Summaryof the BRI sessiononurban industrial solutions

Thebeltandroadinitiative: Industry4.0in sustainable andsmartcities

© UNIDO 2017. All rights reserved. This document has been produced without formal United Nationsediting. The designations employed and the presentation of thematerial in this document do not imply the expression of anyopinion whatsoever on the part of the Secretariat of the UnitedNations Industrial Development Organization (UNIDO) concerningthe legal status of any country, territory, city or area or of itsauthorities, or concerning the delimitation of its frontiers orboundaries, or its economic system or degree of development.Designations such as “developed”, “industrialized” or“developing” are intended for statistical convenience and do notnecessarily express a judgement about the stage reached by aparticular country or area in the development process. Mention offirm names or commercial products does not constitute anendorsement by UNIDO.

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In September 2013, President XI Jinping of Chinaformulated his foreign policy priority, a revitalizationof the ancient trade networks known as the ‘SilkRoads’ in the new Belt and Road Initiative (BRI) tostrengthen economic ties, improve communication,encourage trade and enhance monetary circulationthroughout Asia, but with a vision reaching farbeyond the region, offering economic opportunitiesin Africa and Europe.

The scale of the BRI is unprecedented, with almost atrillion dollars in commitments to infrastructureprojects, including transport (roads, rail, aviation,maritime, ports and airports) and energy supply. Soit was not surprising that, at the Belt and Road Forumfor International Cooperation held in Beijing in May2017, President Xi called it “the project of thecentury”. Nearly two-thirds of the world’s populationfalls within the scope of the BRI, so it has thepotential to change the lives of billions of people forthe better and offer them new economicopportunities.

It was within this framework that the United NationsIndustrial Development Organization (UNIDO)initiated a large-scale annual event, together withthe Finance Center for South-South Cooperation(FCSSC), called the ‘BRIDGE for Cities – DevelopingGreen Economies for Cities’, with the objective ofadvancing the implementation of the SustainableDevelopment Goals (SDGs) and the New UrbanAgenda. The inaugural event was held in October2016 and the second was held in Vienna inSeptember 2017.

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This year’s Bridge for Cities event broughttogether mayors, policymakers, industry expertsand academics from across the world to discussthe issue of pursuing sustainable and smartcities. Under Module 2: ‘Showcasing Urban-Industrial Development Demands andSolutions’, UNIDO’s Department of Trade,Investment and Innovation organized a paneldiscussion on Urban-Industrial Solutions andBusiness Opportunitieswith the theme ‘UrbanInnovation and Smart Solutions’.

The panel’s objective was to highlight thechallenges and opportunities for cities during thetransformation to Industry 4.0 and towardsinclusive and sustainable industrialdevelopment. The panel discussed technologies,challenges and policies, and put forwardrecommendations for developing countries onhow best to harness the potential of Industry 4.0,particularly for city planning. It focused on twomegatrends: the smart city concept and Industry4.0, and how they intersect.

The smart city concept is an urban developmentparadigm integrating new innovative ideas,concepts and emerging technologies, such as:the Internet of Things (IoT); the Internet ofServices (IoS); the Internet of People (IoP); theInternet of Energy (IoE), in other words theInternet of Everything, also known as Industry 4.0or the Fourth Industrial Revolution. The conceptaims to provide effective and high quality publicservices and infrastructure in real time andthereby a better quality of life for citizens and amove towards sustainable cities.

The proliferation of sensors on machines, gridnetworks, cars, and ultimately people, hasopened up new business opportunities in cities.More interconnected networks have emerged outof the possibility of collecting and analyzing largequantities of data and informing decision makingin real time. Many of these technologies arederived from their industrial origins, and havebecome an integral part of city development.

SYNOPSIS

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Increasing urbanization puts pressure on cityplanners to maximize resource efficiency in theircities. Currently, cities are the main consumer ofthe planet’s resources and are the highestemitters of greenhouse gases (GHG), althoughthey only cover a fraction of the world’s landmass.

Cities will be pivotal in achieving the UN’s 2030Agenda for Sustainable Development and its 17SDGs. By 2030, almost 60 per cent of the world’spopulation will live in urban areas, while 95 percent of urban expansion in the next decade willtake place in the developing world. Withouttaking action and bringing smart cities todeveloping countries, the SDGs will not beachieved. Rapid urbanization exerts pressure onwater supplies, sewage, the environment andpublic health, which can then lead to increasedmigration if these issues are not addressed.However, the high concentration of resources incities can bring efficiency gains throughtechnological innovation. The challenge is totransform the cities of today into the smart citiesof tomorrow.

The panellists represented the differentcomponents required for this transformation,bringing together the providers of technologicalsolutions and city planning practitioners, as wellas researchers on Industry 4.0 and itstransformative character.

