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The Rise of Smart Cities

21 October 2014

Live in a city? If you do, there’s a good chance you’ve seen how mobile technology, sensors, big data, complex algorithms and public-private partnerships are being blended together to make cities run smarter.

If you haven’t heard about the smart city phenomenon yet, you will soon, if IHS Technology's latest report about potential smart city growth proves accurate. The smart city trend is evolving quickly from one-off projects impacting single-function applications, such as street lighting or traffic flow, to large-scale, municipal capital investments integrating multiple city services and departments.

IHS expects the number of smart cities worldwide to quadruple within a 12-year period spanning from 2013 to 2025. Under IHS’ definition, there will be at least 88 smart cities globally by 2025, up from 21 in 2013, as shown in Figure 1; annual investment on smart city projects, which reached slightly more than $1 billion in 2013, is predicted to surpass $12 billion in 2025.

Figure 1

Smart city definitions vary, but IHS thinks of smart cities as those that have deployed—or are piloting—the integration of information, communications and technology (ICT) solutions across three or more different functional areas of a city. The main function areas typically targeted include mobile and transport, energy and sustainability, physical infrastructure, governance, and safety and security, according to IHS.

The rise of smart cities directly correlates with what’s happening street-level and alongside the changing needs of metropolitan areas. A global focus on expanding the Internet of Things (IoT), the growth of city populations, stepped up competition to attract talent, the need to improve day-to-day citizen and government interactions, and ongoing municipal efforts to lower costs while improving efficiency and cross-departmental support are some of the main drivers fueling these initiatives, said Lisa Arrowsmith, IHS associate director of connectivity, smart homes and smart cities.

“Cities are having their infrastructures and resources tested. Rapid population growth places pressure on municipalities to be more efficient and more effective in what they do and ensure that costs don’t spiral out of control,” Arrowsmith said. “There is massive drive among cities to do as much as possible with somewhat limited budgets. On one hand, they want to make their city more attractive and improve the quality of life of their citizens, but they also want to reduce costs.”

That’s where the intelligent city concept fits, despite the upfront cost to get these projects moving.

“Initially, you might think that cost reduction efforts and concerns about costs would have a negative impact on creating a smart city because there is not that much money to invest in these types of projects,” she added. “But what we have seen, on the flip side, is that the drive for efficiency resulting from these budgetary pressures has become a partial driver for these projects. The idea is that if you have the opportunity to achieve more efficiency you’ll see more cost savings over the long term.”

Smart City Models

As more cities dive into the smart city realm and early pilot projects mature, models and best practices are beginning to emerge that can be replicated elsewhere.

In many cases, smart cities efforts are being coordinated through partnerships between various municipal agencies, university research centers and technology providers and integrators (who may be competing on some projects and collaborating on others). Several funding models are being tested as well (with public funding, research grants or private investments, or a mix of all three being common), and the reasons behind these projects are as different as the cities hosting them.

Rio de Janiero, for instance, has become a rising star in smart city circles. Torrential rain and severe flash flooding in 2010, along with a pressing need to improve services, communications and emergency response for the 2012 World Cup soccer matches and 2016 Olympic Games, led to a $14 million smart city investment from Brazil’s capital city, according to the IHS smart cities report. Working with IBM (the main contractor) and Cisco (the designer and supplier of the network infrastructure), Rio created a world-class operations center that acts as an integrated command hub for more than 50 city and state agencies, a recent Cisco analysis points out. From this hub, city officials monitor everything from energy use, traffic, transportation issues, waste management, and police and fire activity to weather conditions and disease outbreaks.

Data from sensors and video camera feeds create real-time maps, graphs and weather predictions that allow the city to better identify potential problems and more quickly coordinate its response. According to this IBM video, the smart city system, so far, has improved emergency response by 30 percent. Faster dissemination about traffic conditions and transit information has also significantly improved traffic flow, notes a Cisco report.

Across the Atlantic Ocean, Santander, a coastal city in northern Spain, has also garnered attention and headlines for its experimental SmartSantander initiative.

The €8.8 billion budgeted project, which was mostly funded by European Union grants, was set up to improve the city’s mobility/transport and energy/sustainability functions along with its physical infrastructure. From a technology perspective, the testbed was outfitted with 20,000 sensors, 3,000 IEEE 802.15.4 devices, 200 GPRS/3G modules and more than 2,000 joint RFID tag/QR code labels, the IHS report states.

So far, Santander’s smart street lighting program has delivered an energy reduction of around 40 to 50 percent, estimates Luis Muñoz, an engineering professor at the University of Cantabria, one of the project’s main partners and its technical manager. The city is also moving forward with several other initiatives, including a sensor-based waste management program to improve trash collection schedules and routes, a in-home water monitoring service allowing users to track consumption and pressure changes, and a “pace of the city” service where users send physical sensing details via their smartphones to the SmartSantander platform and receive notifications about different events happening in the city, as shown in Figure 2.

Figure 2

Using their smart phones, citizens send physical sensing information (such as GPS coordinates, compass and environmental data such as noise or temperature) and this data feeds the SmartSantander platform to improve overall real-time information. Users can also subscribe to services such as "the pace of the city” and receive alerts for specific types of city events. Source: SmartSantander

The initial project ended last year, and now the city is exploring how to set up and continue the business and funding models to scale the project to include other function areas, maintain the existing program and replace older technologies, Muñoz added.

Besides the energy savings, Santander learned other lessons that could help other cities implement similar projects. Among them, he said, were:

  • The creation of a massive IoT testbed that supports services and technology experimentation, and brings together companies, researchers and citizens to further research these areas.
  • An IoT infrastructure that supports, among other things, environmental monitoring, traffic management, energy efficiency, irrigation, participatory sensing and augmented reality.
  • A consolidated business and exploitation model.
  • A consolidated ecosystem with tight interaction among stakeholders, which are mainly the municipality, the university, private entities, citizens, media and other related organizations.

