IDC developed the IDC Smart Cities Index to analyze cities in two strategic areas: smartness dimensions and enabling forces. IDC considered "enabling forces," the underlying characteristics of the city, which could facilitate or hinder its evolution into a smart city, namely people, economy, and information and communication technologies.
WHITE PAPER Smart Cities Analysis in Spain Sponsored by: BBVA, Ferrovial Servicios, IBM, Microsoft, Sage, Telefónica, and Urbiotica Rafael Achaerandio Roberta Bigliani Gaia Gallotti Fernando Maldonado José Curto September 2011 IDC OPINION The smart city concept was born two decades ago to address emerging city sustainability issues, and was mainly focused on energy efficiency and emission reduction. More recently the term was attached to the role of ICT infrastructure. IDC considers this necessary but insufficient. IDC defines a "smart city" as a finite unit of a local entity, which declares and makes a conscious effort to have a holistic approach to employ information and communication technologies, for real-time analysis, to transform its essential modus operandi with the ultimate goal of improving the quality of life of the population living in the city, ensuring sustainable economic development. Despite the different EU policies and the efforts of city halls, Spain has yet to reap the benefits of a strong development of the smart city concept across the country. This is due to the fact that the smart city framework is not exclusive to public entities, but also requires the participation of private organizations and society maturity. Taking into account these factors, IDC undertook this Spanish smart cities project, beginning with inviting industry players in the country to analyze and assess the Spanish smart cities context. This paper explores the situation and the need for many large Spanish cities to evolve their current development and management models to establish the basis for a sustainable, intelligent, and socially acceptable future. However, in order to act it is crucial to first measure and establish a starting point. With this objective in mind, IDC carried out intensive interviews and additional complementary research on the 44 largest cities in Spain to evaluate how "smart" these cities actually are at present and how "smart" their future roadmaps are. IDC developed the IDC Smart Cities Index to analyze cities in two strategic areas: smartness dimensions and enabling forces. IDC considered "enabling forces," the underlying characteristics of the city, which could facilitate or hinder its evolution into a smart city, namely people, economy, and information and communication technologies. IDC considered smart dimensions, projects, and policies put in place by the various city stakeholders concerning smart government, smart buildings, smart mobility, smart energy and environment, and smart services — actions in the right direction for a future evolution of a smart city. The IDC Smart Cities Index produced two end results — a ranking and a matrix of the cities. The ranking combines the enabling forces and smartness dimensions, while the matrix plots the cities based on their separate enabling forces and smartness dimension scores. IDC España Plaza Colón, 2. Torre I. Planta 4º. 28046, Madrid Spain Tel.: (+34) 91 787 21 50 Fax: (+34) 91 787 21 65
Transcript
W H I T E P A P E R
S m a r t C i t i e s A n a l y s i s i n S p a i n Sponsored by: BBVA, Ferrovial Servicios, IBM, Microsoft, Sage, Telefónica, and Urbiotica
Rafael Achaerandio Roberta Bigliani Gaia Gallotti Fernando Maldonado José Curto September 2011
I D C O P I N I O N
The smart city concept was born two decades ago to address emerging city sustainability issues, and was mainly focused on energy efficiency and emission reduction. More recently the term was attached to the role of ICT infrastructure. IDC considers this necessary but insufficient. IDC defines a "smart city" as a finite unit of a local entity, which declares and makes a conscious effort to have a holistic approach to employ information and communication technologies, for real-time analysis, to transform its essential modus operandi with the ultimate goal of improving the quality of life of the population living in the city, ensuring sustainable economic development.
Despite the different EU policies and the efforts of city halls, Spain has yet to reap the benefits of a strong development of the smart city concept across the country. This is due to the fact that the smart city framework is not exclusive to public entities, but also requires the participation of private organizations and society maturity. Taking into account these factors, IDC undertook this Spanish smart cities project, beginning with inviting industry players in the country to analyze and assess the Spanish smart cities context.
This paper explores the situation and the need for many large Spanish cities to evolve their current development and management models to establish the basis for a sustainable, intelligent, and socially acceptable future. However, in order to act it is crucial to first measure and establish a starting point. With this objective in mind, IDC carried out intensive interviews and additional complementary research on the 44 largest cities in Spain to evaluate how "smart" these cities actually are at present and how "smart" their future roadmaps are.
IDC developed the IDC Smart Cities Index to analyze cities in two strategic areas: smartness dimensions and enabling forces. IDC considered "enabling forces," the underlying characteristics of the city, which could facilitate or hinder its evolution into a smart city, namely people, economy, and information and communication technologies. IDC considered smart dimensions, projects, and policies put in place by the various city stakeholders concerning smart government, smart buildings, smart mobility, smart energy and environment, and smart services — actions in the right direction for a future evolution of a smart city.
The IDC Smart Cities Index produced two end results — a ranking and a matrix of the cities. The ranking combines the enabling forces and smartness dimensions, while the matrix plots the cities based on their separate enabling forces and smartness dimension scores.
This IDC White Paper provides an objective and independent analysis of the smart cities market in Spain, in terms of both demand and offering. IDC included as many city halls as possible, as well as relevant private companies acting as catalysts in Spain, in the smart cities value chain. The paper includes the following sections:
The smart city concept. IDC outlines the smart city concept, taking into account the opinions of different market players and offering IDC's own perspective.
Smart cities international context. IDC briefly assesses the international context in order to establish a framework for the local analysis.
Smart cities index analysis in Spain. IDC provides a Spanish assessment, benchmarking the top 44 cities in terms of population, assessing and analyzing their initiatives, maturity, and developments in predefined areas.
Smart cities value chain in Spain. IDC interviewed the top executives in the companies involved in this white paper in order to analyze, assess, and explain their specific smart city viewpoints, strategies, and offerings.
Recommendations. IDC provides recommendations for both city halls and smart city solution and service providers in order to promote and develop the smart cities in Spain.
T h e I D C S m a r t C i t i e s I n d e x : O v e r v i e w o f M e t h o d o l o g y
The IDC Smart Cities Index is built on the following methodological steps (see Figure 1):
Identification of the key smartness building blocks covered by the analysis
Identification for each smartness building block, of the evaluation criteria and their relative weighting
Identification for each evaluation criterion, of the detailed indicators to assess
The building blocks of smartness to be used for the analysis are shown in Figure 2. They are organized into two macro-groups:
Smartness dimensions. Smart government, smart buildings, smart mobility, smart energy and environment, and smart services. These are the domains for which initiatives can be developed and deployed.
Enabling forces. People, economy, and information and communication technologies. While it is true that the population and local economies benefit from the development of smart cities, they also act as enabling factors creating more attractive conditions for successful implementations. Considering IDC's smart city definition — a local entity which declares and makes a conscious effort to adopt information and communication technologies to transform its essential modus operandi — ICT plays a key enabling role. For this reason its relative weighting is higher (40%) than those assigned to people (30%) and economy (30%).
For both smartness dimensions and enabling forces, relevant and synthetic evaluation criteria were developed and weighted. The 23 criteria included in the model range from city population dynamics to education level and average population age, local economic composition and dynamism, local government transparency, environment protection policies, access to eservices, residential and commercial building efficiency standards, clean energy development, remote working, traffic management, low carbon mobility, and the level and quality of ICT adoption. To appropriately assess these criteria, the model includes a set of 94 indicators.
F I G U R E 1
I D C S m a r t C i t i e s I n d e x C o m p o n e n t s
The following section describes the application of the IDC Smart Cities Index. The first step is identifying which cities, in this case in Spain, can be considered for evaluation, scoring, and ranking. In this context, IDC considered the 44 biggest cities in Spain by population (those with more than 150,000 inhabitants). While the smart city concept can be applied to cities of any size, the greatest challenges and complexities often lie in the larger cities.
I D C ' s S m a r t C i t i e s I n d e x o f S p a n i s h C i t i e s
Source: IDC, 2011
Having identified the cities to include in the evaluation, scoring, and ranking, the next step is the information-gathering process, to populate the 94 key indicators that make up the 23 evaluation criteria and eight smartness building blocks (five smartness dimensions plus three enabling forces). This step was carried out with a mix of desk research — to collect available data from all national statistics or other public data sources — and a significant primary research effort. Interviews with city representatives were carried out in July–August 2011. IDC also used its proprietary database on ICT data. Where information was not available, best-effort estimates were made.
The city information and data was normalized and turned into standardized values to enable comparisons of non-homogeneous parameters. Finally, a score for each city was calculated to complete the ranking exercise.
S m a r t C i t y V e n d o r P r o f i l i n g M e t h o d o l o g y
During July and August, a second set of interviews was carried out by IDC, with top executives from the companies involved in this white paper. IDC prepared the information-gathering meetings for these companies around the smart city concept. IDC interviewed them to analyze and assess their smart city concept, main challenges and opportunities for the development of smart cities in Spain, their value proposition and competitive advantages, and a future outlook for the country.
T H E S M A R T C I T Y C O N C E P T
W h y F o c u s o n C i t i e s ?
Cities play a pivotal role in the socioeconomic development of any nation. Cities are essential drivers of economic growth, innovation, social progress, culture, knowledge, and diversity. A city's attractiveness is related to its capability to offer basic services and provide quality of life and better conditions for business creativity and professional development. In essence, cities are competing to attract the best citizens and enterprises.