The key conclusions from the panel discussion were:

▸ Partnerships are essential for bringing Industry4.0 technologies to cities to transform them intosmart cities. Multiple stakeholders and views arealso more effective for identifying commonproblems and common goals.

▸There are countless opportunities to make citiessmarter through Industry 4.0 technologies, butthe goal should always be to improve the qualityof life in cities, rather than implement a purelytechnologically driven process.

▸There is the potential for developing countries toleapfrog to higher levels of development.Traditional infrastructure may be insufficient insome cities, but is still essential for ensuring ahigh quality of life in cities.

▸ New technologies could help bridge some gapsand improve the functioning of existinginfrastructure. They can help to use energyefficiently by: controlling traffic congestion andcutting CO2 emissions; reducing food waste andimproving waste management in general;improving safety and security; enabling urbanvertical farming; improving health and educationservices; and bringing modern manufacturingback to the cities.

▸Smart cities will be pivotal in achieving the 2030Agenda. Rising urbanization rates indicate that amajority of the world’s population will live in citiesby 2050. Strategic planning, integrated policiesand interventions are vital. Therefore, addressingglobal challenges in a city context throughIndustry 4.0 technologies will help realize not onlyinclusive and sustainable industrial developmentthrough the nexus of industry, infrastructure, andinnovation in cities, but the whole 2030 Agenda.

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The Urban-Industrial Solutions and BusinessOpportunities panel addressed urbanchallenges in the context of rapid technologicalchange and the new industrial revolution andexplored business opportunities, harnessingthe potential of partnerships in urban-industrial development. The sessionshowcased best practices in leveragingIndustry 4.0 technologies and multi-stakeholder partnerships for the developmentof sustainable and smart cities.

The city-level setting was selected as the primaryfocus of this year’s UNIDO BRI event. Industry andcities have always evolved together. Industrialdevelopment is a key engine of growth with itsstrong potential for job creation and incomegeneration, and has always played a big role incity development. Cities are also integral to theircountries’ industrial development and structuraltransformation. Industrial revolutions not onlychanged manufacturing, trade and services, butthe fundamental set-up of cities. Industrialtechnologies that fostered major transformationshave also improved quality of life in cities. Thefirst industrial revolution brought steam power tofactories, improving productivity, while steamengines enabled mass transportation across andbetween cities. Electricity brought illumination,while enabling the second industrial revolution’smass manufacturing paradigm. Information andcommunications technology (ICT) andautomation technologies that shaped the thirdindustrial revolution enhanced modern cityplanning. Inevitably, the ongoing transformationtriggered by Industry 4.0 technologies will leaveits own footprints on cities. These technologieswill make cities smarter, more sustainable, andimprove the quality of urban livelihoods. The‘DNA’ of cities has always been strongly linked toindustrial heritage, while the challengesindustries face fundamentally affected cities.

Globally, urbanization is rapidly rising,particularly in Asia and Africa, and cities will havethe greatest and most lasting impact on an ever-growing world population. Making citiessustainable is an imperative and UNIDO hasprovided a platform for municipalities, industryleaders and enterprises to foster partnerships forthe advancement of inclusive and sustainableurban-industrial development.

The importance of developing sustainable andsmart cities has begun to receive widespreadrecognition by governments and otherstakeholders around the world. This isparticularly true in developing countries, withgrowing urbanization trends and inefficient andinsufficient infrastructure and utilities unable toprovide sustainable solutions for structuraltransformation. The way cities have beengoverned and developed in the past cannotcontinue in the future, and smart solutions forreducing the environmental footprint and urbanpoverty, as well as for addressing increasedvulnerability from the effects of climate change,will be pivotal to achieving the SDGs.

The 2030 Agenda, and SDG 11 in particular,underline the need to “make cities and humansettlements inclusive, safe, resilient andsustainable”, while the interdependent natureof the SDGs becomes particularly evident in asmart city environment, given the potentiallinkage effects from the infrastructure–industry–innovation nexus (SDG 9) on SDG 11and other SDGs.

INTRODUCTION

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Industry 4.0 and AI will reduce dependence oncentralized production. Polluting industries canbe located in semi-urban or suburban areas;other industries and industry-related servicescan be placed within city boundaries, such aspharmaceuticals, laboratories (for services suchas standards and certification), research centres,vertical farming facilities, and logistics centres.Cities can be hosts to a vibrant start-up scene,with software companies or other relatedindustries creating technology and innovationhubs.

Agribusiness will shift from rural areas to urbansystems, as urban (vertical) farming could bemuch more efficient at allocating resources,thanks to AI. The AI analysis of weather patterns,soil and other parameters could be used to findthe most suitable crops, automate irrigation, andenable timely interventions to optimize yields.

