Global Business Models of Smart and Sustainable Cities


There are apparently no fixed pattern, rules, norms or even common trends in which a city is evolved over time and turn into the state of being recognized as a Smart city. With the passage of time, even the concept of smart cities undergoes metamorphosis; and what we see and believe today to be a smart city by the present level of understanding and benchmarking, may give birth to the new genre smart cities.

By Dr. A.N.Sarkar Ex-Senior Professor (International Business) & Dean (Research), Asia-Pacific Institute of Management, 3& 4 Institutional Areas, Jasola (Sarita Vihar), New Delhi

The future of our world is decided by the quality of its future cities. Globally, there are about 700 cities, each with population exceeding 5,000,000, whereas the top 25 cities of the world today account for half of the world’s wealth. The infrastructure investment for the cities is forecast to be $30 trillion to $40 trillion, cumulatively, over the next 20 years. It is projected that over 40 global cities will come as Smart Cities by the year 2020. Smart cities have attracted an extensive and increasing interest from both science and industry with an increasing number of international examples emerging from across the world. Several attempts to conceptualize smart cities and various benchmarking methods have been developed to evaluate their impact. There are six commonly recognized dimensions among the approaches, namely people, government, economy, mobility, environment and smart living.


"The future of our world is decided by the quality of its future cities"


Key drivers for smart and sustainable cities

Understanding Smart and Sustainable Cities

Smart Cities help transform lives for a better tomorrow. Cities are built on the three pillars of Infrastructure, Operations and People. In a Smart City, not only is each one of these pillars infused with intelligence, but more importantly the pillars work in an interconnected and integrated fashion to utilize resources efficiently. For example, a Smart City’s power distribution infrastructure will be built on Smart Grid technologies, which will integrate with local power demand patterns, grid supply variations, and a well-defined operational process – to manage the available energy most efficiently. A Smart City will integrate energy needs across the board – from home consumers (starting from more energy efficient investment in their own homes) to powering city-wide infrastructure such as lights to ensuring reliable supply of energy for manufacturing jobs. This is accomplished through the use of data to predict energy trends and to compensate through redirection of energy and use of efficient materials to reduce demand. Key ‘smart’ sectors in a Smart city should ideally include: technology, transport, energy, healthcare, environment, water and waste management. A Smart City uses information technologies to support a strong and healthy economic, social, cultural development, by making efficient use of physical infrastructure. It engages effectively with local people in local governance and decision, by use of open innovation processes and e-participation, with the emphasis placed on citizen participation and co-design; it learns, adapts and innovates thereby responding more effectively and promptly to changing circumstances.

A smart city strives to optimize operations in real-time to maximize efficiency. The application of modern analysis and processing techniques to the streams of data flowing around a city offers the prospect of using predictive techniques to intervene in the functioning of a city to prevent problems and to improve efficiency. IBM’s Journal of Research & Development in 2010 offered the following definition of a smart city: “an instrumented, interconnected and intelligent city”. That seems in MasterCard’s view to get to the heart of the concept. In other words, in a Smart City the whole is greater than the sum of its parts (Figure 1).


Smart cities evolve towards a strong integration of all dimensions of human intelligence, collective intelligence as well as artificial intelligence within the city. At the core of Smart Cities is strong infrastructure, seamlessly connected and coordinated. The key infrastructure pillars comprise of transportation, power, integrated utilities, urban development, resource management, IT based connectivity. In a Smart City, these basic infrastructure pillars form the foundation that support building blocks like sustainability, inclusiveness and convergence. All aspects of daily life like education, heath, connectivity, waste-management, basic utilities, upkeep and upgrade of civic services and functions are accessible through on a single platform driven by IT. The focus and aim is to deliver a happier lifestyle through integrated solutions, innovation and technology.

Smart Cities integrate in a more efficient manner, the use of smart physical infrastructure, transport, energy, healthcare, information technology, environment, water and waste management in a cohesive manner to underline progress, livability, workability and sustainability. It is driven by the major challenges of today, including climate change. Smart Cities also support a strong and healthy economic, social and cultural development by making efficient use of physical infrastructure.

Infrastructure dominates Smart Cities

City leaders must provide the fundamental infrastructure to deliver services such as water, energy, telecommunications and transportation while making the city a desirable place through the intelligent application of Information and Communication Technology (ICT). The fundamental concept of a Smart City is the seamless integration of physical infrastructure, such as fiber optics, to the digital infrastructure. Figure 2 illustrates the vision of the future city, a city with a pervasive overlay of ICT connecting things, organizations, and people.


