U-City e-Report

January, 2012 Vol. 1

ⓔ-interview l Academic Column l Methodology Series

Publisher Park Yang-ho

Editor Kim Kirl

Editorial Committee Yi Misook Sung Hyejung Kim Soyeon Kwak Sujung

Copyright © January 2012

Korea Research Institute for Human Settlements (KRIHS)

254 Simin-daero, Dongan-gu, Anyang-si, Gyeonggi-do, 431-712, Korea

TEL 82-31-380-0114

FAX 82-31-380-0470

「U-City e-Report」 is the newsletter

produced and published by KRIHS to

discover and spread the main issues of

the future city based on global mega-

trend analysis, and the outcomes of the

[4-1-1] project of U-Eco City R&D Con-

sortium, “The Analysis on U-City Trends

and the Research on Strategic Develop-

ment of Future Space Technology.”

The content of this newsletter should

not be reproduced or distributed with-

out the prior permission of the KRIHS.

References should be made to the out-

comes of the U-Eco City R&D Consor-

tium when presenting the contents of

any articles in this publication.

CONTENTS

04 ⓔ-interview Smart City - The Way Forward

10 Academic Column Research Trends on U-City Index

22 Methodology Series

Understanding Research Methodology

Implications for Promoting Korean U-City

from the Perspective of Systems Thinking

U-City e-ReportJanuary, 2012 Vol. 1

01U-City e-Report

Introduction

Marc Wolfram (IOER) The IOER (Leibniz Institute of

Ecological Urban and Regional Development) is the larg-

est research institute for spatial development issues in

Germany. It is an independent, non-profit organisation

and member of the Leibniz Association. Research at the

IOER addresses policies, strategies, methods and tools

for sustainable and resilient spatial development across

scales – from local to European. In his position as a se-

nior researcher at the Department of Strategic Issues

and Perspectives, he is responsible for the discovery and

assessment of new research fields and overall research

programming. His work addresses the initiation and gov-

ernance of urban systemic change towards sustainability,

in particular related to the usage of ICT and in the fields

of energy and mobility.

ⓔ-interview

Smart City - The Way Forward

ⓔ-interview

U-City e-Report 4

Smart City - The Way Forward

● Jaeyong Lee(‘Lee’): IOER has been implementing various ICT projects. Please tell us IOER's major

ICT projects briefly and what is the most interesting project of you?

● Marc Wolfram(‘Wolfram’): The different roles of ICT in sustainable urban development are a

key concern of research activities at IOER. Key projects in this domain are for instance:

•�INTELCITY (EU FP5, 2002-03) addressed future requirements for integrated urban information sys-

tems and developed a strategic roadmap for research.

•�INTELCITIES (EU FP6 2003-06) developed and demonstrated an integrated open system city plat-

form for provision of multiple services (e.g. land use planning, urban regeneration, mobility)

•�GENIUS (2008-10) explored the development of local Spatial Data Infrastructures (SDI) and related

planning applications in Germany, identifying actor strategies and alternative future pathways;

•�NICE (2011-14) investigates the emergence, design and implementation of ICT policies for energy

efficiency and decarbonisation in cities across Europe, developing guidance and tools for practitio-

ners, thus supporting the “Green Digital Charta” (http://www.greendigitalcharter.eu/).

IOER has also developed and operates the innovative and interactive web-based Monitor for Spatial

Development in Germany, launched in 2010 (www.ioer-monitor.de).

● Lee: Intelligent city (including high-tech city, smart city, U-City in Korea, etc.) based on ICT technolo-

gies attracted large attention of many countries. 'U-City in Korea', 'MSC in Malaysia', 'cyberport in

Hong Kong' can be the example of Intelligent city projects in Asia. Can you please explain current

progress and current situation of intelligent city projects in Europe?