Go further east, and you’ll see what Seoul, South Korea, is doing on this front. TheSmart Seoul 2015 strategy aims to bring together smart technologies and urban development as a way to nurture knowledge-creating industries, provide easier and more convenient services to its citizens and to help Seoul compete better against other international cities. Its main goals are described in its strategy plan as: Make Seoul a city that best utilizes smart technologies; develop a smart government that actively interacts with citizens; build infrastructure for future urban life, and build a creative smart economy and a global culture city.

High-tech savvy Seoul has taken a big-bang kind of approach to this project, meaning that the local and national governments are funding large-scale projects as opposed to focusing on incremental changes funded by private companies in specific sectors, said Jung-Hoon Lee, a professor at the Graduate School of Information at Yonsei University. It is also supporting direct and indirect services, where citizens and the local government are communicating directly or where third-party providers are engaging with users.

While on sabbatical at Stanford University, Lee did an extensive study of smart city projects underway in Seoul, San Francisco and Amsterdam, and later added Barcelona to his research. In his comparison, Lee, who has also been working with the Korean government for several years on smart city projects, found that the integrated smart city services offered in the Seoul Metropolitan City project cover everything from transportation issues to culture and tourism to facility management and public administration to health and welfare to crime and disaster prevention.

Generally, too, it’s the technology that underpins smart city projects, regardless of where they are in the world, and the trend to develop more open data networks is increasing.

“The role of technology is very important in terms of engaging the citizens with the city, attracting entrepreneurs or technology investors and recreating an old city into a new smart city,” said Lee. “Cities need to create an ecosystem where they can work with big technology companies, small companies or even entrepreneurs. It’s becoming critical how cities formulate their strategies and coordinate all these activities.

These are just a few city efforts underway globally. Many other ambitious projects have been announced in China, Europe (Amsterdam, in particular, stands out as another model city), India and North America.

The Supply Chain Effect

The rise of smart cities globally will have an obvious impact on the electronics supply chain as well. Although recent IoT and mobile technology branding efforts have focused on mass consumer adoption of smartphones and tablets, the smart city trend offers opportunities for technology companies to re-evaluate how their product development work and hardware, software and IP portfolios can better serve the industrial side of the IoT equation and address city government requirements.

For instance, look at how IBM and Cisco have grown their presence in this young field by leveraging different aspects of their in-house expertise.

IBM, for instance, used its might in data collection, management and integration to secure early wins, and then built that core service out to become the main contractor for many smart city bids.

“Smart cities have taken off very fast. When we first began in this space, there was skepticism either about whether the data really existed to do the kinds of things city officials talked about or whether the political will existed within cities to do something about all the things we gripe about every day as citizens,” said Katharine [STET] Frase, chief technology officer at IBM’s Public Sector business. “Smart cities are central to IBM’s notion of a ‘smarter planet.’ It’s this notion that you can use many of the same techniques that we’ve used for years with back-office, payroll and transaction activities and apply it to the physical world.”

“IBM has done a lot of work in this space and it naturally began with the questions ‘where are [STET] the data?’ or ‘where are the most urgent problems of a city?’ You start working, inevitably, one agency at a time to work or on an urgent need. But very quickly, you get to a point that you have to be able to start integrating across agencies,” Frase added. “We began with core capabilities around data, analytics and collaborative decision-making. In many ways, this is as much about how humans make decisions as it is about the sensors or the data. There are also many use cases that show where cloud delivery can make a lot of sense.”

Cisco, on the other hand, used its networking infrastructure and technology integration strength to make significant inroads into smart city projects.

“The foundation for the city of the future will be the network and the information it carries, enabling the delivery of vital services from transportation utilities and security to entertainment, education, and healthcare,” said Jordi Botifoll, Cisco’s president of Latin America, senior vice president for America and Barcelona executive sponsor.“We are clearly moving toward an Internet of Everything world that is driven by application-centric infrastructure (ACI) that operates seamlessly all the time, everywhere. ACI is evolving into a fourth critical utility like gas, electricity and water to exponentially accelerate and multiply new urban services. But no single company or public agency is capable of delivering an end-to-end, plug-and-play smart city solution. To address the complexity involved, city programs are enabled by a collaborative and dynamic multi-stakeholder ecosystem.”

On the component level, there’s lots of room to play in, too. While component makers may be further removed from the hands-on smart city implementation, they could capture some of the smart city investment windfall if they look at how their products close existing or future technology gaps.

InvenSense, for example, sees smart cities’ mid-to-long term potential. With more cities embedding hundreds or thousands of sensors everywhere to collect and monitor traffic, parking, human movement, climate, energy, waste pickup and many other forms of on-the-ground data, the sensor maker correlates the rapidly growing smart cities trend to the worldwide proliferation and expansion of IoT. In many ways, the high-tech sector—and the electronics companies that feed into it—are at an inflection point migrating from mass consumer products to widespread IoT rollouts dependent upon location-based services and data feeds, as shown in Figure 3.

Figure 3

The sensor migration moves from smartphone and tablets to providing location-based services, features that will become increasingly important in smart city deployments.

“As you look at IoT, this is something that will be huge,” Ali Foughi, vice president of marketing and business development at InvenSense. “One of the key enabling technologies needed for IoT or smart cities is sensors. Although we don’t serve that market directly today, we believe we have the right process and the right enabling technology to meet their needs. We believe that many years of experience we have in designing high-volume motion sensors and sensor solutions will be applicable, and we believe the market is big enough that we would want to adjust our roadmap to serve this industry.”

Related links:

IHS Consumer Electronics

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