Due to the continuous growth of urbanization, today on a global level one person out of every two lives in a city (50%). According to the United Nations' Department of Economic and Social Affairs (DESA), this is forecast to hit 70% by 2050. Europe, and to an even greater extent Western Europe, has already reached a tipping point, and by 2020 more than 80% of Europe's population will be living in urban areas.
This high level of urbanization is posing a number of significant new challenges, specifically regarding sustainability. Cities are currently using more than two-thirds of the world's energy, while housing 50% of the population. They account for about 70% of global CO2 emissions, and generate a greater quantity of waste than their rural counterparts, which greatly impacts the environment at all levels.
As most of the world's resources are finite, cities will have to find strategies to cope with this, becoming more efficient and encouraging citizens to make better use of energy and water, as well as reducing greenhouse gas emissions. At the same time cities need to effectively handle the increasing population and its impact on mobility and public infrastructure and services utilization.
W h a t i s a S m a r t C i t y ?
IDC defines a "smart city" as a finite unit of a local entity (district, city, region, or small country), which declares its intent and then makes a conscious effort to have a holistic approach to employ information and communication technologies, for real-time analysis, to transform its essential modus operandi in one or more of the following areas: energy generation, delivery and usage, environment, government, mobility, and buildings. The ultimate goal is to improve the quality of life of the population living in the city, ensuring sustainable economic development.
If a city is a system of man-made systems that come together and interact with each other, then one of the basics of a smart city is one where intelligence (ICT) is
embedded into the city's core infrastructure to make it more efficient, responsive, and less costly. One of the keys for the successful implementation of a smart city is that it be created in an open environment, with an interoperable and scalable platform, one based on non-proprietary code and interfaces.
The methodology section in this paper identified the building blocks of smartness used for this analysis (see Figure 2). The building blocks are organized into two macro-groups: smartness dimensions and enabling forces.
The reasoning behind the selection of the three enabling forces (people, economy, and information and communication technologies) for the IDC Smart Cities Index model is elaborated there as well. Concerning a city's "people," aspects such as population size, age, education, and population dynamism all play a crucial role in the success of a city's attempt to become smart. Concerning a city's "economy," aspects such as economic wealth and make-up and economic dynamics also contribute to successful development of a smart city. The adoption of ICT and mobile solutions also plays a key enabling role in the future of smart cities.
The smartness dimensions (smart government, smart buildings, smart mobility, smart energy and environment, and smart services) were selected as the major smart city domains for which initiatives can be developed and deployed.
For smart government, aspects such as the existence of an environmental protection policy and offering of eservices to citizens were considered in the evaluation process. If a local city government scored high in IDC's indicators then it was deemed "smart." For IDC, if a government is being smart, then it is leading by example, which will help create awareness and push forward the rest of the community.
According to the European Commission, buildings are responsible for 40% of energy consumption and 36% of EU CO2 emissions; obviously there are great possibilities for improvements. To reduce the negative environmental impacts of construction and building operations, some cities are using building retrofits and certifications that can reduce energy and water use; they are also using smart metering and smart building technologies to help optimize consumption. For smart buildings, for example, quality of construction through the existence or not of minimum levels of energy class standards was considered.
Transportation is responsible for about a quarter of the EU's greenhouse gas emissions, with 71.3% of this from road transport (2008). For smart mobility, plug-in electric vehicle adoption or the existence of intelligent traffic systems and sensors are just two examples of how a city's mobility can be made "smart." The adoption of low carbon vehicles for public transportation and incentives for the uptake of electric vehicles are becoming very popular initiatives, not only among Spanish cities, but throughout Europe, in order to reduce CO2 emissions and hopefully in future to also act as energy storage reserves for shaving peak loads.
Globally, the environment, climate, and energy sectors are receiving a lot of attention due to climactic changes and environmental concerns such as the rapid increase in the world's temperature, also due to the rise in GHG emissions. According to Eurostat, in 2009 the energy industries were responsible for 35% of CO2 emissions. This has led to an increased focus by governments around the world on enhancing efficiencies in the energy/climate and environment sectors. Considering smart energy and the environment, development of clean energies, environment management
measures, and improving the reliability of supply and delivery networks are just a few examples considered in the evaluation of a city's smartness in the sector.
Considering smart services, various services to citizens were considered as well as aspects related to security. IDC believes that the more services are offered to citizens, in a safe environment, the more likely it will be for good habits to spread, making this aspect of a city smarter.
S M A R T C I T I E S I N T H E I N T E R N A T I O N A L C O N T E X T
T h e S m a r t C i t y R e a l i t y
Several "smart city" initiatives have been launched globally or are currently being evaluated. Even if not all of them are already fully succeeding in delivering the planned results, or sometimes suffer from lack of fresh funding, the vast majority are gradually developing.
There are a number of international projects executing one or more of the areas of "smartness." Generally, the initiatives can be classified into three main clusters:
Advanced services for citizens (i.e., mobility, traffic management, advanced payment systems for parking, etc.)
Pervasive technologies (i.e., broadband and communication infrastructures, advanced systems for recycling, etc.)
Climate/energy sustainability (i.e., use of solar panels, implementation of smart metering and smart distribution grids, etc.)
Within the context of smart cities, energy infrastructure (electricity, heating, and cooling) often plays a pivotal role, and is also used to support other components such as transportation and buildings.
In Europe, Amsterdam led the way, followed by many others such as Malta, the Malaga Smart City in Spain, and Évora InovCity in Portugal. Madrid is also promoting a smart environment (waste and air quality), urban services, and mobility. The district of Vauban in Freiburg (Germany) is a good example of how to implement the principles of sustainability with a holistic approach to urban planning and building design (passive houses). Linz, in Austria, designed and developed Solar City, an entire district exclusively using solar power for its energy needs. Many other cities, including Milan (Italy), Southampton (the U.K.), and Salzburg (Austria), introduced multifunctional cards which enable access to a range of products and services, such as bus passes, library cards, museum passes, bike sharing, and even electric vehicle rental. Other cities, such as Stockholm (Sweden) and Toulouse (France), have invested in pervasive technologies to enable smarter mobility.
Examples from outside Europe include the well-known Boulder Smart City project in Colorado and Austin Energy's Pecan Street Project in Texas. But there are also Masdar in Dubai (United Arab Emirates), Singapore, and Kochi (India); Durban, meanwhile, with its broadband strategy and significant infrastructure investment, is moving closer to its goal of becoming the "smartest" city in Africa.
Following the introduction of the European Union's 20-20-20 climate targets, Amsterdam set itself even more ambitious goals: to have municipal organizations climate-impact neutral before 2015, to have 20% renewable energy by 2025, and to achieve a 40% reduction in CO2 emissions by 2025 compared with 1990. To achieve these goals, the City of Amsterdam has developed the ambitious "New Amsterdam Climate" program — a platform for the city and many public and private partners to work closely together to achieve the climate goals. Amsterdam Smart City (ASC) is one such public-private partnership that has committed itself to the New Amsterdam Climate program.
ASC focuses on four areas to tackle the largest CO2 emitters in the city:
Sustainable living. Creating awareness and reducing energy consumption in households (with smart meters, energy display devices, energy advice, energy storage, distributed generation, etc.)
Sustainable working. Creating awareness and reducing energy consumption in office buildings (with smart buildings, energy advice, smart working, smart lighting, etc.)
Sustainable public space. Creating awareness and reducing energy consumption in municipal buildings and public areas (with smart meters, energy displays, energy advice, electric vehicles, etc.)
Sustainable transport. Creating awareness and reducing energy consumption in transport (with electric vehicles, mobile charge points, new logistic solutions, etc.)
Project partners include grid operators, local government, housing corporations, the Port of Amsterdam, techno starters, universities, financial institutions, ICT vendors, and transport and waste companies. Since 2009, the municipality, utilities, and private companies have invested several hundred million euros into the ASC project. The European Commission has also provided financial support through the European Regional Development Fund (ERDF). Efforts include investment by local electricity network operator Liander in "smart grid" technology that uses network sensors and smart metering to trim electricity use. ASC has designed more than 20 target pilots involving the following technologies: smart meters, energy displays/feedback, new logistics/waste models, smart (LED/saving) lighting, electric vehicles and charging terminals, and energy advice.
Málaga Smart City
Málaga launched a pioneering Spanish project to create an eco-efficient city. Its objective is to achieve an optimal integration of renewable energies into the power grid. It brings the generators closer to the consumers through the establishment of new models of distributed energy resources management. Batteries will be used to store the energy generated, so that some of the energy can later be used for climate control of buildings, public lighting, and electric transport. Recharging stations will be installed and a small fleet of vehicles dispatched to encourage the use of electric vehicles. New smart meters are being used in the context of remote management to enable more sustainable electricity consumption. Also, the installation of advanced communications systems and real-time control will transform electric distribution network operations, enabling new energy management and increasing the quality of
service. The ultimate goal of the project is to demonstrate that with the development of these technologies it is possible to achieve 20% energy savings.
The city of Málaga was selected by Endesa for the project because of its excellent electrical infrastructure, its universities and businesses, and strong support from the local government. The budget is partly financed by the ERDF with backing from the Spanish Junta de Andalucía, the Ministry of Science, and the Centre for the Development of Industrial Technology (CDTI).
The project covers the Playa de la Misericordia area of Málaga, and will benefit 300 industrial customers, 900 service providers, and 12,000 households over four years.