● Wolfram: While the concepts of “intelligent city” and “smart city” have been virulent in Europe

for over a decade now, the turn towards more holistic attempts of implementation is still rather

recent. Since 2009, the European Commission has issued a number of calls in different funding

programmes under the heading of “smart cities”. The focus is on the innovative use of ICT for en-

hancing decarbonisation and energy efficiency, and on open innovation approaches for creating

urban platforms and a variety of services in support of sustainability. Underlying this development

are a number of drivers that have gradually created a favourable context for local smart city initia-

tives to emerge. This includes in particular: a) EC directive for creating a pan-European Spatial Data

Interviewer Lee Jae Yong

Ph.D., in Geography, Associate Research Fellow, KRIHS, leejy@krihs.re.kr

January, 2012 Vol. 1

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Infrastructure (INSPIRE), fostering harmonisation and requiring Member States to adopt correspond-

ing regulations and initiatives, b) Cumulation of local activities for open innovation, leading to the

formation of the European Network of Living Labs (ENoLL), c) Diffusion of an “open” philosophy

addressing data and software (open source), d) Smart City initiatives launched by industry (e.g. Cis-

co Systems, IBM, Siemens) providing funds and/or know-how for large-scale demonstration of key

applications such as smart grids, smart metering, open platforms, etc. These drivers have become

interlinked. Across Europe, there are however major disparities in terms of take up of smart city

initiatives. While pioneering cities like Helsinki, Manchester, Barcelona, Amsterdam or Hamburg are

well advanced in this respect, many others are still only dealing with individual applications.

● Lee: Based on the previous question, Are there different characteristics of projects by businesses?

● Wolfram: Policy-driven “smart city“ initiatives are strongly focused on grand societal challenges i.e.,

climate change, resource scarcity, social inclusion. Therefore, application fields are primarily derived

from these with a view to maximising impact. In turn, private sector driven projects primarily aim to

open up new markets and therefore address the broadest possible field of applications. While the

application spectrum obviously diverges, there is however a shared concern for methodology either

with an emphasis on enabling societal transformations or on product/service innovation.

● Lee: Can you tell us "INTELCITIES project"? Is this project has any difference from other country's

project?

● Wolfram: The INTELCITIES RTD project was pioneering the concept of an open platform for urban

services. However, at the time of project completion, most cities in Europe were not yet ready to ac-

tually implement such platforms. Meanwhile, conditions have changed substantially, and the parallel

developments linked to INSPIRE, LivingLabs, Open Data, Smart Cities and global harmonisation (OGC,

ISO) have paved the way for a change in practice. Hence, we now see how many cities are creating

such platforms, even going beyond INTELCITIES.

● Lee: What are problems to implement smart city projects in Europe and how to solve these prob-

lems? Please give some examples of policies or other ways to solve problems.

● Wolfram: In Europe, key problems are usually of a non-technical character and need to be ad-

dressed by designing planning approaches that are highly sensitive to the specificities of socio-tech-

nical system transformations. Smart city projects require multiple actors to adapt their cognitive and

normative frameworks, as they are challenging existing institutions, question established practices

and routines, and often raise severe privacy and security issues. In addition, funding is critical as

many cities struggle with the impacts of the financial crisis and related uncertainties. Hence, impor-

tant levers can be seen in the planning and development methodologies used as well as the public

and private business cases identified. From a policy perspective, also translocal networking, knowl-

edge transfer, R&D and guidance are crucial to gradually exploit emerging synergies.

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ⓔ-interview

U-City e-Report 6

● Lee: Let me change topics to focus on Korean U-City projects. I heard that you are interested in

Korean U-City projects. Are there any Korean U-City projects which you have participated in? Do

you have any Korean U-City projects you are interested in?

● Wolfram: No involvement so far. IOER is particularly interested in smart city re-developments, i.e.

projects deployed in existing urban areas regarding comparability with Europe, and projects that

imply a strong focus on environmental performance and sustainability (i.e., “green & smart city”).

Furthermore, we are equally interested in the policy framework created for implementation and the

comprehensive conception of smart cities this implies (regulation, standards, system of plans, guid-

ance) - for this is clearly unique at global level.

