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Smart Cities now and the Next WaveBy Richard Sear: Partner & SVP

June 2018

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What Defines a Smart City?

3

What are Smart Cities?

Smart cities are integrating information

and communication technology into

multiple facets of urban life.

Source: Frost & Sullivan

Percentage of Respondents Indicating Organizational Activity in a Listed Smart

City Concept, Global, 2016

Smart Governance and

Education24%

21% 41%

27%

59%55%

56% 56%

Smart Citizens

Smart Energy

Smart Technology

Smart Healthcare

Smart Buildings

Smart Mobility

Smart Infrastructure

Sm

art

Cit

y C

on

cep

ts

2016 2020 2025

2.461 T

1.564 T

921 B

Smart City Market, Global, 2016–2025

4

2050

2025

2000

66.4%

46.6%58.2%

Percentage of Urban Population, Global,

2000, 2050, and 2025

$21.45 T

$36.17 T

$78.00 T

2000 2015 2030

Smart City Roadmapping: Contribution

of Top 123 Cities to Global GDP, Global,

2000, 2015, 2030

What Factors are Driving the Smart City Mega Trend?

$29.04 T

$90.8 T

$24.86 T

$76.3 T

($4.18 T)

($14.50 T)

Need Spending Gap

2017–2025 2017–2040

Smart City Roadmapping:

Infrastructure Need Versus Spending,

Global, 2017–2040

Rising Urbanization Increasing Urban Wealth Growing Infrastructure Needs1 2 3Source: Frost & Sullivan

5

Smart City Concepts:

Example Smart City Technologies*

Smart Energy: Digital

Management Of Energy

Smart Technology*:

Seamless Connectivity

Smart Healthcare: Intelligent

Healthcare Technology

Smart Buildings: Automated

Intelligent Buildings

Smart Infrastructure: Digital

Management Of Infrastructure

Smart Citizen*: Civic

Digital Natives

Smart Mobility:

Intelligent Mobility

Smart Governance And Smart

Education: Government-on-

the-go

Smart Security: Next

Generation 911

• Smart grids

• Smart meters

• Intelligent energy storage

• Building automation

• Intelligent buildings: advanced HVAC, lighting equipment

• Advanced traffic management system (ATMS)

• Parking management

• ITS-enabled transportation pricing system

• 4G connectivity (with 5G technology approaching)

• Super broadband

• Free WiFi networks

• Sensor networks

• Digital water and waste management

• eGovernment

• eEducation

• Disaster management solutions

• Use of eHealth and mHealthsystems

• Intelligent and connected medical devices

• Use of green mobility options

• Smart lifestyle choices

• Volunteer engagement platforms

• Surveillance

• Biometrics

• Simulation modeling and crime protection

• C2 and response

Smart city goals include

1) Creating long-term

economic

sustainability

2) Providing a high

quality of life for

citizens

3) Ensuring safety,

resource security,

and environmental

sustainability

Solutions range from

highly complex and

large in scale, such as

smart grids, to digital-

first solutions such as

citizen engagement

platforms.

*List is not exhaustive. Source: Frost & Sullivan

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Smart City Participants and Typical Suite of Solutions

(Examples)*

• Enterprise resource

planning for municipalities

and governments

• Central operations centers

• Smart city consulting—

reference architecture and

framework planning

• Big data smart city

analytics

• Cloud-based smart city

services

Integrators

Software Focused

• Networking equipment,

such as routers, switches,

SIM chips

• Geographical information

systems

• Remote access and

monitoring

• Wireless area network

• M2M big data analytics

and consulting

• Unified communication

Network Service Providers

Communication Focused

• Smart devices and control

systems

• Sensors

• Smart meters

• Power and automation

technologies

• Turnkey substations

• Utility hardware and

software

• Smart parking

infrastructure

• Mobility integration and

parking infrastructure

Pure-Play Product Vendors

Infrastructure Focused

• Monitoring and

management of smart-city-

related IT infrastructure

• Prevention, detection, and

reporting of security

threats

• Feature solutions for

premises, cloud, and

hybrid environments

• Support in-house, co-

managed, and outsourced

options

• Manage risk and

compliance

Managed Service

Providers

Operations Focused

*The list is not exhaustive. Source: Frost & Sullivan

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Size of bubble has been estimated based on number of client engagements,

degree of partnership in smart city projects and level of investment in smart products and solutions

Sm

all

num

ber

of S

ma

rt C

ity p

roje

cts

L

arg

e n

um

ber

of S

ma

rt C

ity P

roje

cts

Data Networking Intelligence Integration

IBM

Cisco

Siemens

GEABB

Accenture

Degree of Smart Services

Sm

art

Cit

y C

lie

nt

En

ga

ge

me

nt

OracleEricsson

Schneider

Electric

Game Changers in the Smart City Business

IBM Leads the way with

integrated solutions,

combining state-of-the-

art hardware, software,

and services.

