On the Road to Smart Cities

21st September 2015

Opportunities and Challenges

Reminder…

On the Road to Smart Cities – Opportunities and Challenges2

Rank French city Population Twin-city in China Population Factor

1 Paris 2,181,371 Beijing 21,516,000 10x

2 Marseille 839,043 Shanghai 24,256,800 29x

3 Lyon 472,305 Guangzhou 11,264,800 24x

4 Toulouse 437,715 Chongqing 17,830,100 41x

5 Nice 347,060 Hangzhou 7,081,700 20x

6 Nantes 282,853 Qingdao 4,587,183 16x

7 Strasbourg 272,975 Nanjing 7,347,900 27x

8 Montpellier 251,634 Chengdu 7,415,590 29x

9 Bordeaux 232,260 Wuhan 10,220,000 44x

11 Rennes 209,613 Jinan 4,335,989 21x

TOTAL 5,526,829 115,856,062 21x

Chinese cities are more than out 20 times larger in population than French cities

Source: Wikipedia

As the development process is under way…

On the Road to Smart Cities – Opportunities and Challenges3

….China’s urbanisation rate will increase from 56% in 2015 to 69% by 2030

• Nearly 1 billion people will be living in cities at that time, compared to about 780 million today.• In other words, Chinese cities will have to absorb 220 million people within 15 years

Source: United Nations - Department of Economic and Social Affairs -World Urbanization Prospects: The 2014 Revision

0%10%20%30%40%50%60%70%80%90%

100%

Proportions of urban vs. rural populations

Urban Rural

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

in th

ousa

nds

Total population - China

Urban Rural

Urbanisation will put important strain on existing cities

On the Road to Smart Cities – Opportunities and Challenges4

Transport and traffic management

Healthcare

Government services

Water and waste

Energy

Education

Smart Cities as one element in the solution mix

On the Road to Smart Cities – Opportunities and Challenges5

According to Gartner, a smart city is:

“An urbanized area where multiple sectors cooperate to achieve sustainable outcomes through the analysis of contextual real-time

information shared among sector-specific information and operational technology systems.”

Improved quality and performance of urban

services

Reduced costs and resource consumption

Enhanced and more effective engagement

with citizens

Case 1: Chongqing (and others) - Bus tracking app

On the Road to Smart Cities – Opportunities and Challenges6

• Chelaile (Chinese for “The bus is coming”)

• Smart travel assistant / planner

• Provides real-time information about:‒ When (in how many minutes) the next bus is

coming‒ Its current location‒ Distance (in km) to the exit stop‒ Predicted arrival time at destination

• Reminds users about imminent arrival (through vibration)

• Optimises and recommends travel routes

• Delivers location-based information

Case 2: Ningxia (Medical University Hospital) – Smart grid

On the Road to Smart Cities – Opportunities and Challenges7

• Centralised power management platform that:‒ Automatically records all the parameters in the

system‒ Connects with all the different monitoring units‒ Produces power usage reports in real-time‒ Analyses trends, cyclicality and seasonality to

forecast power usage, predicting and preventing power outages

• Outcomes: ‒ Enhanced monitoring, analysis, control, and thus

overall management of the hospital’s power supply

‒ Increased reliability and safety of the power system

‒ Improved energy efficiency

Case 3: Guangzhou Leighton Apartments – Connected Home

On the Road to Smart Cities – Opportunities and Challenges8

• High-end fashion smart business apartment

• All the rooms are equipped with smart home system supervising and managing:‒ Access (doors and windows)‒ Lights‒ Air-conditioning‒ Electric appliances‒ Water and gas supply

• Remote monitoring and control via Internet, mobile and Wireless (30 meters reach)

• Energy-saving functions and algorithms

…Due to three main factors:

9

China as a “promised land” for smart cities…

On the Road to Smart Cities – Opportunities and Challenges

Necessity

• Solution of problems related to urbanization (overcrowding, scarcity of resources, pollution, traffic congestion)

• Revitalisation of specific regions (e.g., Northeast China)• Transition to sustainable and green development (away from

manufacturing towards services)

• Economic reform for enhanced competitiveness• Fiscal spending to be funneled towards more profitable projects • National initiatives such as Internet+, Industry 4.0, etc.• Commitment from the Ministry of Housing and Urban-Rural Development• Planning of start-up smart cities (e.g. Meixi Lake district, Guangming,

Tianjin Eco-City, etc.).

• Superior digital and mobile affinity of Chinese Millennials / Generation Y (90后, post-90s)

• Leapfrogging of certain technologies in remote areas (telephone, cars) • Existing of local champions with both technological and commercial

power (Huawei, ChinaSoft, Tencent, Alibaba, Baidu, etc.

Policy

Technology

Challenges

On the Road to Smart Cities – Opportunities and Challenges10

• Variety of regulations and local compliance requirements

• Unrealistic expectations

• Disparity of objectives between central and local government (due to different incentives)

• Unclear (siloed) ownership of smart city initiatives → Variety of stakeholders

• Smart cities perceived as vanity projects

• Excessive vendor promises

• Individual requirements (need for location and customisation)

• Immaturity of ecosystems

• Thorough planning and road mapping

• Focus on financial viability

• Clear understanding of requirements

• Definition of realistic expectations

• Adaptation of offers to the local environment

• Design localized solutions

• Ensure “integratability” of solution with existing technologies

• Prioritise specific verticals (healthcare, transportation, utilities, etc.)

• Co-operation with domestic players to become part of the ecosystem

Common difficulties Risk mitigating steps