A new white paper co-sponsored by the United Parcel Service and the Consumer Technology Association holds a number of sobering but intriguing revelations for would-be smart cities — among them the finding that Asia, not the U.S., is likely to become a center of smart city innovation.
But in a determination a UPS representative said he finds significant, the report finds would-be smart cities must stay committed, collaborative and consistent, and emphasize community in order to thrive.
The number of smart city projects around the world is unquestionably on the rise, according to The Evolution of Smart Cities and Connected Communities, a white paper tipped in early January at CES 2017 and made available to Government Technology the following month.
UPS has been a part of that intelligent evolution since 2008 when it began installing GPS tracking equipment and sensors on its “package cars,” the company name for the famous brown trucks.
Globally, smart city projects rose more than 38 percent over three years, from 170 at the end of 2013 to more than 235 in 2016. The value of that market is growing too, naturally, from $14.85 billion in 2015 to an estimated $34.35 billion by 2020 — a compound annual growth rate of more than 18 percent.
“With 70 percent of the world’s population forecast to live in cities by 2050, the need for sustainable, livable world cities is essential for a prosperous future,” the report’s authors wrote.
The report emphasizes early on that a smart city needs to have a “data-based infrastructure system” — but that it must also integrate other city functions including energy, buildings, health care, services and citizen involvement.
Smart cities’ ultimate promise, its writers conclude, is “data being used as an improved input for better processes and decision making.”
But, they point out, most would-be smart cities have smart blocks or corridors — “not a fully realized ‘smart city’ implementation at this time.”
The smart city concept “isn’t well-known among laypeople,” the authors noted, citing an April 2016 study from Frost & Sullivan, and adding, “no individual with less education than a high school diploma said that he or she had ever heard of the term … .”
And while smart cities are developing from India to Europe and nationally from San Diego to New York City — with 77 cities competing in last year’s federal Smart City Challenge, the report found “Asia is a likely center of smart city innovation,” due to urban needs, tech readiness and government support.
Citing a BMI Research report from 2016, the report noted urbanization in China and India rose to 65 percent and 37 percent respectively last year, up from 56 percent and 33 percent respectively in 2015. Singapore, meanwhile, aims to be the world’s first smart nation — leveraging one of the world’s highest mobile and broadband penetration rates.
Asia is further ahead on smart cities, the authors noted, pointing out China has established 285 pilots and India is planning 100 new smart cities and overhauling 500 others to make them smart.
David Roegge, UPS’ director of high-tech segment marketing, who mentioned the report’s impending release at the recent consumer electronics show, told GT that finding wasn't a surprise to him.
“I’d still say in terms of the U.S., we’re still at a test and learn and pilot stage. There was a lot of increased activity in 2016 on that front,” Roegge said, citing a quote in the survey from an unnamed Kansas City innovation officer who also agreed.
The innovation officer — identified by GT as Bob Bennett, chief innovation officer for Kansas City, Mo. — said in the report that no such thing as a smart city exists because “you don’t have sufficient dispersion into any city population to where the data can be fully extrapolated.”
He confirmed this in an interview — noting his own city has implanted smart sensors in just two of its 318 square miles.
Cities must do two to three things to move from cool to smart, Bennett said: Use data to inform their decision-making; deploy enough sensors to accurately apply what’s learned to the whole city; and get buy-in from the city’s entire ecosystem, from community groups to private utility companies.
“Twenty-five years from now, these will just be called cities. The ‘smart’ bit will be assumed. My goal as a CIO is to ensure as we are building out, doing maintenance on all these conditions,” Bennett said. “For us, the transportation system was an easy way to do this because we have more square miles of road network per capita than any other city in America.”
Another significant hurdle for U.S. cities, Roegge said, is their age and legacy infrastructure — a roadblock to getting smart.
“In some of the Asian areas, India for example, they don’t necessarily need to overhaul their infrastructure, so that gives them an advantage on the speed side,” Roegge said.
George Karayannis, vice president of CityNow, the smart city arm of Panasonic — which has an operations hub for its Denver division as the anchor tenant at Denver smart city Peña Station Next –– agreed after reviewing the report.
The new Asian cities have the potential to be truly smart cities, Karayannis said via email.
“But,” said Karayannis, “that will depend on how they are planned, implemented and managed — too early to tell as ‘business as usual’ is a very powerful draw, and the creation of a smart city or community requires a much different approach … .”
The drivers for smart cities include desires to reduce waste and re-allocate underused resources; reducing the frustrations associated with urban living (often, traffic congestion); creating early warning systems for disasters like earthquakes, floods, storms and infectious diseases; and raising revenues.
The report notes that the smart city/community concept promotes a specific vision of modern urban development — one that acknowledges the importance of IT in economic competitiveness — but Roegge said that while he agrees, the underlying issue is unquestionably quality of life.
“It has to be what’s most beneficial and useful for the citizens, and the citizens have to have a voice in it,” he said, highlighting the report’s recommendations cities commit at their most senior levels to becoming smart; collaborate with stakeholders, agree on a consistent vision and hear from community members.
“If it’s not something that’s benefiting the citizens, it’s not something that’s worthwhile,” he added.
Since 2009, UPS has invested more than $750 million in alternative fuel and advanced technology vehicles and fueling stations around the world — including in the North Corridor, Atlanta’s so-called “smart corridor” project.
The company has an annual technology budget of more than $1 billion and uses the data it collects through sensors and GPS to reduce fuel costs and emissions.
In Portland, Ore., the eBike, an electrically assisted delivery bike based on a 2012 pilot in Hamburg, Germany, debuted in November, part of a fleet of more than 7,700 low-emission vehicles.
Elsewhere, in the U.S., UPS fields electric and hybrid electric vehicles whose drivers run On-Road Integrated Optimization and Navigation (ORION), which uses fleet telematics and algorithms to help them optimize delivery routes to save time, fuel and distance. ORION saves the company more than 1.5 million gallons of fuel annually.
UPS's work in Atlanta, home to its headquarters, is broadly analogous to the work Kansas City’s major “smart” partners like AT&T, Cisco and others have done to collaborate with the public sector.
That contrasts, Bennett said, with India — where the federal government has a $20 billion budget it invests in smart cities.
“Our corporate partners are taking on some of that risk with us. Because of that, we are all rowing together to make this thing work,” Bennett said.