Stockholm
The city of Stockholm invested in predictive analytics technologies to implement a smarter way of managing its traffic and city mobility. The system collects real-time information from global positioning systems in about 1,500 taxis in the city, and data from delivery trucks, traffic sensors, transit systems, pollution monitoring equipment, and weather information. The system integrates and analyzes any type of data coming from continuous text, voice, images, videos, databases, weather forecasts, news, sounds, market data, and application data in real time.
City residents can have real-time information on traffic flow, journey times, and best travel options for commuters. For example, residents can send a text message indicating their location and the desired destination. The technology instantly processes the real-time information on traffic and weather, and provides rail travel times, estimated car travel times, and public transport times, providing an instant and accurate view of the quickest way to reach the destination.
The Stockholm congestion management system has:
Reduced traffic in the Swedish capital by 20%
Almost halved the average time of travel
Decreased the amount of emissions by 10%
Additionally, Stockholm, like many other cities around the world, such as London, Tokyo, Singapore, and Milan, decided to tackle its growing traffic problem with a congestion charge. The congestion charge was first introduced as a trial in 2006, not only to ease the city's congestion problem, but also to raise money for ancillary services such as public transportation. By the end of the trial, traffic had been reduced by 25%, and public transportation authorities had to redraw their schedules as previous transit times were significantly decreased due to a reduction in traffic levels. Stockholm also benefited from a 40% reduction in greenhouse gas emissions such as CO2 , and the city has become a worldwide example of how to design a successful congestion charge.
E x a m p l e s o f K e y E u r o p e a n P r o g r a m s f o r t h e D e v e l o p m e n t o f S m a r t C i t i e s
Covenant of Mayors
Following the adoption of the EU Climate and Energy Package in 2008, the European Commission launched the Covenant of Mayors (www.eumayors.eu) to endorse and support the efforts deployed by local authorities in the implementation of sustainable energy policies. By voluntarily signing the covenant, cities committed themselves to implementing sustainable energy policies to meet and exceed the EU's 20% CO2 reduction objective through increased energy efficiency and the development of renewable energy sources. With EU data showing that 80% of primary energy consumption and CO2 emissions is associated with urban activity, the proactive support of local governments is crucial.
The 2,849 signatories represent a wide range of communities, from small villages to major metropolitan areas, and about 130 million inhabitants. Figure 4 provides an overview of the location of signatories. Countries such as Italy and Spain are leading the way, with 1,258 and 867 cities respectively signing the covenant.
C o v e n a n t o f M a y o r s : S i g n a t o r i e s M a p
Source: Covenant of Mayors, 2011
Cities signing the covenant need to prepare an inventory of baseline emissions as a basis for the Sustainable Energy Action Plan (SEAP); submit the SEAP within a year of formally signing up to the covenant; adapt city structures, including allocation of sufficient human resources, in order to undertake the necessary actions; and mobilize the civil society in their geographical areas to develop the action plan, outlining the policies and measures needed to implement and achieve the objectives of the plan. Cities also commit to submit an implementation report at least every second year after submission of the Sustainable Energy Action Plan for evaluation, monitoring, and verification.
In return, the European Commission supports local authorities by giving visibility to their efforts and providing the support of the Joint Research Center for the definition of guidelines for the Sustainable Energy Action Plan and monitoring. Most importantly, however, it undertakes to introduce instruments to finance city initiatives, using existing programs and resources, such as the provisions of the 7th Framework Programme, the Public Private Partnership for Energy Efficiency in Buildings, the
Green Car Recovery Plan, the Intelligent Energy Program, and Regional Development Funds (ERDF).
SET Plan — Industrial Initiative on Smart Cities
Among the industrial initiatives of the European Commission's Strategic Energy Technologies (SET) Plan, one is specifically dedicated to smart cities. The Smart Cities Initiative aims to improve energy efficiency and to step up the deployment of renewable energy in large cities, going even further than the levels foreseen in the EU energy and climate change policy. The initiative is designed to support cities and regions that take pioneering measures to progress toward a radical reduction of greenhouse gas emissions through the sustainable use and production of clean energy. This European initiative builds on existing EU and national policies and programs, such as Civitas, Concerto, and Intelligent Energy Europe. It draws on the other SET plan industrial initiatives, in particular the Solar and Electricity Grid, as well the EU public-private partnership for buildings and green cars established under the European Economic Plan for Recovery.
The Smart Cities initiative has a budget of €11 billion, to be integrated with national and private investments, and is focused on three main pillars: buildings, energy networks (including both electricity and heating and cooling networks), and transport. The 10-year program roadmap is shown in Figure 5.
S m a r t C i t i e s I n i t i a t i v e R o a d m a p ( E u r o p e a n C o m m i s s i o n S E T P l a n )
Source: SETIS, 2011
S M A R T C I T I E S I N D E X A N A L Y S I S I N S P A I N
I D C S m a r t C i t i e s I n d e x : R a n k i n g
As discussed in the methodology section, the IDC Smart Cities Index comprises 94 key indicators, which make up 23 evaluation criteria and eight smartness building blocks (five "smartness dimensions" and three "enabling forces"). The IDC Smart Cities Index Ranking is derived from a combination of the scores for the 44 cities for the three enabling forces and the five smartness dimensions, weighing 20% and 80% respectively. The IDC Smart Cities Ranking comprises the top 5 cities ranked, the next 10 "contenders" clustered, 21 "players" clustered, and eight "followers" clustered. The four groups (top 5, 10 contenders, players, and followers) are color coded: red, yellow, green, and blue respectively. This color coding will also be used in the IDC Smart Cities Index Matrix in the following section.
I D C S m a r t C i t i e s I n d e x R a n k i n g
Note: With the exception on the top 5 cities, the remaining categories (contenders, players, and followers) are shown in alphabetical order.
Source: IDC, 2011
Top 5 Cities
The top 5 cities in the IDC Smart Cities Index Ranking are numerically indentified from highest to lowest based on their final score in the index. The top 5 cities are also identifiable in the color coding system with the color red.
1. Málaga
According to the IDC Smart Cities Index Ranking, Málaga is currently the "smartest" city in Spain. Málaga achieved the number 1 position due to its high scores in the smartness dimensions, despite its relatively low final score for enabling forces (people, economy, ICT). Málaga scored very well in two of the smartness dimensions, namely smart energy and environment, and smart services. Its success in smart energy and environment comes as no surprise, as it is a pioneer in becoming an eco-efficient city through its Smart City Málaga project (http://www.smartcitymalaga.es/). The Smart City Málaga project is described in detail in the "Smart Cities in the International Context" section above. To recap, however, in terms of the energy and environment domains, its ultimate goal is to make a 20% energy saving by adopting the following measures:
Achieving optimal integration of renewable energies into the power grid
Bringing generators closer to consumers by establishing new models of distributed energy resources management
Using batteries to store the energy generated, so that some of the energy can be used later for climate control of buildings, public lighting, and electric transport
Leveraging new smart meters, advanced communication systems, and real-time control to transform electric distribution network operations, enabling new energy management and improving quality of service
Concerning smart services, Málaga scored high on the security and emergency services offered to its citizens, and on the strong availability of e-education. Considering its relatively low final score for enabling forces, Málaga should be an example to other Spanish cities that do not have a foundation of best enabling forces (people, economy, ICT) to become a smart city.
2. Barcelona
According IDC's Smart Cities Index Ranking, Barcelona is the second "smartest" city in Spain. In relation to Málaga, Barcelona scores less high in the smartness dimensions, but compensated with a much better starting position (the enabling forces). From the outset, Barcelona benefitted from high adoption of ICT and mobile solutions. In the smartness dimensions, Barcelona excels in smart mobility.
Barcelona is a leader in Spain in terms of revolutionizing its transport sector, and has been designated the hub of innovation for electric vehicles. Spain's transport sector is responsible for 37.9% of final consumption of energy and accounts for more than a quarter of total CO2 emissions. Spain is actively facilitating the acquisition of low-emission vehicles, for instance by offering subsidies (of up to €7,000 per vehicle) for plug-in hybrid or pure electric plug-in vehicles.
Barcelona's LIVE project (Logística per a la Implementació del Vehicle Elèctric, http://w41.bcn.cat/) has made it the innovation hub for electric vehicles. LIVE is a public-private platform which aims to support and promote the development of electric mobility in the city and metropolitan area of Barcelona. The development partners in the project are Barcelona City Council (Environment, Mobility, and Economic Promotion), the Government of Catalonia (Catalan Energy Institute), Endesa, and Seat. Other partners and collaborators include IDAE (the Institute for the Diversification and Saving of Energy, Ministry of Industry), UPC, IREC, Leitat, STA (Technical Automotive Society), Barcelona Digital, TMB, BSM, Regesa, Tabasa, Saba-Abertis, Catmoto, Nissan/Renault, Toyota, Siemens, Volt-Tour, Avele/Avere, Altran, Quimera, Idiada, RACC, Circutor, and Initzia.
LIVE has 234 current charging points, with additional points planned for the near future. On its Web site, supported by Google Maps, LIVE shows all the current, future, and temporarily unavailable charging points. In some cases, there is more than one charging point (socket) in each charging station. LIVE's charging points map can also be accessed remotely via Apple's iPhone and Google's Android.
LIVE's Electric Vehicle Card is the ID card for electric vehicle users in the city of Barcelona, enabling users to carry out electric charges in any point in the city. For now, the charging service is free, but the charging card has limited credit. When the credit runs out, users will have to add more credit to the card.