Focus on Smarter Public Service Planning and Delivery Systems

Computer simulation, modeling and visualization tools will be central to interpreting and understanding the mass of data generated by the Smart City, allowing the relevant public authority to coordinate their services and interact with its residents and businesses. In particular, smartphone applications are already central to the Smart City, with many cities already testing applications to allow citizens to report littering, anti-social behavior etc. via cameras on their phones, with the relevant city authority sending back a message when the problem is resolved. GE, for example, are developing games linked to smart meters which enable children to drive energy saving behavior by competing with friends and neighbors. Integrated into and supporting this infrastructure is a parallel ICT infrastructure of increasing numbers of sensors picking up data to be stored on servers. The data is accessed by city authorities, the energy provider, businesses, and residents increasingly via the ‘Cloud’ which enables all parties to concurrently analyze and share data. Increasingly people will want to consume data wherever they are, and whole-city WiFi will become all the more important in supporting the Smart City and ‘Smart Citizen’.


Smart Citizen-oriented Smart Cities

Cities will also have to play a role in developing ‘Smart Citizens’. With increasing concerns about privacy, government will have to demonstrate the safety and security of data sharing and the potential benefits that can accrue. Similarly, as the growth of data increases choices and potentially supports more efficient markets, information will have to be presented in increasingly innovative ways to ensure that people are clear about the choices on offer. It is estimated that the choices that individuals make about their lives and behaviors is a significant contributory factor in levels of carbon emission. Developing sustainable behaviors in people, from smart policies which ‘nudge’ people towards more sustainable living, to online applications and tools which support smart citizens, in the classroom, at home and on the move, are central to the smart and sustainable functioning of a city. Smart citizens are also important to ensure that the benefits of a ‘smarter city’ are experienced across a city’s diverse inhabitants, and those who work, study, and visit a city.


Capitalizing on Smarter Transport and Mobility Systems

A smart city transport infrastructure aims to optimize those journeys that take place within a city and minimize their carbon impact. Real-time city transport planning and coordination of buses, trains and traffic lights, complemented by live travel information sent to people’s smart-phones, supports a seamless passenger experience and minimizes disruption. City-wide cycle hire schemes (and associated cycle lanes) reduce traffic, can reduce pressure on public transport and improve health. The EU Transport envisages that all cities are free of conventionally fuelled vehicles by 2050, a network of electric vehicle charging points will need to be delivered across cities. A significant proportion of traffic in any modern city is made up of vans and trucks delivering to the hundreds of different stores. Smart logistics projects make use of rail and water freight to deliver goods to the city, which are then consolidated and dispatched using cycle or electric vehicle.


Smart Grid Systems : Providers for Sustainability of Smart Cities

Key to creating a step change in the sustainability of cities is ‘smarter grids’. One of the biggest challenges for cities is its energy infrastructure. In addition to needing to revolutionize the way we produce and distribute energy so as to meet climate change targets, the pressures of growing city populations increases energy demand, and the need for greater resilience from national electricity grids. Smart grids seek to manage peak energy demand to reduce the need to build more capacity through new power stations. Smart grids also incorporate distributed and micro renewable energy (solar PV, combined heat and power, wind turbines etc.) thereby supporting the transition to a lower carbon energy mix. Smart grids require communication between users and suppliers of electricity meaning that energy transmission infrastructure (substations, gas pipes etc.) need to be improved to allow data to be captured and transmitted. The Smart-Grid basics are shown as an illustration in Figure 3.


Smart grids also require smart appliances and smart citizens using those appliances to allow for automated systems to regulate energy demand.


Smarter Carbon- neutral Green Buildings

An equally important challenge is the refurbishment of our existing building stock, which currently contributes 40% of our carbon emissions. The carbon and productivity savings of a smarter electricity grid will be lost if they are not accompanied by measures to make new and existing buildings more energy efficient. Such measures in homes include insulation, modernisation of boilers and windows but can also extend to water saving devices, smart meters and home energy management systems. Smart meters which measure and present your energy use in cash terms, and smart appliances which ‘talk’ to the grid and turn on when energy is cheapest, are two critical components of building energy efficiency. A host of other products and systems are available to reduce energy use in buildings, commercial, public and government buildings in particular can benefit from low energy lights, combined heating, cooling and ventilation systems, and building energy management systems.


Smarter Waste Reduction, Reuse, and Recycling

Dealing with waste in a Smart City will require, at a basic level, the facilities to collect, sort and recycle household and business waste. However, more innovative approaches include investing in a city-wide pipeline system (Envac) for disposing of and sorting waste, as has been delivered in Hammarby Sjodstad (Sweden). ‘Closed-loop’ recycling systems, such as at the Sustainable Industries Park in East London, take plastic waste and, after treatment, are able to make plastic out of it again. There are also an increasing number of ‘up-cycling’ projects that take waste streams and turn them into more valuable products (a good example are Freitag bags, made from truck tarps, used car safety belts and used inner tubing of bicycle tires). Businesses of this kind can be supported by the development of hub facilities where similar businesses can share costs and innovate together.


