Key Trends in Urban Digital Transformation: The Impact of Smart Cities and Communities
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1 Key Trends in Urban Digital Transformation: The Impact of Cities and Communities Ruthbea Yesner VP, Government Insights October 31, 2018 IDC
2 Discussion Points Trends Driving Investment Evolution of IT Themes Trends in Spending Key Considerations for Investments Conclusions IDC 2
3 Cities and Communities: A Framework for Large Scale Change The digital transformation of an urban ecosystem to meet environmental, financial and social outcomes. Cities, towns, counties or states (stadiums, college campuses, military bases, airports) that use data and technology to enable this urban transformation. All great changes are preceded by chaos. Deepak Chopra IDC Visit us at IDC.com and follow us on 3
4 To Address Current and Future Challenges Growth in urban populations Competition for talent & industry Growth in energy needs Technology innovation & disruption Economic Inequality and Digital Divide Source: IDC, 2015 Increase in Severe Weather Events
5 The Evolution of IT Themes Prior to and & Beyond Reduce Costs/Operational Efficiency Economic Development Future Investment Citizen Engagement Citizen Experience Livability & Quality of Life Open Data Sustainability Risk Supplier Relationships Open Data, Transparency, Performance Sustainability, Resilience Innovation Partnership Ecosystem Data Sharing and Interoperability Sustainability, Resilience, Climate Preparedness Innovation Culture and Digital Transformation Trusted Partners, New Procurement Models
6 The Results Demonstrate Opportunity Networked LED Street lighting Trash Bins Parking Buildings Water 50-60% reductions in operations and energy costs, 6 year ROI % cost reductions 2 Daily vehicle miles traveled reduce by 30-40%, 30% emission reductions 3 20% energy consumption reductions % clean water loss, 65% utilities cite lack of business case for investment 5 6
7 The Internet of Things is a Driving Force NYC potentially managing and collecting data from 2-3 million devices For a city of 100,000 that could mean 25,500 city devices Street Lights Vehicles Intelligent Transportation Buildings People 320 million Outdoor Street lights Over 1 Billion Vehicles Over 1.1 million signalized intersections Over 5 million public buildings 54% accessing the Internet
8 Key Investment Priorities Now and Over Next 5 Years Strategic Priorities PROGRAMS USE CASES Economic Development & Civic Engagement Augmented Arts, Culture Tourism Civic Engagement Stadiums Kiosks Open Data Concessions Intelligent Event Omni-channel City Portals Stadium Parking Museums Next Gen Non-emergency Services Interactive Experiences Digital Equity Sustainable Urban Planning & Administration Digital Administration Sustainable Land Use Community Resiliency City Platforms Data-Driven Urban Planning Neighborhoods Back Office Digital Permitting, Licensing, & Inspections Reliability as a Service Digital Legislating Digital Twin Data-driven Public Safety Proactive Social Services Emergency Field Workers Early Warning Systems Data-Driven Social Services IoT-enabled Fire Fighting Next-generation Emergency Data-Driven Policing Real-Time Crime Centers Officer Wearables Data Sharing Platforms Visual Data & Analysis Body Worn Cameras (BWC) Resilient Energy & Infrastructure Water Sustainable Infrastructure Buildings Non Revenue Water Environmental Monitoring Indoor Lighting Water Quality Monitoring Outdoor Lighting Building Infrastructure Trash Collection In-Car Cameras Digital Evidence Mobile Forensics and Intelligence Intelligent Transportation & Automated Vehicles Infrastructure & Operations Autonomous Vehicles Parking Vehicle to Everything Connectivity Journey Planning Advanced Public Transit Multi-modal Transit Hubs Intelligent Traffic Ride-Hailing/Ride-Sharing IDC 8
9 High Growth and Largest Initiatives Top Five Use Cases by CAGR Top Five Use Cases by Spending Note: Bubble size indicates relative spending share in 2018 Source: IDC s Worldwide Semiannual Cities Spending Guide, 2017H2 (July 2018) IDC 9
10 Cities Spending will Reach $ 158 Bn in Cities represent 15% of the Opportunity Calgary Vancouver Chicago San Los Angeles Jose Kansas City Dallas Mexico City Medellín Quito Toronto Boston New York City Copenhagen Moscow Amsterdam Warsaw London Berlin Prague Almaty Paris Budapest Beijing Milan Barcelona Istanbul Seoul Kashiwa Tokyo Wuhan Kawasaki Tel Aviv Sagamihara Chengdu Shanghai Yokohama Bhopal Fujisawa Fuzhou Guangzhou Taichung Riyadh Dubai Pune Shenzhen Bhuwaneshwar Ho Chi Minh Singapore Rio de Janeiro Cape Town Melbourne Christcurch City Source: IDC s Worldwide Semiannual Cities Spending Guide, 2017H2 (July 2018) IDC 10
11 Key Considerations for Investment Clear funding path, revenue or cost recuperation model Point solution that is noticed by the public Part of large capital budget funding or existing investment Public outcry or demand (a trend or from a crisis) Solutions that combine several of these factors IDC 11
12 Clear Funding Path + Noticeable Point Solution IDC 12
13 Public Demand (Trend or Crisis) IDC 13
14 We Need Interconnected Initiatives That Match How Cities Function Adapted from: Harvard Business Review, How, Products Are Transforming Competition, by Michael E. Porter and James E. Heppelmann, November 2014