With the LIVE electric vehicle card, users can access a myriad of other benefits besides free charging, such as:
Up to 75% of vehicle registration tax
Free parking in any regulated area of the city, according to regulated criteria, for Barcelona residents
New public car parking lots with 3% of spaces reserved for electric vehicles and facilities ready for the future inclusion of points in the rest of the spaces
The municipality of Barcelona is also evaluating other incentives to further promote the uptake of electric vehicles in the area, including:
Fewer tolls and a reduction in the level of tolls
Promotions with the Generalitat (FGC) and RENFE to encourage the use of public transport
Preferential access to restricted areas (low emission areas) and overnight services
Permission to use bus and carpool lanes
3. Santander
According to IDC's Smart Cities Index Ranking, Santander is currently the third "smartest" city in Spain. Similar to Málaga, Santander placed in the top 5 even though it did not excel in the enabling forces criteria, scoring just above average for all three evaluation criteria. But the city made up for this with a very strong performance in the smartness dimensions, specifically for smart buildings and smart energy and environment.
Santander is one of the smallest cities in the top 5 cities index, along with Donostia-San Sebastián, with fewer than 200,000 inhabitants. But Santander has been proactive in trying to position itself as a future smart city through its SmartSantander project (http://www.smartsantander.eu/). SmartSantander won a bid under the 7th Framework Programme ICT, and started on September 1, 2010. Through SmartSantander, Santander will serve as a live test-bed for large-scale experimentation and evaluation for the Future Internet and Internet of Things, beginning with the deployment of 20,000 sensors throughout the city. SmartSantander plans to introduce projects for environmental monitoring, traffic control, public transportation efficiencies, and urban waste management. The project will last 36 months and will involve a consortium of 15 companies across eight EU countries as well as Australia. Project partners include Telefónica I+D, Alcatel-Lucent, Ericsson, TTI Norte, Universidad de Cantabria, the University of Surrey, Universitat zu Lubeck, Lancaster University, Commissariat a l'Energie Atomique, Computer Technology Instritute, Alexandra Institute, Santander Council, Sociedad para el Desarrollo de Cantabria, and the University of Melbourne.
4. Madr id
According to IDC's Smart Cities Index Ranking, Madrid is the fourth "smartest" city in Spain. The index showed that Madrid has very strong enabling forces in comparison with other Spanish cities being evaluated, specifically with regards to its economy and its ICT base. Besides being the most economically powerful city in Spain, Madrid was
also identified by the Global Economic Power Index as the 14th most economically powerful city in the world in 2011, with an economic output of $188 billion.
In the overall smartness dimensions, Madrid scored below Málaga, Barcelona, and Santander, but it scored highest in the smart government evaluation criteria and high in the smart services and smart mobility evaluation criteria. A very strong performance in the smart government evaluation criteria clearly benefits all of Spain, not just Madrid, the nation's capital. Similar to Barcelona, Madrid, Spain's largest city, is also heavily focused on improving its mobility and traffic situation.
Concerning smart services, Madrid has fully integrated its emergency management systems under the "Centro Integrado de Servicios de Emergencia (CISEM)," allowing coordination between fire, police, and medical emergency (SAMUR) departments, optimizing their actions. They are integrated under the same command and control center, improving their response time and effectiveness. Responsiveness increased 25% in the last few years under the new management system, enabling police and fire services to attend an emergency in less than 8 minutes and SAMUR in less than 7 minutes.
Concerning smart mobility, Madrid was chosen by Spain's Institute for Energy Diversification and Savings (IDEA — Instituto para la Diversificacion y Ahorro de la Energía) as the testing bed for its Movele (electric mobility) project. The project is also testing electric vehicle deployment in Barcelona and Sevilla. As well as IDEA, the Movele project also includes Spain's largest utility companies Endesa, gasNatural Fenosa, and Iberdrola. Madrid aims to have a network of 280 charging points for electric vehicles around the city, located on both public roads and outside (parking, etc.). Electric vehicles will be able to charge for free, for up to three hours at a time, until December 31, 2011. A Movele Madrid Card is required to access the charging stations.
In April 2011, the Movele project announced a delay in reaching its target of deploying 2,000 plug-in electric vehicles due to slower than expected supply from manufacturers. The project is collaborating with Spanish automotive manufacturer Seat, as well as Toyota and the Renault-Nissan Alliance.
Madrid also scored high on the smart mobility smartness dimension due to its successful car sharing program. The program does not have fixed costs for program subscribers and only charges for actual car-use time. There are three major operators of the program in Madrid: Respiro "Breathe" Car Sharing (www.respiromadrid.es), Connect by Hertz (www.connectbyhertz.com), and Hello Bye Cars (www.hellobyecars.com).
Besides being an eco-friendly solution to transportation, Madrid's car sharing program was also a success during the recession, becoming a popular option for occasional car users.
Additionally, the city of Madrid has also undertaken the development of the "Catedral de las Nuevas Tecnologías" (Cathedral of New Technologies), a 13,000-square-meter area fully dedicated to innovation. Holding 700 people, the auditorium will bring together the city's citizens from business, education, and government. Enhancing the physical "Catedral de las Nuevas Tecnologías" is a virtual Internet space (http://www.lacatedralonline.es), all of which is expected to be ready by 2012.
According to IDC's Smart Cities Index Ranking, Donostia-San Sebastián (DSS) is the fifth "smartest" city in Spain, with a good balance between enabling forces and a very high score in the people, economy, and ICT evaluation criteria. Like Santander, Donostia-San Sebastián has a smaller population base than the other top 5 IDC Smart Cities Index cities, with fewer than 200,000 inhabitants. While scoring below the other top 5 cities in the smartness dimensions, Donostia-San Sebastián still scored well above average, scoring especially high for smart services and, to a lesser extent, in smart mobility.
Donostia-San Sebastián laid out its smart city plans in the Estrategia 2020 Donostia-San Sebastián (E2020DSS) project, creating a Web site (http://donostiafuture.com/cas/portada.php) with strategy updates and encouraging citizen participation. The E2020DSS is based on four strategic axes: Connected City, Designed in DSS, People and Values, and Live-Enjoy.
10 Contenders
The 10 "contenders" in the IDC Smart Cities Index are identified in yellow in the color coding system. The 10 contenders in the IDC Smart Cities Index are cities that scored relatively high in the smartness dimension indicators, but were not excelling in any of them. They greatly differ in their scores for enabling forces, from below average to the highest possible score, namely Coruña (A). These cities were identified as "contenders" due to their potential to break into the top 5 if the right mechanisms are put in place by their respective governments, utilities, and industries. The cities of Zaragoza and Bilbao, for example, are both very well positioned from an enabling forces perspective; if backed by positive actions in the fields of smart government, smart buildings, smart mobility, smart energy and environment, and smart services they could rapidly climb up the rankings.
Players
The "players" (21 cities) in the IDC Smart Cities Index are identified in green in the color coding system. Players are cities that are average from an enabling forces perspective and scored around average in the smartness dimensions. In general, these cities are taking some actions toward becoming a smart city, like signing the Covenant of Mayors, but are not particularly proactive or leading the pack in their initiatives.
Followers
Finally, the "followers" (eight cities) in the IDC Smart Cities Index are identified in blue in the color coding system. Followers have below average scores for both enabling forces and the smartness dimensions building blocks. It is worth reiterating that low scores in enabling forces do not prevent strong performances in the smartness dimensions (smart government, smart buildings, smart mobility, smart energy and environment, and smart services), as demonstrated by Málaga, which scored relatively very low in the enabling forces criteria but was still able to achieve the number 1 position in the IDC Smart Cities Index Ranking.
I D C S m a r t C i t i e s I n d e x : M a t r i x
In addition to the ranking produced by the IDC Smart Cities Index, IDC also produced a matrix showing the relative position of the 44 Spanish cities under evaluation. In contrast to the ranking, which combines the results of the enabling forces and the smartness dimensions, weighing 20% and 80% respectively, the matrix plots each city's scores for the two sets of data separately. In the matrix, cities' smartness dimensions score is plotted on the Y-axis, while the enabling forces score is plotted on the X-axis. As with the IDC Smart Cities Index Ranking, which categorized the 44 cities into four color-coded groups (top 5: red, 10 contenders: yellow, players: green, and followers: blue), the matrix also uses a color-coded system.
The IDC Smart Cities Index Matrix shows the individual city's performance for the smartness building blocks (enabling forces and smartness dimensions), demonstrating the uniqueness of each city with regards to its people, economy, and ICT, as well as its smart government, smart buildings, smart mobility, smart energy and environment, and smart services initiatives.
S M A R T C I T Y V A L U E C H A I N I N S P A I N
IDC interviewed senior management at the major smart city industry players in Spain to get a better understanding of their thoughts on the following:
Positioning. IDC wanted to understand the players' positioning; what are they standing for in the smart city market? What is their strategy?
Challenges and opportunities. We asked about the main challenges and opportunities for smart cities.
Proposals. IDC wanted to get a better understanding of their smart city proposals and highlight their offerings and capabilities.
Differentiators. We asked them about the capabilities and assets that give them an advantage over their competitors in order to offer readers a global picture of every player.
Looking forward. IDC finally asked them about the future of the industry and their strategy to promote and develop the smart city concept in Spain.
With these objectives in mind, IDC interviewed the following companies in the value chain:
BBVA. One of the biggest banks in Spain and worldwide, BBVA manages a lot of digital city and individuals' information that could be shared under a common platform to create smart services for the city.
