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Driving Innovation Through Smart Cities
World Telecommunication and Information Society Day 2015
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www.pwc.com
PwC
Shifts in the urban markets due to megatrends is driving change across all dimensions of daily life
Demographic shifts
Economic power shifts
Accelerating urbanization
Aging workforce and need for retraining
Shifts in housing demand, changes in city services needed (i.e. mobility)
Design feature changes (i.e. curb height)
Shift in ethnic/cultural balance
Increased demand for investment strains resources
Rise of “city states”
Public vs. Private investment transition
Increasing challenges to governance
Emergence of new consumers in cities
Emerging cities become exporters of talent and capital on south-south axis
Developed cities need to identify new sources of growth
Infrastructure needs changing (i.e. more flooding events)
Shortages in water, food resources
Changing public health issues (i.e. heat, disease)
Land uses adapt to rising sea levels and changing needs
Improved “user experience”
Increased opportunities for economic growth
Growth in safety, sustainability, and efficiency
Climate change
Technological breakthroughs
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Accelerating urbanisation is Impacting Cities Abilities to Deliver
Demands from citizens are increasing while there are fewer resources Demands from citizens are increasing while there are fewer resources
Today, there are 457 cities greater than 1 million population(1)
(1) World Atlas, 2014
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Innovation can no longer be considered a purely technological endeavor
Administrative Innovation
Technical Innovation
Operational Innovation
Commercial Innovation
Other Areas of Innovation
• Privacy, Legal Evidence • Capacity Building, of stakeholders • Ensuring right Systems Integrator
• Right choice of Architecture • Planned Solutions • Analytics and Integration
• Non-planned city infrastructure • Availability of Right Manpower • False Alarms
• High capital and recurring cost • High TCO and ROI not very
quantifiable
• Collaborative Engagement • Expectation Management
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Right Stakeholder
Suitable Approach
Smart Programs
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Smart Mauritius
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Definitions for Smart Cities Continue to Emerge
A smart sustainable city is an innovative city that uses information and communication technologies (ICTs) and other means to improve quality of life, efficiency of urban operation and services, and competitiveness, while ensuring that it meets the needs of present and future generations with respect to economic, social and environmental aspects".
Foundational: Audit, Taxation, Regulations, Analytics Shared Infra: Municipal Network, Integration Platform, Network/Cyber Security, Sensors, Devices, Utility Tunnels, Shared Poles/Ducts/Conduits, Rights-of-Way, Utility Notification Centre
Transport
Liveability
Safety
City Gateway
ICT Economic Character
Utilities
WARNING 24 HOUR
SURVEILLANCE
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Government
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Innovative Digital Services (G2C, G2B, G2G)
Urban Platform (Open multi vendor integration)
Instrumented (Connectivity, Sensors)
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Partner Ecosystem for Smart Cities Implementation
Smart City Agency (Government/Private Sector/SPV)
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Citizen advocacy
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A robust and scalable ICT platform leveraging current and planned assets is needed to facilitate technology innovation
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Operations support Operations support
Monitoring Monitoring
Incident management Incident management
Capacity management Capacity management
Configuration Management Configuration Management
Help Desk Help Desk
Change Management Change Management Customer Service Customer Service
Certifications Certifications Billing Billing
City Agency Support City Agency Support Asset
Licensing Asset
Licensing Asset Management Asset Management
API Management
API Management
Dash-boarding Dash-boarding Membership Management Membership Management
Reporting & Analytics Reporting & Analytics
Sensor Management Sensor Management
Ticket Management Ticket Management
Service enablement Service enablement
Payment Gateway Payment Gateway
WAP WAP
Mail Mail
MMS MMS SMS SMS
Service Catalogue Service Catalogue
API/Web Services API/Web Services
Content Management Content Management Proximity Detection Proximity Detection
API Architecture
API Architecture
Electronic Medical Records
Electronic Medical Records
GPS Tracking GPS Tracking
Home Energy Management Home Energy Management
Intelligence Engine Intelligence Engine
Medical Info Library Medical Info Library
Search Search
Smart Metering Smart Metering Traffic Mgmt Platform Traffic Mgmt Platform
Hosting
Network LTE/4G LTE/4G City Broadband City Broadband Telecom Providers Telecom Providers Open Wi-Fi Open Wi-Fi Wireless Mesh Wireless Mesh GSM GSM
Data Centers Data Centers Cloud Cloud Servers Servers Integration Platform Integration Platform
UI Hosting UI Hosting Portals Portals Document
Management Document
Management
Data Hosting Data Hosting
Video Video Internet Internet Internet
of Things Internet
of Things
Asset Licensing Asset Licensing
Cloud Storage Cloud Storage
E-Learning Platform E-Learning Platform
Sensors Sensors Proximity Detection Proximity Detection
Smart Power Grid Smart Power Grid
Fixed & Portable Hotspots
Fixed & Portable Hotspots
Security HW Security HW Security SW Security SW Security LDAP LDAP Identity Management Identity Management Information Security Information Security Provisioning Provisioning