For cities to be sustainable, social dimensionssuch as inclusiveness, cultural adequacy,fairness and gender equality are crucial, inaddition to economic, ecological andenvironmental dimensions. Smart cities, whereIndustry 4.0 technologies are tested and applied,have to aim for integrated solutions that useresources efficiently and effectively, and followlow-carbon and inclusive developmentpathways. Cities will be a key component forachieving the SDGs.

The development of sustainable and smart citiesrequires integrated interventions in planning,investment, and the uptake of new technologies.Industry 4.0 technologies, and especiallyArtificial Intelligence (AI)-enhanced urbantransportation, smart grids, renewable energy,waste and water management, and urbanfarming, will not only reduce CO2 emissions, but may also improve energy, water and foodsecurity, and effectively address climate changeand environmental issues.

The introduction of renewable energy will hugelybenefit from frontier technologies, such as AI,through smart grids and the efficient allocation ofenergy where it is needed. More efficient wastemanagement and water supplies can also beachieved by using AI. Water pipes, sewage, andthe location of utilities can be improved by usingAI algorithms (sewage and electricity reachesmany more people in cities than in rural areas). AI could be applied in transport, such as in:(autonomous) electro-mobility; using drones forurban delivery of goods; and planning trafficsystems, resulting in more efficient traffic lightcontrols, transport routes and modes, thusreducing congestion and fuel consumption.

However, the provision of basic infrastructureand utilities is problematic for most people living in today’s megacities, particularly indeveloping countries, where resources are scarce and the capacity to implement newtechnologies is lacking. This is where the biggest challenge will be.

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Olga Memedovic, Chief of the BusinessEnvironment, Cluster and Innovation Division atUNIDO, emphasized the importance of smart cityinitiatives in achieving the 2030 Agenda. Citiesare the highest consumers of planetary resourcesand producers of waste and pollution, andMemedovic highlighted their role in industrialdevelopment in general, and the symbiosesbetween industrial technology and urbanlandscapes in particular.

Why are smart city initiatives important?

▸ Cities occupy less than 0.5 per cent of theworld’s land area and host 51 per cent of theworld’s population.

▸ Cities consume around 80 per cent of ourplanet’s resources.

▸ Cities account for more than 70 per cent ofglobal energy consumption.

▸ Cities emit between 50 and 60 per cent of theworld’s total greenhouse gases.

▸ Cities produce a huge amount of waste.

OPENING STATEMENTBY MODERATOR

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Cities are a powerful force for economicdevelopment and shared prosperity. Citiesaccount, on average, for 75 per cent of a country’sGDP. They are crucial for division of labour,productivity, knowledge spillovers, innovation,and technological change.

Accelerated urbanization is estimated to result inaround 70 per cent of the global population livingin urban areas by 2050, with 90 per cent of theurban population growth taking place in Africaand Asia. If rapid urbanization continues, it willput pressure on infrastructure and utilities, forcreating decent jobs, for preserving theenvironment, and for addressing climate change.It will become a major challenge for city planners,policymakers, and the international communityin general. Designing sustainable cities usingintelligent technological solutions andapproaches will be crucial in addressing globalchallenges and achieving the 2030 Agenda.

In Africa, the primary beneficiaries ofurbanization so far have not been manufacturingindustries, but informal services, with littleproductivity gains. This prematuredeindustrialization has resulted in precariousemployment and has triggered migration waves.The problem with rapid urbanization indeveloping countries is the proliferation ofinformal neighbourhoods without quality accessto electricity, sewage, waste management andother public urban services, significantlyimpacting the quality of life in cities. Industry 4.0technologies can help address these problems.

Cities can reinvent themselves throughleveraging the opportunities from Industry 4.0.However, Industry 4.0 alone is not the panacea tourban problems. Significant challenges lieahead, particularly for developing countries. Theinternational community will have to act to reapthe benefits of smart city initiatives globally. Inraising awareness UNIDO can facilitateknowledge exchange and technology transferand prepare developing countries for the uptakeof new technologies and business models.

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Schlund explained the intersection of Industry4.0 and smart city initiatives. Among others, theIoT is most likely to be the determinant of smartcities, as more and more sensors trickle into ourdaily lives. Most notably are current smartphonesthat increasingly pervade markets all over theworld and can be used for the good of cities. Thebenefits could include analyzing real-time trafficdata, crowd monitoring and optimizing trafficflows in metropolitan areas.

The adoption of Industry 4.0 technologies isgaining traction and bears the potential toaddress many of today’s problems. Cities are welladvised to become not only smarter and moresustainable, but ultimately more resilient, withincreasing urbanization further straining theworld’s resources and causing substantialenvironmental degradation. The adverse effectsof climate change are occurring more frequentlyand can cause massive damage in cities. Theobjective of smart cities is not only to reducepollution, greenhouse gases and othersubstances, but ultimately to deal with thepotential effects of climate change.

