International Trends in Smart Cities and the Role of Banks

2017/12/1 上午 12:00:00

Reviewing international smart city cases and relevant literature on their connotations, characteristics, and definition, this study first analyzes their origins, building blocks, and important strategic dimensions in order to explore trends with respect to international cases. Other countries’ policies and experiences can serve as models for Taiwan. Second, it further discusses the business opportunities and challenges arising from smart city development, proposing channels for participation in smart city financing, then exploring strategies for the financial industry to support smart cities.

The role of Taiwan’s banking industry is one of the biggest challenges for smart city promotion. In fact, bank loans are one of the main way to finance smart cities – along with fiscal expenditures – but their construction is different from normal infrastructure projects. The core task is to rebuild the city and re-allocate its resources. In view of the complexity of the issues and values involved, although the government plays an important role, Public-Private-Partnerships (PPPs) remain indispensable. The PPP model solves the problem of tight government finances, but not the financing problems of private businesses. Since their construction requires the provision of vast social resources – whether from a capital or technological perspective – asset securitization and PPP funds are used frequently. Project financing is another important alternative.