Smarter City Planning

Collaborative data platforms can provide city planners and developers information on a wide range of city information to assist with smarter planning. Real time information on traffic, land use, building typologies, demographic data, socioeconomic data, environmental data, infrastructure systems, and flood risk zones present new opportunities for much more intelligent spatial planning of city growth and infrastructure. This is increasingly important in the context of sustainable urban development, which is increasingly resulting in mixed use neighborhoods. The Leipzig Charter on Sustainable European Cities from 2007 (among other documents), defines this as the “strategy of mixing housing, employment, education, supply and recreation use in urban neighborhoods”. As neighborhoods are mixed more in terms of their content, they become more complex, and as complexity increases, the kinds of data platforms referred to above become more and more useful to those charged with managing these areas from a planning point of view. The process of making city planning “smarter”, is an illustration of how technological advances can support and enhance existing management, policy and development processes, like urban planning.


Providing Good Governance Framework of Smart Cities

Governance services in a Smart City are a managerial function for the Smart City concessionaire. These services may not be capital-intensive, but they bring in a high value-add to the city’s operations. The Smart City concessionaire; as it were4, will coordinate between the various branches of utility companies as well as between State and Central government bodies, providing seamless operations, integrated service delivery, holistic e-governance and economic services. The development of Smart Cities will require a holistic framework that will consider both the high capital expenditure (CAPEX) as well as structure the revenue streams such that over a period of time, these Smart Cities will become financially self-sustainable. “Smart” efforts are expected not only to enhance the efficiencies of complex urban systems but also to increase the quality and efficient delivery of basic services through a variety of e-solutions; empower citizens through access to knowledge and opportunities; and, to address environmental challenges and disaster risks through measures enabled by new technology. In this context, “smart” approaches can help achieve the Sustainable Development Goals (SDGs) on making cities and humans settlements inclusive, safe, resilient and sustainable. These efforts focus on various important interrelated elements depicted in Figure 4.




Developing business model of smart cities has of late become very trendy. Use of bullet trains, metros, aerotropolis, eco-city, eco-towns etc. speak volumes about the ways new business models are being evolved as innovative business propositions. The idea that digitalization drives new business models is being widely recognized. In general terms, a Smart city is typically characterized by heritage, architecture, aesthetics, ecology, lifestyle etc. This apart, current focus is directed towards improvement of essential services, economy with focus on employment generation, transportation, healthcare, education, municipal and social security, civil services etc. Many countries and cities have taken leads in these domain areas; with, among other things – the unique selling propositions in international business terms (viz. as tourist destination; high-tech city, commonwealth heritage centre, Port & Harbour, Olympic stadia etc.). Presented below are some of the illustrative international business models of smart cities; carefully chosen to represent different continents of the world as case studies.

HONG KONG: The Smart City Model

Hong Kong’s capacity to innovate is supported by excellent connectivity with the Mainland and the rest of the world, world-class universities, and robust intellectual property protection. The Government strives to create a vibrant ecosystem with excellent software and hardware support for industry players to collaborate on research, development and innovation activities. Innovation and technology as well as testing and certification are two sectors with great potential for Hong Kong.

Innovation and Technology

Hong Kong has become a major information, communication and technology hub in the region, with international rankings consistently putting Hong Kong at the forefront. The Government’s Innovation and Technology Fund has funded more than 4,100 projects with about US$1.1 billion over the past 15 years. Key innovation and technology infrastructure includes Cyberport and the Hong Kong Science Park. A new Innovation and Technology Bureau will soon be set up to act as a centralized body to co-ordinate and promote innovation, research, science and technology in Hong Kong.

Tech start-up hub

Hong Kong is fast becoming a start-up hub for technology firms. The Government is making efforts to create a better environment for technology start-ups in collaboration with local R&D institutions and universities. The Innovation and Technology Commission launched a Technology Start-up Support Scheme for Universities, initially for three years, from 2014-15, to provide annual funding of up to US$3 million to six local universities to encourage their students and professors to start technology businesses and commercialize their R&D results.

Technology Links with the Mainland

Hong Kong is strengthening its intermediary role to promote technological cooperation between the Mainland and the rest of the world. Hong Kong is now the base for 16 Partner State Key Laboratories. There is also a National Engineering Research Centre for Application Specific Integrated Circuit System (Hong Kong Branch) in partnership with the Southeast University in Nanjing. ASTRI-The Hong Kong Applied Science and Technology Research Institute (ASTRI) is a Government-funded institute that delivers world-class technologies and customer-focused R&D for industry. It is designated as the R&D centre for information and communications technologies focusing on communica¬tions technologies, integrated circuit design, sensing and integration, and software and systems. The first Hong Kong Branch of Chinese National Engineering Research Centre operates under ASTRI. ASTRI, which has won major awards at home and abroad, has been granted over 450 patents.

