Macau: Ready for Digital disruption and becoming a Smart City

1All copyrights © reserved to the author Prof. Dr. Filipe Castro Soeiro | 2017- 2018
filipe.castrosoeiro@usj.edu.mo
https://www.linkedin.com/in/filipecastrosoeiro

 Digital Ecosystems – Disruptive, Sustained and Efficient
Innovation
 Smart Cities – International Benchmark
 Macau Smart City – A Smart Regional Approach with
Challenges and Opportunities

Digital Ecosystems – Disruptive,
Sustained and Efficient Innovation

Problem of Perception
We tend to overestimate the
impact of big changes in the
short run and underestimate in
the long run.
All copyrights © reserved to the author Prof. Dr. Filipe Castro Soeiro | 2017- 2018
4
There is a macro referential paradigm change from an Economy essentially focused on Natural Resources and
Physical inputs to one based on Knowledge, Intellectual assets, Technology Market transfer and commercialization
of innovation to generate new “Innovation Waves” that originate Disruptive Innovation, Sustained Innovation and
Efficiency Innovation, and create value for the Stakeholders of the Ecosystem.
New Scientific Knowledge = Engineering and Economic Knowledge? (Economic Growth, Value Added, Job Creation,
Wealth creation, Welfare?)

Key Trends #1. Network Everything (2010-2025)
#1
Everything Smart
Everything Connected
Everything Digital
(aka Internet of Things)
Source: Ashok Rao & Filipe Castro Soeiro (Chair), Entrepreneurial Journey Conference, Laureate International Universities, Lisbon, 2015

Key Trend #2 Big Data Getting Bigger
Source: Ashok Rao & Filipe Castro Soeiro (Chair), Entrepreneurial Journey Conference, Laureate International Universities, Lisbon, 2015
All copyrights © reserved to the author Prof. Dr. Filipe Castro Soeiro | 2017- 2018 6

Key Trends #3 Mobile Computing
Source: Ashok Rao, Filipe Castro Soeiro (Chair), Entrepreneurial Journey Conference, Laureate International Universities, Lisbon, 2015

Key Trends # 4. Security and Privacy
– New Laws coming in US, China and EU

Key Trends # 5. More Globalization
(The Flat World)

Key Trend # 6. Small is Getting Smaller

Key Trend # 7. Fast Disappearing Line between Virtual and Real
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Genome editing (GEEN) - type of genetic engineering in which DNA is inserted, deleted or
replaced in the genome of an organism using engineered nucleases, or "molecular
scissors” digitally and computer assisted.
Key Trend # 8. Extension of the life molecule with the
Genome editing digitally assisted
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Key Trend # 9. Breakthrough materials extend performance
technology
Breakthrough materials (e.g. yolk-and-shell nanoparticles for lithium-ion battery charging cycle, etc.). A new
"yolk-and-shell" nanoparticle could boost the capacity and power of lithium-ion batteries. The gray sphere at
center represents an aluminum nanoparticle, forming the "yolk." The outer light-blue layer represents a solid
shell of titanium dioxide, and the space in between the yolk and shell allows the yolk to expand and contract
without damaging the shell. In the background is an actual scanning electron microscope image of a collection
of these yolk-shell nanoparticles. Source: David L. Chandler, MIT, August, 2015

New forms of Machine intelligence (from Artificial Neural Networks (ANN) and Machine learning to
Machine intelligence, i.e., from Large datasets to New Data streams, Data Patterns and Knowledge etc.)
Key Trend # 10. The “Man/Woman Machine” New forms of
Intelligence
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Key Trend # 11. Blockchain technology
Approaches to governance that rely on cryptographic methods such as the blockchain (e.g., permissionless distributed databases,
e.g., bitcoin protocol, etc.) Blockchain technology protocol leads to “All in One” databases cryptographic methods

Source: Report from McKinsey referring to Economic Impact (although not being comprehensive and including potential direct impact of sized applications only) estimates Economic
Potential and Consumer Surplus (not GDP or market size revenue) by showing the potential of disruptive technologies, including the Internet of Things (IoT) (2013)
According to IDC The global network
connecting people, data and
machines are propagating a radical
digital business transformation that
has the potential of $10 to $15
trillion USD to global GDP in next two
decades.

The Fourth Industrial Revolution and the Innovator’s Dilemma: “Disruptive” technologies may
threaten established firms and will transform the Digital Ecosystem
Source: Clayton Christensen (1997), “ The Innovator’s Dilemma”. Clayton Christensen, Michael E. Raynor and Rory McDonald “What Is Disruptive Innovation?”, HBR (2015)
Digital Technology Disruption and Ecosystem Transformation

Source: Gartner (August 2017)
Gartner Hype Cycle for monitoring Emerging Technologies (2017)
18

Technology Cycles and Challenges in Technology Monitoring
Source: Managing Technology and Innovation Chapter 17, Management, 11th edition, Bateman and Snell, Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.