● Lee: Korea has been developing 37 areas with U-City titles since 2008. Korean government also en-

acted laws and guidelines about U-City (such as 'Act on Ubiquitous City Construction', 'Guidelines of

Ubiquitous City Plan', 'Guidelines of Ubiquitous City Infrastructure Management', etc. which contained

central and local government roles and guidelines of U-City planning and management). Are there any

legal systems about smart cities in Europe or Germany? Are there any problems of legal systems?

● Wolfram: At present, there are no signs of emerging top-down policy approaches under the head-

ing of “smart city” in Europe. However, there are a number of relevant regulatory interventions and

efforts for creating enabling frameworks at European, as mentioned above.

● Lee: There are a lot of emerging problems during implementing U-City projects such as service

standard problems, privacy and security problems, securing fund problems to manage U-City, coop-

eration problems among ministries. Do you have opinions or ideas to solve these problems? Please

suggest the desirable direction to overcome U-City practical problems.

● Wolfram: In the Korean context, it seems to be an interesting question in how far the chosen

rationalist top-down approach to planning and implementation is able to deal with some of the

intrinsic and structural problems of “smart city” development. Traditional civil engineering and ur-

ban development projects have often failed to consider the ecologic, social, economic and political

constitution and prerequisites of cities. The conception of “smart cities” has raised the bar here, for

their development requires to deploy ICT for an integrated handling of all of these issues, enhancing

sustainability and its governance.

● Lee: I heard that you are interested in ecological problems. Are there any link points between U-

City concepts and ecological concepts?

● Wolfram: Since the “Smart2020” study (Climate Group 2008) has first quantified the potential

of ICT to reduce global carbon emissions, the hypothesis of a positive correlation between environ-

mental benefits and growth in the ICT sector has been widely embraced. However, the assumptions

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made are subject to complex multil-level societal negotiation processes, the outcomes of which are

rather difficult to predict. Hence, smart cities can be seen as a crucial field of experimentation where

the diverse potentials of ICT for enabling transformative change, for sustaining ecosystem services

from global to local levels, and for enhancing adaptive capacity (resilience) need to be explored,

while also addressing trade-offs for implementation and the emergence of negative feedback loops

and effects of overcompensation (e.g., ICT footprint).

● Lee: Please tell us what the core values of Korean U-City is.

● Wolfram: Judging from my insight so far, the value of the Korean U-City approach lies especially

in a) the comprehensive approach taken, radically applying ubiquitous ICT to all aspects of urban

development, b) efforts to reconcile economic growth with social and environmental goals, c) an

outstanding capacity for implementation based on a strong position of central government, large IT

and development companies.

● Lee: I heard that you want to enlarge networks and to co-work with U-City related Korean organi-

zations. What is the plan of you and IOER to enlarge networks?

● Wolfram: IOER has maintained an active exchange with Korean research organisations for several

years already. As part of its international cooperation strategy, the institute would like to intensify

this cooperation through joint research projects and has selected “smart cities” as a strategic topic.

IOER is therefore ready to work with the KRIHS and other Korean partners on common priority is-

sues. Moreover, considering previous bilateral co-funding experiences, current policy contexts and

the state of the art in research, prospects for funding acquisition are very positive.

● Lee: Please give your impression of the U-City World Forum which you were participated in.

● Wolfram: In my view, the Forum was professionally organised and provided an excellent opportu-

nity to foster exchange between Korean actors engaged in U-City development and other interna-

tional stakeholders dealing with various smart/intelligent city issues. The discussions illustrated that,

while there are still significant gaps of awareness on either side, this offers opportunities for a fruitful

dialogue that now needs further structuring, as well as broader international participation. The logi-

cal step for the next Forum would thus be to develop a joint agenda that takes up the priority issues

of stakeholders globally and relating these to the specific Korean approach and expertise, thereby

seeking to establish an own profile among the various established international events dealing with

smart city issues. On the downside, while co-organisation with the Incheon partner city meeting of-

fered a very interesting potential for discussing smart city concepts in different contexts, this has not

really been exploited.

● Lee: Thank you for your valuable advices.