Science Park

The Hong Kong Science Park comprises 26 state-of-the-art buildings offering 330,000 square metres of R&D office and ancillary space in Phases 1 and 2, and where Phase 3 will come into place in phases from 2014–2016. The Park is home to about 490 companies engaged in electronics, information technology and telecom¬munications, precision engineering, biotechnology and green technology industries. The Park is also designated as the Hong Kong National High-Tech Industrialization (Partner) Base for Green Technology and Hong Kong National Modern Services Industriali¬zation (Partner) Base. The organization also runs incubation programmes for start-ups, providing rental, marketing, financial and technical support in their critical initial years.


Cyberport occupies a spectacular 24-hectare site at Telegraph Bay on Hong Kong Island. The creative digital community comprises 293 companies engaged in information and communica-tions technology, digital content creation and mobile apps development. Cyberport has five inter-dependent centers –Entrepreneurship Centre, Technology Centre, Collaboration Centre, Knowledge Centre and Campus Development Centre. In January 2014, Cyberport’s Technology Centre launched the Master Control Centre to support the adoption of 4K standard in digital entertainment and solve key challenges in 4K content production. It will help content creators capture international market opportunities.



The city of Barcelona has witnessed significant economic development and growth in recent years, with increasing focus on how to do this in a socially, economically, and environmentally sustainable manner. Since the Barcelona 1992 Olympic and Para-Olympic Games, the city has attracted investment and development and prospered through its transformation. Creation of new infrastructure to support the growth and redevelopment has been essential; however the city has looked beyond the short term and adopted measures to allow for on-going sustainable growth.

Smart and Sustainable Urban Development Projects

Bicing –Smart Bicycle Scheme

Bicing is the community bicycle system in Barcelona, set up in 2007. The scheme is managed by the city council and Clear Channel. Over 400 stations across the city provide over 6,000 bicycles to rent, located at regular intervals and at transport interchanges. The system uses a smart technology system with contactless cards which are swiped at services stations to unlock the bikes. The system is able to recognize bikes when they are returned to the stations. The aim of the system is to encourage sustainable travel within the city and thus reduce CO2 emissions from transport. The technology system integrates the bike fleet software with a web page which allows users to browse where the bikes are stored, and the availability of free bicycle parking spaces.

Solar Powered Bus Stop Information Systems

IED Barcelona (the International school of design, fashion, visual arts and communication in Barcelona), Capmar SL and EMT (The Metropolitan Transport Body) worked together to produce a solar powered bus stop information system for implementation in Barcelona. The bus stop provides information on the bus network with digital information on real-time bus information, updated every 30 seconds to help inform public transport users. The bus stop provides data through a GPRS connection powered by solar energy. The digital screens have been designed to use minimal levels of power to enhance the energy saving process. Using solar
power also reduces the energy bills to the transport authority. The project placed an order in 2009 for 100 bus stops for delivery in the metropolitan area. Ultimately the intention is to replace 2,000 existing bus stops with the new solar powered model.

Solar Thermal Ordinance

The Solar Thermal Ordinance was approved by Barcelona City Council in 1999 and came into effect one year later in 2000 (Figure 5). The Ordinance requires all new buildings, renovated buildings, or buildings changing their usage plans (both private and public) to generate 60% of their hot water requirements from solar energy. Since its implementation in 2000, the number of solar panels in Barcelona has increased by 1,780%, effectively saving 32,076 MWh/year from hot water energy consumption. The equivalent CO2 savings achieved are in the region of 5,640 tonnes per year.

22@Barcelona Smart City Innovation District Programme Initiative

22@Barcelona is a regeneration project involving 200 hectares of land in the Poblenou area of the city. A municipal society was set up in 2000 by Barcelona City Council as a separate company to promote and manage the project. The purpose of the project was economic, urban, and social renewal over a 20-25 year period, and has since transformed a previous industrial area into a new urban development comprising green space, businesses, retail units, and new homes. In total in the ten years since it began, the regeneration has seen the set up of approximately 4,500 companies creating over 55,000 new jobs. There are more than 1500 companies in 22@ which did not exist previously. The district promotes innovation and collaboration between research centers, universities, and commercial businesses, setting a model for economic development which the city council now intends to implement elsewhere in the region.