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Digital Ecosystems – Disruptive and Sustained Innovation
Source: Mark Skilton, 2014 – Modified by Filipe Castro Soeiro (2018)
Pervasive
role of
technology
Rate of
Technology
adoption
Non-exclusiveness
effect of
Technology
Digital
Economy and
Consumer Surplus
New Scientific, Engineering and Economic Knowledge
Social Collaboration, Digital Alliances and Networks

Smart Region Innovation System -
the Knowledge Triangle

Smart Cities – International
Benchmark

23
Smart Cities – Exploring Model

Smart City HK

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HK - Smart Mobility
Key Strategic Projects
 Intelligent Transport System
and Traffic Management;
 Public Transport
Interchanges (PTIs)/Bus
Stops and Parking;
 Environmental Friendliness
in Transport.

 Wi-Fi Connected City;
 Digital Payment;
 eID (electronic Identity);
 Services Support for the
Elderly and Persons with
Disabilities;
 Support for Healthcare.
HK - Smart Living
Current Status

27
 Climate Action Plan 2030+;
 Green and Intelligent
Buildings, and Energy
Efficiency;
 Waste Management;
 Pollution Monitoring.
HK - Smart Environment
Current Status

28
 Attract and Nurturing
Young Talent;
 Innovation and
Entrepreneurial Culture;
HK - Smart People
Current Status

 Open Data in Public and
Private Sectors and Digital
Citizenship;
 Smart City Infrastructure;
 Adoption of Public Services
through Technology;
 Review Legislation and
reduce bureaucracy
HK - Smart Governance

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 Strengthen the current
pillars by leveraging I&T;
 Promoting Sharing
Economy;
 Develop new economic
pillars.
HK - Smart Economy

Singapore the perfect living laboratory for a smart city
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https://www.cnbc.com/video/2017/05/18/singapore-the-perfect-living-laboratory-for-a-smart-city.html

Singapore the multifunctional highly specialized smart city
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Singapore the multifunctional highly specialized smart city
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 Singapore is taking their imagination to the extreme trying to be the world
most connect smart nation in the world, while setting the global standards:
 Urban living
 Driverless cars
 Ride sharing
 Interactive bus stops transforming the way we travel
 Mobile access
 One stop shop app stores with already streamlined bureaucratic services
 Personal trackers motivating citizens to live healthier
 The effort is not only about individuals, but also all-around-key-
stakeholders to ensure the smart city sustainability

Changi Airport Group - Hub of Innovation and Sustainability
34
 Changi Airport Group (CAG) in partnership with Government has launched
a S$50 million (US$34.8 million) in the next 5 years innovation program
focusing on technologies such as Robotics and the Internet of Things;
 CAG will collaborate with both established companies and start-ups to
develop and demonstrate new technology solutions in a live airport
environment;
 Automation and robotics - to optimize scarce manpower resources and
empower the airport workforce to operate at higher efficiency and
productivity levels;
 Data analytics and the Internet of Things (IoT) – The aim here will be to
create a more accurate and real-time perspective of airport operations,
while optimizing its operational processes and decision-making;
 Consumer analytics could offer deeper insights into travelers’ habits and
preferences, strengthening the airport’s lifestyle product offerings (Digital
Ecosystem);
 Non-intrusive security technologies to improve the experience and reduce
the stress of undergoing security clearance, while strengthening safety and
security standards;
 Smart infrastructure management – New technologies such as sensors, IoT
and smart controls will be implemented optimize infrastructure resources.

Macau Smart City – A Smart Regional
Approach with Challenges and
Opportunities

36
Smart Region – Pearl River Delta / Greater Bay Area

37
Smart Region – PRD / GBA Contextual Analysis
 Historical Framework: The “Factory of the World” with the combined GDP of the 11 cities in the
region of RMB 9.35 trillion (US$1.38 trillion) in 2016.
 Economic Engine: Regional Innovation System accounts for 12 % of China’s economy (2016), even
though the region only accounts for 5% of the country’s population. If the region were a country, it
would be the 5th largest economy in Asia.
 Competitive Rivalry: PRD Hub has higher potential for Innovation and Cost Leadership, but the
region faces increasing competition from countries such as India and Vietnam for low-cost
manufacturing.

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Smart Region – PRD / GBA – Challenges & Opportunities
 New Framework Agreement (2017):
 Between the National Development and Reform Commission (NDRC) and the governments of
Guangdong, Hong Kong and Macau to transform the PRD into the “Guangdong-Hong Kong-Macau
Greater Bay Area (GBA)” by further integrating Honk Kong, Macau and nine cities in Guangdong, so
that they become a “World Class City Cluster”.
 Regional Challenge:
 From “The Factory of the World” to a dynamic “Hub of Innovation and Services” with a GDP of US$4.62
trillion by 2030. This means that the PRD will overtake rival bay areas in Tokyo, New York, and San
Francisco to become the biggest in the world in terms of GDP.
 Leading role in China’s next stage of economic development (up- and downstream).