02Research Trends on U-City Index

Academic Column

U-City e-Report

U-City Index Development

The [4-1-1] project of U-Eco City R&D Consortium “The Analysis of U-City

Trends and the Research in Strategic Development of Future Space Technol-

ogy” was developed to navigate the strategic orientation of the U-City with

the focus on forecasting the rapidly-changing future technology and global

megatrend analysis. The goal of this project is to provide a strategic blueprint

for the U-City by analyzing the current status of available technology.

KRIHS Researchers have made various efforts to reach the aforementioned

goal and as a part of these continuing efforts, this academic column has been

created to provide the blueprint for the U-City by using a future research

framework. The current edition features articles on the research and develop-

ment of the U-City Index, as well as commentaries and editorials that focus on

the status of available technology. These research results will be used to ana-

lyze the current U-City technology in various aspects with the application of

the future research framework featured in the previous edition. Through such

a process, this academic column is intended to provide a strategy for develop-

ing future space technology with a focus on policy, technology, and industry,

as well as spreading the ideas and reaching an agreeable conclusion among all

concerned parties.

The next edition will feature an analysis of the current technology needed for

actualization of the U-City centered on the current technology, urban space,

and cultural and societal environment based on the future research frame-

work. It is expected that this analysis will provide an evaluation of the current

status of the necessary technology needed for development of the U-City on a

global scale.

Academic Column

U-City e-Report 10

1. Background and Goals

●U-City is a future city where ubiquitous technology is integrated into urban space

▶ Designed to efficiently manage the city by providing necessary information to its residents immedi-

ately upon request and to provide the urban space plan which will maximize convenience

●��Previous management plans for the U-City failed to provide a strategy that enabled one to

show any outcomes. In addition, the individual plans had a tendency to focus on ideal situations

▶ There is no existing system which would show or evaluate the status of the U-City development

despite the efforts made by each local government to contribute to the smooth functioning of the

U-City and to improve the quality of life

▶ In addition, previous U-City plans had a tendency to focus on ideal situations although there are

fundamental differences between the research and the applicability of its results in real life

▶ The existing U-City plan did not provide an applicable method to evaluate the city management

after development

●�The U-City competitiveness index, which will be updated and published annually, was devel-

oped to overcome the aforementioned limitations with the hope that the evaluation of the

competitiveness of the U-City will be carried out in a more reasonable and objective fashion

in the long run

▶ The index will be one that is agreeable to residents and accurately reflects the satisfaction felt

among the residents in the U-City

▶ Rather than providing the ideal model of the U-City, the goal is to provide specific examples to lo-

cal governments that can be utilized to develop U-Cities that will reflect regional characteristics

▶ The ultimate goal is to promote shared growth of the U-Cities through efforts to improve the com-

petitiveness of each one

2. Scope of Research

●�“Ubiquitous City” is defined as the city which provides ubiquitous service by using ubiqui-

tous urban technology according to the “Act on Ubiquitous City Construction”

Research Trends on U-City Index

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▶ Here, ubiquitous urban technology means the fusion of construction and ICT developed to provide

ubiquitous service by laying down ubiquitous infrastructure

●�As a part of this research, a study on the ICT index will be conducted, in addition to that on

the U-City related index

3. Research Trends in the Existing U-City Index

3-1. U-City Related Index

●�Current research on the U-City index includes 「Smart Cities: Ranking of European medium-

sized cities」 at Vienna University of Technology(TU Wien), 「Smart City Index & Development」

by Taipei City, and 「Intelligent Community Indicators」 by Intelligent Community Forum(ICF).

The details are as follows:

< Definitions and Concepts of the U-City Index >

●�「Smart Cities: Ranking of European medium-sized cities」 conducted by TU Wien selected and

provided indices for 70 medium-sized European cities based on their population (0.1~0.5

million), presence of a college/university, and urban population (under 1.5 million)

▶ Smart City is defined as a city where all six characteristics of smart economy, smart people, smart

governance, smart mobility, smart environment, and smart living are well developed

▶ TU Wien analyzed 74 indices according to 31 factors, which were in turn based on the aforemen-

tioned six characteristics. Each index was then standardized by using z-transformation