In addition, the

ecosystem has been

rapidly expanding,

including

electronics and

telecommunications

companies, such as

Panasonic, Hitachi,

AT&T, and Verizon.

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Future of Connectivity in Smart Cities

2015

2025

2020

Cloud services

and software

components

Smart systems

based

on Internet of

Things

Future Internet

platforms and

services

City-based cloud system

Open and federated

content platforms

Cloud-based fully

connected city

Smart power

management

portable systems

Smart systems

enabling integrated

solutions e.g., health

and care

Software agents and

advanced sensor

fusion

Fully networked and

context-aware mobile-

enabled infrastructure of

sensors and connectivity

Living-lab approach to

be a balanced mix of

technological and social

innovation

Digitally connected city

with citywide wireless

Internet, fully networked

parking, self-driven cars.

Source: Cisco.com; ibm.com; Alcatel-Lucent.com; Frost & Sullivan

Future of Connected Digital Services, Global, 2015, 2020, 2025

City-based cloud

system, fully digitally

connected city, and

fully networked and

context-aware

mobile-enabled

infrastructure will

bring new waves in

connectivity in the

future.

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Smart City Maturity and the era of Sentient Cities

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Smart City Maturity

Model

GOVERANCE INVESTMENT

MODELDATA IoT and PLATFORM BUSINESS MODEL

SYNERGIZED

Public-private Smart

City alliance drives

long-term

transformation

Long-term

investment in Smart

City ecosystem from

a variety of public

and private

stakeholders

Full data integration

through a virtual city

twin, allowing for

holistic simulation

and what if scenarios

Citywide IoT

deployment, with full

horizontal integration

of IoT solutions

Value add realized,

such as through

international

recognition or

quantified economic

impact

ALIGNED

Dedicated Smart City

department in local

government aligns

efforts

Sustained funding

from multiple sources

to support Smart City

vision or strategy

Optimization of

process through data

analytics

Smart City IoT

piloting

Initiatives have

achieved revenue

generation

SUPPORTED

Smart City strategy

supported by mayoral

and local government

efforts

Sustained local

budget to support

Smart City vision

and/or strategy

Better assimilation of

data through real-

time applications and

dashboards

Citywide connectivity

network to support

future IoT rollout

Citywide efficiencies

are being realized

DEFINEDSmart City vision

present

Multiple funding

sources for one-off

project

Presence of open

data with API

Integration of assets

in vertical systems

(energy,

environment,

transport, water

management)

Initiatives focus on

piloting projects to

determine ROI

AD HOCIndividual initiatives

underway, but no

overarching plan

Local funding for

one-off or sporadic

projects

Systems in place for

data capture

Siloed domains with

potential for vertical

integration using

ICTs

Initiatives lack

discernable ROI and

beneficiaries

1 52 3 4

AD HOC

SMART CITY

DEFINED

SMART CITY

SUPPORTED

SMART CITY

ALIGNED

SMART CITY

SYNERGIZED

SMART CITY

Smart City Maturity Model

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Q. Please rank the top 3 to 5 greatest challenges for your organization when securing/fulfilling a Smart City project engagement.

6%

9%

9%

9%

10%

10%

14%

15%

18%Gaining consensus/buy-in from diverse stakeholders (various

government/city agencies, citizens, local partners)

Clearly expressing the solution’s ROI or total value for the

relevant city

Moving from the piloting phase to a larger scale rollout

Aiding in the development of compelling financing and

operating models

Building a solution provider consortium or using common

platforms/systems

Developing end-to-end or holistic solutions, emphasizing

synergized value

Setting realistic customer expectations (for instance,

regarding project time frames or funding lengths)

Creating and conveying tailored solutions (addressing the

unique complexity, challenges, and infrastructure of each

city)

Identifying receptive and complementary partner cities

En

gag

em

en

t

Ch

allen

ges

*Percentages indicate the ratio of points

assigned through weighted rankings of listed

responses to the aggregate of possible points

Source: Frost & Sullivan

Smart City Engagement Challenges

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*Additional responses “Expressed fear of vendor lock-in or installation of

proprietary systems” and “Citizen concerns related to new technology

integration” received approximately 1.9% and 1.6%, respectively.