Sebastian Schlund, Head of ProductionManagement at the Institute for IndustrialEngineering, explored the following questions:

1. What are Industry 4.0 technology solutions(IoT/IoE/IoP/IoS) for transforming current citiesinto smart and sustainable cities?

2. Can modern manufacturing revitalize cities?

3. What is the role of integrated planning andoptimization?

kEYNOTE SPEECh

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Quality of life in cities is not only threatened bypressure on resources, particularly water, sewageand electricity, but also by extreme weatherevents, which can have profound socialimplications.

Available data in cities can be powerful toolswhen applied and analyzed in the right context.The multitude of sensors available in cities allowfor many ‘Internets’. The IoT, IoP and IoS are allfed by multiple data sources, each with their ownbenefits, but also risks. Schlund described thegrowing interconnection betweenmanufacturing, services, and people as a keyfeature of Industry 4.0.

Manufacturing has become much cleaner inrecent years, which will trigger a relocation ofmanufacturing activities to urban centres. Muchlike earlier industrial revolutions, the fourthindustrial revolution will leave its mark on cities.The modern, high technologies can bringmanufacturing back to cities and create avirtuous cycle of growth with high-quality jobs.

The concept of smart cities has engagedpolicymakers, city planners and researchersacross the globe and produced diverse concepts,with one core component: the improvement ofcitizens’ wellbeing. Industry 4.0’s transformativepower will not only shape the future of cities, butwill impact our daily lives. The increasinginterconnectedness and the wealth of availabledata allows for new business models,applications and solutions that can bring thebenefits of Industry 4.0 to an ever growing worldpopulation.

What are the opportunities?

Leapfrogging of development by embracingdigitalization without having to fully implementother infrastructure.

Public and private investment in newtechnologies, meaning fewer discussions,doubts and resistance.

Potential talent poolof willing, well-educatedand trained people (entrepreneurs, engineers, IT).

What are the challenges?

Infrastructure: stable infrastructure required(reconciling old with the new, such as powersupply and broadband internet).

Privacy: IoT applications collect, analyze andrelay data without the knowledge or agreementof the user, and thus require clear andenforceable privacy laws to prevent abuse andthe infringement of personal rights.

Local IoT expertise: for adjustments,implementation and maintenance of IoTapplications to the special needs of theirdeveloping counterparts.

Conclusions

▸ Industry 4.0, as part of smart city initiatives, willmake cities and human settlements moreinclusive, safe, resilient, and sustainable, andwill help address global challenges.

▸ Industry 4.0 has the potential to revitalize citiesand create new jobs; many kinds of high-techclean manufacturing industries have emergedin recent years that allow small-scaleproduction. Decentralized, modularizedindustrial production will be located in cities,helping to speed up industrial innovation.

▸ In developing countries with rapid urbanizationand premature deindustrialization, there areopportunities to integrate modern industriesand leapfrog technological development.

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The Alibaba Group, a Chinese firm, is one of theworld’s largest e-commerce companies and theimportance of smart city initiatives is rooted inthe spirit of Alibaba. The company wants toensure inclusivity and bring these technologiesto poor people who otherwise would not be ableto access the benefits, such as payment services.The ‘Alibaba Cloud’ is the application of AI in acity context. Liu gave a detailed analysis andoverview of the Alibaba Cloud in the city ofHangzhou, where it has helped to significantlyreduce congestion and commuting times for itsinhabitants. The technical component relies on adense network of interconnected devices,ranging from smart traffic lights, cameras, taxis,public transport services, and smartphones.

kEYNOTE SPEECh

Qunkai Liu, Partnerships at Alibaba Cloud,explored the following questions:

1. How can artificial intelligence (AI) be used tomake cities sustainable and smart?

2. What is Alibaba Cloud’s experience of smartcity projects and how can it be deployed in lessdeveloped countries?

3. Can these projects be piloted in Africa, and ifso, what are the preconditions?

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The data that is available to cities is often unused.Hangzhou has learned from that and now has thecapacity to monitor traffic flows in real time. Thetechnological solution to integrating all thedifferent datasets requires close cooperationbetween a range of private partners, as well aspublic institutions, which then use the data for thepurpose of traffic monitoring. Liu stressed theimportance of partnerships to successfully applythe Alibaba Cloud and collect the data: without thedata (for example from Chinesetelecommunication providers), an essentialcomponent would be missing from bringing thesolution to a specific city context.

These technologies have enabled Hangzhou toanalyze and optimize traffic flows. The city nowhas a real-time traffic monitoring system that canquickly communicate with local police stationsand intervene to avoid heavy traffic jams. Thesystem automatically detects unusual trafficpatterns and sends an alarm to the operators.Forward planning is vital in bringing thetechnology into full use and the city hasdemonstrated its commitment and vision to fullyutilize Alibaba’s technologies to improve traffic inthe city.