Ferrovial Servicios. One of the biggest infrastructure, management, and maintenance players in the world, Ferrovial proposes a new city service management framework to address the smart city concept.
IBM. One of the biggest IT players worldwide, with a strong offering in smart cities, IBM encourages cities to adopt solutions and technologies to manage data consistently in order to make smarter decisions and create sustainable services.
Microsoft. One of the leading software vendors worldwide, Microsoft offers a technological framework to manage infrastructure and networks, access to data, services and components, service and integration processes, and security and identity.
Sage. One of the leading application software vendors worldwide, Sage offers a strong portfolio of egovernment and e-administration solutions to enhance the smart city concept in Spain.
Telefónica. One of the biggest telecom operators worldwide, it is promoting the development and improvement of mobility, government, quality of life, environment, energy, and communication in the city using the right platforms, services, and technologies.
Urbiotica. Urbiotica is a technology based company focused on providing cities with dynamic data, using sensor-based technology to improve management of public services to achieve the corresponding benefits for the city.
At the end of 2009, the innovation department of the BBVA Group, as part of the Business Discovery initiative, created a smart cities workgroup to explore the potential impact of smart cities on the bank's business, as well as the bank's potential role in the value chain.
The intelligent use of information is characterized by decision making that is:
Based on evidence. From an integrated vision that combines the data generated by the city's activity, not just by the infrastructure, for example sensors, but also by the behavior of its agents — economic transactions, travel, communication, etc.
In real time. Information can be collected and used exactly when it is required in order to act on a resource — for example, management of traffic, energy, water, etc. — or to make an individual decision, for example where to go, what transportation to take, where to shop, etc.
The main benefit for cities is that a new management paradigm is created, which translates into efficient use of resources, better management of demand, the creation of new markets, improved city planning, and generally a better quality of life for citizens.
The elements that have begun to come together and that make it possible for us to talk about the concept of smart cities are varied and include technological factors (the growing ubiquity of Internet access), geo-demographics (the unstoppable growth of populations in cities, "personal insights" (greater decision-making power on the part of individuals), and economic factors (scarcity of resources, for example). These elements are in turn the same ones that make up the 2020 Vision on which BBVA has based part of its strategy for its future evolution.
Smart City Challenges and Opportunities
Smart cities offer the opportunity to optimize the functioning of cities and achieve the benefits mentioned above. This paradigm of the generation and use of information also opens doors to new business models based on the capacity to manage resources better, which will increase efficiency, with the consequent reduction in costs, and generate new services of value to citizens that open up new sources of revenue.
However, the real challenge that cities face to take advantage of these benefits is not only the collection of data, but also how to combine different sources of information to extract the maximum value by creating services based on it.
The data generated by the city's activity is being under-utilized due to:
Data collection from infrastructure. There are a large number of data sources that "talk" to us about the city, but that are not being used from this perspective. Also, at this point, a minimal number of sensors have been deployed in infrastructure to enable the reporting of their status. This is mainly a short-term challenge.
Combination of data from different agents. The different agents to which the data is provided are not yet conscious of the value that it provides for the city, or
the data is simply not collected, or if it is, they are not willing to share it. Incentives are therefore needed to encourage collaboration between citizens, companies, and administrations when shedding light on these aspects.
Identification of business models. Lack of definition of the business models that make it possible to create applications based on the data, as well as on the content of the applications themselves.
BBVA's Proposal
BBVA's proposal consists of the creation of an urban platform for the real-time exchange of data that will make it possible to extract, combine, and analyze the information generated by the city, so that all of the agents can create services and applications based on this data, generating a feedback process that will make the city a better place.
This platform must be created in collaboration with both public and private entities.
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R e a l - T i m e D a t a E x c h a n g e P l a t f o r m
Source: BBVA, 2011
BBVA is working to participate in the value chain of smart cities, sharing data on economic activity and combining it with third-party data to generate new services or to improve the existing ones.
BBVA is able to play an active role in this because:
It has proven experience in the management of large volumes of information in real time with 100% security.
It is a large-scale generator of data and information, with real-time access to the economic behavior of millions of citizens around the world.
It is a service provider with the capability to create and offer personalized services to millions of clients — 48 million people in 32 countries.
BBVA's Diferentiators
BBVA as a source of data on the economic activity of the city:
Strong ties with cities through 17,500 ATMs, 7,500 offices, 500,000 point-of-sale terminals, and 30 million cards, which generate more than 24 million transactions a day and enable it to classify streets, neighborhoods, and the activity of a city.
Comprehensive knowledge of the characteristics and behavior of citizens through the aggregation of the information that they generate with their transaction activity (e.g., profile, source, movements, behavior, etc.), all through aggregated, anonymous information.
BBVA's firm commitment to smart cities:
Internal team and dedicated budget that is flexible depending on the pilots/projects to be carried out.
Collaboration agreement with MIT's SENSEable City Lab as an Industrial Member, and recent launch of a three-year joint project to develop urban applications and define the characteristics of the data exchange platform.
Stakeholder in the European Union's Smart Cities Outsmart project.
Willingness to collaborate with other private companies and with public administrations and city councils to make this vision a reality, with some initiatives that are already underway.
Looking Forward
"In order to make sustainable use of resources compatible with the increase in population growth and activity in urban centers, the information that is now available thanks to technology must be used differently. And the truth is that thanks to technology, we can bring the necessary knowledge to the cities' agents (citizens, companies, and administrations) to allow all of us to make better decisions. We believe in the transformational capacity of this new system of generating and using knowledge, and our smart cities initiative has grown out of this belief" — Beatriz Lara, BBVA Group Chief Innovation Officer.
F e r r o v i a l S e r v i c i o s
Ferrovial Servicios has been developing the smart city idea and assessing the context for two years. This process recently led to the creation of the new Cities Division within Ferrovial Servicios, reporting to the CEO and integrated into the Executive Committee. Ferrovial Servicios sees the concept of smart cities as a new city management model that enables the generation of cost efficiencies and enhances the quality of life of the citizens through innovation and sustainable integration of the different services provided to cities. Ferrovial Servicios promotes engagement and collaboration with city councils to improve management of public services.
This new concept of smart cities addresses the need to provide solutions for the development of a macro model in cities. This is a new city management model that
goes beyond the installation of sensors and technology in the city. The framework implies a model developed jointly with city councils and other institutions, such as universities. Ferrovial Servicios proposes a very practical approach, based on reducing costs, improving energy efficiency, and enhancing the quality of life of citizens.
Opportunities and Challenges
Ferrovial Servicios sees the smart city model as a requirement for future urban development in Spain. From the company's perspective, there are many challenges that represent opportunities and requirements:
Service quality expectations. Citizens and society in general have increasingly higher expectations in regard to the quality and quantity of services, and are demanding more participation and interaction.
Overcoming economic restrictions. City expenditures are surpassing revenues, putting stress on city budgets. It is critical to adjust expenditure by improving public service levels.
Open administrations. Administrations have shown a willingness to embrace new management models to address these requirements. There is a need for politicians who are committed to long-term transformation to enable city sustainability.
Administrative reorganization. Cities are now defining new organizational models that are required to address this new context. Consolidation and professionalization favor the implementation of new service management frameworks. In the past, city labor forces were narrowly focused on specific tasks, but to improve efficiency, a multidisciplinary workforce is now becoming key to support and sustain city services.
Economic recovery and sustainability. Cities are encouraging local employment and promoting innovation. With city size increasing year after year, energy and mobility efficiency are becoming mandatory. Environmentally friendly cities are also becoming essential for sustainability.
Ferrovial Servicios' Proposal
Ferrovial Servicios proposes a new management framework based on three main concepts:
New, efficient model. Through its service management practice, Ferrovial Servicios has gained the experience to dramatically decrease a city's service delivery costs while increasing service quality. The generation of economies of scale through service integration is key to achieving this. Service fragmentation is already one of the biggest sources of inefficiency on which Ferrovial Servicios focuses, with different providers delivering different services with no communication, coordination, or scale.
Service management and participation. City service contracts are "input based," defining the service provider involvement in terms of workforce and resources to provide the service with no communication with the service user. Within this service management framework, Ferrovial Servicios proposes a new definition based on "service output," measured through KPIs, with payment
based on results and the quality of service delivered. KPIs are both internal and external to the service; Ferrovial Servicios includes the quality of service perceived by the citizens and even involves the service users to continuously improve the service.
Collaboration and sustainability. Ferrovial Servicios feels that this new framework requires a structural change, rather than a temporary one. For this reason, Ferrovial Servicios considers the current two-year contract to be insufficient to establish the required trust and collaboration framework with the city council, to make large long-term investments in the city, and to change processes to achieve the expected efficiencies. Ferrovial Servicios proposes long-term contracts (minimum 10 years) to transform city services and make them sustainable and smart.
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S a v i n g s L a y e r s
Source: IDC, 2011
Ferrovial Servicios' Differentiators
Ferrovial Servicios already provides an extensive city services portfolio, facilitating service integration and enabling cities to provide end-to-end services. It has an entire centralized division focused on city service management, focusing internal management to provide integrated management of city services.
Ferrovial Servicios has already implemented this model in a number of cities, including Birmingham with a 20-year contract and a high level of investment. The experience has been positive so far and has been well received by both local labor unions and the city workforce that has joined Ferrovial Servicios.
