Introduction
Today, Special Economic Zones (SEZs) are recognized as strategic centers for boosting economic growth and attracting domestic and foreign investments. The smartization of these zones has brought about a profound transformation in their functioning and productivity. Smartization involves the integration of digital technologies into production, distribution and management processes, as well as the creation of infrastructure that not only increases productivity, but also ensures sustainability and global competitiveness (UNCTAD, 2020; Zeng, 2021).
Key Features of Smart Special Economic Zones
The key features of smart special economic zones can be summarized as follows.
Digital infrastructure and widespread communications
Intelligent logistics and supply chain management
Sustainability and energy efficiency
Strengthening physical and cyber security
Automated services and optimized processes
Connection with research and development (R&D) and innovation centers
The rest of the article provides an explanation and example of each of these features.
Digital infrastructure and widespread communications
The economy relies on digital infrastructure, including high-speed internet, 5G networks, and the Internet of Things (IoT), which enable real-time communication between systems and machines, increasing productivity and reducing downtime in production processes (World Bank, 2021).
Digital infrastructure acts as the backbone of these areas. For example, installing IoT sensors in industrial machinery provides real-time data that can be used to predict failures and improve performance. In addition, 5G networks enhance collaboration between industrial and management units by reducing latency in data transmission.
The Shenzhen Special Economic Zone in China is known as a technology hub with advanced infrastructure that ensures fast connections between businesses and factories. The zone has been able to increase productivity by 30% by reducing downtime on production lines.
Intelligent logistics and supply chain management
In these areas, the supply chain is optimized and helps reduce costs by using digital tools such as automated inventory management systems and demand forecasting based on artificial intelligence (Bostrom & de Coninck, 2022).
This feature reduces delivery times and warehousing costs. For example, using machine learning algorithms in inventory management can reduce human errors and prevent unnecessary inventory accumulation.
Jebel Ali Port in the United Arab Emirates uses automated logistics management systems that have reduced costs by 15% and increased transportation speed. (OECD, 2022)
Sustainability and energy efficiency
Using renewable resources such as solar and wind energy helps reduce carbon emissions, and smart grids control and optimize energy consumption (IRENA, 2023).
Technologies such as Smart Grids can analyze energy consumption patterns and adjust energy production based on demand. Also, integrating solar or wind energy storage systems not only ensures energy sustainability but also contributes to energy independence in these regions.
The Masdar Special Economic Zone in Abu Dhabi, as an example of a smart city, has been able to reduce carbon production to near zero by using solar energy and smart grids.
Strengthening physical and cyber security
These areas are ensured by the use of advanced surveillance systems, cybersecurity protocols, and biometric controls. These measures maintain the security of infrastructure and sensitive data (OECD, 2022).
Artificial intelligence-based surveillance systems are able to detect suspicious behavior and warn in a timely manner. In the cyber domain, advanced encryption protocols and the use of blockchain ensure the security of information and transactions. These measures increase the trust of investors and companies.
In India, smart economic zones are using integrated security systems like Aadhaar to control access and secure data, which has greatly increased corporate satisfaction.
Automated services and optimized processes
Administrative and regulatory processes are being digitized, which reduces bureaucratic barriers and accelerates the entry of new businesses (Zeng, 2021).
Automated systems for obtaining permits or carrying out customs procedures eliminate bureaucratic obstacles and facilitate the entry of new companies into the market. For example, in countries such as Estonia, the company registration process is completed online and in less than a few hours.
In special economic zones in Estonia, the creation of new companies is done digitally in less than 3 hours, making the country one of the leading regions in attracting investment.
Connection with research and development (R&D) and innovation centers
Often these regions collaborate with research and development centers, which provides access to new research and technologies and promotes a culture of innovation (UNCTAD, 2020).
This cooperation can include joint research projects, holding innovation events, and supporting technological startups. As a result, smart regions can become global innovation centers and increase their competitiveness in global markets.
In India’s Bangalore Special Economic Zone, technology companies have collaborated with local universities, resulting in the development of new technologies in artificial intelligence and blockchain.
Benefits of Smart Special Economic Zones
Smart economic zones are very attractive to international companies that focus on new technologies and sustainable industries. This model helps to increase productivity, reduce costs, and increase competitiveness, while attracting responsible and environmentally friendly investments (World Bank, 2021; OECD, 2022).
These regions are recognized as centers for attracting sustainable investments. The use of clean and modern technologies not only leads to reduced operating costs, but also presents a positive image of commitment to sustainability that is attractive to international investors and businesses.
Singapore has been able to increase foreign direct investment by 20% by developing smart special zones and offering tax incentives.
Challenges in developing smart special economic zones
The establishment of smart special economic zones faces challenges such as high initial investments, the need for skilled labor, and cybersecurity concerns. However, with appropriate policies and effective incentives, these challenges can be overcome and the transition to smart zones can be made possible (Bostrom & de Coninck, 2022). In general, the challenges and solutions can be summarized as follows.
High investment: The initial costs of smart infrastructure are an obstacle to rapid development.
Skilled workforce: Need for specialists in the fields of information technology and supply chain management.
Cybersecurity: Security threats are another challenge for attracting companies.
Solutions: Using successful models such as attracting joint investments and holding specialized training workshops for the workforce.
Conclusion
Smart Special Economic Zones are not only a new model for economic growth, but also a tool for addressing the world’s environmental and economic challenges. They can have significant impacts on sustainable development and global competitiveness in the near future (IRENA, 2023).