Percentages indicate the ratio of points assigned through weighted

rankings of listed responses to the aggregate of possible points

Q. From a vendor’s perspective, please rank the top 3 to 5 greatest restraints keeping cities from

adopting/successfully rolling out Smart City technologies.

Pro

ject

Restr

ain

ts

3%

5%

5%

6%

6%

7%

11%

11%

12%

13%

16%Securing adequate funding

Lacking a cohesive Smart City vision or municipal

strategy

Cost concerns: preference for less expensive or short-term

incremental solutions

Unsure ROI (solution viewed as a nice to have, not a need to

have)

Inability to coordinate efforts across siloed city agencies

Inability/lack of know-how to prioritize Smart City

projects/initiatives based on importance

Technological maturity/solution reliability concerns

Lack of mayoral support/motivation for smart project

implementation

Cybersecurity or privacy concerns

Elected official term lengths preventing long-term

commitments

Perceived misalignment between Smart City solutions and specific

needs of each community/city

Smart City Project Restraints

Source: Frost & Sullivan

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Kansas City

Chicago

Portland

Columbus

Bellevue

Washington DC

New York City

Austin

Schenectady

Atlanta

Dallas

Miami

Montgomery

Chapel Hill

San Leandro

Baltimore

Boston

Detroit

Denver

Boulder

Houston

Jacksonville

Los AngelesSan Diego

San Francisco

Orlando

Madison

Memphis

Minneapolis

St. Paul

Santa Fe

NashvilleCharlotte

Raleigh

Seattle

Providence

Pittsburgh

Newark

Burlington

South Bend

San Antonio

Wichita

Jackson

Greensboro

Birmingham

Milwaukee

Chula Vista

Spokane

GreenvilleChattanooga

Cambridge

ATT Smart Cities Framework

MetroLab

NIST* SuperClusters

Envision

*NIST is National Institute of Standards and Technology; Source: AT&T; NIST; MetroLab; Envision America; Frost & Sullivan

The Smart City

movement in the US

has been rapidly

expanding, with a

number of Smart City-

oriented networks

arising to pilot

technologies and

solutions, and cross-

pollinate best

practices.

Tier II Cities are Driving the Current Smart City Wave in the

US

Cities in Smart City Networks, US, 2018

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Governance Maturity—A Coordinated, Multi-Stakeholder Effort

(Often Leveraging Technology to Secure Interest and Input)

Vote on

Projects

Track

Projects

Gain Project

Details

Participatory Budget Overview, Paris, 2014–2020

• Paris has dedicated 5% of its

capital investment budget from

2014 to 2020, or a total of €500

million, to citizen projects.

• Parisians submit ideas and vote

online.

• Ideas can fall into one of 12

categories, including a category

specifically devoted to digital city

initiatives.

• Ideas need to satisfy a general

interest, concern areas within the

city’s jurisdiction, represent more of

a capital (rather than operational)

investment, and be technically

feasible.

• Once filtered, ideas receiving

enough votes are implemented,

with the progress posted online.

• Parisians can view details on the

projects being implemented,

including the project’s location, its

budget, and timeline of

completion.

• In 2015, more than 5,000 ideas

were submitted, with 8 Parisian

projects and 180 neighborhood

projects selected for

implementation.

Image Source: Paris Budget Participatif

Source: Paris Budget Participatif; Frost & Sullivan

As part of the Smart

and Sustainable

Strategy, 5% of

Paris’s capital

investment budget is

being dedicated to

citizen projects

submitted and voted

on through an online

portal, ensuring

citizen interest in the

Smart City.

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Cisco three-year program to

accelerate Germany’s digitization

strategy, Deutschland Digital,

promises to invest €500 million to

support a range of projects.

Costs for Panasonic’s Fujisawa

Sustainable Smart Town project totaled

¥60 billion, although estimates for the

Aldershof project have not been released.

IoT technologies Panasonic is

considering integrating smart

refrigerators and health monitors in

the apartments.

Opened in 2009, IBM’s Analytics Solution

Center in Berlin focuses on meeting the

increasing demand for analytics in the public

sector, universities, and healthcare

organizations.

Additional support from IBM has been

shown through $120,000 worth of free

cloud credits for qualified local start-ups.

Cisco’s investments in

Berlin include 1 of 9

global innovation

centers.

Cisco’s openBerlin provides an open digital platform

that partners can use to help develop and monetize

digital innovations. The center operates as a gateway

to global markets for Berlin and other German

companies.

Smart City-related Mega Investments, Berlin

Panasonic has committed to

developing a Smart City community in

the Adlershof district of Berlin. Plans

include 67 environmentally friendly,

renewable-energy supplied, and

IoT-integrated apartments.