The technology applied here is not confined to acity context. Alibaba Cloud is increasinglyinvesting in applying similar methodologies toindustry, healthcare and security. The benefits are self-evident: industrial technologies canproliferate in any context, as long as properplanning, management, and partnerships areestablished. Without partnerships withtelecommunications providers, as well as taxi andpublic transport enterprises in Hangzhou, thewhole process would not have been possible.

Conclusions

▸The integration of technologies in a smart citycontext requires close coordination between thetechnology provider and decision makers incities. Once the systems are in place, it is crucialto have a constant data flow between thedifferent stakeholders to ensure the optimumconclusions from available data.

▸Cities can be host to a vibrant start-up sceneaimed at creating technology and innovationhubs which boost innovation. Cities must ensurea business environment conducive to buildinginnovative small and medium-sized enterprises(SMEs) and start-ups that create jobs for womenand youth. Critical to their success is an openpublic-private dialogue to demonstrate theirinterest in policymaking.

▸AI-enhanced urban transportation, smart grids,renewable energy, waste and watermanagement, and urban farming, may not onlyreduce CO2 emissions, but will also improveenergy, water and food security, and effectivelyaddress climate change and environmentalissues.

▸Special attention must be given to the needs ofcities in developing countries, where access totechnologies and knowledge throughknowledge-sharing platforms are pivotal inenabling cities to benefit from new technologies.

Okan Geray, Co-Rapporteur, InternationalTelecommunication Union Study Group 20 Question 7;Smart Dubai Office

Markus kottinger, Solutions Architect, Smart Cities,IBM Vienna

Necmettin kaymaz, Chief Project Director, PrimeMinistry Investment Support and Promotion Agency ofTurkey (ISPAT)

Florian Ansgar Jaeger, Research Engineer, Siemens

OThERPANELLISTS

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Stockholm, for instance, together with the RoyalInstitute of Technology, has integrated real-timedata analysis into an intelligent toll system whichhas reduced congestion, travel times, CO2emissions, and increased the number of publictransport users. In the United States, IBM Watsonhas assisted police officers in New York toimprove their response times and help bringdown crime rates. In Corpus Christi, themonitoring of critical infrastructure hassignificantly reduced failures and helped city-wide responses to gas leaks, burst water pipes,and other critical incidents, and this has resultedin an overall increased satisfaction of the city’sinhabitants.

Kottinger noted that although some of thedevelopments in modern technologies arepicking up faster in developing countries than indeveloped countries, some technologies havebecome truly globalized, which has enabled awider application in many different contexts.

DEBATED ISSUES

Intersection of IoE and smart city initiatives

Florian Jaeger of Siemens in Munich, Germanyhighlighted the company’s role in usingindustrial technologies to perform tasks toimprove residents’ quality of life. In energymanagement in developing countries, the IoErelates to predictive maintenance and resourceoptimization, resulting in the reduction of non-technical losses and downtimes. He said thatSiemens focuses on decentralization and theinclusion of more renewable energies to increasethe resilience of energy grids and the use oftechnologies to achieve certain targets.

Industry 4.0 solutions related to energy,water, waste and transport in a smart citycontext

IBM has been a partner of public institutions forseveral years, applying its technologies in urbancontexts to allow for the best possible allocationof resources. The major technologicalbreakthrough for IBM is its Watson system, an AIsystem that can process huge amounts of data toperform assigned tasks. Marcus kottingerprovided insights into the problem-solvingpotential of big data analysis. Managing thecritical infrastructure of cities can enhance theirresilience and ensure reliability, while alsoreducing costs. Connecting otherwise isolatedsystems can lead to a range of positiveoutcomes, such as improved emergencyresponses, thanks to reduced congestion, whicheventually translates into improved publichealth, lower crime rates, early interventions intoproblem-affected areas, improved water supply,and many more.

Kottinger echoed other keynote speakers byhighlighting the need for a close and integratedpartnership approach. Public institutions shouldinvolve citizens to identify problems, with theprivate sector proposing solutions. This can bedone from a very early point in the planningprocess. IBM Watson has already helped severalcities address their most pressing problems.

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The company is increasingly engaged in e-mobility, where it acts as a provider of hardwareto produce energy, but also for the chargingstations, billing and other related services. Inaddition, this enables Siemens to deliverservices like load management to energydistributors, as they have the data available topredict and estimate expected grid loads.

Mindsphere, an aggregation of IoT applications,is Siemens’ cloud platform which integrates datafrom different sources – not only frominfrastructure – to deliver better services to itscustomers. The company sees it as “theintersection of the physical and digital world”.

Cities are the optimal place to apply thesetechnologies. In Nuremberg, for example, airpollution was a primary concern in an initiativewhere Siemens could analyze the status ofcarbon emissions. Estimations of futureemissions were based on statistical data frominfrastructure and calculated over a period of sixmonths. Through that, the forecasting could bebroken up into several smaller contributors toenable targeted interventions, whether in an areasuch as transport, or with the major emissionsources. Different infrastructure measures can betaken at city level and Siemens provides themwith the modelling based on their calculations,enabling the city to have a better estimate of theirplanned intervention.