Maximizing the value to cities
1
2
3
Budget constraints overcome
Improve service quality to citizens
Cost reduction through enabling synergies between servicesCreation of economies of scale
Investment in hi-tech Networking: local partners, institutions …Innovation promotion Boost qualified local job creationIntegrated solutions
Outcomes orientedCommunication improvement with community
Ferrovial Servicios is also an integrator, partnering with the city administration to find the best solutions, technologies, and innovations to improve service delivery in terms of efficiency and user requirements. To do this, Ferrovial Servicios establishes local alliances with local city agents applying the company's global framework and technology alliances, to benefit from local expertise while at the same time applying global practices.
Preliminary estimates anticipate savings of around 20% of the current urban services cost base. Savings depend on the services portfolio being transferred to Ferrovial Servicios and how efficiently they are managed. Additional savings can be obtained from releasing municipal resources allocated to contract monitoring and supervision, bidding, and procurement activities.
Looking Forward
Ferrovial Servicios is currently evaluating which cities are ready to implement this new service management framework. The company will continue investing in innovation to enhance its service offering. It is collaborating with universities such as MIT in the U.S. in order to add new solutions and innovations to its service portfolio.
Ferrovial Servicios is firmly committed to the smart city concept and has a comprehensive strategic plan to implement its experience and address the needs of cities in Spain.
Santiago Olivares, Ferrovial Servicios chief executive, and Enrique Sánchez, managing director of cities, both feel that the smart city movement is already in motion and cannot be reversed, and also that over time it will become a balanced combination between technology and efficiency.
I B M
The process of urban development is requiring cities to take greater political and economic control over their own development, but their progress and competitiveness will depend increasingly on people and their qualifications, creativity, and knowledge. In this context, one of the fundamental differentiating factors will be the ability of cities to create and absorb talent and innovation through citizen-oriented services.
Cities have the chance to improve their existing capabilities to provide services by giving their basic systems "intelligence." This is done by applying new technologies and analytical tools that make it possible to optimize the functioning of the city and create a prosperous economy.
Transforming cities into smart entities means gathering and using all of the available information to improve decision making, forecast potential problems to prevent them, and coordinate existing resources to achieve greater operational efficiency.
The objective is therefore to improve city processes by taking advantage of existing technology and using the massive quantity of information that the city generates to benefit all parts of its ecosystem: companies, citizens, universities, hospitals, water and power supply, etc. The city can be seen as a system of systems that achieves optimization by increasing the efficiency of the interaction between all of those systems.
Obviously, in the present economic situation, cities are facing serious economic problems. However, this does not mean that investment must necessarily be at odds with short-term economic goals. The opposite is true: investment aimed at improving city systems will significantly reduce costs and will increase the city's efficiency, while at the same time generating long-term economic growth.
Challenges and Opportunities for Cities
The main challenges that cities face are related to the deficiencies in their basic systems, such as transportation, energy, and water:
Several estimates suggest that the price of traffic jams in developed and developing cities equals 1%–3% of GDP. (Brian Carisma and Sarah Lowder, Economic Costs of Traffic Congestion: A Literature Review for Multiple Locations, 2008.)
Leaks in the water supply often account for up to 60% of water supplied. (Bill Kingdom, Roland Liemberger, and Philippe Marin, The Challenge of Reducing Non-Revenue Water in Developing Countries, December 2006.)
Every year, more than 1.2 million people die in traffic accidents worldwide and there are more than 50 million accidents. (World Report on Road Traffic Injury Prevention: Main Messages, World Health Organization, 2004.)
The challenges and threats to sustainability are not only significant individually, but are also interconnected. For example, buildings and transportation alone account for 25% of emissions and traffic congestion poses an increased risk to physical safety. (Global Anthropogenic GHG Emissions on Global Climate Change.)
To improve the services to citizens and sustainable and economic development, cities must study systems holistically and make them more efficient through intelligent use of technology, facilitating the integration between the different systems. Cities need to apply a new focus that seeks:
Efficient gathering of information through rational installation of sensors in the city
Integration of all data sources, including sensors, video, and voice, allowing them to be concentrated
The application of intelligence to this data, converting it into information by applying prediction techniques, short-term decision-making analysis, or simply displaying the data so that specific actions can be carried out
Coordination and integration of people in different departments and agencies to increase operational efficiency
Smart cities are defined not only by the use of available information, but also by the translation of that information into specific actions that are executed in such a way as to optimize resources.
IBM's Proposal
IBM's approach involves identifying the priorities of each city, increasing the value of the actions that will be undertaken with the support of the best available practices,
and taking advantage of the knowledge of current technological deployment alternatives.
Building a strategy. The goal is to identify priorities that maximize the value for the city. This requires the construction of an integrated strategy, adapted to the needs of each city, taking advantage of the new tools that are available on the market and determining what the priority objectives are, how the different systems that make up the city interact, determining their performance using different key indicators, the operational maturity level, what specific actions should be taken, and in what order.
Based on best practices. Although each city has to seek its own path by establishing its own priorities, there are references from other successful initiatives in other cities that can serve as a point of reference to identify which data is most important, which analyses provide the greatest value, and which groups need to be coordinated in the execution of defined actions.
Deploy the technology. Regardless of size, cities must have access to technology, either through their own resources, using shared resources, or by using cloud services, using a reference framework that includes the architecture and processes, adapted and integrated solutions, etc.
To build the strategy, apply the best practices available, and deploy the technology, IBM proposes the creation of operational centers that use real-time key indicators to provide a unified view of the agents involved, anticipate events in order to respond effectively, and to optimize the use of the required resources.
IBM's Differentiators
IBM has the experience gained from the execution of more than 2,000 projects around the world in relation to the transformation of cities of different sizes and with different characteristics. A few examples:
In Stockholm, rush-hour traffic has been reduced by 25% and CO2 emissions by 14% using a smart traffic-charging solution.
In Madrid, emergency response time has been reduced by 25% thanks to an integrated system that provides a comprehensive, real-time view of incidents throughout the city.
A major land transport authority in Asia has implemented an integrated fare system for public transport. The solution has resulted in more efficient transportation planning and nearly 70% of public transport users have benefited from cost savings through reduced fares. The solution allows the land authority to collect key data, analyze patterns, improve the planning and service of public transportation, and reduce traffic congestion.
In Malta, the national electric and water companies — Enemalta and Water Services Corporation — are collaborating with IBM to help the country become the first in the world to build a smart national grid and an integrated water management and electrical system. The system will be able to identify water and electrical losses on the network, allowing both companies to manage their investments more intelligently and reduce inefficiency.
In Rio de Janeiro, a smart operations center has been implemented to analyze all relevant data for weather, power, buildings, transportation, and water in real time to facilitate decision making and anticipate future problems or incidents. An alert system, for example, was created that can predict heavy rain with 48 hours' notice, improving citizen safety and quality of life.
IBM works with its clients, combining its business vision and advanced research and development capabilities, to give them a competitive advantage in today's rapidly changing conditions. Its integrated focus enables IBM to help its clients in all phases from the definition of the strategy through implementation. With experience in 17 sectors and global capabilities in 170 countries, IBM can help organizations to anticipate changes and benefit from the new opportunities for transformation.
Human Resources
IBM considers the success of its Smarter Cities strategy to be key, and has implemented an organizational model worldwide to specifically support its development. In Spain, the team comprises professionals from all sectors and branches of knowledge, and is coordinated by Javier Gil, the director of business development of Smarter Cities, who is in turn responsible for coordinating with the rest of the global directors. With the model in place, knowledge of best practices from other countries flows quickly.
Looking Forward
In future, cities will contain many more sensors, generating much more information from different sources that could be used by everyone and that, when intelligence is applied to it, will make it possible to significantly improve quality of life and business development in cities. All of this requires intelligent use of technology and the application of standards, and, of course, the implementation of organizational models that make it possible to get the most out of people's talents.
M i c r o s o f t
Microsoft's corporate labs are the source of the company's biggest innovations and where the R&D associated with new paradigms such as smart cities is being developed.
The level of deployment of technological infrastructure needed to convert cities into smart cities and transform data into something valuable for cities is still in its infancy. But Microsoft is participating in projects with ambitious goals that characterize this new paradigm of the city:
More efficient cities. Maintaining the economic viability of cities is complicated because the revenue generated does not grow at the same rate as the demand for public services by citizens and companies. For this reason, more efficient management of infrastructure is needed to make it possible to cut costs while at the same time increasing the quantity and quality of the services provided to citizens and companies.
Increased satisfaction of users in their interactions with the city. User influence in relation to cities is continually growing. They are participating more and demand innovative services with broad technological support that makes it possible to monitor the status of processes that are initiated and to self-manage their services in real time. From the perspective of the city, the opening of new
channels of communication allows information to be managed in real time, which translates not only into better management but also better service.
Employees and public managers equipped with the resources needed to make good decisions. The people who are responsible for providing or managing public services will play a very important role in the concept of intelligent cities. Public employment will grow slower than the levels of service, so internal users will have to be equipped with advanced tools to improve productivity, internal and external collaboration, and performance monitoring, to facilitate decision making.
Sustainable local development. The concept of digital cities will permit sustainable economic development of the city that is compatible with the proliferation of new applications and services, improving access to public data and citizen participation, reducing the carbon footprint, and increasing the number of local businesses and entrepreneurs.