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User access devices User access devices Digital Signage Digital Signage Wearable Devices Wearable Devices Mobile Phones Mobile Phones Tablet/eReaders Tablet/eReaders Computers/Laptops Computers/Laptops Display Screens Display Screens
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Ecosystem Orchestrator
Interconnector
The network operator is emerging as a central player in the smart city value chain and as a result, has the opportunity to pursue multiple value streams
Manage the interface with city governments to understand objectives, impact metrics, and prospective smart city service opportunities as well as address policy and funding requirements
Manage relationships with real estate developers and identify opportunities for smart services targeted to the needs of their customer base including but not limited to industrial clusters
Manage the relationship with vertical sector services providers (e.g. utilities) as both go-to-market partners for smart services and prospective clients for smart value added services
Work with technology partners to define the value proposition, assess service feasibility, and plan the go-to market approach
Evaluate various communications technologies including but not limited to 3G, LTE, M2M and fixed IP in order to effectively deliver services to users and aggregate smart services data
Define and drive adoption of standard QoS-enabled connectivity configurations for each smart service based on user data consumption needs and smart services analytics requirements
Define clear and standard QoS-enabled and fully resilient fixed connectivity requirements to the City Command & Control Center and to vertical sector enterprise partners and clients (e.g. utilities, health care providers, waste management, parking management, etc.)
Services Innovator Collaborate with vertical sector enterprise partners and technology partners on definition of
smart services paradigms and outline prototyping and rollout priorities Collaborate with city governments to define the portfolio of smart services to be included in the
smart city roadmap and the opportunity to synergize analytics from these services to maximize actionable insights for the city.
Identify opportunities to develop digital applications to market and package smart services for consumers and embed the ability to collect data in order to generate insights for the city
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Customer Interface
The network operator is emerging as a central player in the smart city value chain and as a result, has the opportunity to pursue multiple value streams
Data Aggregator
Leverage retail stores and customer support centers as channels for promoting and supporting smart city services
Serve as channel for user feedback – Partner with city government and vertical sector smart services providers on solution for collecting citizens feedback on service quality to be used in order to prioritize smart services improvement.
Collect data generated by smart services applications, location services and machine-to-machine applications, such as connected vehicles or sensors, etc.
Work with vertical sector partners and city governments stakeholders to aggregate data from the sources and others
Conduct analytics studies to generate insights from collected data and empower city governments and vertical sector partners/clients to make city-level and service level smart services improvements decisions
System Integrator & Operator
Define and drive adoption of resilient collocation centers to house the smart city Command & Control Center (CCC) or to host value added services for vertical sector partners/clients
Manage the implementation of CCC computing and data infrastructure including city managed systems and cloud based systems used by vertical sector partner and the smart application development community
Manage the implementation of network and information security solutions and policies. Define and manage the implementation of smart analytics and insights platforms Operate the CCC and select adjacent smart services infrastructure components
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Developed by the Land Transport Authority (LTA) of Singapore, MyTransport.SG provides information and eServices for all land transport users, be it commuters, motorists or cyclists
Provides tools for users, such as interactive maps, real time data on road traffic and bus arrival timings for all bus stops, real-time variable toll rates, and real-time parking availability
Representative global smart services deployments
Urban real-time data
Qualcomm has partnered with InStrat Global Health Solutions, Etisalat Nigeria, and the Nigeria health department to develop a wireless electronic medical record system for clinics
KEPCO Rolled-out Nuri's AMI Solution to its 180,000 C&I Customers throughout South Korea
AiMiR AMI allowed KEPCO to define pricing policies based on time interval usage. It also enabled real-time monitoring of electricity usage and notification of abnormal activity so that corrective action can be taken to maintain service quality and avoid costly electricity losses
AT&T provides a Remote Patient Monitoring (RPM) solution that utilizes connected devices to collect physiological data from sick or at-risk individuals outside of the clinical environment, and share that data with a designated clinician or caregiver
Verizon allows its customers to remotely adjust thermostat settings, lock or unlock doors, and turn on or off lights and appliances from any computer or mobile device
Verizon also partnered with Belkin to rollout devices allowing remote home monitoring and the ability to remotely switch appliances on or off to manage energy consumption as well as security
KEPCO, South Korea
CliniPAK360 project
Smart Healthcare
Smart Metering
MOBILE LIVING
Connected Home
Smart Healthcare
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Revenue Predictability Vs Sufficiency – Is the Nation Prepared?