15 Solutions Involve Multiple Organizations Industry Solutions Economic Development & Civic Engagement Sustainable Planning & Administration Data Driven Public Safety Resilient Energy & Infrastructure Intelligent Transportation Enterprise Applications Applications and Services Analytics and Data IT and Professional Services Infrastructure Cloud City Platforms Enterprise Connectivity Industry Consortia and Non-profits Standards and Regulatory Bodies Source: IDC, 3Q17 For areas that IDC covers, the top 3-5 market share leaders are represented. For areas that IDC does not cover, vendor selection is up to analyst discretion. IDC 15
16 Mapping to Show Timing & Relationships Kiosks Museums Neighborhoods Environmental Monitoring Water Quality Monitoring Digital Permitting and Licensing Open Data Back Office Omni- Channel Portals Field Workers Data Driven Social Services Body Worn Video NextGen Non- Emergency Services City Platforms Officer Wearables Real Time Crime Centers Trash Collection Outdoor Lighting Advanced Public Transit In car camera systems Parking Journey Planning Ride Hailing/ Ride- Sharing Autonomous Vehicles Non Revenue Water Stadium Parking Intelligent Traffic Data Drive Urban Planning Early Warning Systems Concessions Intelligent Event Data Sharing platforms Visual Data and Analytics IoT Enabled Firefighting Indoor Lighting Digital Evidence Next Gen Emergency Building Infrastructure Mobile Forensics Digital Legislating Digital Equity Interactive Experiences V2X Connectivity Digital Twin Multi-Modal Transit Hubs Reliability as a Service HORIZON 1 Now HORIZON 2 Medium Term HORIZON 3 Long Term IDC 16 16
17 Priorities to Address Investment Drivers Kiosks Museums Neighborhoods Environmental Monitoring Water Quality Monitoring Priority 1 Easier to deploy, impactful and measurable Priority 2 More complex but highly desirable Priority 3 More difficult, costly and/or complex Digital Permitting and Licensing Open Data Back Office Omni- Channel Portals Field Workers Data Driven Social Services Body Worn Video NextGen Non- Emergency Services City Platforms Officer Wearables Real Time Crime Centers Trash Collection Outdoor Lighting Advanced Public Transit In car camera systems HORIZON 1 Now Parking Journey Planning Ride Hailing/ Ride- Sharing Autonomous Vehicles Non Revenue Water Stadium Parking Intelligent Traffic Data Drive Urban Planning Early Warning Systems Concessions Intelligent Event Data Sharing platforms Visual Data and Analytics IoT Enabled Firefighting Indoor Lighting Digital Evidence Next Gen Emergency HORIZON 2 Medium Term Building Infrastructure Mobile Forensics Digital Legislating Digital Equity Interactive Experiences V2X Connectivity Digital Twin Multi-Modal Transit Hubs HORIZON 3 Long Term Reliability as a Service IDC 17 17
18 Conclusions: Trends for Action Focus on managing growth More RFPs related to strategic planning and benchmark assessments The City Council is more educated and more involved Address the scaling problem by testing new business models, and funding sources Pay more attention to security Privacy extends into ethics; ethical AI and bias Agile structures to encourage innovation and also manage risk 18
19 Five Steps to Get City Investments Right 1 Start tomorrow by identifying a selection of use cases that align with the overall smart city strategy Creating working groups with internal and external stakeholders to identify the key data, information flows and unmet needs that could benefit from a platform approach Work with more than one vendor. RFIs and pre-rfp stakeholder meetings can help evaluate capabilities and generate new ideas as well as develop competency in creating the best RFPs Develop platforms incrementally, by building on the existing systems and data, and fostering modularity and re-usability across use cases. Experiment one use case at a time with eye to scalability. Establish clear governance principles and guidelines that ensure integrated and secure access to data, while enabling experimentation.
20 Final Thoughts CapEx to OpEx, operational and cost savings, reinvestment are not straightforward; point solutions often avoid this complexity leading to more siloes. Many cities have tested or piloted solutions, but business models to scale citywide, and fund the required infrastructure, is an issue requiring innovation. Cities cannot realize their full benefits if they create siloed solutions where data is not easily shared or analyzed in concert with other solutions. For AI and automation, systems need to talk to each other. IDC 20
21 For More Information Ruthbea Yesner Vice President, Government Insights and Cities Global Director Cities Strategies Twitter LinkedIn IDC 21
22 Related Research IDC's Worldwide Digital Transformation Use Case Taxonomy, 2018: Cities and Communities (#US , September 2018) Worldwide Economic and Industry Assumptions, 2H17 (#US , September 2018) 2018 World Cities Summit: Harnessing Innovation to Make Cities More, Livable, and Sustainable (#AP , August 2018) IDC's Worldwide Semiannual Cities Spending Guide Taxonomy, 2H17 (#US , July 2018) IDC Innovators: U.S. City Kiosks, 2018 (#US , July 2018) Real-Time Crime Centers: Case Studies (#US , June 2018) IDC Perspective: Asia/Pacific Intelligent Transport Initiatives 2018 (#AP , June 2018) IDC 22
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