Alphabet’s Sidewalk Labs this week revealed its blueprint for a data-driven development on a waterfront site in Toronto, Canada’s largest city. The USD 1.3bn plan will include advanced sensors designed to monitor day-to-day life, influencing everything from traffic flow to air quality and carbon emissions. The project has drawn controversy since its announcement in 2017, with stakeholders worried about surveillance, advertising and land usage.

But we view the smart city trend as only just beginning, with the most pronounced opportunities in Asia, home to more than half the world’s megacities, where populations exceed 10 million inhabitants.

Asian cities have been grappling with the challenge of balancing sustained population growth with strained infrastructure, depleting resources and finite space. As a result, Asian cities are now in the vanguard of innovation in areas such as smart connectivity, smart governance, smart services, smart automation, smart health and smart mobility – with cybersecurity forming the foundation of each smart city.

* China is rolling out a nationwide 5G network. Most telecom operators in Asia will launch 5G services over the next few years, with those in Australia, China, Japan and Korea set to do so in 2019. We believe the extensive use of Wi-Fi and the upcoming 5G technology, which significantly reduces latency, should further bolster smart services.

* Bhopal, a city in central India, sought to retrofit its city through integrated area developments, integrated traffic management systems and smart road lanes with spaces for cycles and pedestrians.

* By the time the 2020 Tokyo Olympic Games begin, there will be autonomous buses in the Tokyo Bay area, where most of the games will be held, and we believe this technological innovation wave will spread across Tokyo in the near future.

* In Singapore, residential fiber access has hit an APAC-high of 93%, ensuring rapid connectivity. The government is seeking to optimize the city in partnership with private start-ups, with modernized access rules to anonymized government data sets like commuter journeys.

So with the current momentum, we estimate Asia’s smart city market, led by China, could become a USD 800bn per annum revenue opportunity by 2025, creating sizeable growth opportunities for local economies along the way. Investors can tap into these secular trends today through our long-term investment themes, including Fintech, Smart mobility (e.g. electric vehicles and autonomous driving) and HealthTech. For more on this developing sector, read our Shifting Asia: Smart Cities report.