Fab Lab - Barcelona

The Fab Lab Barcelona, one of the leading fabrication laboratories in the world, is part of the Institute for Advanced Architecture of Catalonia (IAAC), a cutting edge education and research centre for the development of architecture capable of meeting the challenges of habitability in the early 21st century. A fabrication laboratory (Fab-Lab) is a small scale workshop equipped with digital fabrication machines and technologies, such as laser cutters, 3D printers, milling machines and a platform for manufacturing electronic boards. Now, there are around 100 labs located in more than 30 countries, connected through the Internet, constructing one of the biggest networks of knowledge in the world. Fab-Labs are an outreach project of the Center for Bits and Atoms at the Massachusetts Institute of Technology (MIT). In 2008, IAAC and Fab-Lab Barcelona took part in the official section of the Venice Biennale with the project Hyperhabitat and in 2010 presented the Fab Lab House at the Solar Decathlon Europe in Madrid where it won the People’s Choice Award.



The city of Amsterdam is a leader in the implementation of projects and initiatives to drive sustainable economic growth. The Municipality of Amsterdam has developed ‘New Amsterdam Climate’ to provide a formal framework to support the transition to a city with reduced carbon emissions. New Amsterdam Climate sets out the city’s vision to reduce CO2 emissions by 40% in 2025 compared to 1990 levels. The city has adopted a collaborative approach to help deliver the 2025 goals. A scheme known as Amsterdam Smart City has been established, uniting the city’s residents, businesses, and local authorities to help deliver the ambitious goal of moving towards a more sustainable future. Projects taking place in the city range from smart grids, solar energy, wind farms, smart mobility, electric vehicles, smart street lighting, and distributed energy management systems.

Amsterdam Smart and Sustainable Urban Development Projects

A range of projects have been set up covering sustainable living, sustainable working, sustainable mobility, and sustainable public space. Projects include the use of technologies such as distributed generation, energy advice, energy displays, energy storage, smart meters, smart lighting, electric vehicles, EV charge points, electric waste collection, and sustainable logistics (i.e. low-carbon delivery and supply processes). Each project involves collaboration between different companies. For example, 500 households in Amsterdam tested energy feedback displays connected to smart meters in the ‘West Orange’ project initiated by Nuon, IBM and Cisco. The displays were supplied by Home Automation Europe. The project aimed to analyse behaviour and how consumption reduced as a result of the smart meter installation. Further similar projects followed as a result. Another project tested is ‘Onze Energie’, an initiative to collectively finance seven wind turbines. Amsterdam Harbour is investing €2.5million in a project to install 73 ship to grid electricity points for barge vessels and river cruisers.

Amsterdam Smart City – Building a Smart City through Citizen involvement

Amsterdam’s transition to becoming a Smart City began in 2009 when the independent organization, Amsterdam Innovation Motor, and the grid operator, Liander, launched the Amsterdam Smart City project in close collaboration with the Municipality of Amsterdam. The project has as its explicit aim the reduction of carbon emissions and energy use, thus creating a more sustainable and efficient city. This is done through unique collaboration between governmental agencies, private companies, knowledge institutions and the citizens of Amsterdam. Together, all these different actors develop and implement innovative new technologies in the city fabric, which will not only help to directly reduce the use of energy and CO2 emissions, but also stimulate behavioural change amongst the city’s inhabitants. All new initiatives are tested in local, small-scale projects. Whereas the Amsterdam Smart City project started out with few partners, it has grown rapidly and it now involves over 70 different partners, including big players like IBM and Cisco.


HELSINKI: Forum Virium Helsinki

Through its smart city initiatives, Helsinki is making innovative use of mobile technology, engaging with citizens and opening public sector data up to all interested parties. Since 2007, a network of “Living Labs” has been providing test and experimentation environments where user communities can work with producers to co-create innovative smart city services in the Helsinki Metropolitan Area. A number of successful trials and commercial projects, such as a traffic information platform and Helsinki Region Info-share, have been deployed in Helsinki, which has also run open data competitions, such as Apps4Finland, to inspire start-ups, citizens and established companies to utilize open data resources.


This network is overseen by Forum Virium Helsinki, a private non-profit organization owned by the City of Helsinki. Forum Virium Helsinki is tasked with the development of new urban digital services in collaboration with the private sector, the municipality, other public sector organisations and Helsinki residents. Forum Virium Helsinki’s projects span six key areas - smart city, wellbeing, new forms of media, innovative public procurement, innovation communities and growth services. As part of the user-driven approach, smart city ideas and proposals are sourced from a wide variety of stakeholders, including citizens of Helsinki, public and private service providers, developers, and technology companies. Helsinki’s smart city strategy is supported by the development of a mobile application cluster and a focus on open data. Forum Virium Helsinki has set up the Helsinki Region Infoshare project in collaboration with City of Helsinki Urban Facts –department, to make regional information quickly and easily accessible to all through In 2005, the City of Helsinki and several media and telecommunications companies, such as Elisa, Nokia, TeliaSonera, Tieto and YLE Finnish Broadcasting Company, founded Forum Virium Helsinki. Forum Virium Helsinki helps shape the development of ecosystems by engaging users and providing support for start-ups and app developers. Its projects span six key areas:

Wellbeing – the development of healthcare related digital services that promote a healthy lifestyle and tackle the challenges of aging
New forms of Media – the development of new kinds of media services on consumers’ terms
Smart city – the development of public and private digital urban services that make living
in the city easier
Innovative public procurement –rejuvenating public services by procuring innovative solutions
Innovation communities – sharing best practices of user-driven innovation
Growth Services – boosting the internationalization of SMEs

User–driven Model behind Smart City Projects

Overseen by Forum Virium Helsinki, Helsinki’s smart city initiative is based on a network of Living Labs (test and experimentation environments where users and producers co-create innovations) and their partners in the Helsinki Metropolitan Area. This user-driven approach is built on the principles of open innovation and encouraging collaboration between private and public organisations to develop and commercially launch new ideas and services (Figure 8). In the vast majority of smart city initiatives around the world today, ordinary citizens are involved primarily.



COPENHAGEN: a leader in smart development

Ranked among the top Smart Cities in the EU, Danish cities provide an ideal test market for new smart technologies and solutions. Not only does the country occupy a leading position within several key green technologies needed for the Smart City, its long tradition of involving different stakeholders in the planning and decision-making process makes it an ideal living lab for smart solutions. This is backed by the fact that Denmark is a highly digitalized society, where all stakeholders are able to connect, share and collaborate in new and innovative ways. Furthermore, municipalities, companies and citizens provide a wealth of open data, which can be used in the development of new smart technologies. Denmark is an innovative country, where new forms of collaboration across society are constantly being developed and tested (

The city of Copenhagen’s quest to become a smart city has developed from the ambitious vision of becoming the world’s first carbon-neutral capital by 2025. In order to reach this ambitious goal, the city is determined to implement new and innovative solutions within transport, waste, water, heating, and alternative energy sources. Carbon neutrality will result in a better quality of life, innovation, job creation and investment. The Danish capital has been awarded on various occasions for its targeted work to create a greener, more sustainable and liveable city. Recently Copenhagen was awarded the prestigious European Green Capital Award 2014 by the European Commission. The road to a smarter Copenhagen is based on a dual strategy: firstly, Copenhagen is to be the world’s leading test-bed for smart and sustainable solutions. By turning itself into a living lab for new green solutions, the city is able to attract innovative companies. A very good example of this is seen in the creation of the new sustainable neighbourhood of Nordhavn, which is to house 40,000 residents and create a similar number of jobs. In order to facilitate new development, the city is focusing on collaboration (co-creation) between public authorities and private companies.

Due to the city’s ambitious aims, Copenhagen is an ideal test bed for new and innovative solutions. One example is the market for Smart Grid technologies, where Denmark is the leading European country hosting 22% of all European Smart Grid test and demonstration projects. Another example is wind turbines, which will play a central role in the decentralized energy system of the Smart City. According to the recently published Global Cleantech Report 2012, the global cleantech market will grow by 10% on an annual basis up to 2015. This growth will be driven by developments within the world’s cities, which are expected to be “the key driver for the Global Cleantech Market in the years to come”. The highest growth rates are expected within traditional Danish strength areas such as energy-efficient building materials, smart grid, and wind turbines. The global market for Smart Grid technologies alone amounted to 18.4 billion euros in 2014. This positive trend is reflected in the Danish forecast for the Smart Grid industry in Denmark. The Danish Energy Association estimates the Smart Grid market will create around 8,000 new jobs and an increase in exports of 1.9 billion euros by 2020. This makes it a very promising market for companies within the Smart Grid sector.

BERLIN: The Smart City

The city is a laboratory for the urban life we aspire to live in the 21st century: an efficient infrastructure with an information network, eco-friendly mobility, creativity and the combination
of high productivity with a high quality of life. In the European Green City Index, Berlin is no. 1 in the Buildings category and no. 3 in the Water Management category. The capital is at the top of the Federal State Mobility Index when it comes to environmental protection and land use, and holds second place in the overall ranking. These results are excellent, but we see room for improvement. This one of the city’s clear policy objectives and thanks to the excellent scientific landscape and numerous innovative companies in Berlin – particularly in the focal areas of energy, environment, transport and mobility, healthcare and above all information and communication technologies.


