Smart cities offer opportunities for new technologies and economic development by addressing challenges of urbanization, sustainability, and intelligent infrastructure. Key aspects of smart cities include intelligent devices, broadband networks, analytics, energy systems, transportation, health, retail, and financial services. Successful smart city projects in Austin and Amsterdam demonstrate benefits across sectors through public-private partnerships and pilots. Vendors can capture the large worldwide market by establishing partnerships, selling to city consortia, and leveraging initial projects into broader deals across sectors.

1. Smart Cities: Proving Ground for the
Intelligent Economy
Rick Nicholson
Vice President,
IDC Energy Insights
Copyright 2010 IDC | Reproduction is forbidden unless authorized. All rights reserved.

2. Agenda
What are the mega-trends behind smart cities?
Why make cities smart?
What is a smart city?
What role do specific industries play?
Smart city case studies
How big is the opportunity?
Essential guidance
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3. Urbanization
The Percent of the Population Living in Urban Areas is “The 19th century was a century of
Projected to Rise Rapidly in the Less Developed empires, the 20th century was a
Regions—Asia, Africa and Latin America century of nation states, the 21st
100 century will be a century of cities”
89 90
90 84 – Wellington Webb,
78 81 former Mayor of Denver
80 72
70 66 64
62
60 51 People living in cities:
50 41 41 – Are more economically
39
40 successful
30 – Are better educated
20 15 17 – Are generally healthier
10
However, urban citizens also:
0
Africa Asia Europe Latin North – Use more energy
America America – Consume more goods and
services
1950 2007 2050
– Create more pollution and waste
Source: UN Population Division, World Urbanization Prospects: The 2007 Revision, Executive Summary (2007)
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4. Intelligent technologies
U.S. Intelligent Devices (Units x 1,000)
80,000 Intelligent devices (e.g.,
70,000 smart phones, smart meters,
60,000
50,000 sensors) provide cost effective
40,000 “telemetry” for infrastructure,
30,000 vehicles, people, etc.
20,000
10,000 Pervasive broadband
0 networks enable real-time
2009 2010 2011 2012 2013
communications among
Smartphones Smart meters intelligent devices and back-
end systems
Worldwide Broadband Connections (Units x 1,000)
700,000 Analytics and social media
650,000 process the real-time data
600,000 streams, enable real-time
550,000 decision making, and provide
500,000 a platform for information
450,000
dissemination and
400,000
collaboration
2009 2010 2011 2012 2013
Source: IDC, 2009
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5. Why make cities smart?
Sustainability
– Reduce greenhouse gas
emissions/carbon footprint
– Reduce water waste/make clean
water available
Economic development
– Make it easy to do business/attract
new business
– Promote job growth
– Increase per capita GDP
– Drive economic diversity
ARRA funding (U.S.)
– $4 billion in smart grid grants
– $2.4 billion for battery manufacturing
and electric vehicles
– $2 billion to promote telemedicine
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6. What is a smart city?
Citizens Businesses
Energy Water Communications Transportation Buildings City Services
City Infrastructure
Intelligent Pervasive Broadband Analytics and
Devices Networks Social Media
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7. Infrastructure: Energy
Worldwide CO2 Emissions Energy Prices (Oil)
$88
$86
$84
$82
$80
$78
$76
Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12
Worldwide Energy Consumption Worldwide Energy Demand
Sources: International Energy Agency (IEA) and Consensus Economics, 2009
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8. Infrastructure: Energy
Opportunities
– Smart grid
• Smart meters, grid sensors
• Neighborhood/wide area networks (wireless
mesh, WiMAX)
• Meter data mgmt and grid mgmt systems
– Energy efficiency and demand response
• In-home displays, smart thermostats, smart
appliances
• Home area networks
• CRM systems, analytics and customer portals
– Electric vehicles
• Charging infrastructure (smart charging stations)
• Wide area networks
• Charging management systems
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9. Infrastructure: Transportation
Worldwide Growth of Electric Vehicles Transportation as a Service
(Car 2.0, Mobility on Demand)
– Rent a car, scooter, bike via
subscription
– One-way sharing (pick up and
drop off in different locations)
– Enabled by smart grid, GPS,
wireless communications,
analytics
– Integration with public transit
(multi-modal)
Source: International Energy Agency (IEA), 2009
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10. Infrastructure: Transportation
Opportunities
– Smart charging, vehicle-to-grid (V2G)
• In-car technology (software, communications)
• Charging infrastructure
• Wide area networks/GPS
– Back office systems
• Billing and settlement systems
• CRM and account management systems
• Analytics (demand forecasting, GHG emissions)
• Enterprise asset management (EAM)
– Driver/consumer services
• Portals
• Mobility
• Social media
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11. Infrastructure: Health
Drivers
– Aging population
– Increasing costs
– Prevalence of chronic
disease
– Consumer expectations of
service quality and life
style continuity
– Provider staffing shortages
that are significant and
accelerating
Source: U.S. Centers for Disease Control and Prevention, 2009
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12. Infrastructure: Health
Opportunities
