Connected cities ibm

© 2012 IBM Corporation
Get Smarter for a New
Economy
How cities are competing in the
innovation economy
Martin Fleming
IBM Chief Economist and
VP, Business Performance Systems
June 27, 2013

Cornelius Vanderbilt built the Grand Central Terminal with the help of
engineer William Wilgus and created mid-town Manhattan
 Begun in 1903 and
completed in 1913
 Covered Park Avenue
and created billions of
dollars of GDP and real
estate value
 Also created:
– Commuter Fares
– Red Carpet Welcome
– Ramps
2
 Displayed bare electric light bulbs as a massive
advertisement for electricity.

Get Smarter for a New Economy: How cities are competing in the innovation
economy
 In the years ahead, economic growth will increasingly rely on the merger of
creativity, technology and innovation.
– Cities will face increasing competition for human capital, entrepreneurship, and
investment.
 Addressing this challenge will require cities to provide services that meet the
needs and expectations of the highly skilled and diverse population.
– Analytics and systems thinking will require new deployment of information and
communication technology for cities to gain competitive advantage in this new
economic age.
 Investing in city’s to improve social and economic returns will help address
pressing capital constraints.
3

Skills and knowledge are having an increasingly significant impact on
economic growth and activity among cities and regions
 Leading regional and
urban economies
combine
– a strong base of skills and
talent, and
– a high share of
knowledge-intensive
industries in the overall
economy
 Economies are becoming
more skills and
knowledge-intensive over
time
Skills and knowledge are driving growth in income
(Regional and urban data, 1999-2007, size of the bubble reflects
income per capita, US$ PPP)
0
10
20
30
40
50
60
0 10 20 30 40 50 60
Third level education, % of labor force
Knowledgeintensiveservices,%oftotal
1999
2007
Source: OECD Regional Statistics database, 2010 and IBM Global Center for Economics Development
analysis
4

As focal points of economic activity cities are strongly positioned to benefit
from the new talent-intensive economic growth
Bangalore
New
Delhi
Beijing
Guangzhou
Shanghai
Johannesburg
Cape Town
Sydney
Mexico
Paris
Lisbon
Brussels
Seoul
-10
0
10
20
30
-5 5 15 25 35 45 55
Top cities act as economic activity hubs
(Size of the bubble – ratio of city share of national GDP
to its share of national population, 2009)
 The top 100 cities worldwide
accounted for roughly 25% of the
world’s GDP in 2005. By 2008 this
had increased to over 30%
 The world is at an unprecedented
level of urbanization.
 Cities contain an increasingly
large share of the world's highly
skilled, educated, creative and
entrepreneurial population
 Cities support large-scale
business networks that absorb
and extend innovation
Source: UN Habitat 2010, and IBM Global Center for Economics Development
analysis
Cityshareofcountrypopulation,%
City share of country GDP, %
5

Cities are competing globally for more diversified and internationally mobile
talent
 Diversity of skills, creativity and knowledge has a positive effect on cities’ income
per capita
 By 2030, the stock of highly educated migrants will more than double on 2010
 Internationally, flows of skills and talent are also becoming more cities-centered
Diversity of skills, creativity and knowledge is
positively linked with income
50 leading US cities, 2006
17,000
19,000
21,000
23,000
25,000
27,000
29,000
31,000
20 30 40 50 60 70
Source: UN Human Development Report, 2009, Diversification score is based
on data from Impresa Consulting, 2006, and IBM Global Center for
Economics Development analysis
Incomepercapita,PPPUSD
Diversification score, percent
0
20,000
40,000
60,000
80,000
100,000
120,000
Europe North
America
Asia World
1990 2010 2030(f)
Inflow of highly educated migrants
Thousands, 1990-2030
Source: UN Human Development Report, 2009, and IBM Global Center for
Economics Development analysis
6

Congestion is one of the main urban transportation problems faced by
almost all cities and incurs significant costs
0 1 2 3 4 5
Kuala
Lumpar
Bangkok
Sao Paulo
Mexico City
Dakar
Manila
Dublin
Congestion costs
%of GDP
Source: Ley and Boccardo, 2010; CSO, County Incomes and Regional GDP 2010
 Congestion negatively impacts the quality
of life in a city by
– decreasing personal and business
productivity
– lowering air quality
– creating noise pollution.
 Congestion pressures faced by cities will
intensify going forward
 Car ownership in Sao Paulo is increasing
at the rate of 1,000 cars a day
 Traffic is growing four times faster than the
population in Mumbai, Delhi, Ahmedabad,
Bangalore, Chennai and Hyderabad
7