▶ A city profile was provided for each city based on the standardized information from the z-trans-

formation (±3.0z)

Field Research (Organization) Definitions and Concepts

U-City

Smart Cities: Ranking of European medium-sized cities (TU Wien)

TU Wien defines the components of a Smart City as industry, edu-cation, participation, and technical infrastructure. TU Wien hierar-chically organized these components using six characteristics, 31 factors, and 74 indicators to rank medium-sized European cities

Smart City Index & Development (Taipei III)

Taipei III has devised a Smart City Index, which defines the ele-ments of a Smart City as smart environment, smart economy, smart citizens, smart service, and smart government. Based on these ele-ments, the competitiveness of Taipei as a Smart City is quantified by using 39 indices

Intelligent Community Indicators (ICF)

ICF defines an Intelligent Community as a community competitive in broadband economy. To improve its competitiveness, the community must satisfy broadband connectivity, knowledge workforce, digital inclusion, innovation, marketing and advocacy

Academic Column

U-City e-Report 12

●��Smart City Index & Development was conducted by Taipei III (Institute for Information In-

dustry) in an effort to make Taipei a competitive Smart City

▶ This research regards the Smart City as consisting of five dimensions, which include smart environ-

ment, smart economy, smart citizens, smart service, and smart government

●��For each dimension, three pillars were assigned and indicators were selected for each to enable

hierarchical analysis

▶ 39 indicators more closely related to the Smart City Index were selected among preliminarily-select-

ed 68 indicators

< Analysis Structure > < City Profile (example) >

< Analysis Structure of Smart City >

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▶ Collected data were used for analysis after the process of standardization, and each of the five di-

mensions was given an equal weight of 20 percent

▶ Results were used in ICT Application Strategy and Industrial Clusters & Urban Renewal Plans of Taipei City

●�ICF (Intelligent Community Forum) aimed to develop Intelligent Community Indicators

which could be applied to any kind of community regardless of its size

▶ Intelligent Community was defined as a community competitive in broadband economy. In order

to increase its competitiveness, the community should satisfy broadband connectivity, knowledge

workforce, digital inclusion, innovation, marketing and advocacy

▶ Collaboration, leadership, and sustainability should also be satisfied to make the Intelligent Com-

munity a successful one

▶ Unlike the previously-mentioned indices, each region must apply to participate in this program and

those that meet the criteria will be awarded the "Smart 21.” Seven communities among the “Smart

21” are then selected as the “Top Seven Intelligent Communities,” and the most competitive com-

munity among these seven communities receives the honor of being named “Intelligent Commu-

nity of the Year”

▶ In Korea, Seoul City (2002), Gangnam District in Seoul (2008), and Suwon City (2010) previously

received the honor of being named the “Intelligent Communities of the Year”

< Factors of Intelligent Community Indicators >

Academic Column

U-City e-Report 14

3-2. ICT Related Index

●�Much research has been conducted on the competitive index in ICT industry. Thus, many in-

dices from various organizations could be found

●�The indices below are recognized globally and have been cited the most frequently among

others

< Major Contents of the ICT Index >

●�Until 2007, International Telecommunication Union(ITU) announced Information Communi-

cation Technology Opportunity Index(ICT-OI) and Digital Opportunity Index(DOI) separately

but after much discussion with ITU member countries and experts, it began announcing ICT

Development Index(IDI), a combination of ICT-OI and DOI, in 2009

▶��IDI has been adopted as the official Index by the World Summit of Information Society (WSIS) and

recognized worldwide as it was developed by using official data published by OECD, UNCTAD, and

UNESCO

FieldTitle

(Research Institute) Major Contents

U-City

ICT Development Index (ITU)

The ICT Development Index (IDI) is a composite index developed by ITU (Interna-tional Telecommunication Union) combining 11 indicators into one benchmark measure that serves to monitor and compare developments in ICT in 154 countries

Network Readiness Index

(WEF)

The Network Readiness Index (NRI), developed by the World Economic Forum (WEF) and INSEAD in France, measures both the ICT readiness and competitive-ness of each country

