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More Than a Smart City: Scaling Up Technology Adoption for Bhutan’s Growth

DHI InnoTech is developing a strategic policy framework for smart cities in Bhutan leveraged by livable and dynamic urban settlements.
  • Daniel Jaramillo
  • |
  • September 2, 2021

A Smart City Approach to Navigate Challenges

After three decades of success in economic growth, poverty reduction, and an international recognition of a prosperous and happy country, Bhutan is now facing three major trends that will put the country in a position where significant changes need to take place in order to continue such successful development path. 

Probably one of the most critical challenges is climate change. Although Bhutan is recognized as a carbon-neutral country and one of the greenest places on earth, severe anomalies in temperature and precipitation will have impacts on hydropower potential -especially during the months of November and December—agricultural productivity and natural wealth stock. By 2050, dry seasons will be 20% more severe and 2 degrees Celsius hotter (IPCC, 2021).

IPCC AR 6, Mean temperature and total precipitation change
Source: IPCC AR 6, Mean temperature and total precipitation change

Another reality is the demographic transition from rural areas to urban settlements. By 2050 and continuing the present trend, about 60% of all population will be urban in Bhutan. This translates into more demand and a great pressure for municipalities, the government and key stakeholders providing public services to start planning now for these changes

Source: Urban population projection. World Bank, 2020

But probably what makes the latter tendencies so critical is that the end urban consumer of those services, that will be severely affected by climate changewill have much higher expectations regarding the quality of the services. This is the third reality: the average urban citizen of 2050 will depend on how livable, dynamic, and productive the city is, and will have much higher standards, possibly similar to those of a high-income country today. So, if smart cities are to play a key part in Bhutan’s development, they need to ensure that all technological and digital interventions aim at improving the quality of services and contributing to a more productive and prosperous economy. 

Today, DHI InnoTech is developing a strategic policy framework for Smart Cities in Bhutan. This project intends to establish a framework to think about the future of Bhutan and the deeply-needed economic diversification, leveraged by livable and dynamic urban settlements, where technology plays a key part in a new economic and social system. This strategy addresses, therefore, the main growth challenges of Bhutan under a growth diagnostic approach and assesses some of the most pressing constrains to achieve a dynamic and livable city in the country. 

Three Pillars for High-Quality Services: Affordable, Accesible, and Reliable

As stated before, one thing is certain when we talk about the future of urban areas in Bhutan: it all starts with the provision of high-quality infrastructure services. Let us define high-quality as affordable, accessible, and reliable water, energy, and transportation services. Given this premise, technology and smart-city interventions need to be thought as a mean rather than the goal to improve people’s lives and make Bhutan’s future more promising. But how does the situation look like today?

Hydropower was key not only to boost economic growth but also to provide a push for universal access to electricity. Virtually, everyone has access to electricity, especially at the urban level (99.7% according to the last census). However, access to water sources is less positive. About 60% of urban inhabitants enjoy a 24-hour service, whilst more than a third of Bhutan’s population must use some method to purify drinking water. Wastewater and water management are also key areas of improvement. The concept of circular economy could add to Bhutan’s existing environmental commitments and target additional segments of investments for industries that have a circular approach to environmental and social responsibility. Reaching that point requires first a comprehensive waste management system at the urban area, with technology systems being a key part of it and improving logistics in the collection, reuse and recycling and final disposal of fluid and solid residuals. Moreover, people in Bhutan have to cover long distances to the source of water, something that is more significant among the lowest income groups.

Distance (m) and time (minutes) to wáter. Area 1 is urban, 2 is rural.
Source: Census 2018.

The reality that poorer households need to walk more to gather water is an example of a regressive service scheme. In general, lower income households tend to pay more proportionately for public services. Only transportation can be considered “progressive”, since only higher income population owns vehicles and therefore spend more on this kind of service.

Affordability of public services.
Source: Census 2018.

How to Start Implementing Smart City Interventions

With such a great potential of accelerating climate action, adopting new technologies and catalyzing investment and growth, the main question that remains is where and how to start. One of the more natural approaches to answer this question is to look at futuristic or already-implemented solutions in high-income countries. But what this approach lacks are the understanding and alignment of interventions with the context-specific needs. The DHI InnoTech smart city approach is therefore based on a growth diagnostic that specifically shows that quality of public services could rapidly increase private investment by making urban settlements more appealing, productive, dynamic, and full of people with high quality standards and human capital wealth. With this as the overarching consensus, all smart city interventions need to be prioritized by the degree of alignment with improving the quality of services. That is, tackling the challenges mentioned before. For example, information management system can help reduce interruptions, manage demand during peak-hours and ensure that people in need of a certain service receive it. Another example is the implementation of smart metering and sensors for water and energy provision together with distributed generation sources. These technologies can not only improve reliability of the service and peak-demand management, but also lower final costs and make the pricing scheme more progressive. 

More Than Tackling Social Issues through Smart City Interventions

Finally, when we talk about diversifying the economy and developing a stronger private sector, smart-city interventions can also provide opportunities for entrepreneurship and private investment. The call for a diversification of the energy matrix is urgent, and with the past success story on reaching global coverage the main challenge that remains is to provide a reliable and high-quality service and even more so under increasing demand scenarios. Solar, wind, and other renewable energy sources will become more competitive with respect to hydro, and with the introduction of new distributed sources of energy (electric cars and motorbikes) and higher industrialization, the country now needs to shift its paradigm of few power sources to a system where hydropower remains the backbone of the country, but with complementarity with distributed power generation.

In the transport sector, the challenges look very similar to those of Bhutan’s peers in South Asia, but probably more like those of Latin America. With an increasing median income or income per capita, the main urban areas will see a growth in motorization. In fact, motorization rates have exceeded population and economic growth over the past 10 years. The era of private vehicles is certainly bad news for public transportation, but with low-cost electricity, higher individuals’ expectations and increasing congestion and travel times, Bhutan has now the potential of becoming a piloting and innovation destination for disruptions in the transport industry. Electrification and automation are not only becoming feasible but a promising solution to reinvent transportation in cities, whilst intelligent transport system will help planners and local administrations manage traffic flows and seize the agglomeration opportunities of urbanization.

A 2050 Bhutan

A 2050 Bhutan is not only a prosperous economy and society, but a country with thriving public infrastructure systems where transportation runs on clean electricity and is highly automated and connected; where energy is reliable, affordable and accessible for all. Distributed sources of generation allow for an interactive system between supply and demand, and where universal access to water is achieved and climate-related risks are mitigated with demand management systems, while seizing water as a natural wealth of the future. 

To reach that point with gradual implementation and based on an international review of smart city interventions, plans, strategies, the Smart City Strategic Framework gathers all possible smart city approaches in each sector and develops a readiness score that can be aggregated by thematic area (infrastructure, policy and regulation, training, information systems, business development) and sector, together with an implementation guideline for the years to come. 

This is a first blog of the series on Smart Cities. In the following 2 blogs, we will discuss some of the potential and current projects and how they’re aligned with contributing to a 2050 prosperous Bhutan.

English (UK)