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MANAGEMENT AND ORGANIZATION
IN THE DIGITAL ECONOMY CONTEST
SMART CITIES: NEOM AND THE LINE PROJECT
Professor Maria Cristina Farioli
Academic year 2022-2023
INTRODUCTION
Neom is the name of the city which will host the new project of “The Line”, located in Saudi
Arabia’s north-western Tabuk province, extending from the mountainous hinterland to the
coastal desert of the Red Sea. The city of Neom will host two other projects, Oxagon and
Trojena, transforming a piece of desert the size of Belgium into a powerhouse of technology
which is almost entirely not polluting.
The Oxagon project is going to be the most advanced industry district: it will contribute to
Saudi Arabia’s regional trade and commerce but it will also be a new focal point for global
trade flows, accompanied by the latest technologies and 100% powered by clean energy.
The Trojena will have a really different purpose: it will be a tourist destination aimed at those
who want to enjoy the amazing scenarios and climate of the territory, 50km away from the
Gulf of Aqaba and at altitudes ranging from 1,500m to 2,600m, covering an area of 60 square
kilometers. Different activities will be offered depending on the season: the Wellness Season
from September to November offers relaxing spa treatments, yoga classes and residencies for
artists; the Winter season from December to March will host the “typical” winter activities
like skiing, snowboarding and skating but also festivals of different natures; the Adventure
season from March to May offers the outdoor activities of hiking and exploring the lake, on
which the whole structure overlooks; and the Lake season for the remaining months of the
year will provide high entertainment on the lake, with food fairs and festivals.
The Line is projected to be 170 km long, just 200 meters wide and 500 meters above sea
level, with all the services needed within the walls of the city that is estimated to host 9
million people. The region’s mild weather provides an all-year-long pleasant climate and the
fast train line that runs through the city, from end-to-end in just 20 minutes, reduces
commuting time significantly in respect to what you could find in a traditional city.
The project is without a doubt an expensive one: the engineering, the infrastructure, the work
force, the shops, stores and the train line will make the first phase of the project cost $320
billion, half of which comes from the Public Investment Fund. It is estimated that another
$159 billion will be raised by other wealth funds of Saudi Arabia and by an initial public
offering on the Saudi stock market. The overall project is estimated to be a $500 billion
investment.
1. CLIENT
The project aims at hosting 9 million people by 2045, a little bit more of New York City’s
current population.
Since the creation of the city took a big investment, it is expected to have clients with higher
spending habits and that can afford rent within the walls: entrepreneurs, artists, celebrities,
politicians and people who will want to visit it as a luxury trip.
In this case, and as suggested by Roger’s model, the project planners are using potential
clients as an added value which contributes to this reality. This is done by developing an
economy that is based on creating value first and foremost for customers, focused on its
citizens: “people's health and wellbeing will be prioritized over transportation and
infrastructure, unlike traditional cities”. It’ll put the focus on the customers in new ways,
giving them a green environment that is not polluted as the other big cities, highly accessible
and easy to navigate. Therefore The Line promotes free and quality time to their clients, with
a particular attention to the social sphere of the locals; with an efficient transport
infrastructure, residents will be able to reach any part of the city in a simple and fast way,
cutting travel time that can be instead spent with friends and loved ones.
Additionally, the city could potentially leverage on its customers by making them their
influencers: when the first people will start to move into The Line, they will be the marketing
tool. Clients will play an active role, rather than just being the targets of the product and
services offered.
We can also say that having a progressively increasing population within the walls will create
some type of loyal and exclusive society, making those who live there feeling part of
something like an exclusive club.
2. COMPETITION
The founders of The Line anticipated that cities will not grow fast enough to accommodate
the exponential population growth in Saudi Arabia, creating problems to its citizens on every
level: bigger cities without efficient roads, transportation that scramble to catch up making
commuting hard and time-wasting, high pollution and overloaded public services (such as
schools and hospitals which are often crowded and not accommodating) will represent an
issue.
We could say that there is not a proper “competition’’ yet; we have similar cities which are
still in the making, but the high capital requirements and the non-apparent demand has made
the market weakly competitive.
Again, similar projects are hosted in other parts of the world: the New Administrative Capital
in Egypt, Akon City in Senegal, BiodiverCity in Malaysia and the Floating City in the
Maldives. They all aim to achieve similar objectives, smart cities that don’t pollute and that
want to put citizens’ best interest first in advanced ways.
Competitiveness is hardly present because these cities are far apart, there is not one country
that is hosting two smart cities at once: this provides that those who want to move there will
choose either the closest one or the one that they would prefer based on their needs in work
terms, climate preferences and proximity to countries where their family and friends are.
However it is expected to see more competition in the future, when similar projects will be
more widespread and common, but until then competition is not to be feared.
3. INNOVATION
The Line is a progressive smart city whose main intention is to combine a successful
coexistence between human and nature.
Based 100% on renewable energy- derived from reusable energy such as solar and wind
energy among the others- the city will be zero-carbon emission: cars and roads will not be a
part of the equation, a sustainable transport system will be put in place cutting pollution and
maintenance car costs which will guarantee saving in terms of money and time. Citizens will
be easily and rapidly connected, supported by the most advanced technology that represents
the core of a cognitive smart city which will assimilate, process and use data provided by its
citizens to predict their needs and facilitate their lives; the surrounding green environment
will work as an air purifier, granting to its inhabitants a “never been better” air quality.
Besides the technological innovation, the peculiar design of the city is something safe to say
futuristic; based on ‘Zero Gravity Urbanism’ the city is thought as vertically layered, so that
residents can move fluidly in the city towards three directions – up, down and across.