Berlin- A City of Research

Berlin’s scientific landscape has a lot to offer – including a major contribution to the future of intelligent city design. Over 300 research groups and companies in Berlin are working on Smart-City-related subjects. Technische Universität Berlin has pooled its strengths and initiated the Smart City Urban Lab, the Fraunhofer Institute for Open Communication Systems (FOKUS) is conducting research in and about Berlin as part of the Fraunhofer Morgenstadt Initiative, the Beuth University of Applied Sciences Berlin has founded the City of the Future center of excellence and FU Berlin is doing research on self-driving cars.

City of Future Locations

Berlin has room for innovation: in recent years, the city has made areas for development available. They have prime locations, an exciting history and provide plenty of room for the future. The city initiated Urban Tech Republic for shaping the future of the Tegel Airport site. The vision of the “intelligent city” of the future is being developed today at EUREF Campus. Ecologically and economically sustainable solutions are making this office and scientific complex a center for innovation and future-oriented projects that is unique in Europe. Clean Tech Business Park in Marzahn provides ideal conditions for new companies and Technology Park Adlershof – already home to 1,000 companies – is one of the leading technology locations in Europe.

A Smart City of New Ideas and Open Data System

A city worth living in, Berlin is open to experimentation. This is why the city has evolved into one of Europe’s most important start-up metropolises. With its applications and services, the digital industry is a key driving force of technological development. Young, innovative companies from Berlin attract the world’s attention and successfully establish themselves in the market. Inspired by urban life, they deliver solutions for intelligent networking in all areas of life. Since 2011, the state of Berlin has been providing companies, organizations and citizens with access to public data through its Open Data Portal. Over 791 data sets are now available for research and app development, and the number is rising. The spectrum ranges from the list of books burned in the 1930s and data on the power supply network to social structure data from the healthcare reporting system. One example is the “Bürger baut Stadt” application, which makes it easier for citizens to participate in building projects and plan approval procedures. Berliners can also track the movement of various means of transportation online, in real time.

City of Electro-Mobility

Today, the capital region is a pioneer in innovative, sustainable mobility. It is the largest practical laboratory for electro-mobility in Germany. Ranked no. 1 among all German cities, Berlin has the most vehicles and projects, and the largest public recharging network. The projects cover an extensive spectrum of possible applications: from private transportation and ecar-sharing fleets, public transportation and company fleets to freight transport with electric trucks, vans and bikes(
Berlin Partner for Business and Technology supports growth and innovation in Berlin.



JAPAN: Contribution to Smart City Projects Abroad

The New Energy and Technology Development Organization (NEDO80) is the representative of the METI abroad for Smart City projects. Similar to the NEPC, it is the authority holding the funds and therefore has the necessary power for negotiating with foreign LGs and companies at the planning phase of the project. The main comparative advantage of the package proposed by the NEDO lies in the advantageous financial plan: the Japanese government draws on the METI budget and subsidizes most of the technology provided by the Japanese firms of the consortium, leaving municipalities with the cost of operation and maintenance once implementation is over. Japanese firms have also been successfully seeking opportunities to get involved in Smart Community projects on their own. Whether Japanese businesses are supported by the NEDO or not, the objective of companies is to showcase their technology and to increase their global market share of Smart City services and solutions.

Smart Community projects in cities without sufficient infrastructure

Many of Japan’s neighbours do not have an equivalent power grid or urban infrastructures. The population also tends to be younger, resulting in a market different from Japan’s. The Smart Community model needs to be adapted. However ICT is growing in all markets and the NEDO assiduously looks for opportunities for Japanese firms to be involved in Smart City projects in Asia. In January 2011, the Vietnamese Ministry of Industry and Trade made a Cooperative Agreement with the NEDO to promote collaboration activities on Smart Community technology between the two countries81. In July 2013 a Memorandum of Understanding (MOU) was signed between the NEDO and the Ministry of Energy and Mineral Resources of Indonesia to confirm the mutual interest to build a Smart Community in Suryacipta City of Industry.
Another large market with opportunities for Smart City development is China. As early as January 2011, the NEDO, the National Development and Reform Commission of China and the Beijing Municipal Development and Reform Commission concluded a MOU for a demonstrator of Traffic Information System. And in June of the same year, a collaborative project of Smart Community was initiated in Gongqin. The NEDO is also conducting talks with Russia, where Energy Dialogues have been initiated with the government for a possible Smart Community project that might take place in Sestroretsk. The large natural resources of Russia are an asset for energy scarce Japan. Hitachi and Panasonic are two active firms which take part in Smart Community projects without the contribution of the NEDO. Both are involved in the Chinese project in Dalian for instance. Toshiba is especially involved in no less than 11 Smart Community initiatives in Asia:
- In China: Gongqing “Smart Community”, Tianjin “Environmental City”, Guangzhou Nansha Development Zone “Smart City feasibility study”, Jinzhou “Smart Community”, Dongying and Wenzhou “eco-city”
- In India: Manesar and Haryana Industrial Areas “Cogeneration Projects”
- In Vietnam: Hanoi “Software Technology Park”, Ho Chi Minh “Bason District Redevelopment”
- In Thailand: Amata Science City “Advanced Industry Integrated City”
- In Malaysia: Putrajaya “Green Township”

