Smart Cities - Deloitte

1 Smart CitiesHow rapid advances in technology arereshaping our economy and societyVersion , November 2015 2015 Deloitte The NetherlandsPrefaceNavigatingthechallenge towardsasmartcityTheworldisfacingincreas ingurbanizationwhile,simultaneously, ,citiesareexperiencingpersistentsocietal challenges:unemploymentandcrimedemandsol ution,theneedforenergyefficiencyisbecomi ngurgent, , ,urbanareastransforminto smartcities .Inthistransformation, , , , , warontalent smartcity do s and don ts andwhatcanbelearnedfromcitiesthatareearl yadopters? Cities A Deloitte Point of View, Version DubbeldemanPartner Deloitte Public Sector | GovLabStephen WardPartner Deloitte DigitalSmart Cities exist on the intersection of digital technology, disruptive innovation and urban environments.

2 They are an exciting place to work and live and the breeding ground for new 2015 Deloitte The NetherlandsContentsSmart Cities A Deloitte Point of View, Version Digital EconomySmart Cities : Overview, Benefits and ChallengesCapability Framework and Maturity ModelDisruptive TechnologiesSmart Solutions per sectorFoundational Systems and InfrastructureSmart Cities of the World (to appear in a next version) Mobile42 DigitalPlatforms43 InternetofThings44-47 BigData48 OpenData49 CognitiveComputing50 3 DPrinting51 SocialRobots52 SelfDrivingVehicles53 Drones543132740557882 SmartMobility56-57 SmartSafety58 SmartEnergy59-60 SmartWater61 SmartWaste62 SmartBuildings63 SmartHomesandLiving64 SmartHealth65-66 SmartEducation67 SmartFinance68-69 SmartTourismandLeisure70-71 SmartRetail72 SmartLogistics73 SmartManufacturing74 SmartConstruction75 SmartGovernment76-77 2015 Deloitte The Netherlands1.

3 The DigitalEconomy3 2015 Deloitte The Netherlands01002003004005006007008009001 000 Smart Cities A Deloitte Point of View, Version technology shows a spectacular growth in capacity and price/performance, for example in internet bandwidth and traffic, processor speed and storage capacity. This pace of this growth outperforms any other advances in technology are driving the digital economyMonthly volume (in Peta Byte) of AMS-IX Internet TrafficProcessor speed benchmark of iPhone generationsSource: : 3G(2008)iPhone 3GS(2009)iPhone 4(2010)iPhone 4S(2011)iPhone 5(2012)iPhone 5S(2013)iPhone 6(2014)iPhone 6S(2015)Gordon Moore s Law: Computing power doubles every two years, and decreases in relative cost. The law fits data from 1970 to 's Law of Internet Bandwidth: The speed of a high-end user connection grows by 50% per year.

4 The law fits data from 1983 to 7 years45xtimesin 10 yearsImagine how the world would look like when the price/performance of other technologies, like cars, increased by the same rate .. 2015 Deloitte The NetherlandsDigital technology is enabling big shifts in the economy (1/6) , , ,wehaveclusteredthemintofivedomains(each relatedtooneormoredomainsinthebusinessmo delcanvass): ValuePropositions Customers,ChannelsandRelationships ActivitiesandResources Partners CostsandRevenuesSmart Cities A Deloitte Point of View, Version StructureRevenue StreamsValuePropositionsKey PartnersKey ActivitiesCustomerSegmentsCustomerRelati onshipsKey ResourcesChannels Digital technologies are doing for human brainpower what the steam engine and related technologies did for human muscle power.

5 They re allowing us to overcome many limitations rapidly and to open up new frontiers with unprecedented speed. It s a very big deal. But how exactly it will play out is uncertain Andrew McAfeeSource: Harvard Business Review, June 2015 Smart Cities are not an isolated phenomenon but an integral part of a broader transition towards a digital economy. 2015 Deloitte The NetherlandsBig Shifts in the Digital Economy (2/6) Smart Cities A Deloitte Point of View, Version From possession to useInthetraditionaleconomy, ,fullydigitalproducts , , thavetheassetsthemselvesandarethereforev eryflexible. Ultra personalizationInthetraditionaleconomy, , ,personalizationnotonlyappliestotheprodu ctitself,butalsotothedeliveryprocesswhic hallowsmuchmoreflexibilityforthecustomer .

