Smart City Innovation Day

Smart City Innovation Day

Danilo Mazzara21, Aprile 2016

2Copyright © 2016 Accenture All Rights Reserved.

Opportunities to catch

The century of the cities

Conclusions

Agenda


The 21st century will be the one of the cities, with more than 2 bln people that will

move from rural areas to urban centers in the next years

Shifts in Global Demand

96

101

113

190

199

204

218

365

875

Russia

Philippines

Mexico

Indonesia

Pakistan

Brazil

Nigeria

USA

India

China 1.038 73%

54%

90%

75%

94%

59%

66%

88%

69%

83%

Top 10 Country with Urban Population

(expected at 2050 in mln)

On total population

Today, over half of the world’s population live

in urban areas, and at current urbanization

over two-thirds of the global population will

likely to be urban dwellers by 2050

Cities generate roughly 80% of global GDP

and account for more than 60% of all CO2

emissions

These population growth patterns will shift

consumer growth and purchasing power from

rural to urban areas

Source: Corporate Disruptors: How business is turning the world’s greatest challenges into opportunities, Accenture and World Economic Forum’s Young Global Leaders Community


Five major trends are forcing Cities to find new and innovative ways to deliver value to

their stakeholders and community

Key Trends

By 2030 there will be more than 100 bln Connected Device worldwide, data will be

critical to measure success and progress of investments that provide both an economic

and social or environmental return

In the EU, there is a shortfall of up to 900,00 digitally skilled people by 2015 at time

when average youth unemployment is nearly 24 percent.

At the current rate of increasing resource consumption, we will need three planets by

2050 to meet demand— which is clearly not possible. A massive drive is needed to

expand the capacity

In the age of austerity, city governments are experiencing budget cuts and looking for

new ways to deliver public service

By 2030, Information and Communication Technology (ICT) will connect 2.5 billion extra

people to the “Knowledge Economy” and almost 44% of people share due to lack of

confidence in the online security that protects their personal data

Digital

Transformation

War for Talent

Resources stress

Budget

costraints

Pro-sumers


In order to deal with these challenges and continue to grow, smart Government and

Cities need to improve their Digital Density

Digital disruption impact in the Economy

328394

419

1.913

2020

1.519

4,2%5,6%

1.993

2020 Optimized*

1.574

2015

1.812

1.484

Dig

ita

l E

co

no

my

No

n-D

igit

al

Ec

on

om

y

The Growth Multiplier in Italy

(additional GPD)

(18,1%)

(21,0%)(20,6%)

* Assuming 10-point boost in digital value levers

Which are the most promising areas ?

Is there any trend we can leverage to favor

transition ?

Which are the main key enablers ?

How to go there ?

How to ensure the right financial coverage

of the transformation ?

1

2

3

Source: Digital disruption: The Growth Multiplier Optimizing digital investments to realize higher productivity and growth, Accenture 2016

4

5




Conclusions

Agenda


The Smart City market will amount to $ 1,5 trillion in 2020, with remarkable growth

dynamics in Energy, Infrastructure and Transportation

Which are the most promising areas ?: Smart City market overview

114

20685

212

143

229

139

314

136

153

85

250

71

11,8%

Smart Infrastructure

Smart building

Smart Transportation

1.500

2020

52

688

2012

Smart Security

Smart Governance & Education

Smart Energy

Smart Healthcare

Source: Global Smart City Market – A $1.5 Trillion Market Opportunity by 2020, Frost and Sullivan

Smart City Market size

(in mln $)

1

12,4%

19,6%

6,9%

14,0%

8,9%

8,8%

14,8%

CAGR

Overall 2025 City Competitiveness rankings tableWeighted total of all category scores

(0-100 where 100=most favorable)

65

66

66

67

67

68

68

71

73

76

Toronto

Chicago

Stockholm

Paris

Sidney

Tokyo

Hong Kong

Singapore

London

New York

Ranking vs 2012

+1

+4

-2

-1

-2

+2

-2

+5

+3

-

Source: Hot spots 2025 Benchmarking he future competitiveness of cities, Economist Intelligence Unit