Smart City Challenges and Opportunities
The main challenges that cities face with this new paradigm of government and management are as follows:
Deployment of infrastructure. The deployment of the necessary infrastructure, such as sensors and mobile communications, to collect data on the city's activity is essential, but this alone is not enough to generate a return on investment from a smart city. The real return on investment is made at a later stage, when the data is transformed into valuable information. This means that financial justification in this phase is difficult, and it will be necessary to seek public subsidies or models of public-private collaboration as a way to overcome this barrier.
Data integration and development of new applications to improve management. Integrating and exploiting the enormous amount of data and information provided by the infrastructure deployed in a digital city is a formidable challenge in terms of magnitude and cost. The complexity associated with the extraction of quality information comes from the integration with existing, inherited environments, as well as during the development of new applications and future services.
Cultural change. The main barrier to the development of smart cities is the resistance to change associated with the introduction of new management models and the highly technological nature of the components. The sponsorship of managers and executives, the promotion of attractive and innovative self-services, and the availability of a technological ecosystem for public employees that is the same as what they might find in their homes or companies today will all play a key role.
Cities will have to overcome these barriers because users will continue to demand higher levels of service. For cities to respond to these demands, however, they will have to transition to new management models.
Microsoft's Proposal
Although the concept of smart cities currently revolves around the deployment of the infrastructure needed to collect the data and parameters on the city's activity and
consumption, it is also helpful at the same time to develop and integrate the new software applications that make it possible to take advantage of this immense potential: the real return lies in the transformation of the data into management information, which will require the creation of a software platform in the environment of the public services.
As part of the Connected Government Framework Microsoft offers administrations a reference framework to support the transformation of their management models and service to citizens to convert them into smart cities.
This framework provides a series of standards, tools, and milestones for the technological evolution that is needed to scale as the needs of the cities evolve over time. For example, it describes a basic model for interoperability, expressed through five main concepts:
Infrastructure and networks
Access to data
Service and components
Service and integration process
Security and identity
As a global software manufacturer, Microsoft provides a single platform that seamlessly connects all of the functions, agencies, and jurisdictions to offer efficient services to citizens and companies through an extensive ecosystem of partners and manufacturers.
Deployment can also take place like traditional ICT solutions, taking advantage of the obvious efficiency of cloud computing, or making use of a hybrid model.
Microsoft's Differentiators
Presence at all points in the smart city value chain. Microsoft is a manufacturer of solutions for system infrastructure, productivity, collaboration, open government, data management and performance, and the development and integration of applications, with partners and manufacturers present throughout the entire value chain related to smart cities, from manufacturers of embedded electronic systems, including ISVs with business intelligence solutions, management ERP, or CRM, to telecommunication operators that provide mobility or unified communication solutions.
Freedom to choose the technology deployed. Microsoft is approaching the provision of public services in the future as an irrepressible combination of services or processes provided from the city hall's own datacenter, along with other services from aggregators over the Internet. Microsoft's current offering of cloud services aimed at both consumers (Windows Live) and public and private organizations (Office 365 and Windows Azure) represents an opportunity to develop the smart city services at the lowest cost in terms of timeframe, the capacities offered, and the resources involved.
References in the local market. In Spain, Microsoft has been collaborating with public administrations for more than 20 years, participating in significant and
innovative egovernment initiatives at the national, regional, and local levels, including the recent cases of the integrated municipal management system in a private cloud for the BiscayTIK Foundation of the Vizcaya government, and the opening up of data and citizen collaboration for the urban tree service for the Madrid City Council. In addition, Microsoft has real experience providing support to public services in a private-cloud model in the Ministry of Development, AENA, and the Generalitat de Catalunya, and using a public cloud for the Government of Aragon, the Regional Government of Castilla y Leon, and the Court of Auditors.
S a g e
Sage's vision of smart cities is important due to its strategy based on the generation of service experiences in its relations with an organization at all levels. In the smart city area, this is transferred to local entities as the generators of the experience of their "end clients" — citizens and companies.
The concept of smart cities seeks to apply intelligence to reduce the economic, social, and environmental impact of our daily activities, and the best lever for achieving this is technology.
The user or end client must always be the greatest beneficiary. This means that if the taxes paid by each one of these citizens are seen as the investment that they make in their cities, those cities must be profitable.
Sage believes that egovernment, or e-administration, offers many opportunities for both citizens and companies, and for local institutions. eGovernment is the fastest, most effective, and most profitable means of communication between citizens and companies and their respective local entities.
Among the various benefits for citizens, Sage highlights the following initiatives:
For citizens:
Flexibility. Coordination of personal and work time.
Speed. Processes carried out in real time with no travel, waiting in line, or delays.
Positive perception of the public administration. This type of initiative engenders a greater level of assurance that the local institutions are investing their taxes in citizens and companies.
For entities:
Greater productivity, control, efficiency, and therefore increased organizational capabilities of public employees.
Greater citizen focus. Also, and most importantly, the fulfillment of government's responsibility to service its citizens and companies.
Smart City Challenges and Opportunities
One of the greatest current challenges for local entities is to improve economic efficiency. This means improving the budget deficit, but it also means improving investments in the future to continue investing in citizens and companies.
The investment in technology for egovernment makes it possible to generate profitability in the very near term, with direct and very positive consequences for both balance sheets and society.
Automation of processes: offering service 24 x 7 and generating savings of more than 40% (by eliminating paper and the need for filing), and tripling the speed of the processes.
Reduction of CO2 emissions: not only due to the elimination of paper, but also by reducing travel in both public and private vehicles.
Increased efficiency of processes and user satisfaction.
Sage's Proposal
Sage's vision consists of generating better experiences through thinking, innovation, and development of solutions for end clients, citizens, and companies. This vision is implemented through close collaboration with public entities, both the central government and local administrations, to continue developing and providing high-value solutions.
With the vision as the starting point, Sage's proposal is based on a set of initiatives to carry out actions within the smart city area. Since 2007, Sage has been working in the egovernment are, helping entities and institutions to incorporate egovernment and adapt to the Electronic Administration Law 11/2007, monitoring and promoting the adoption of laws that natively promote the smart cities concept.
As a result of these initiatives over the last year, Sage España has provided connectivity to 1.5 million citizens through portals implemented in a number of municipal governments.
Sage's Differentiators
Although its initiative is much more expansive, Sage considers the public administration to be the main point of action for smart cities.
Under this premise, Sage focuses on egovernment, providing specific solutions aimed at the management and processing of all administrative procedures transparently for both citizens and companies, as well as for local institutions in their internal daily work.
Sage has an integrated vision of egovernment that includes electronic internal processing and management (taxation, residence registration, tendering, incoming/outgoing document registry), building permit applications, and online tax services through the citizen and provider portals.
All these procedures are processed under the established certification standards, closing the circle with document management, using the Accede and Firmadoc platform that is part of Sage's egovernment catalogue.
Looking Forward
"To continue the innovation of our solutions, working together with the central administration, local entities, and citizens and companies, adapting to all the specific needs of the different situations. Our corporate DNA is imprinted with the need for continuous development with this aim, and every year we develop more surprising
new applications and services under the concept of smart cities" — Luis Pardo, Director of Public Administrations.
T e l e f ó n i c a
Telefónica has been working with the concept of smart cities for about five years. It is being implemented using the same development cycles of any innovative concept, starting with initial developments in R&D and progressing through the stages to products and services managed by the business units.
Telefónica began with exploratory developments, generating prototypes and proofs of concept in the middle of the last decade, then toward converting these into marketable products.
Given the different facets of smart cities and the wide range of potential services, there are varying degrees of development. Business models are being fine-tuned and the technology is mature, so a large number of integrated products that are currently passing through the R&D phase to pre-commercialization and commercialization are expected to be launched in coming years. The importance of smart city services within the company is seen in its decision to assign responsibility for the launch to a recently created global unit, the Global M2M Unit. The unit is responsible for conceiving, designing, and deploying homogeneous services at the worldwide level in all of the group's business units.
Telefónica sees smart cities as the new urban ecosystems that are capable of maximizing economic, social, and environmental welfare by properly assigning resources and enabling more sustainable and efficient functioning. The intensive use of ICT, which facilitates the gathering of large amounts of data, combined with the large number of interconnected systems, makes it possible to improve decision making in a wide range of aspects related to city management (from handling infrastructure, to improved transportation, and even the management of the city councils themselves). All of this will improve the provision of services while at the same time bringing them closer to the citizens.
Telefónica believes that smart cities are an excellent opportunity because they make it possible to attract large investments, generate jobs, and position cities as central points of reference in innovation. The quality of life of citizens is also improved, offering a socially cohesive city with sustainable development and growth. Likewise, smart cities also act as magnets for talent.
Challenges and Opportunities
For Telefónica, the fundamental challenges lie in the collaboration between the city's agencies and the agents involved in the value chain. Developing the smart city concept should not be done by individual entities, and an ecosystem of IT providers and integrators, operators, infrastructure owners, city councils etc. should be created to tackle the issue.
Business models for smart cities involve a complex multiparty stakeholder ecosystem and require a cooperative and open market approach. For this reason, it is essential to have a unified global vision to make intensive use of ICT and connectivity, promoting innovation and technological leadership.
The "Internet of Things," the move to cloud computing, the proliferation of smartphones, and the growth of open innovation (App Store) and social media are expected to support the development of smart cities.
A holistic approach incorporating these and other technologies should be adopted. It is clear that efficiencies come with a cross-fertilization of data between application domains. The key is enabling the sharing of applications and data by providing a common platform to build the applications on using unified data models and process definitions. This commonality should be seen both in terms of sharing a large amount of data and having every time, everywhere connectivity.
