Macro to Micro Implications of Smart and Sustainable Cities in Driving Convergence of Competition

Archana Amarnath, Program Manager

Visionary Innovation Research Group

27 March 2013

Agenda

Smart City Market - Key Smart City Segments of 2025

Introduction and Definition of Smart Cities

2

Smart City Stakeholders Analysis – Key Market Participants and New Business Models

Macro to Micro Opportunities

Introduction and Definition of Smart

Cities

4

Smart Diamond that Defines a Smart City

4G

Smart Energy

Smart Building

Smart Citizen

Smart Technology

Smart Healthcare

Smart Mobility

Smart Infrastructure

Smart Governance

Source: Frost & Sullivan analysis.

Key Parameters That Will Define a Smart City in 2020

• Smart Grids

• Smart Meters • Intelligent Energy

Storage

• Renewable Energy Integration

• Building integrated Photovoltaic

• Low-emission Mobility

• Integrated Mobility Solutions

• Multimodal Transport

• Sensor Networks

• Digital Water and Waste Management

• Use of ehealth and mhealth systems

• Intelligent and connected medical devices

• e-Government

• e-Education

• Disaster Management Solutions

• Use of Green Mobility Options

• Smart Lifestyle Choices • Energy conscious

• Broadband penetration rate of over 80%

• Location Based Services, Augmented Reality, GPS enabled devices/ phones

Smart Energy: Digital Management of Energy

Smart Buildings: Automated Intelligent Buildings

Smart Mobility: Intelligent Mobility

Smart Infrastructure: Digital Management of Infrastructure

Smart Governance: Government-on-the-Go

Smart Healthcare: Intelligent Healthcare Technology

Smart Citizen: Civic Digital Natives

Smart Technology: Seamless Connectivity

Source: Frost & Sullivan analysis.

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Selected Smart Cities in 2025

Global Smart Cities Over 26 Global Cities to be SMART Cities in 2025 - More than 50% of Smart cities

of 2025 will be from Europe and North America

Source: Forbes Smart City List, Innovation City Index, Specific Smart Project Websites for Each City, Frost & Sullivan

Toronto

San Francisco

Vancouver

Paris

New York

London Berlin

Barcelona

Amsterdam

Seattle

Tokyo

Singapore

Calgary

Chicago Los Angeles

Vienna

Copenhagen

Oslo

Seoul

Beijing

Tianjin

Wuhan

Helsinki

Sydney

Shenzhen

Stockholm

25.10%

13.60%

21.10%

22.20%

12.49%

5.40%

Smart Energy Smart Technology

Smart Infrastructure Smart Building

Smart Transportation Smart Healthcare

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Smart City Market

3

1

2

4

5

6

Smart Energy Highest growth rate (CAGR): 28.7% by 2025 Highest growth in Smart Meter (CAGR): 23.15% by 2025 Highest growth in North America

Smart Technology CAGR: 18.23% by 2025 More projects coming up in North American and European regions

Smart Infrastructure Highest growth in smart utilities market (CAGR): 10.16% by 2025 Highest growth in North America and Asia

Smart Building The market to reach $1 trillion mark by 2030 China and India are the fastest growing market followed by Japan and Korea

Smart Transportation Market value: $423 billion by 2025 Market growth in Latin America, Middle East & Africa, and CIS + Eastern Europe. Latin America will have about 50% growth in smart transportation by 2025

Smart Healthcare North America to dominate the smart healthcare market with more than 50% share by 2025, followed by Europe

Smart City Market by Segments, Global, 2025

Source: Frost & Sullivan analysis.

Smart City Market Smart cities to create huge business opportunities with a market value of $3.3

trillion by 2025

Note: The graph represent the market share of each segment in the smart city market

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• Europe will experience a growth rate of 20-25% in smart grid market in next 3 years

• Smart Technology to Fuel Double-digit Growth in European HEMS and BEMS Markets by 2018

Smart City Market Smart cities to create huge business opportunities with a market value of $3.3

trillion by 2025

• North America accounts for

29% share in smart building market in 2011 and is estimated to reach 30-35% in next few years. .

• The Southeast Asian region will see a growth in smart meter market with 24.5% penetration rate by 2020

• The Asian smart building market to reach $1.03 trillion by 2020, up from $427 billion in 2011. The biggest contributing region to be China with 46% followed by Japan with 19% and India by 11%.