Rising costs for material, energy, land, water

Extreme volatility in commodity markets

Economic and social risk of supply disruptions

The Circular Economy is the trend that can be exploited and leveraged to favor

transition

Is there any trend we can leverage to accelerate transition?: Circular Economy

Source: Circular Advantage Innovative Business Models and Technologies to Create Value in a World without Limits to Growth, Accenture

Resource supply/demand imbalance

(2015-2050)

1. Circular Supplies: Provide renewable energy,

bio based- or fully recyclable input, material to

replace single-lifecycle inputs

2. Resource Recovery: Recover useful,

resources/energy out of disposed, products or

by-products

3. Product Life Extension: Extend working

lifecycle of products and components by

repairing, upgrading and reselling

4. Sharing Platforms: Enable increased utilization

rate of products by making possible shared

use/access/ownership

5. Product as a Service: Offer product access

and retain ownership to internalize benefits of

circular resource productivity

Emerging Business model in the circular economy

Business Model Example

2


Emerging technologies are the key enablers and their continuous cost downsizing

make them cheaper and more affordable

3 Which are the main key enablers ?: Technology

700

2007 2013

-99%

100.000

80

30.000

2009 2014

-100%

0,2

1984

30,0

2014

-99%

Key technology emerging

Source: Circular Advantage Innovative Business Models and Technologies to Create Value in a World without Limits to Growth, Accenture

Big data

Open data

Data Analytics

Internet of Things,

Mobile-based sensing

location

Condition sensing

Intelligent transport,

Smart grid,

Citizen e-ID

Mobile health monitoring

Data

Sensors

Sector-specific

Technology Cost comparison in $ Tesla Model 3

35K $ (1/3 compare to previous model)

400K units ordered as of today

180K orders in the first 24 hours with and

average price around $42k (~$7,5 bln)

Area Technology Drone

Solar

Sensors (3D Lidar)


Due to the magnitude of change effective Smart Cities deployment need to move from

pure RD approach to Open Innovation

How to go there ?: Open Innovation

R&D Crowd Innovation Innovation ecosystem

Inc

rem

en

tal

Wh

at

Dis

tan

za

da

llate

cn

olo

gia

co

re

How to innovateGrado di apertura verso l’esterno

Su

sta

ina

ble

Dis

rup

tive

The Innovation MatrixAutomotive example

ABS

Common Rail

Self-parking car

Self-assembly Car

GPS

Electric Vehicle

Black Box

Self-driving car

+-

4

The “Cité de l'Objet Connecté” project is being

developed by a group of partner industrial companies

supported by Government and local Institutions


Given budget constraints new sources of funding are needed, the raise of

sustainability awareness from both Companies and Citizens can be leveraged

How to ensure the right financial coverage of the transformation?: Private and Public partnership

Link projects to CSR

program leveraging

for example the

companies

commitment for

Sustainable

Development Goals

97

71

248

106

89

99

98

129

68

133

178

91

United Kingdom

Spain

Singapore

Portugal

Netherlands

Japan

United States

Italy

Greece

Germany

France

Canada

Source: Accenture elaborations on IMF data, 2015

5

Leverage the power

of active citizenship

stimulating Civic

Crowdfunding

platform initiatives

General government gross debt on GDP(selected advanced economy 2015)

Civic Crowdfunding

Corporate Sustainability Program

The Sustainable Development Goals, also referred to as The Global Goals, are a set of 17 goals that are expected to set the world’s development agenda for 2015–2030

1. No poverty

2. Zero Hunger

3. Good Health and well being

4. ….

Source: Corporate Disruptors: How business is turning the world’s greatest challenges into opportunities, Accenture and World Economic Forum’s Young Global Leaders Community




Conclusions

Agenda


The 21st century will be the one of the Cities

Emerging trends are forcing Cities to find new and

innovative ways to deliver value to their community

The best way to deliver value in urban context is by

linking it to long term objectives like competitiveness

enhancement or the improvement of the quality of life

New technologies are the key enablers to be leveraged,

while collaboration across the whole stakeholders

ecosystem is the key accelerator

Conclusions

Danilo Mazzara @DaniloMazzara

Presentations & Public Speaking

Smart City Innovation Day