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Global cities that succeed in the next phase of urban growth will be those that create economic opportunity while scaling housing, mobility and essential services fast enough to preserve liveability, according Vladislav Boutenko, Managing Director & Senior Partner, Global Segment Leader Cities & Regions, BCG
“The most successful urban centres in the 21st century aren't defined by their concrete skylines but by their ability to compound human potential,” he told Zawya Projects.
He pointed out that the primary driver of sustainable growth is creating and expanding economic opportunities for talented, motivated individuals, while the greatest constraint consistently proves to be insufficient or obsolete infrastructure due to chronic underinvestment.
“When housing supply falls behind demand, cities inadvertently close their gates to the very talent they need, as scarcity drives prices beyond reach,” explained Boutenko. “Similarly, when mobility systems collapse under pressure, every resident pays with lost hours that could otherwise contribute to productivity and quality of life, ultimately driving talent to seek opportunities elsewhere.”
He said successful cities operate through a “balanced flywheel” in which opportunity attracts talent, talent creates value, value funds infrastructure, and better infrastructure improves quality of life, which in turn attracts even more talent.
“Balance remains crucial since overinvestment in infrastructure can drive living costs so high that cities become less attractive to the residents they most want to retain,” he cautioned.
He pointed out that digital infrastructure is emerging as a key enabler of smarter urban planning with UAE and Saudi Arabia leading the region in scale and execution.
Excerpts from the interview:
How does digital infrastructure enable smarter urban planning?
Digital infrastructure fundamentally transforms urban planning by operating through two critical mechanisms that I've witnessed across numerous smart city initiatives.
First, it converts physical infrastructure into controllable, responsive systems where sensors, data analytics, and artificial intelligence dramatically improve planning accuracy, implementation speed, and operational performance, effectively increasing the return on every invested dollar.
Second, it establishes a digital economy ecosystem encompassing cloud services, platforms, and data centres that scales more rapidly and cost-effectively than traditional heavy assets while attracting digitally skilled, globally mobile talent.
This digital talent subsequently reduces pressure on physical city systems by working remotely, utilising digital government services, and conducting transactions online, converting saved time into enhanced quality of life and increased productivity. Digital professionals typically demonstrate higher satisfaction levels within urban environments and generate greater economic wealth and tax revenue per capita.
Within our region, I've observed that the UAE and Saudi Arabia distinguish themselves through both scale and execution excellence, while Qatar and Bahrain also demonstrate strong, focused progress in implementing digital infrastructure solutions.
How do countries and cities use metaverse technologies and immersive platforms to support urban planning and citizen engagement? Any standout example?
The application of metaverse technologies and immersive platforms in urban planning represents a paradigm shift from assumption-based decision-making to experience-driven development, which I've found resonates strongly across various innovation sectors from research experimentation to residential property purchasing.
These technologies extend digital twin capabilities into virtual and augmented reality environments, allowing planning teams to navigate through designs, test multiple scenarios, and identify potential issues before physical implementation begins.
For citizen engagement specifically, immersive platforms enable residents to experience proposed developments in three-dimensional space, including streetscapes, public spaces, and skyline modifications, leading to more informed and constructive feedback compared to traditional two-dimensional mapping presentations.
Among the most compelling examples I've encountered are Singapore's comprehensive Virtual Singapore initiative, Helsinki's detailed 3D city modeling project, and Seoul's ambitious Metaverse Seoul platform, which delivers immersive public services and facilitates meaningful community engagement through experiential interaction rather than abstract consultation.
How can smart cities accelerate GDP growth? What are the KPIs that demonstrate this?
Smart cities accelerate GDP growth through three interconnected engines that I've documented extensively in our research, including the fourth edition of Cities of Choice.
The first engine centres on talent-driven productivity, where advanced digital ecosystems attract digitally skilled professionals who typically earn higher wages, demonstrate greater productivity, and report enhanced job satisfaction, collectively lifting both GDP per capita and overall productivity metrics.
The second engine involves digital economy expansion, as platforms and marketplaces create entirely new economic sectors and transaction types that directly contribute to GDP growth.
The third engine focuses on infrastructure productivity optimisation, where AI-enhanced operations and predictive maintenance strategies extract greater capacity from existing assets while reducing friction, operational costs, and barriers to growth.
The KPIs that demonstrate this impact include GDP and GDP per capita growth rates, labour productivity and total factor productivity improvements, wage and median income advancement, digital sector representation within overall GDP, information and communications technology employment expansion, technology business formation rates, venture capital and foreign direct investment flows, cloud and data centre capacity development, talent attraction and retention metrics, and friction reduction measures such as commute time optimisation, housing supply delivery efficiency, and public service reliability enhancement.
How have digital services improved the quality of life for residents? How are security concerns addressed?
Digital services fundamentally improve urban quality of life by returning the three most precious resources that cities typically consume: time, attention, and money. Through my work with various urban digital transformation projects, I've seen how these services reduce routine administrative burdens and commuting requirements through remote work capabilities, flexible workspace options, digital government platforms, and on-demand service delivery.
They simultaneously expand choice and enable better matching between residents' needs and available resources, helping people optimise their activities, locations, timing, and costs, ultimately making urban life feel more abundant without requiring additional time investment.
Remote work particularly reduces total mobility costs for residents, as does the implementation of comprehensive digital government services. Security concerns, which are paramount in any digital transformation, are addressed through robust trusted digital identity systems, end-to-end encryption protocols, sophisticated access controls, and comprehensive auditability measures, ensuring that convenience gains don't compromise trust or privacy.
A particularly effective approach I've observed is the implementation of national digital identity frameworks that combine encrypted data storage with detailed, traceable access logs, providing both security and accountability.
How has progress been on building a framework for ethical AI and sustainable digital growth across the GCC?
The GCC region has demonstrated remarkable progress in building frameworks for ethical AI and sustainable digital growth, largely because these countries rank among global leaders in digital government adoption, supported by young, highly educated populations and sustained public sector investment in technology infrastructure.
As digital services have scaled across the region, the supporting trust frameworks encompassing privacy protection, accountability measures, security protocols, and governance structures have matured in parallel, creating the foundation for more sustainable and responsible digital growth.
Two particularly compelling examples illustrate this progress: Saudi Arabia has established comprehensive national AI ethics principles and control mechanisms through the Saudi Data and Artificial Intelligence Authority (SDAIA), providing clear guidelines for responsible AI development and deployment across both public and private sectors.
Similarly, the UAE has developed detailed AI ethics principles accompanied by practical guidelines and implementation toolkits that help organisations operationalise responsible AI practices in real-world applications, demonstrating how policy frameworks can translate into actionable business practices.
(Reporting by Dennis Daniel; Editing by Anoop Menon)
(anoop.menon@lseg.com)
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