. Fuel Pipe Lines
 12 inch gas pipeline costs about Rs. 11.2 million per km
has recommended the smart city.
 The smart city is being around 50 km away from the
existing CNG pipeline grid, the cost of the CNG pipeline
for constant supply is Rs. 560 million.
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14. ECONOMICS OF SMART CITY
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15. ECONOMICS: SMART CITY WITH
ECONOMICAL ASPECT
Dependency on ICT and IoT
Smart phones and its extended
Smart digital devices
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16. DEPENDENCY ON ICT AND IOT
 The consolidation of Information Age has been facilitated by
the development of computer hardware and software industries,
which have transformed the economies of cities and regions,
particularly in the form of information technology (IT) parks
and knowledge parks.
 Massive investments in the extension of IT infrastructure
across nations and the global spread of electronic literacy (e-
literacy).
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17. SMART PHONES AND ITS EXTENDED USE
 The arrival of Smartphone in recent years has reenergized the
Information Age and the world of ICTs.
 A combination of mobile or cell phone and handheld
computer, Smartphone is credited with creating the greatest
technological revolution since the Internet .
 A standard smartphone supports in addition to the basic
telephone features such as
 Internet and Web access,
 e-mail and audio-visual communication,
 all sorts of digital applications (or apps),
 music and movie player,
 camera and camcorder,
 voice dictation,
 global positioning system or GPS navigation, among others.
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18. SMART DIGITAL DEVICES
 Smart digital devices including smart phones, tablet
computers, and phablets (PHonetABLET) are changing
the ways in which people communicate, socialize, live,
and work in villages, cities, regions, and nations.
 On the other hand, social media, which depends on
mobile phone and Web-based technologies, has aided the
spread of smart digital devices and their usage around the
world and, in turn, demands further extension of IT
infrastructure and development of ICTs.
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19. URBANIZATION, CITIES, AND ECONOMIC GROWTH
 Ii is always assumes that positive correlation between
urbanization and economic growth within national economies.
 Based on the analysis of long-term statistics World Bank, UN-
Habitat noted that ‘while the share of urban populations
worldwide increased from per capita income increased by 152
%—33 to 51 % between 1960 and 2010, from US $2382 to
US $6006—over the same period’.
 Backing from such statistics has repeatedly confirmed the
notion that urbanization and economic growth go hand in
hand.
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20. ECONOMIC GROWTH
 This is especially true when it comes to aggregate figures, such as those highlighted above
by UN-Habitat. However, there are exceptions to this. For example, despite slower
economic growth compared to other regions, Africa’s urban population grew almost
ninefold between 1950 and 2000; some have termed this phenomenon as ‘urbanization
without growth’ .
 Following from the general and positive correlation between urbanization and economic
growth, cities are now recognized as engines of economic growth .
 For example, cities in Asia generate over 80 % of national gross domestic product (GDP).
This has led governments to include urbanization as part of national economic
development policies, such as in China and India in recent decades.
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21. URBANIZATION AND ECONOMIC DEVELOPMENT IN
INDIA
 Urban India has grown at an unprecedented rate in the last two
decades.
 However, Census of India 2011 showed that more population addition
took place in urban areas than in rural areas.
 It can be seen that greater number of settlements in India had
transformed to Census Towns adding more of urban character to
India.
 India’s population growth shows that by 2031 the total population is
expected to reach about 1.5 billion, of which the urban population is
estimated to be about 600 million, i.e. approximately 40 %.
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22. GROWTH PATTERS AND ECONOMY
MANAGEMENT
 Also there is a rapid tendency to form urban agglomeration,
and the decadal growth in urban agglomerations stood at 23.7
%.
 There are also instances in which two adjacent urban
agglomerations merge into one big urban agglomeration.
During the ten-year period (2001–2011), there was only 6.37 %
increase in the number of statutory towns.