– Telemedicine and remote patient
monitoring
• Intelligent/connected medical devices
(glucometers, pulse oximeters, blood
pressure monitors)
• Wide/home area networks
• Care management systems (enables
remote care by clinicians)
• Electronic medical record (EMR)/personal
health record (PHR) systems
• Patient portals
• Telepresence/video conferencing
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13. Businesses: Retail
Drivers
– Smaller urban stores vs. big-box suburban stores
– Product/service differentiation
– Consumer focus/”customer first”
– High energy and transportation costs
– Carbon footprint/sustainability
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14. Businesses: Retail
Opportunities
– Real-time in-store systems
• PoS/self-checkout
• Kiosk
• Mobile/personal shopping assistant
• Digital signage
• Video intelligence
– Centralized back office systems
• eCommerce, mobile and social media
• Merchandising and supply chain management
• Business intelligence and customer analytics
– Energy management systems
• HVAC
• Lighting
• Refrigeration
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15. Businesses: Financial Services
Drivers Most Frequent Transaction Types Conducted
– Fewer and smaller branches will
need to handle more activity with
smaller footprints
– Specialists (wealth, insurance,
mortgage, etc.) inefficiently
distributed in branch network
– Customer acceptance of self-service
Future Mobile Banking Initiatives
Source: IDC, 2009
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16. Businesses: Financial Services
Opportunities
– Smart banking
• Personal teller machines (video,
centralized specialists)
• Mobile banking (smart alerts,
integration with ATMs and home
PCs)
• Back office systems (dynamic
pricing, fraud analytics)
• Security
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17. Austin, Texas
Pecan Street Project
– Started with no budget and
200 volunteers
– Leveraged resources of
founding and corporate – Goal to “design and implement
partners including: an energy system that generates
a power plant’s worth of power
• Austin Energy
from clean sources… and
• Cisco delivers it over an advanced
• City of Austin delivery system that allows for
• Dell customer energy management”
• Environmental Defense Fund – Want the infrastructure (grid) to be
• University of Texas at Austin a platform for innovation
– Focus is on economic
– $10.4 million ARRA smart
development
grid demonstration grant
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18. Austin, Texas
car2go
– First launched in Ulm, Germany
– Austin pilot launched in late
2009 with 200 cars used by city
employees and their families
– Locate available cars via
– Owned by Daimler AG phone or web site
– Smart Fortwo cars – Car unlocked and started by
– No reservations required smart card and PIN code
– In-car touchscreen
– Per minute/per hour rental fee
– Park in any non-
includes fuel, maintenance,
metered/restricted space
insurance
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19. Amsterdam
Amsterdam Smart City
– Collaboration between:
• Municipality of Amsterdam
• Liander (utility)
• Amsterdam Innovation Motor (AIM)
– Series of pilot projects over two years
in four focus areas – Focuses on “innovative
technology, sustainable
• Sustainable living
economic investments
• Sustainable working
and changing the
• Sustainable mobility
behavior of the people in
• Sustainable public space
Amsterdam”
– Technology partners
• Accenture
• Cisco
• IBM
• Phillips
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20. Amsterdam
West Orange project
Sustainable – 500 homes with smart meters and in-home displays
living Geuzenveld project
– 700 homes with smart meters and in-home displays
ITO Tower project
Sustainable – 38,000 square meter office building
working – Sensors managing lighting, heating, cooling and security
Ship to Grid project
Sustainable – 154 shore power connections for river cruisers and inland
mobility freighters
– Pay-by-phone system
Climate Street project
– City center street with 140 SMBs (mostly retail)
Sustainable
– Waste collection and goods delivery with electric vehicles
public space – Intelligent street/facade lighting
– Solar powered tram stops, billboards and waste bins
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21. How big is the opportunity?
Examples for a city of 1 million people
Smart metering 600,000 $120 million
smart meters opportunity
Electric vehicle 45,000 $225 million
charging electric vehicles opportunity
infrastructure
Remote patient 70,000 $14 million
monitoring people opportunity
(diabetes) w/diabetes
Smart retail 4,000 $200 million
establishments stores opportunity
Total Worldwide ICT
Smart bank 3,200 $160 million Opportunity ≈ $200 Billion
branches PTMs opportunity
Note: These are high level estimates – not to be used for formal market sizing
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22. Vendor universe
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23. Essential Guidance
Learn how to sell to consortia that include both private and
public sector organizations
Look for smart city initiatives in:
– Medium sized cities in mature economies (North America,
Europe)
– Developing cities in developing economies (Asia, Middle East)
Get in early and establish brand recognition
Leverage initial projects into multi-sector deals
Develop partnerships with other key vendors
– Intelligent device vendors
– Engineering, procurement, construction (EPC) companies
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24. Contact Information
Email us at:
rnicholson@idc.com
Please fill out your Directions
evaluation form
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