Indeed The Line’s modular design enables the city to be viable within 5 minutes walk,
making it possible to reach every service offered by the city; infrastructure support will be
also available to residents, who will have access to a high speed rail able to run across the
whole perimeter of the city in only 20 minutes.
Food will be sustainable as well: the Agri-food tech accelerator program brings together the
smartest minds for a collaboration directed towards innovation to nourish people and the
planet, ensuring food for the next generations. Different startups in the food sector, (such as
Punabio, Symbiagro, Nemo’s Garden, Aquaai, Monitorfish and Prevess) are implementing
their resources to make progress, having as a final objective the one of making an impact and
difference in the long term.
As the executive director Deputy Sector Head for the Health, Wellbeing and Biotech Sector
at NEOM Dr. Maliha Hashmi underlined, quality of life will be a priority, human life and its
healthcare will be at the core of a complex system made of skilled technologies at the service
of the human well being.
Residents will have access to specialists’ knowledge able to provide them support for every
dimension of their health: ‘‘NEOM has built its strategy around five dimensions of health and
wellbeing: mental, physical, virtual, social, and emotional, in order to provide all its residents
and visitors with the tools to successfully meet the needs of all five elements” Dr.Maliha
Hashmi said. The final objective of NEOM sector health it’s not only to deliver citizens in
need with the best treatment possible, but to make an investment for a future in which
prevention is enhanced.
Sustainability, innovation, priority for human life, in conjunction with efficiency and respect
for the environment, differentiate The Line from other existing urban cities, and that’s exactly
where The Line project finds its competitive advantage.
4. DATA
As highlighted many times, what really distinguishes the rise of NEOM and as a consequence
the high tech urban center The Line, is its use of artificial intelligence as the cornerstone of
the city, with data employed as a key intangible asset for value creation.
The Line is in fact designed for the usage of data collected from residents who, through their
smartphones and other high tech sensors, smart devices connected with the Internet of things
(IoT), will see every aspect of their life being captured and transformed into data usable by
the artificial intelligence of the city to forecast residents’ needs, improving their quality of
life and habitability in the area.
None of this would be possible without the latest iteration of cellular technology, the Fifthgeneration wireless technology. As a matter of fact the continuous flow of information is
supported by the infrastructure of the 5G network which enables all smart devices of the
cognitive city to be connected. NEOM has actually signed a contract with Saudi Telecom
Company Group (STC) as the first move to establish a 5G network infrastructure for the
development of a cutting-edge urban center.
The company held accountable for the IT facility is Neom Tech & Digital Company, and
despite their sophisticated and futuristic vision, this latter had to face a not so indifferent
problem: privacy.
Collected data are used like they are a currency: users consent to the usage of their data and
in exchange they get paid. But at what cost? Are users’ data safe?
Concerning this problem, Joseph Bradley, Head of Technology and Digital at NEOM Tech &
Digital Company said: “M3LD will place data ownership back in the hands of users and
restore trust in the data economy. Today, trust is fundamental.Without trust, there is no
data.Without data, there is no value. M3LD gives subscribers the benefit of transparency and,
if a user agrees, a way to benefit from providing consent to use of their personal data,”
Indeed Joseph Bradley considers the use of data not disposable, finding the solution to the
privacy problem within M3LD, an innovative consent management platform able to inform
users about who is in possession of their data, providing them information about how they are
applied.
5. VALUE PROPOSITION
As said by the Crown Prince Mohammed bin Salman the city is thought of as “ the future of
urban living’’, which is their value proposition. This is proven by the distinctive features that
no other traditional city holds: absence of cars and roads, reserving much of the space for
trees and parks (95% of the 34 total square kilometers), putting citizens’ well-being and the
healthcare system first in the priority list rather than the infrastructures and transportation.
There aren’t many other cities that offer what The Line is and there hasn’t been a real
“demand’’ from customers, as we’ve already mentioned in the clients segment analysis, but it
is expected to create great success.
That is because, as the new Digital Era requires, The Line has been conceived before there
was the need to change, staying ahead of the curve and offering innovation. Doing this is
fundamental in order to not stay behind: considering that these projects take a long time for
the construction and the large capital requirements, The Line will be ready just when there
will be the need for cities like these, and it has got just the perfect timing. The investors of
this project uncovered what customers value before many others did, having the privilege of
being the “first comers’’.
The value proposition of The Line promises its customers to provide an innovative way of
living, with no cars to drive, surrounded by greenery and with the best services within a 5
minutes walk: this shows how the customer is the center of attention and the priority.
SOURCES:
https://www.neom.com/en-us/regions/theline
https://www.thenationalnews.com/arts-culture/2022/08/02/12-futuristic-cities-being-builtaround-the-world-from-saudi-arabia-to-china/
https://www.bloomberg.com/news/newsletters/2022-08-01/financing-mbs-s-neommegaproject-opec-and-russia-dubai-s-crypto-trading-shops
https://cities-today.com/how-neom-will-allow-people-to-manage-and-trade-their-personaldata/
https://www.itp.net/business/leap-2022-neom-tech-digital-co-launches-first-cognitivemetaverse
https://www.prnewswire.com/ae/news-releases/neom-tech--digital-co-announces-m3ld--agroundbreaking-platform-enabling-users-to-control-and-earn-from-personal-data301472662.html
https://www.neom.com/en-us/sectors/health-wellbeing-and-biotech
https://highways.today/2020/07/28/neom-stc-iot-5g-cognitive-cities/
https://www.neom.com/en-us/newsroom/the-line-exhibition-riyadh