Telefónica's Proposal
Telefónica provides both services and platform capabilities. The key will be having an open, secure, modular platform, on top of which multiple innovative applications (either designed by Telefónica or by third parties) from various domains might run.
Telefónica is focusing on six main smart city areas:
Mobility. This refers to sustainability, safety, and efficiency of transport systems and infrastructure, as well as local, national, and accessibility.
Government. The use of ICT and Web-based telecommunication technologies to improve the efficiency and effectiveness of service delivery in the public sector and the interaction between citizens and their local authorities.
Quality of life. This represents health, safety, educational installations, and social cohesion.
Environment. Describes natural conditions, pollution, environmental protection, and sustainable management of resources.
Energy. Efficient management of the city for sustainable development.
Communication. Ubiquitous access to information and services, where and when they are needed, via the channel that is best suited to the needs of the citizens and the availability of ICT infrastructure, so that people, systems, and devices are interconnected.
Telefónica's Differentiators
Creating a smart city is a very complex task that requires not only the involvement of a large number of agents but also a long-term commitment. Success will also depend on the value proposition, which must demonstrate benefits for citizens and businesses, while at the same time being feasible and sustainable from the perspective of the business model.
For this reason, large entities with commercial, technological, operational, and financial capabilities are well positioned to respond to these challenges. Telefónica has demonstrated a clear commitment to the development of smart cities at the global level. This will be achieved with a clear value proposition, aimed at providing both end-user and platform services. Likewise, the company's efforts to consolidate and promote R&D projects in the smart city field will continue, taking advantage of their results to enrich the portfolio of services offered by the company. The
SmartSantander and other projects that are underway in Malaga are clear examples of this.
Looking Forward
The future will bring a radical transformation of cities toward integrated models, with a complex nerve system made up of communication networks and computing capacity that will generate new, more sustainable spaces, with new services for citizens who are more involved and who are more active participants.
The key is the idea of measurement (the use of sensors) in infrastructure, buildings, and urban spaces to report information on their activities and behavior to systems that will learn and adapt and then generate responses based on the information received. In a smart city, a multitude of operational processes, covering a wide variety of areas of the city (economy, transportation, energy, waste, health, emergencies, environment, etc.) will run continuously, predicting and reacting to events that affect the city as a whole. The paradigm will be "measure, manage, decide, and learn."
U r b i o t i c a
Urbiotica was created in 2008 through the merging of urban furniture design, information technologies, and cutting-edge university research. The company's goal is to provide cities with dynamic data using sensor-based technology to improve management of public services to achieve the corresponding benefits for the city through:
Increased efficiency, with the consequent reduction in costs
Income generation through increased revenue collection
Sustainable growth, managing environmental impact
The key to achieving these objectives is the availability of an abundance of real-time data on the activities that take place in the city, which makes it possible to make decisions at all times based on up-to-date information.
To achieve this, it is first necessary to have smart, Web-connected infrastructure that enables real-time management of public services. This infrastructure that collects the data generated by the city is the foundation of what the market has come to call the smart city.
Smart City Challenges and Opportunities
Smart cities are cities that are capable of achieving optimum management of the existing public services, which would lead to some, if not all, of the following benefits: lower costs, increased income, and social and environmental returns.
Smart cities also enable the creation of new services that are not possible today, but that will promote the development of the city and its economic agents, while at the same time increasing the quality of life of the city's inhabitants.
However, cities need to overcome economic, technological, and organizational barriers in order become smart cities:
Economic barriers. The technology used is new and must be proven to be economically viable and to generate a clear return on the investment. Existing implementations need to show how the investment is recovered through a cost-benefit analysis.
Organizational barriers. The existing departmental silos must be avoided, creating a single, integrated, and global horizontal vision that avoids disconnected or incoherent vertical developments.
Technological barriers. Interoperability between the different systems is essential; in other words, the systems must use a single infrastructure, avoiding the current situation in which each vertical application has its own infrastructure.
Urbiotica's Proposal
Urbiotica is a technology company focused on data collection, transport, and basic analysis of that data to generate a unified communications infrastructure on which all of the city's vertical services are supported.
The company offers a horizontal, unified, and global view of the city, in which, to draw a parallel with computing, it defines an "urban operating system" to act as an intermediate layer between the physical infrastructure of the city — its fixed and mobile assets — and public services.
This means that Urbiotica's solutions respond to problems that have not yet been resolved in cities, such as the problems caused by traffic congestion, the difficulty finding parking spaces, management of solid urban waste collection, excessive water consumption to water the city's trees and green zones, and unnecessary power consumption in public lighting.
This urban operating system initially improves existing public services, but over the medium term it enables the creation of new value-added services that do not currently exist.
Also, the smart city concept can be extended beyond cities and can be applied to smart spaces; in other words, management of spaces with defined limits that have both fixed and mobile assets that can be monitored to allow more efficient management. For example, ports, airports, and public parks.
Urbiotica combines cutting-edge technology with an innovative business project in the smart city area.
Cutting-edge technology:
In its first three years, the company has invested its resources in the R&D necessary to allow it to take part today in various projects in cities such as Barcelona and Paris.
The company holds four international patents, with three more pending, in addition to eight registered trademarks of its technological products.
The company has a team of university researchers that guarantees a high level of technological innovation in the development of its products.
Innovative business project:
The company has a multidisciplinary team that combines the resources of its three founding partners: Santa & Cole contributes experience in urban design; Iviron Group in information and communications technology; and D3K in university research.
Urbiotica encourages the active transfer of knowledge between the university and the company, with D3K SL set up by a group of university professors to invest in the company and provide continuous technological innovation.
Looking Forward
"Simplify the management of an increasingly complex urban setting, which not only increases efficiency, lowers costs, and increases revenue, but also promotes improved quality of life and sustainability in our cities in the future" — Antoni Brey, CEO, Urbiotica.
I D C R E C O M M E N D A T I O N S
R e c o m m e n d a t i o n s f o r C i t i e s
Define the smart city strategy. Sustainable cities are better places to live, and less expensive to run. Cities around the world compete to attract direct investments, residents to support GDP growth, and tourists who are able and willing to spend money. Every city should care about sustainably development for the future, and assess the best dimensions on which to take action and adopt a full, holistic approach. A good assessment will provide the city manager with challenges and opportunities, but also strengths and weakness to become a smarter city. International best practices are a useful reference and a powerful tool to better understand specific contexts and help define a real and achievable smart city strategy.
Build the smart city. Once the strategy is clear, IDC encourages cities to transform objectives into an actionable implementation plan, carefully designed to meet the defined strategy and highlighting measurable milestones. The action plan needs to leverage public and private partnerships, since the realization of smart cities requires different stakeholders to work together. Public organizations might be unable to progress alone in this complex journey.
Innovate smart services. As discussed in this paper, a smart city is not truly a set of independent technologies providing data and information, but is a system of systems; the final objective of a smart city being to improve the quality of life of the population living in the city, while ensuring sustainable economic development. Once again, with a holistic approach in mind, all city services, public and private, must be reevaluated and questioned, to improve and synchronize changes and decisions, to deliver innovative services to the city's citizens.
Smarter operation and management. One of the expected outcomes is to provide better services at lower cost. Information is power, and power enables the best decisions to be made to operate and manage a city. Professional city management is required to gain efficiency, measuring performance, and making decisions based on a realistic and analytic view of the city, the services, and its impact on society. Smart management also means process improvement, and better people organization; this is a strong change that requires long-term commitment.
Measure smartness and strive to continuously improve. The transformation into a smart and smarter city is a long journey. It is important to measure and
communicate intermediate achievements. IDC also suggests reviewing, analyzing, and replanning a city's smartness on a continuous basis.
R e c o m m e n d a t i o n s f o r I n d u s t r y P l a y e r s
Smart strategy. Industry players must have a clear strategy with a credible roadmap in the smart city arena. Opportunistic approaches are not suitable, as this concerns real city transformation. IDC also considers it critical to have a good go-to-market strategy to indentify the right candidates and the right buyers to approach. Smart city evolution very much depends on a city's sustained commitment.
Smart capabilities. IDC encourages industry players to identify their differentiators and test them in the market. This is a multitenant project that requires specialization and a clear value proposition; only valuable players with differentiators will be able to provide solutions to the market.
Smart ecosystem. IDC discussed the importance of solid cooperation in smart city projects, suggesting industry players create an ecosystem providing solutions to the market. By its nature, a smart city requires the integration of different technological capabilities, and more broadly different stakeholders. The complexity of integration and cooperation is one of the reasons why smart cities are taking time to mature. IDC recommends the industry align itself by creating comprehensive and holistic offerings for ecosystems, combining the required technologies, processes, methodologies, practices, knowledge, structures, and people all aligned in a working model.
Smart efficiencies. Efficiency is one of the expected outcomes from a smart city. Industry players must work in their internal economies of scales and efficiencies to transfer these benefits to the city. International practices and knowledge must be combined with local expertise and resources to provide the right services at the right cost.
Smart innovation. IDC considers the smart city concept a live idea that will evolve and grow in time with all the different managerial and technological developments that are taking place. Industry players must keep pace with technological innovation, selecting and introducing the most valuable technologies and developments for every concrete context and situation, trying to address the requirements and challenges that cities currently face and will have to face in the future.
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