Smart Region and
Internationalization
– Pearl River Delta
Greater Bay Area
towards China,
Africa and Europe
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Smart Region PRD / GBA – Strategy

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Smart Region GBA| Integrated Infrastructure Development
1. Hong Kong-Zhuhai-
Macau Bridge, which
will likely open in 2018
and significantly
reduce travel time
from Hong Kong to
Zhuhai and Macau.
2. Express Rail Link,
which is due to open
in 2018 and will
connect Hong Kong
to Shenzhen and
Guangdong, and
subsequently to
China’s vast high-
speed rail network.
3. Shenzhen-
Zhongshan Corridor,
which is an eight-lane
highway that will
reduce travel time
between Shenzhen
and Zhongshan /
Jiangmen by
approximately 30
minutes, after its
completion in 2024

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 Smart Regional Economy: increasing the economy’s value adding
capabilities and boosting internationalization (next stage of economic
development);
 Smart Multifunctional Region: to become an important global center
for Advanced Manufacturing and to focus on Innovation, Finance,
Shipping, Trade and Leisure (complementary approach based on cities’
comparative advantages);
 Hong Kong to play the World Financial & Legal Center – Smart
Economy and Smart Governance;
 Shenzhen to play the China’s “Silicon Valley” because of its Innovation
and Startup culture – Smart Economy, Smart Living, Smart People and
Smart Mobility;
 Guangzhou to play the role as the Manufacturing Industry and
Logistics Hub – Smart Mobility and Transportation and Smart
Economy;
 Guangdong to play the strategic corridor to support innovation and
growth, firstly with GBA, and then to China;
 Macau and Zhuhai to reach higher value in Leisure and Tourism –
Smart Economy and Tourism, Smart Mobility and Living.
Smart Region GBA | Multifunctional Development
“Lok Mau Chau Loop
Technology Park”
“Booming
Innovation and
Startup
Ecosystem”
Legal and
Business
Environment
Leisure and
Tourism
Local and Global Value Chains
Manufacturing
Industry and
Logistics

42
Smart Region – PRD / GBA – Full Integration
 Global Value Chains (Huawei, Tencent, Alibaba, Baidu, etc.) International impacts beyond
the GBA, as the region is located on the maritime section of China’s ambitious Belt &
Road Initiative – Positive Externalities;
 HK, as an international city with a highly developed professional services industry and
RMB convertibility, to assist Chinese companies to achieve these global ambitions;
 Businesses will also be able to increase their competitiveness by relocating to new
development hotspots, such as Zhongshan, Zhaoqing, and Huizhou, where rents and
labor costs are lower than Shenzhen and Guangzhou;

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Smart Region – PRD / GBA – Full Integration
 The region will have to overcome silos between cities, especially those between
Guangdong province, Macau, and Hong Kong. Currently, the region is less integrated
than the European Union (EU), but the objective is to be able to prioritize the Bay
Area’s benefits over individual ones;
 Eliminate and smooth barriers between the regions including the currency use,
immigration rules (visa), and corporate tax rates;
 Regional Infrastructure projects will require more harmonized policies and regulations
so that goods, services, capital and people can move more freely within the region;
 The region will also need to attract international talent and investment, if it is to be
more innovative and rival other bay areas, such as San Francisco.

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Smart City Macau – What’s next?
 Smart Mobility: AI-enabled transportation management systems, sensors, smart controls and app services
(e.g., Alibaba, Tencent, Baidu, etc.).
 Smart Living: Wi-Fi connectivity, Internet services and Digital payment, Smart Home, Internet-of-Things, e-
Health care, Regenerated Green and Pedestrian areas, etc. (Huawei, etc.)
 Smart Environment: Water, Energy and Waste Management, Pollution Monitoring, Climate Action Plan
2025+.
 Smart People: University-Corporate partnerships, Digital, Blended and Campus-based combined
experience, Digital Entrepreneurial and Business Incubation, Executive Education, Digital Business
Transformation, STEM and Education Grants, etc.
 Smart Governance: Open Data for public and private sectors, Adoption of Public Services through
Technology, etc.
 Smart Economy: Smart Tourism and Diversification Services supported by Cloud computing and Digital
Marketing and AI, and strengthen the current pillars by leveraging I&T.

Thank you for listening! I look forward to
learning from you!
filipe.castrosoeiro@usj.edu.mo
https://www.linkedin.com/in/filipecastrosoeiro

Macau: Ready for Digital disruption and becoming a Smart City

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