• Latin America, Middle East & Africa will account for 39.1%, and 31.4% of share respectively in smart transportation market from 2013 to

2018.

25.10%

13.60%

21.10%

22.20%

12.49% 5.40%

Smart Energy

Smart Technology

Smart Infrastructure

Smart Building

Smart Transportation

Smart Healthcare

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Case Study of SMART City Plan: In Santander, Spain 10,000 sensors feed BIG DATA into Data Servers that Integrates Various Infrastructure

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Smart City Sustainable City

Difference Between Smart and Sustainable City

Smart cities are cities built on “Smart” and “Intelligent” solutions and technology that will lead to adoption of at least 5 out of the 8 smart parameters.

Sustainable cities are cities that are built on eco-friendly basis. These may not necessarily include “intelligent” systems but are built more on an energy-efficient or environment-friendly objective.

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Global Snapshot of Sustainable/ Eco Cities in 2025

North America

Latin America

Europe

Portland Sacramento Oakland San Diego Dallas Houston Orlando Austin Minneapolis San Jose Denver Boston Ottawa Montreal Philadelphia Washington DC Columbus Edmonton

Brasília Belo Horizonte São Paulo Rio de Janeiro Curitiba Bogotá Mexico City

Accra Johannesburg Cape Town Durban Tunis Masdar City Doha

Middle East & Africa

Asia-Pacific & Australia

Note: Eco Cities are cities built on a green initiative, from buildings to transport, governance, city planning, energy, and technology. These cities are either upgraded or built from scratch Moreland

Sustainable / eco-city in 2025

Sustainable / eco-city built from scratch

Source: Siemens Green Index, Frost & Sullivan, 2012

Cardiff Brussels Zurich Lyon Frankfurt Milan Rome Cambridge shire Marseille Tampere

Geneva Graz Riga Vilnius Metz Tubingen Montpellier Bordeaux Casablanca Norwich Hamburg

Manchester Gothenburg Isle of Wight Glasgow Liverpool Dublin Marseille Bergen Edinburgh Nantes Gyor

Istanbul Bursa Ankara Eskisehir Izmir Denizli Antalya Adana Edinburgh

GIFT Sino-Singapore Tianjin Eco-city, Tianjin

Nanjing Hong Kong

Foshan Guangzhou

Wuxi Osaka

Yokohama Wanzhuang Eco-city, Hebei

Medan Palembang

Jakarta Surabaya Denpasar Makasar

Balikpapan Adelaide

Moreland

Smart City Stakeholders

Analysis

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Smart City Stakeholders Analysis- “Smart” as a value proposition

Direct Stakeholders City as a Customer

Indirect Stakeholders Enabling City as a Customer

Citizens

Municipal Infrastructure and Services

Municipal Government Management

Municipal Government

Service Delivery

Technology and Application Providers

Systems Integrators

Infrastructure Services Providers and Operators

Stak

eho

lder

Ty

pes

Role in smart city

.

• Create digital platform for data processing and analysing

• Create digital infrastructure

• Plays the role of interface and operator

• Enables the generation of intelligence

• Provide intelligent, logical and information framework

• Creates and delivers advanced services

• Plan and execute governance system, government services and fundamental services

• Provide access to employment, healthcare, education, and recreation.

• Located in the city to promote industrial growth and enable market growth.

• Use of intelligence and insight to create plans, system strategies, and support decisions

• Supports effective and efficient infrastructure.

Local Enterprises

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The city planner allows any qualified company or business organisation to build city infrastructure and provide city services. The city planner however will impose some regulatory obligations. Eg. Songdo in Seoul

The smart city planner appoints a trusted partner to develop the city infrastructure and services. The partner operates and manages the smart city services. The city planner has no role further. Most of the public-private partnerships are build on this model. Eg. Barcelona

The smart city planner appoints a trusted partner to build the city infrastructure and provide smart city services for a particular area within a time period. After completion the operation is handover to the smart city planner. Eg. Ausgrid

The smart city planner independently builds the city infrastructure and delivers smart city services. The operation and maintenance of the services is fully under the planner’s control.

Business Own

Operate (BOO)

Build Operate Transfer

(BOT)

Business Operate

Managed (BOM)

1 2

3 4

Smart Cities Business Models 6 out of 10 smart city projects are developed under Business Operate Managed

(BOM) business model

Source: Frost & Sullivan analysis.