Ca
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Low Medium High
Revenue Predictability
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Revenue Sufficiency
Revenue Predictability Revenue Sufficiency
Water Water Power Power Gas Gas
Solid Waste
Solid Waste
Mobility Projects
Mobility Projects
Mobility Management
Mobility Management
Illustrative Illustrative As an illustration – Water involves high Capex, the predictability of Revenue is high but the user charges are not sufficient to cover even the Operating Expenses. Hence for water both Capex and Opex grants are needed.
Institutional & social infra
Institutional & social infra
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Pay-for-performance contracts where the private partner identifies and recommends efficiencies that can be paid for through the savings realized.
Instance Performance contracts usually involve a private-public partnership where the private sector works with the public sector to implement a new more efficient or more sustainable technology.
Funds The owner gets the immediate advantage of savings from reduced consumption without making a capital investmentor assuming debt.
Example Multiple examples across cities where LED based smart street lighting allows ~30% savings in energy costs
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Value Capture is the identification and capture of increased land value from resulting public investment in infrastructure
Instance Improving transport system impacts and accessibility is a benefit to neighboring properties. This benefit is the increase in higher land values and, perhaps, an increase in business for property owners.
Funds
Beneficiaries should pay for receiving benefits through the city’s choice of assessment, which could be an imposition of public transit impact fees, land-value taxation or capture of property tax increments
Example
The Dulles Corridor Metrorail project, the Silver Line, is funded by special assessments on commercial and multi-family residential property and increased toll charges. The first phase of the Silver Line opened in 2013 costing Fairfax County $400 million.
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User fees impose fees to cover cost associated with funding services and enhancements to increase the quality of life.
Instance As an option and not a tax - Paying a toll to drive in express lanes. Taxes, on the other hand, are compulsory and support government operations across the board.
Funds The attractive thing about user fees is that they can be used to secure financing to fund all or parts of large capital projects.
Example
In 2009, the city of Toronto experienced a $500 million budget deficit. Convenience fee of paying a parking ticket by phone or online- increased by 50 cents, Changes to tax accounts increase by $15 , Increase of 3.7% in city-run programs and renting a city-run facility brought in $396.3 million
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Developer Dedication requirements are commonly found in city and town ordinances as part of the land use and zoning regulations for new development.
Instance Option and not a tax: Paying a toll to drive in highway express lanes. Taxes, on the other hand, are compulsory and support government operations across the board.
Funds
City’s existing residents should not subsidize developers who bring in new residents. Rather, the additional infrastructure costs demanded by the new subdivision should fall to the developer and its new residents.
Example
Douglas County, Colorado requires all adjacent roads around a new development be paid for by the developer. In addition, the county requires the dedication of park space (or cash-in-lieu) at a rate that achieves the county’s goal of 15 acres/1000 population
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A Case Study for Technical Assistance: RE.Invest
Purpose
18-month predevelopment process with eight US cities and teams of
leading private sector design, engineering, law, and finance experts.
Primary Partners: Bechtel Corporation (engineering); Akin Gump
Strauss Hauer & Feld, LLP (legal); Wall Street Without Walls
(finance); Rockefeller Foundation.
Results
Results are projects made possible using a new framework
for reimagining civic infrastructure systems to create both
public value and private investment opportunities, especially
for vulnerable communities.
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Other Examples
Eurasian City used World Expo as an intermediary milestone and is
leveraging funding for Expo to meet smart city objectives
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Indian City is having a private operator invest in surveillance in-lieu of NOC/ROW
and will lease surveillance equipment back to city police department
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Regional health exchange funded in part by payers (insurance agencies)
that see a constant surge in costs
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Hardware usage and software license costs that billed on a pay per use and paid
over extended periods
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Findings are based on a PwC survey conducted in 64 cities comprising a total population of over 120 million people from around the world .
Key Enablers and Barriers
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Thank you
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liability company in India), which is a member firm of PricewaterhouseCoopers International Limited (PwCIL), each member firm of which is a separate legal
entity.
Jean-Pierre Young Partner Direct: +230 404 5028 Mobile: +230 57 28 6918 [email protected] Biju Kadapurath Associate Director PricewaterhouseCoopers Pvt. Ltd. Mobile: +91 7093804471 [email protected]
Vikas Sharma Senior Manager Direct: +230 4045015 Mobile: +230 54973395 [email protected]
Diya Guttoo Manager Direct: +230 4045014 Mobile: +230 57976990 [email protected]