Poor public safety has a negative impact on skilled and innovative workers
and businesses
Source: Lloyds, Under attack? Global business and the threat of political
violence
Corporate location responses to
political violence and terrorism
% respondents (past five years)
37
8 7
0
5
10
15
20
25
30
35
40
Avoid investments
in certain territories
Cease or sell of
operations in a
territory
Relocate operations
wihtin a territory or
region
 Levels and quality of human capital
are linked to overall levels of public
safety
– Higher individual and average
levels of education increase
demand for public safety
 How cities respond to threats to public
safety, such as violence and
terrorism, are of utmost importance for
business location decisions
– Crime and poor public safety have
a deterrent effect on foreign direct
investment and domestic
entrepreneurship, especially in
highly skills-intensive sectors
8

Health is fundamental to the quality and productivity of a workforce and is
crucial for a city’s overall survival and attractiveness
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0
Education index
Human development index, 2007
Leaders
Followers
Better health is positively correlated with higher quality of skills and knowledge
Educationand
HumanDevelopmentIndices
Health Index
Source: UN Human Development Report, 2010 database, http://hdrstats.undp.org/en/indicators/ and IBM Global Center for Economics Development analysis
9

Smarter Cities solution portfolio can help no matter where a leader starts
EnergyGovernment HealthcarePublic Safety Transportation Water
Operations insight
Law enforcement and
public safety
Building management
Planning and Management Infrastructure Human
Transportation
management
Water management
Utility Network
management
Asset Management
Social program
management
Citizen health and safety
Educational outcomes

Smarter Transportation enhances the traveler experience
InfrastructureHuman
Planning and
Management
“What used to be a time-consuming process
is now accomplished automatically and in real
time, allowing us to make smarter and more
timely decisions that keep our city’s traffic
flowing smoothly.”
Used intelligent video analytics to
provide real-time traffic
information to drivers, conduct
traffic surveillance and improve
city roads
.
Bucheon City Official, Korea
Smarter Transportation
Leverage information to create
visibility across transportation
networks and improve
operations
Anticipate commuter demand to
optimize capacity and minimize
congestion
Coordinate resources to assure
safety and improve the traveler’s
experience

T
Public safety analytics make cities safer and more desirable for citizens
and businesses
InfrastructureHuman
Planning and
Management
“Coplink proved to be an important
resource tool to help identify a suspect
and solve an otherwise unworkable
case.”
North American police agencies
worked together to attain guilty
convictions for theft cases
Smarter Law Enforcement
Leverage crime data to get a
holistic view and identify leads
more quickly
Anticipate and uncover criminal
trends to proactively deploy
police resources
Coordinate police resources and
processes to quickly and
efficiently resolve crimes
David Maher, Tustin Police Department

One platform, many use cases
• Organization-wide dashboards
• Domain analytics
• Event and KPI management
• Geospatial mapping
• Data modeling and integration
• Simulation and visualization
• Cross-department collaboration
• Situational awareness
• Incident management
• Alerts and directives
…within a particular service area or
managing across many services
• Leverage real-time visibility of cross-city data to optimize cost efficiencies
• Anticipate and proactively manage problems to mitigate impact to services and citizens
• Coordinate cross-agency operations with business and citizen participation to drive
economic prosperity and enhance citizen involvement
Intelligent Operations Center for Smarter Cities provides integrated insight

Analytics is transformational and will improve decision making, but will
require increased skills and ways of thinking about the entire work force
 Analytics are moving away from
answering well-defined business
problems towards solving for
questions users don’t even
know to ask.
 Hadoop and visualization are
complementary to data
warehousing and will be
integrated into most analytic
processes in the future.
 Analytics is shifting to more
probabilistic platform that
analyzes only some of the data,
while sifting out the noise.
14
Source: Morgan Stanley Research; Tech Hardware Insights Meetings Highlight
Pent-Up Demand for Analytics / EDW; December 14, 2012
 The shortage of data scientists and
complex integration issues are critical
problems that often hold companies back
from adopting analytic solutions.