Note: City Planner: Governing authorities involved with urban planning/land use planning that design plans for the development and management of urban and suburban areas based on land use compatibility, economic trends, environmental implications and social needs. Partner: Private / public stakeholders collaborating with city authorities over urban planning and smart city initiatives

Build Own

Operate (BOO)

Build Operate Manage (BOM)

Open Business

Model (OBM)

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The Next Game Changers in the Smart City Business IBM Leads the Way With Integrated Solutions Combining State-of-the-Art

Hardware, Software, and Services

Data Networking Intelligence Integrators

IBM Cisco

Schneider Electric

General Electric

Siemens

ABB

Accenture

2009

2010

2011

2012

Degree of Intelligence in Smart City Projects

Year

of S

mar

t C

ity

Init

iati

ves

Size of bubble has been estimated based on number of client engagements, degree of partnership in smart city projects and level of investment in smart products and solutions

Convergence of Competition

Convergence of Technology Will Lead to Convergence of Competition

Telecom Players

IT Players

Energy/Infrastructure Players

Automation/Building Control Players

Note: This is an illustration and does not show all market players

Point of Convergence

Verizon

O2

Deutsche Telekom

Cisco

IBM

Schneider Electric

Alcatel-Lucent

Senergy

Eaton Siemens

General Electric

ABB Emerson

Honeywell

Rockwell Automation

Johnson Controls

SAP

HP ST

Electronics

Oracle

Google

Microsoft

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Stockholm Royal

Seaport

Smart ICT for living and working

Sweden’s ICT Department along Ericsson are developing architecture for the Stockholm Royal Seaport’s Smart ICT project.

Ericsson, ABB and Electrolux have come together to develop next-generation smart grid activities

Swedish ICT, Exformation Communication, INTENO Broadband Technology, ITUX Communication, JM, KTC Control are working together to create a generic ICT infrastructure that can reduce investment, climate and environmental costs.

Smart Grid

Smart Communication

Companies like Fortum, Ericsson, ABB and Swedish ICT are Converging to make Stockholm Royal Seaport a new smart district

Source: Stockholm Royal Seaport

Macro Micro

From Macro to Micro: Taking Mega Trends from Information to Strategy Implementation

Mega Trend Selected trends that impact your

business and markets

Sub Trend A sub-layer of trends that has a

wide ranging impact

Impact to Your Industry Visualising the roadmap of these critical forces through scenario-

building and macro economic forecasts

Impact on Future Product/ Technology

Analysis of Opportunities and Unmet Needs

To

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Macro to Micro Implications of SMART City Opportunities on Different Industries

OPPORTUNITIES AND

IMPLICATIONS AUTOMOTIVE

• Smart Grids: Demand Response, Energy Management Systems etc

• Smart Meters • Smart Home Appliances • Flow and Regenerative technologies • Renewable Integration

• Traffic management solutions • Electric vehicle charging

infrastructure solutions • Tolling and congestion charging

solutions • Integrated mobility management

solutions • Transit management solutions

ENERGY

LOGISTICS

ICT

SECURITY

HEALTHCARE

• Connected Vehicles • Connected People • Connected Assets • Connected Work Place

• Integrated health record System • e-Healthcare • m-Healthcare • Tele-Consultation Facility

• Physical Security and Safety • Energy Security Management • Logical Security and Communication • Response Security Management • Mobility Security Management • Building Security

• Smart Trucks • Integrated Network • Real-time Solutions • Innovative Warehouse Tec. • Transport Logistic Platform • Auto ID Systems Source: Frost & Sullivan

So what will the future of Smart Cities market will look in 2025

1. Over 26 cities to be Smart cities, out of which 50% share will be from Europe and North

American cities by 2025

2. The smart city market will be valued at $3.30 billion in 2020-2025. Out of this , 25.10%

of projects will be in the smart energy sector

3. Companies in the smart city space will not only partner and converge to offer “smart”

capabilities– but would also start converging with different players in the eco-system

4. Location Based Services, Trust and Security Platforms, Multimodal User Interfaces

will be some of the more obvious technologies that will be deployed in every smart city

market in the future.

5. E- Services to Citizens – such as e-payments, e-exchange, e-sharing etc. will empower

citizens with real-time access to personal data and related services. More than 60% of

citizens of smart cities will have full access to e-services in next 10 years

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Contact Information

Archana Amarnath Program Manager, Visionary Innovation Research Group

(+44) 2079157893

aamarnath@frost.com

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