AI and digital cities: Balancing innovation with regulation
The super-charged pace of artificial intelligence (AI) development means that the implementation of regulations has a hard time keeping up. How should we approach this new frontier, and what protections should we put in place now to safeguard equitable cities of the future?
The period since late 2022 has seen the most accelerated pace in new technology adoption since the advent of the desktop computer. Generative AI and large language models such as ChatGPT have dramatically changed the landscape for business and individuals alike. Major technology companies such as OpenAI, Microsoft, Google and NVIDIA are now investing billions of dollars into driving this fast changing technology area forward.
McKinsey Global Institute estimates that generative AI will add between US$2.6 to US$4.4 trillion annually to the global economy over the coming decade. As AI begins to penetrate technologies and services, the flow-on effect to cities is expected to be enormous.
The growing reliance of our cities on critical IT infrastructure such as cellular networks, high-speed internet, satellite location services, and cloud computing and storage highlights how digital technologies and data are integrated with almost all aspects of core services for modern cities. As the trend in urban population growth continues, it can be expected that AI will increasingly impact many aspects of the planning, governing and functioning of cities and their communities.
With this extraordinary shift happening for economies and enterprises around the world, both governments and corporations are seeking to understand what appropriate regulations and governance should look like in this rapidly changing era of AI. With AI expected to create trillions of dollars of new value in the global economy over the next decade, appropriate governance is critical to protect citizens and preserve the national security and economic resilience of our cities and regions.
Challenges and opportunities of digital city AI
One major opportunity area for AI in cities is around transport and traffic management, where AI is poised to offer new and innovative solutions to long-standing urban mobility challenges. Smart traffic management systems, powered by AI algorithms, can dynamically analyze and respond to real-time traffic patterns, optimizing signal timings and routing to alleviate congestion.
Similarly, AI-driven predictive analytics can forecast traffic trends, enabling city planners to proactively implement measures to prevent bottlenecks. AI can also facilitate the development of integrated, multimodal transportation systems, offering commuters seamless connectivity between various modes of transit.
In the realm of sustainability, AI will be expected to offer new ways to enhance the efficiency of power grids, promoting the use of renewable energy sources and reducing overall consumption. Smart waste management systems, guided by AI algorithms, can streamline collection routes, minimizing fuel consumption and lowering carbon emissions.
AI's role in monitoring and analyzing environmental data will also allow cities to proactively address issues such as air quality and water conservation, while predictive maintenance of key assets across cities is expected to accelerate through leveraging the latest AI technologies.
Generative AI also stands at the forefront of a paradigm shift that is poised to redefine the employment landscape within cities. As the technology evolves, it is expected to significantly change a wide range of jobs. While concerns about job displacement are valid, the overarching impact of generative AI lies in its capacity to create new opportunities and reshape existing roles to become more productive and creative. This change in the nature of work is expected to drive an increase in flexible and hybrid work arrangements, which will likewise influence forward planning around commercial and residential precincts and associated transport needs.
For example, NEOM, the smart and sustainable regional development in Saudi Arabia, is making early investments in AI so that it can provide a backbone to the planning, construction and functioning of this futuristic city. This includes a recent US$100 million investment in Pony.ai to integrate autonomous vehicles and infrastructure into the city from inception.
NEOM is also seeking to integrate AI situational awareness across all its services to ensure optimal provision of secure and efficient energy. This is a trend that can be expected to grow rapidly across all major cities around the world given the ever- increasing challenges around energy and water security.
The role of regulation and governance
As these applications for AI grow, the need for effective regulation, policies and governance also becomes paramount. Striking a delicate balance between innovation and safeguarding citizen rights, cities will be tasked with developing frameworks that can address cybersecurity, privacy concerns and equity considerations, while realizing the economic and social benefits that AI can provide.
The City of San Jose in California is an example of a city which has led the way in developing guidelines for use of generative AI for services provided by the City Council. The guidelines are based around six key principles: privacy of personal information; review of accuracy of outputs generated by AI; transparency around when generative AI is being used; guidelines on equity to factor in any inherent bias from AI; accountability for person/s using AI-generated content; and ensuring use- cases of generative AI are beneficial to the quality, outcomes and efficiency of the services provides by the city.
Singapore is another major city which has developed an AI Governance framework
as a central pillar of its digital economy strategy. The framework is based around the guiding principles of ensuring that any decisions made by AI should be explainable, transparent and fair, and that any AI solution should be human-centric. These principles are then used to inform the approach to governance, AI use-cases and stakeholder interactions where AI is involved.
At a national level, governments around the world are in the early stages of bringing into place regulations that seek to protect citizens and prevent outcomes which are harmful to national security or economic progress.
The European Union (EU) has been one of the first regions to develop a legislative framework to bolster regulations around the development and use of AI. As of June 2023, a draft proposal of an ‘AI Act’ was approved by the European Parliament. Likewise, the United States Government released a Blueprint for an AI Bill of Rights in October 2022 with the Biden administration releasing a further Executive
Order around AI Safety in October 2023. Almost all OECD countries are expected to put in place similar legislative frameworks and draft regulations in the months ahead.
Embracing the AI revolution
Just as previous technology revolutions have dramatically changed the landscape of jobs, industries, and the fabric of our cities and communities, the latest AI revolution can be expected to have far- reaching impacts across society.
As our cities rapidly grow as the core hub for communities and organizations, they will be able to increasingly leverage the many advances and benefits from AI. Likewise, they will also inherit the new and emerging challenges which AI introduces as governments and corporations alike seek to adapt to new risks and unknown challenges.
What is clear is that individuals, governments and corporations must embrace the change that is underway and adapt to the opportunities and challenges AI brings. As we move into an era when the security of energy, food and water are more important than ever, it is clear that AI provides a transformative means to significantly lift the productivity of societies whilst enabling more sustainable, livable and resilient cities.