Benchmarking and Analysis

Benchmarking of Smart Cities is still at an early stage of development and are not entirely reliable. So far, the research conducted did not identify a specific Japanese benchmarking system of the projects. There may be a ranking that is available in Japanese only, but of now no mention of it was found. However the Japanese government regularly evaluates most projects: the METI monitors the pilots it subsidises, as it checks that requirements are fulfilled and targets are reached by the companies of the consortium. Besides, Japanese academic research on Smart Communities provides good insight on the project details, even though systematic benchmarking is not performed. Below given several types of benchmark initiatives used worldwide are listed:

- Company assessment framework, such as IBM’s “Smarter city assessment tool”: developed as a service to municipalities, it is described as the first step for the development of a comprehensive city strategy
- Independent expert ranking, such as Boyd Cohen’s Smart City Wheel: based on the six factors of the 2007 report on EU Smart Cities, the ranking uses a simplified panel of indicators with only 27 criteria relating directly to sustainable development (for example the number of start-up companies and the total energy consumption)
- Private institutes specific benchmark for instance IEEE’s “Benchmarking Internet of Things Deployment in Smart Cities” : the framework was released in 2013 and relies on seven factors (available on their website)
- International Standard Organisation “Smart Community Infrastructures”: the Secretariat ISO/TC 268/SC 1 published a first standard ISO/TR 37150 in 2014 and is now working on the elaboration of metric standards (ISO/DTS 37151); the Secretary and Chairperson are Japanese nationals
- Public institution success evaluation as in the 2014 report “Mapping Smart Cities in the EU”: commissioned by the European Parliament, the study defines successful Smart Cities as initiatives meeting their objectives and contributing to Europe 2020 targets.



The Importance of Smart Cities in India

India’s is urbanizing at an unprecedented rate, so much that estimates suggest nearly 600 million of Indians will be living in cities by 2030, up from 290 million as reported in the 2001 census. With about 30 village dwellers moving every minute from villages to become city dwellers, not many villages will be left India at the end of this century. Today’s cities face significant challenges – increasing populations, environmental and regulatory requirements, declining tax bases and budgets and increased costs. Citizens are increasingly getting instant, anywhere, anytime, personalized access to information and services via mobile devices and computers. With increasing urbanization and the load on rural land, the government has now realized the need for cities that can cope with the challenges of urban living and also be magnets for investment. The announcement of ‘100 smart cities’ falls in line with this vision. Alongside the hordes of Indians go the jobs and the money as well: a McKinsey Global Institute study estimated that cities would generate 70% of the new jobs created by 2030, produce more than 70% of the Indian gross domestic product and drive a fourfold increase in per capita incomes across the country.

Major Instruments of a Smart City

There are several instruments that facilitate the development of a Smart City. These are:

-Use of Clean Technologies: As per the WHO report, Indian cities are amongst the most polluted in the world, creating severe health hazards. The trend needs to be reversed by promoting the use of clean technologies that harness renewable materials and energy sources and have a lower smaller environmental footprint. In smart cities buildings, transport and infrastructure should be energy efficient and environmentally benign.

-Use of Information and Communication Technology (ICT):The extensive use of ICT is a must and only this can ensure information exchange and quick communication. Most services will need to be ICT enabled, and this often helps reduce the need for travel. The ability to shop on-line or book tickets online or converse online are very powerful ways of reducing the need for travel, thereby reducing congestion, pollutants and energy use.

-Participation of the Private Sector: Public Private Partnership (PPP) allows Government to tap on to the private sector’s capacity to innovate. Greater involvement of the private sector in the delivery of services is another instrument as it enables higher levels of efficiency (this should be the prime motive for using the private sector rather than just tapping financial resources).
Citizen participation: Citizen consultation and a transparent system by which citizens can rate different services is yet another instrument for improving performance. Making these ratings openly available for public scrutiny creates a powerful incentive for improved performance and a disincentive for poor performance.

-Smart Governance: The existing Government setup in the Urban Local Bodies (ULBs) is rather fragmented with each department working in silos. The result of this is lack of coordination which is reflected in the form of poor services to the citizens. Therefore, for cities to become smart, it is essential that the governance structure is also smart. Therefore, ULBs would need to make effective use of ICTs in public administration to connect and coordinate between various departments. This combined with organizational change and new skills would improve public services and strengthen support to public. This will mean the ability to seek and obtain services in real time through online systems and with rigorous service level agreements with the service providers.


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