6 Everything that can be digital, will be digitalPhysicalproductsaretransformingin todigitalproductsinthreedifferentways: First, ,theworldwidemusicindustrycollectedmorer evenuesfromdigitalmusicthanfromtradition alcarrierslikeCD sandDVD ,forexample, ,oneneededseparatedevicesforavideocamera ,photocamera,musicplayer,navigationdevic e, ,thesehavebecomeanapponasmartphoneatafra ctionofthecostsofthephysicaldevices. Second,amuchlargerclassofproductsbecomes hybrid; ,theTeslaModelSreceivedasoftwareupdatewh ichaugmentedthefunctionalityofthecarwith anautopilot. Third, ,asmartscalecanbeusedinconjunctionwithan appthatanalyzestheresultsandgivestheuser personalizedadviceonweightcontrol. Shift to subscription based business Shorter product life ,thepaceatwhichnewproductsareadopted(num berofyearsuntilx%penetrationhasbeenreach ed) , , , , Shifts related to cluster Value Propositions Cost StructureRevenue StreamsValuePropositionsKey PartnersKey ActivitiesCustomerSegmentsCustomerRelati onshipsKey ResourcesChannels 2015 Deloitte The NetherlandsBig Shifts in the Digital Economy (3/6) Smart Cities A Deloitte Point of View, Version Information transparencyTheInternetprovidesanunlimit edsourceof(product) , On-demandInthedigitaleconomy, , ,whichbroadcastscontentstoeverysubscribe ralike,thatarethreatenedbyon-demandvideo providers.

7 DisintermediationInthetraditionaleconomy , , ,eliminatingintermediariesfromthevaluech ain. Digital is the new normalInthedigitaleconomy,information, ,customersexpectmorethanjustonline,theye xpecttheexperiencetobeeasyandinteresting , , ,insteadofbeingjustthedigitalversionofth etraditionalphysicalprocess. Trust and reputationIntheonlineworld, ,butalsoformicroentrepreneursonplatforms likeAirbnb, ,technologyisusedtobuildtrustbetweenstra ngers, : Thecurrencyoftheneweconomyistrust .Cost StructureRevenue StreamsValuePropositionsKey PartnersKey ActivitiesCustomerSegmentsCustomerRelati onshipsKey ResourcesChannelsBig Shifts related to clusters Customer Segments , Customer relationships and Channels Thanks to digital technologies, we ll be able to produce more: more health care, more education, more entertainment, and more of all the other material goods and services we value.

8 And we ll be able to extend this bounty to more and more people around the world while treading lightly on the planet s resources. Andrew McAfeeSource: Harvard Business Review, June 2015 2015 Deloitte The NetherlandsBig Shifts in the Digital Economy (4/6) Smart Cities A Deloitte Point of View, Version Manual work is automated / robotizedInthedigitaleconomy,everybusine ssactivitythatcanbeautomatedwilleventual lybeautomatedduetoitsadvantages:nohumane rrors,24* , Processes become data-centricInthedigitaleconomy,datahasb ecomeafundamentalproductionfactornexttoc apital, Mobile processesDigitizationofinformationandpro ducts, Shifts related to clusters Key Activities and Key Resources Cost StructureRevenue StreamsValuePropositionsKey PartnersKey ActivitiesCustomerSegmentsCustomerRelati onshipsKey ResourcesChannels From push to pull Traditionally, ,itbecomesharderandhardertopredictaccura telyandthis push pull , ,forexample,byreplacingtappingintoflowso fassetsprovidedbyothercompaniesandbyrepl acingmanpowerbydigitalpower.

9 From efficiency to fast learningUntilrecently, ,however, ,thisrequireseithercompletelydigitalorpa rtiallydigital(hybrid) ,forexample,hasbeenabletoaugmentthefunct ionalityoftheirModelSthroughanautomatics oftwareupdate,incontrastwithtraditionalc armanufacturersthatrequireyearstoredesig nacar. If man and machine work side by side, which one will make the decisions? 2015 Deloitte The NetherlandsBig Shifts in the Digital Economy (5/6) Smart Cities A Deloitte Point of View, Version ConcentrationConcentrationisthetrendtowa rdsrelativelyfew,verylargeplayersthatpro videinfrastructure, , :appsstores,cloudcomputing,socialmedia,p aymentplatforms,etc. FragmentationAtthesametime, ,eachentityhasasmalladdressablemarket, , , ,combinedwiththeavailabilityofon-demandc loudservices, , ,thedegreetowhichcustomersaredesiringmor epersonalizationanduniquenessoftheirprod uctsintermsofprice.

10 The hero s journey through the landscape of the future, Deloitte Center for the EdgeNiche operatorsScale-and-scope operatorsProduct / serviceInfrastructure providersDigital Technology (Cloud)LogisticsManufacturingFacilities managementBack OfficeInfrastructureAggregation platformsBroker / MarketSocialFinanceDataContentCost StructureRevenue StreamsValuePropositionsKey PartnersKey ActivitiesCustomerSegmentsCustomerRelati onshipsKey ResourcesChannelsBig Shifts related to cluster Key Partners 2015 Deloitte The NetherlandsBig Shifts in the Digital Economy (6/6) Smart Cities A Deloitte Point of View, Version Lower Coordination costsPowerfulpersonalcomputing,improvedc ommunications, ,businessareabletomobilizetheirexpertson agloballeveltoworktogetheronfrimprojects .