Despite this progress, Jaeger stressed theimportance of recognizing that some of theseinterventions are long-term, while many cities inthe world need short-term or immediatemeasures to make an impact. Thereforetechnologies such as Mindsphere need real-timedata so that they can build applications based onthe problems cities face.

Lessons learned from implementing smart city initiatives

Okan Geray from Smart City Dubai highlightedthe importance of clear visions, targets andstrategies when tapping into smart cityimplementation. Without a clear goal, such aspeople’s happiness, these endeavours may notbe successful. In contrast, clear targets that canbe measured will help not only in creatingtransparency, but also in creating more efficiencyin policymaking, planning and executing.

Governance is a key issue to successfully applymodern technologies in a city context. Allpanellists agreed that the inclusion of citizens is aprerequisite and must be the goal of all cityplanning. The use of technology can never be anend in itself, but a means to facilitate a higherquality of living in cities.

Geray said that impact is measured in threedimensions: customer (or social) impact;financial (or economic) impact; andenvironmental impact. The vision of an initiativefor the city of Dubai, in the United Arab Emirates(UAE), for example, is “to become the happiestcity in the world”. Smart cities are only realizedwhen all aspects of city life are smart, namelysmart cities, smart government, smart mobility,smart economy, smart society, and also a smartenvironment.

Key performance indicators (KPIs) are importantfor Dubai, measuring not only success, but theprogress and impact of its initiatives. There aremore than 40 KPIs that denote the strategicdirection of the city, and another 50 or more KPIsthat are ‘Tier 2’. These have been mostlydeveloped by the United Nations EconomicCommission for Europe (UNECE) and ITU. Dubaiwas the pilot city to apply this smart city index.

Among the most significant KPIs for the city,Dubai envisages 100 per cent digitally availableand implemented government services,meaning that all services must be availablethrough digital means, and carried out digitallyby 2021. Dubai aims to make all its eligiblegovernment transactions through blockchain,and is currently testing this technology city-wide.Other targets include decreasing energy andwater consumption, and further reducinggreenhouse gases.

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Impact investment in new technologies forrealizing smart cities

Necmettin kaymaz of the Investment Supportand Promotion Agency of Turkey outlined theimportance of bringing funds to fill the gap in therural-urban divide. This includes not onlypartnering with private institutions to respond tothe growing urbanization of major urban centres,but also bringing public institutions to rural- andperi-urban areas and the outskirts of major cities.

Foreign direct investment (FDI) has an impact onsociety and performs a crucial role intransforming cities into smart cities, especiallyconsidering the contributions of FDI todeveloping countries in terms of bringing know-how, technology, and most importantly, capitaland funding, which are vital for projects to berealized in cities. The ultimate goal is to improvethe wellbeing of society, hence FDI is assessed bylooking not only at its impact on the economy,but also on people’s daily lives. The impact ofinvestments is critical in facilitating access topublic services, such as transportation andhealthcare.

The environmental impact is also important,whether direct investment in renewable energy orwaste management, or an indirect impact, suchas environment-friendly and pollution-reducingtechnologies that are employed inmanufacturing.

Investing in inclusive growth can also have asignificant social impact, especially in terms ofcreating jobs for youth and women. Kaymazreferred to Vodafone’s collaboration with thegovernment in Turkey to support womenentrepreneurs and help them access funds andtechnologies. Public-private partnerships (PPP)are crucial in implementing impact investmentsand smart city policies, and Turkey hasimplemented many projects through PPP, forexample, a comprehensive programme for thetransformation of healthcare services. Dozens ofintegrated healthcare campuses, or ‘cityhospitals’, that are also centres of science andtechnology, have been built across the country.Here, the most advanced technologies are usedfor improving public health, as well as formonitoring the buildings’ own parameters. Thisreduces risk through faults in, for example,supply systems, as operators have real-time datato avoid outages.

FDI can enable project implementation in mobilecommunication infrastructure in regions that arecurrently disconnected. Kaymaz re-emphasizedthe fact that urbanization rates are rising;migration from rural areas to urban centres is amajor trend and challenge. One way to respondto this challenge is to bring services to rural areaswhere people can easily access them.

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FURThER DEBATEAND QUESTIONSFROM ThE AUDIENCE

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Will the definition of the kPIs – and howthey are measured – be shared with thepublic? how does the city of Dubai plan todecrease its dependence on fossil fuels?how do you see this embedded in thecontext of smart cities, energy efficiency,and renewable energy?

