Prime Minister Kishida has pronounced Digital and Green transformations as the two X factors of his government policy. The locus where DX and GX meet is the “smart city” concept. And the number of Japanese regions opening their doors to smart city planning is starting to balloon.

More than one in 10 local governments have signed up to the most important initiative in this space, the Smart City Public-Private Collaborative Platform. That bodes well for the nationwide volume of projects in clean energy, as well as ICT, and strongly suggests that increasing volumes of public money will flow to support the trend. In 2022, budget allocations for smart city initiatives grew about 10% beyond initial estimates.

As concern about the Covid pandemic subsides in both Japan and overseas, there’s reemerging interest in improving urban and industrial infrastructure as a way to tackle climate, energy, and supply chain issues. Recent surveys report hundreds of smart city projects globally, with investments worth over $500 billion in the present and likely exceeding $1 trillion by 2027. Some bulls even pronounce that the sector’s market size will hit $7 trillion by 2030.

Of course, what a “smart” city entails – as was the case before the pandemic – remains fluid. The definition has become even more elusive in the net-zero age, through a plethora of new permutations such as “sustainable smart cities,” “smart green cities,” and “smart digital cities.” Kishida recently added his own Vision for a Digital Garden City Nation to the mix. Whatever the title, this is a topic that’s exciting both national and local governments in Japan, a rare feat. It’s also winning support from industry.