In spite of current financial constraints, there are some basic steps city
leaders can and must take now
1. Decide what their city brand should be
2. Adopt policies conducive to skills, creativity and knowledge-driven growth
3. Optimize their services around the citizen
4. Employ systems thinking in all aspects of planning and management
5. Develop and apply the fundamental enabling information technologies to core
city systems
15

1. Cities need to decide what their city brand should be
16
What are
your city’s
differentiating
strengths?
What strategy
can best
support these
strengths?
Which core
systems
investments
should be
prioritized?
City brand
 Identify the city’s differentiating
strengths that will attract human
talent
 Create a strategy that emphasizes
them, building on existent basis of
core services
 Prioritize investments in core
systems: transport; government
services and education; public
safety and health; as well as
energy, environmental
sustainability, urban planning and
design in line with the strategy
Source: IBM Global Center for Economics Development analysis
16

New York is a global power city and exerts a significant impact on many
professional fields, such as finance, media, art, fashion, and research
 The home of the United
Nations, New York is an
important center for
international diplomacyand
has been described as the
cultural capital of the world.
 Mayor Michael Bloomberg has
championed issues such as
smoking, obesity, climate
change and gun control.
 Mass transit use is the highest
in the US, and gasoline
consumption is the same rate
as the national average in the
1920s.
17
 NYC is the 2nd
largest center for the US film
industry, including independent film production.
 Since 2005, the city has had the lowest crime
rate among the 25 largest US cities.
Sources: facebook and Wikipedia

Boston is an intellectual, technological, and political center
 A global city, Boston is
placed among the top 30
most economically powerful
cities in the world.
 The area's many colleges
and universities make
Boston an international
center of higher education
and medicine, and the city is
considered highly innovative.
 Boston is sometimes called a
"city of neighborhoods"
because of the profusion of
diverse subsections; there
are 21 officially designated
neighborhoods.
18
 The city's water supply, from the Quabbin and
Wachusett Reservoirs, is one of the very few in
the US so pure as to satisfy federal quality
standards without filtration.
Sources: facebook and Wikipedia

2. Cities need to adopt policies conducive to skills, creativity and knowledge-
driven growth
Attract
internationally mobile
talent by enhancing
quality of life
services
Enable
better opportunities for
deploying skills and
abilities, using better
deployment of data collection
and analytics
Retain
the existing base of
education, skills, creativity,
and aptitude to reduce
the brain drain
Create
a domestic skills and
knowledge base by
offering education
services and training
People,
skills,
knowledge
and
creativity
19

3. Cities need to optimize their services around the citizen
 Shift from standardized services to tailored services that meet individual needs
 Create digital linkage across core systems and the analysis and actions driven by data
 Develop a transparent system of charges that reflects the costs of citizen-centric services,
encouraging direct engagement by the citizens, and lower costs burden on public finances
 This city is what it is because our citizens are what they are (Plato)
Old Reality
Not standardised... ...but tailored
Not uniform… …but individualised
Not only reliable… …but also green and clean
Not only accessible… …but also efficient
Standardized
services
Citizen-centric
services
New Reality
20

4. Cities must employ systems thinking in all aspects of planning and
management
 Consider problems, solutions and the value
that improvements will create in the context of
related and interconnected city systems
 Identify, map and appeal to constituencies
essential to the success of city improvements
 Focus on system behaviors instead of
singular events, and examine multiple
approaches to changing system behaviors
 Fully leverage the value of data across
systems by making information widely
accessible to citizens
Source: Bosellli, 2010
21

5. Cities need to develop and apply the fundamental enabling information
technologies to core city systems
Measuring, Monitoring, Modeling and Managing
MeteringMeteringSensingSensing
Real Time
Data Integration
Real Time
Data Integration
Real Time
+ Historical Data
Real Time
+ Historical Data
Data Modeling
+ Analytics
Data Modeling
+ Analytics
Visualization
+ Decisions
Visualization
+ Decisions
 Data modeling and analytics to
create insights from data to
feed decision support and
actions
Feedbacktouseranddatasource;
Incentivesandactionstochangebehavior
Feedbacktouseranddatasource;
Incentivesandactionstochangebehavior
 Comparison of historical data,
with newly collected data
 Data collection
 Data Integration
 Cities need to deploy
information
technologies to core
systems
– Collect and
manage the right
kind of data
– Integrate and
analyze the data
– Based on
advanced analysis,
optimize the
system to achieve
desired system
behaviors
22

Cities must act NOW to gain leadership in the new environment of skills and
knowledge-intensive economic growth
 Recognize talent - skills, knowledge, creativity and innovation ability - as an
ever more important driver of sustainable growth implies significant changes in
how we think about managing and improving cities
 Shift the thinking from appealing to mass audiences to appealing to individual
citizens en masse
 Leverage modern information technology to make this seemingly daunting
challenge not only practicable, but also, over the long-term, cost-effective
 Cities that adopt this thinking and make such wise investments to build a
smarter city now will thrive. Those that continue to invest in traditional
infrastructure improvements designed for a mass population will inevitably
struggle
23

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