Okan Geray: In terms of the KPIs, more than 50are publicly available through United 4 SmartSustainable Cities (U4SSC) and ITU. Dubai isusing these definitions to align with internationalsmart sustainable city indicators. Cities candevelop their own specific KPIs in alignment withthe city-specific vision and goals.

The city of Dubai has clear targets to reduce itsenvironmental footprint, such as reducinggreenhouse gases by 16 per cent and reducingdemand on water and energy by 8 to 10 per centby 2021. Demand-side actions have been put inplace to achieve this, such as restructuring tariffs,building codes, retrofitting existing buildings,district cooling and renewable energy, amongothers. In fact Dubai expects to achieve 7 per centof renewable energy in its energy mix by 2021.

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Olga Memedovic: To representatives fromSiemens, Alibaba and IBM – when is it best toengage citizens in smart city initiatives?

Florian Jaeger:Siemens is a company serving largeinfrastructure projects in cities and has initiated aplatform where people can directly give feedbackon carbon-related issues, providing the cityauthorities with estimates of where infrastructureis needed most. The communication, however,has been more strongly linked to citygovernments, as the municipalities are thecustomers of Siemens, so the company actsmostly as a technology and service provider.

Qunkai Liu: Alibaba merely provides the platformwith technology building blocks, although itbrings data scientists and they will work with localpartners recommended by the cities, as each cityhas different ways of interaction with theirresidents. Interaction with local institutions isimportant for Alibaba, for example with localuniversities to train data scientists. Alibaba’sstart-up programmes help cities identifyparticularly innovative start-ups that could beamong the solution providers to a city’s problem,meaning that local engagement and localexpertise is used wherever possible.

Markus kottinger: IBM’s role in partnering withleading companies such as Siemens, ABB andothers, means that it relies on its IoT expertise andsoftware being applied by other companies. Thispartnership approach is at the core of IBM’s smartcity initiative worldwide. Each city requires uniquesolutions and, therefore, the different partnershipand engagement schemes will work outdifferently depending on the context. In IBM’scase, the bulk of work is consulting services,based on understanding the needs of the peopleliving in the city.

We operate a citizen innovation platform – afterstarting a smart city business it was decided a yearago to include citizens into this project. In the caseof Dubai, at what stage are local people included?

Okan Geray: Dubai has introduced electronicsolutions for engagement, but in terms of engagingthe people of Dubai, there are several structuredmeans which were undertaken, for example,surveys, and face-to-face discussions. Dubai has‘reverse engineered’ happiness – it wanted toprofoundly understand what makes people happy.Even AI was applied to identify importantparameters. Over 5,000 people have beencontacted and were asked very detailed questionsconcerning their educational background, overallhealth conditions, employment status, and so on,and these were linked with happiness throughmathematical correlations.

This detailed study enabled the smart city initiativeto strongly align with people’s needs so that Dubaicould allocate resources most efficiently to serveits citizens.

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Olga Memedovic: Can you explain whatblockchain was used for in the case of Dubai, asIBM is providing the solution to the city ofDubai?

Markus kottinger: This is an excellent exampleto showcase the differences in culture when itcomes to the requirements of a city. Theblockchain project is still in progress as the goalis the digitalization of all government services.The technology will be used to connect allavailable data, such as healthcare and othercitizen-specific data, which would beunthinkable in some regions, like Central Europe,where data protection laws prohibit such ascenario. The main target is to reduce and breakdown different data silos that could help lowertransaction costs among government agencies,significantly improve efficiency, and speed upworkflows.

Questions from the audience: Are the conceptsof smart cities and intelligent cities the same?Do we have technology-supported citieswhereas human intelligence is not extended tothe concept of intelligent cities?

Sebastian Schlund: The word intelligence inregard to machines should be used with caution.The terms ‘intelligence’, ‘smart’, and ‘artificialintelligence’ should remain separated, as it is stillnot entirely understood what intelligence inhuman beings actually is. Therefore, the term‘smart’ in smart cities, smart devices, etc. is moreappropriate and highlights the fact that we areadding features to existing devices and enablingtheir interaction, but not mimicking humanintelligence.

Markus kottinger: IBM has vast experience withAI with its Watson system. We have been workingwith it since 2006 and know that people are morethan just bits and bytes. Also, mathematicalequations cannot come close to the way humansthink and develop ideas. The term ‘intelligence’ isnot even close to being realized by machines atthe moment, but we enable more human-likefeatures that will smartly assist us in everydaylife, just like smartphones have already done.

Qunkai Liu: AI will not replace human beings,particularly not in settings like interpretation, butit will assist humans in their worklife. The realintelligence is still the human behind the AI, as itneeds to be programmed and trained. At themoment AI is only in its infancy and it is apowerful tool in certain settings. It will enablehumans to focus on the really important things intheir daily work, since AI can take over manysimple, monotonous tasks.

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What would be some of the major infrastructureinvestments necessary to enable cities indeveloping countries to leapfrog?