IBM has located 1 of 8 global

Analytics Solution Centers in Berlin.

Further partnerships include

techberlin.com, an online hub for

Berlin entrepreneurs developed in

collaboration with the City of Berlin.

Image Source: Cisco; Panasonic; IBM Source: Berlin Partner for Business and Technology; Financial Times; Wired; Cisco; IBM; Frost & Sullivan

Berlin has attracted

investments from

major technology

giants, which has, in

turn, led to the

support of

the local

entrepreneurial and

start-up communities.

Investment Maturity—Attracting both Public and Private

Investments in Smart City Initiatives and the Local Economy

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Data Maturity—Full Data Integration Throughout the City, with Access to

Relevant Data for Public, Private, and Citizen Innovation

Attributes

• Includes semantic modeling, so that users can discern a building’s

geographic footprint, its volume, and material composition

• Provides details regarding terrain, vegetation, infrastructure, transit

connections, and traffic and weather conditions (among others)

Data Sources

• Represents a five-year effort assimilating geometric and image

data across public agencies, while integrating 2D data and

information from both geospatial and non-geospatial sources

• Leverages modeling technology to support static, dynamic, and

real-time data uploads

Use Cases

• Creates a virtual test bed and experimentation environment, allowing for

planning and decision making without disrupting the real world (e.g.,

analyzing a building’s solar energy potential given its surrounding built

environment)

• Allows for if-then scenario testing, such as for disaster control or public

safety applications

• Helps citizens plan routes, track lost pets, and keep tabs of children and

the elderly

Image Source: National Research Foundation Singapore Source: National Research Foundation Singapore; Frost & Sullivan

Building on 3D

topographical

mapping data,

Singapore’s $73

million Virtual

Singapore Project

provides a

collaborative,

dynamic data

platform for public,

private, research, and

citizen use.

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Image Source: Capital New York; NYC Analytics Presentation; NYC MODA

Supporting operationsFacilitating cross-

agency data-sharing

Promoting economic

development

Aid in disaster

response and

recovery

Improving open data

The MODA has helped the city’s fire

department establish a risk-based

inspection system and more accurate risk

map by re-weighing inspection criteria to

match characteristics of buildings that have

had major fires.

Original

Map

Historical

Map

Updated

Model

To protect tenants in rent-stabilized

apartments against landlord harassment, the

MODA created a Timeline of Harassment by

aggregating data and determining the driving

factors of unit loss. Correlations in data have

helped mitigate harassment.

The Mayor’s Office of Data Analytics

(MODA) designed a multi-modal system to

help the agency in charge of affordable

housing find buildings at the risk of

becoming highly distressed. 500 buildings

not being monitored were identified for

proactive inspection measures.

Housing Violations Heat Map Rent Stabilized Unit Loss Data Map

Data Initiatives Examples

Overview of MODA, New York City, 2017

Source: MODA; NYC Analytics Presentation; Frost & Sullivan

New York City has

established a

dedicated data

analytics team, the

MODA, to aggregate

data across

government agencies

and find data-driven

solutions to city

challenges.

Data Maturity—Integrated Data Across Government Agencies for More

Accurate Assessments of City Scenarios and Better Resource Response

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Data-driven

decisions

Congestion

Utility efficiencyPublic safety

Emissions

CitizensPublic

Sector

Private

Sector

Academia

>$1.0MIn funding from the

National Science

foundation and its

partners

Boston, Boston University, and the private sector install a network

of sensors, collecting citywide data…

Boston’s SCOPE Project Embodies the Connected City

Boston Metro 2025:

• Population, 5.3 M

• GDP, $1.18T

The multi-faceted open cloud operates as an online marketplace,

connecting citizens, public agencies, solutions, and vendors in

one democratized ecosystem.

MOC technology, and multiple cloud and IT vendors provide

SCOPE’s underlying infrastructure.

Platform Technology Enabling Technology

MOC—Massachusetts Open Cloud

Academia

Data services

Cloud

vendorsCloud

operators

Data centersIT vendors

Boston’s City-as-a-Customer Design, US, 2015

…which app and solution providers use to enhance quality of

life and improve public agencies.

SCOPE—A Smart-city Cloud-based Open Platform

and Ecosystem

Smart City Services System

Assets,

utilities

Public

agenciesApps,

solutions

Providers

Citizens

Note: All figures are rounded. Source: Boston University; Census.gov; UN ESA; Frost & Sullivan

1 2

4 3

Image source: Flickr/Wally

Gobetz/Creative Commons

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Kalasatama’s Smart Development and Agile Piloting Timeline, Helsinki, 2013–2035

IoT Maturity—IoT-Based Living Labs are Popping up in Cities Globally,

Offering Forums for Testing and Vetting Next-Gen Solutions

2013: City council decides to make Kalasatama a model

district for Smart City deployments.