 This shows that in coming years urban agglomeration may
become the unit of planning and replace the approach of
preparing statutory plans for Municipalities and Municipal
Corporations. 22

23. THREE ECONOMIC GROWTH SCENARIOS FOR INDIA,
2014–2034
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25. STATE ECONOMY AND URBANIZATION LEVEL
 It can be seen that Delhi has
highest per capita income and
there are many states above mean
per capita income.
 Maharashtra is the biggest
contributor of GDP.
 Other southern states, such as
Kerala, Karnataka, Gujarat, Tamil
Nadu, and Andhra Pradesh, are
above the average per capita
income.
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26. STATE CONTRIBUTION TO NATIONAL DOMESTIC PRODUCT
AND PER CAPITA INCOME IN INDIA
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28. PRINCIPLES OF COMPETITIVENESS IN NEW URBAN
ECONOMIES
 Asia has become the engine of economic growth in the world. To support
the cities-led economic growth process, the Asian Development Bank
detailed out its urban development agenda, which is broadly divided into
three areas of focus: competitiveness, environmental sustainability, and
inclusiveness . Choe and Roberts have outlined the Asian Development
Bank’s ‘competitive cities’ agenda along with three rich case studies. In
this major work, they discuss the three principles of competitiveness in
new urban economies as follows. A Long-term, Strategic Vision for Urban
Economic Development is the first principle. To sustain development of
the local economy, an economic vision should be agreeable to the civil
society, inspire collective effort by those involved, and build and
strengthen confidence to outcompete the rivals. Such collective
understanding can go a long way in energizing cities and their economic
clusters to achieve their development goals. Identification and agreement
on local economic development goals, and how they should be achieved
will guide government policy, business strategies, investment, and
development decisions.
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30. LOCAL ECONOMIC DEVELOPMENT MODELS
 Prehistoric economy model
 Conventional Urban Economy/Linear economy
 Pre-industrial Urban Economy
 Technopoles model
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31. PRE HISTORIC ECONOMY MODEL
 The pre-historic remains of Dholavira, Harappa, Lothal, and Mohenjo-
daro cities of Indus Valley Civilization show the possibility of an open
urban economy with outside trade connections along with the
importance of citizens in the town as against king and priests in
medieval times when walled cities came up for security reasons.
 In the medieval times, urban economy was contained within it’s the
physical boundaries of a human settlement. Most of the manufacturing
was undertaken by artisans and managed by their respective guilds
wherever necessary.

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32. CONVENTIONAL URBAN ECONOMY (LINEAR
ECONOMY)
 Like in cities of the twenty-first century, the conventional
urban economy in the past was built on secondary and tertiary
activities (called as developing elements of economy).
 But a careful look shows that the urban-based secondary and
tertiary activities have been changing and evolving over time.
 This model follows the principal of TAKE-MAKE-DISPOSE
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34. PRE-INDUSTRIAL URBAN ECONOMY
 The evolution of urban economy is briefly discussed
under the two historical phases of
 Pre-industrial age
 Industrial age.
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36. TECHNOPOLES MODEL
 The idea of ‘technopolis’ or ‘technopoles’ goes back to 1958
when Tsukuba originated as a satellite Science City of Tokyo .
 In 1994, Castells and Hall argued that technopoles had become
‘a key feature of national economic development worldwide’.
 They conducted a systematic survey of technopoles that are
‘planned centres for the promotion for high-technology
industry’.
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37.  As ‘mines and foundries of the Information Age’, technopoles
are built as science parks, science cities, technobelt
programmes, or national technopoles .
 They are designed to promote interactions among high-tech
firms, research centres, and often universities to create
synergy that generates knowledge, innovation, products,firms,
and thus regional growth and development’ .
 Technopoles have been developed worldwide, for instance in
Brazil, China, Germany, India, Italy, Japan, Republic of Korea,
Malaysia, the Netherlands, the UK, and the USA .
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38.  Many technopoles have succeeded, such as the famed
Silicon Valley in the USA.
 However, several others have had limited success as:
 they aimed at importing technologies instead of developing them
locally;
 with the goal of generating higher value-added and employment
multipliers, they promoted manufacturing
 processing industries as in growth poles.
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42. Thank you
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