Olga Memedovic: What are the critical barriersto the uptake of these technologies indeveloping countries, and even moreimportantly, in least developed countries(LDCs)? Did you ever imagine how you couldapply your knowledge in a fast-track manner ina LDC or developing country? What are thebarriers that you could immediately address, orwhat advice can you give to the government ofthese countries so that they can quickly adoptthis particular technology?

Florian Jaeger: Generally, IoT will give us theopportunity to more efficiently manage the small-scale interaction of energy grids, for example.Madagascar has very few areas with reliablepower supply, so IoT could be used to managesmall parts of the grids to avoid the whole powergrid outage. On the other hand, a lot of thehurdles encountered in developing countries arenon-technical losses. Basically, people are notreally paying for power, thus the companies arenot able to invest in the grid and grid technology.Renewable energy on a small scale could alsooffset some of the challenges and avoid gridoverload.

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Olga Memedovic: Could you address the issueof industrial districts in a city context? Is itpossible to apply the ICT model of modularity incities, for example, on a district level?

Okan Geray: Blockchain gives Dubai acompetitive advantage today, but when lookingfrom a technology life cycle point of view, almostall technologies eventually become acommodity. Consequently, some of theknowledge that has been built up from ‘earlyadopters’, which in the case of new technologiesare mostly developed countries, could andshould be transferred to developing countries.They can profit from technologies that havebecome much cheaper and much moreaccessible than they used to be for first movers.Therefore, developing countries could bypassand leapfrog much faster.

A second possibility is to use some of thesehighly advanced technologies as a sharedservice instead of reapplying them specifically toeach organization, for example. There are hugefinancial advantages to be gained throughtechnology as a shared service. Dubai hascompletely unified most of the back-officeservices of all the executive branches in its localgovernment. There is just one system that runsfor all agencies, only certain aspects are tailoredto the specific needs of each agency. District-level development is possible for smart cities, asDubai integrated smaller-scale smart districtsand scales up to city level and beyond.

Sebastian Schlund: It is worth thinking aboutnew infrastructure, but what would happen if westopped repairing traditional infrastructure suchas roads, etc.? The idea of leapfrogging andleaving out certain infrastructure developmentsis bold and hardly feasible. >>>

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Qunkai Liu:The homework for cities is to ensurethat the necessary infrastructure is in place,such as water, electricity, and transport,including roads and internet. These are thebasic infrastructure requirements. In order tohelp developing countries, it is important tohelp small businesses to grow. One example ise-commerce. Alibaba has started rural e-commerce. Thanks to that and mobilepayments, they help small agricultural villagessell their produce through the e-commerceplatform to the whole world. This does notrequire huge investments from the village side,apart from a functioning internet connection.Through payment services provided by Alibabathey can help overcome finance shortagesthrough micro-loans.

Markus kottinger: There is already atelecommunications infrastructure provided outthere; smartphone rates in developing countriesare rising much faster than in industrializedcountries. Therefore, partnerships withtelecommunication companies are important forIBM. However, given that more and more peopleare connected to the internet, there could soonbe a bottleneck in broadband infrastructure, notonly in developing countries, but in developedcountries, too. From a technology point of view,the question is: is it really necessary to connectall devices to the internet and instead do moreanalytics on site, rather than online.

Necmettin kaymaz: In addition to infrastructure,education and qualified human resources are keyto achieving and updating these technologies, asit will be people who have to use the technologiesand they will only be able to do so if they aretrained.

>>>

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▸ Cities need to formulate clear visions andstrategies, to best utilize availabletechnologies. City planners need aconcrete vision and to formulate specificgoals, which allow technologies to servecitizens’ needs, rather than applyingtechnologies for their own good.

▸ The international community can helpformulate kPIs so that progress in theadoption of Industry 4.0 technologies in asmart city context can better understandthe obstacles and hurdles that are facedin each context.

▸ Each city should develop its own set ofkPIs to track its progress transparentlyand efficiently. kPIs can also improvedecision making to objectively verifycities’ priorities to improve the quality oflife of its citizens.

▸ Infrastructure, education, and qualifiedhuman resources are key to achieving andtaking up new technologies.

▸ Developing countries need to specificallyidentify areas where they can move fastand exploit the low-hanging fruits first, tofree resources for other innovativetechnologies.

▸ AI-enhanced urban transportation, smartgrids, renewable energy, waste and watermanagement, and urban farming will notonly reduce CO2 emissions, but may alsoimprove energy, water and food security,and effectively address climate changeand environmental issues.

▸ Integrated interventions in the planning,investment, and uptake of newtechnologies are required for thedevelopment of sustainable and smartcities. The complex interaction ofdifferent systems is particularlypronounced in cities, therefore planningneeds to consider all aspects of people’slives, business needs and industrialrequirements.

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