2035: Kalasatama houses 25,000 residents and provides

workspace for 10,000.

2016: Kalasatama houses 3,000 residents.

Spring 2016:

Foller: Use of RFID tags to enable

automated real-time inventory,

pricing, and marketing of expiring food

Nifty Neighbor: System for localized

crowdfunding

Tuup: Aggregation of payment for

multi-modal mobility services from

public and private vendors

Smart Trash Bins: Investigation

seeking insights from data collected

through smart trash bins

Autumn 2016:

KuntoKaverit: mCoach Solution:

Connecting trainers and trainees to

enhance fitness

Auntie Solutions: Connecting those

experiencing mental health crisis with

professionals via video chat

Rounds of Agile Innovation

Spring 2017:

Witrafi: Smart parking app to book

spaces in advance

Parkkisahko: Upgrade of car block

heaters to EV charges controlled by

smartphones

Elwedo: Excess solar power from

buildings fed to grid, while proceeds

are distributed to building residents

Innogreen: Installation of green walls

for storm water control

The Natural Step Helsinki:

Combination of real-time carbon

footprint data with sharing economy

opportunities

Kalasatama’s agile innovation program provides €1,000–8,000 in funding to pilots, which runs for up to 6 months. Real-life

testing allows solutions to accelerate full-scale launch, while improving upon design and delivery.

Degree of

IoT focusHigh Medium Low

Source: Smart Kalasatama; Frost & Sullivan

As part of the

bIoTope project,

Helsinki’s Smart

Kalasatama district

will serve as an agile

innovation platform

for IoT solutions; its

goal is to save

residents at least an

hour per day through

increased

efficiencies.

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Making Smart Cities Tangible for You

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2015 2020 2025

Innovators Early adopters Early majority Late majority

• Boston

• Chicago

• Los Angeles

• New York

• San Diego

• San Francisco

• Seattle

• Atlanta*

• Baltimore

• Columbus*

• Dallas

• Denver

• Houston

• Kansas City*

• Las Vegas*

• Miami*

• Minneapolis

• Portland*

• Richmond*

• San Jose*

• Washington DC

• Albany

• Albuquerque

• Austin

• Bakersfield

• Baton Rouge

• Bridgeport

• Buffalo

• Cincinnati*

• Charlotte

• Columbia

• Des Moines

• Detroit

• Durham

• Harrisburg

• Hartford

• Akron

• Allentown

• Birmingham

• Cleveland

• Dayton

• El Paso

• Fresno

• Grand Rapids

• Greensboro

• Greenville

• Jacksonville

• Knoxville

• Little Rock

• Milwaukee

• New Orleans

• Oklahoma City

• Omaha

• Oxnard

• Providence

• Springfield

• Tucson

• Tulsa

• Virginia Beach-

Norfolk

• Worcester

Innovators

Early adopters

Early majority

Late majority

Smart City Roadmap—Which Smart Cities are Evolving in The

United States to Sentient Cities?

• Honolulu

• Indianapolis*

• Louisville*

• Madison

• Memphis*

• Nashville

• New Haven

• Orlando

• Philadelphia

• Phoenix

• Pittsburgh

• Raleigh

• Riverside

• Rochester

• Sacramento

• Salt Lake City

• San Antonio

• St. Louis

• Syracuse

• Tampa

2016 2018

Lagging adopters

2017

Estimated timeframe for

Initial development

Estimated timeframe for

continued implementation

2019 2021 2022

*Denotes city that has been moved to a category with an earlier timeframe for adoption than approximated by model. Note: Timeline bars represent approximate timeframe for

prioritizing of smart city solution adoption. Lagging adopters are not included in scope. Source: Frost & Sullivan

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The initial hype surrounding smart cities is transitioning into wider adoption of

strategic and integrated smart city planning.

Smart city initiatives were once concentrated in global and mega cities. However, the

greatest opportunities are now in smaller Tier II cities, which face pressing

urbanization challenges but have only recently begun to embrace smart city

solutions.

Smart cities are a “when” not “if” opportunity. As legacy infrastructure is upgraded

and replaced, smart solutions will become the technological norm.

Source: Frost & Sullivan

The Last Word: 3 Key Takeaways

1

2

3

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Thank You!

Richard SearPartner & Senior Vice PresidentFrost & Sullivan

+1-210-849-3944

rsear@frost.com