Smart City Developments;

Overview & Observations

Gordon Falconer AAPI MRICS June 2012

Director, Urban Innovation,
Internet Business Solutions Group (IBSG)

Cisco IBSG © 2011 Cisco and/or its affiliates. Internet Business Solutions Group 0
All rights reserved.
 Many “smart city” projects & much activity

March
2011

June
2012

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 “Smart City” projects have many approaches

 Design led
 Business led
 Government led
 Private sector led
 Foreign direct investment led
 Local real estate demand led
 Educational / knowledge sector led
 Aspirational / Vision led Smart Cities are
often highly
 Government developed aspirational and
 Privately developed futuristic

 Government / Private development

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Brownfield smart city projects & approaches

 Some Bottom Up
 Some Top Down
 Smaller scale to Greenfield
 Often “precinct” developments
 Often more government involvement / driven
 Often driven by urban regeneration opportunities as catalyst
 Single focus areas often common (e.g. transport initiatives etc)

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Brownfield smart city issues

 Complex policy, regulatory, financial

and organizational environment
 Detailed value case for technology
driven smart cities not clear to leaders
 Role of technology in smart cities not
clear – insertion points & “must
haves”
 Lack of public sector funding places Sporting events often
over reliance on private sector to fund used as starting point for
public infrastructure new city Brownfield
urban redevelopments
 Challenging to existing status quo (e.g. Qatar, Brazil,
London Olympics)
 Lack of understanding across cities
 Limited resources, skills & capabilities
Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Multiple city stakeholders adds complexity

Where is the role of “smart cities” actually inserted within each stakeholder ?

Policy Regulators Developers Owners Operators

Users / Public / Business

 Stakeholders ultimately determine the shape of cities and how they will evolve and at what
speed
 In many cities the above roles are often performed by the same or related entities which
changes the interdependences and dependencies (e.g. state controlled countries or cities)
 Where and how “smart” ICT solutions / designs actually fits into the components of the city
needs to be carefully examined / understood within each stakeholder role

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Typical Greenfield development approaches

 Smart cities are large in Feasibility &

Strategy
scale
 Includes development of Marketing / Sales /
Operation
Feasibility /
Economic Impact
utilities
 Design / Vision led Simplified
 Business Case led Development
Cycle
 Government led Construction
Master Plan -
Conceptual

 Private sector led

 Foreign direct investment
focus Master Plan -
Individual Design

Detailed
Local real estate demand
focus Illustrative

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Greenfield cities issues

 City development is new, complex & technology role unclear

 Lack of “smart city” experience by government and private sector
 “Design led” or “vision led” too often
 Technology / solution providers do not understand “must haves”
and “like to haves” and “insertion points”
 Developments with utilities & infrastructure adds complexity
especially with stakeholders with different business models
 Fundamental real estate drivers often ignored
 Asset ownership ( asset bundles ), funding, delivery and
operational models complex and impact design
 Over reliance on PPP models and assumption that public sector
projects will be funded by private sector
Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Masdar City – Abu Dhabi ( Greenfield )

90,000 Total population

50,000 commuters 40,000 residents

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Masdar City Project Summary

 Project Cost $16 Billion (2010)

 Funding – debt / equity
 Zero Carbon / Zero Waste City
 Living Lab for Cities & Cleantech
Cluster
 5.4 million m/2 - mixed use real estate
– residential, commercial, retail, hotels
 Masdar Institute of Science and
Technology in partnership with MIT
Boston initial anchor

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Masdar City issues & lessons learned

 Sustainability and technology

innovation versus cost
 Stakeholder alignment
 Speed of development
 Shared Vision
 Master Plan complexity
 Design integration complexity of real
estate and utilities
 Business models complexity
 Fundamental real estate drivers
 Living Lab / Real estate / Cleantech or
FDI ?

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Chicago, Moscow & London

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Barcelona

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 Amsterdam

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 So what have learned about smart cities ?

To help summarise our learning

about smart cities we need to review
the following questions :

 Why – leaders need to prioritise a The “why” is partially

smart city (economic business understood and accepted
case)
 What – the physical project and the The “what” is most
popular with product /
technology solution vendors
 How - do you enable smart city
policies and solutions to be The “how” is the biggest
implemented in a city ? challenge facing
smart cities

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group
 We need to understand “city frameworks”
to make the cities smarter
4. Policy – Best practice & policy examples

1. Utilities 2. Transport 3. Real Estate 4. City Services

3. City Components

2. City Indicators

1. City Objectives – Social, Environmental, Economic

Policy Regulators Developers Owners Operators

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group 15
 Best in the World. Best for the World.

Cisco IBSG © 2010 Cisco and/or its affiliates. All rights reserved. Internet Business Solutions Group