Global Competitiveness

Index (WEF)

The Global Competitiveness Index (GCI) is a comprehensive tool that measures the microeconomic and macroeconomic foundations of national competitive-ness through 3 sub-indices, 12 pillars, and 110 indicators

E-readiness rankings (EIU)

The Economist Intelligence Unit (EIU) and IBM evaluate e-readiness in each coun-try, based on six pillars of connectivity & technology infrastructure; business en-vironment; social & cultural environment; legal environment; government policy & vision; and consumer & business adoption

IT Industry Competitiveness

Index (EIU)

The Economist Intelligence Unit (EIU), sponsored by the BSA (Business Software Alliance), evaluates ICT industry competitiveness in 66 countries and announces its IT Industry Competitive Index annually

World Competi-tivenessYearbook

(IMD)

The World Competitiveness Yearbook has been published annually since 1989 by the International Institute for Management Development (IMD). It assesses and an-nounces the competitiveness of nations through four main factors which are eco-nomic performance, government efficiency, business efficiency, and infrastructure

e-Government Readiness Index

(UN)

The UN Department of Economic and Social Affairs assesses e-government readiness in countries through the web measurement index, telecommunication infrastructure index, and human capital index

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▶��IDI consists of three components such as ICT access, use, and skills, and 11 indicators, as listed be-

low. Each of the indicators is used for analysis after being normalized, rescaled, and weighted

< Indicators included in the ICT Development Index >

▶��South Korea has been ranked first among all countries considered in 2011

●�The Network Readiness Index (NRI) has been announced annually by the World Economic

Forum (WEF) since 2002. The NRI is comprised of three sub-indices that evaluate the envi-

ronment for ICT, in addition to the readiness and usage of the main stakeholders, with a

total of nine pillars and 68 factors

▶���As with IDI, components of the quantitative data collected are only those that are internationally-

recognized (a total of 27 variables)

▶���In terms of qualitative data collection, data from the “Executive Opinion Survey” are used (41 vari-

ables)

▶���Each sub-index is composed of three pillars and all three are weighted equally (33 percent)

▶���The sub-indices, readiness and usage of main stakeholders, are evaluated separately based on

characteristics/settings of the research populations (e.g., individual, business, or government)

Components Weight Indicators

ICT Infrastructure and access indicators

40

Fixed-telephone subscriptions per 100 inhabitants

Mobile-cellular telephone subscriptions per 100 inhabitants

International Internet bandwidth (bit/s) per Internet user

Percentage of households with a computer

Percentage of households with Internet access at home

ICT use

indicators 40

Percentage of individuals using the Internet

Fixed-broadband Internet subscriptions per 100 inhabitants

Active mobile-broadband subscriptions per 100 inhabitants

ICT skill

indicators 20

Adult literacy rate

Secondary gross enrollment ratio

Tertiary gross enrollment ratio

Academic Column

U-City e-Report 16

< Indicators included in NRI >

●�The Global Competitiveness Index assessed by the World Economic Forum (WEF) defines na-

tional competitiveness as policy, system, and infrastructure that enable continuous economic

growth and long-term prosperity. WEF evaluates national competitiveness through three

main categories, which are basic requirements, efficiency enhancers, and innovation and so-

phistication factors, as well as 12 pillars and 110 indicators

▶���Not all of the indicators are related to the ICT, however. The eight indicators regarding Technology

Adoption Readiness under Efficiency Enhancers correspond to ICT and account for 8.5 percent of

the whole

▶���The quantitative data are taken from ICT and qualitative data are derived from the survey commis-

sioned by the associated organization of each country (KAIST in Korea)

< Major Contents of the Global Competitiveness Index >

▶���The e-readiness Index was developed and has been published annually since 2000 by the Economic

Intelligence Unit (EIU) and IBM to assess how the nations with advanced ICT industry use ICT

▶���The e-readiness Index comprehensively assesses six sub-indices including connectivity and tech-

nology infrastructure, business environment, social and cultural environment, legal environment,

Subindexes Pillars (number of variables)

Environment (33%) Market environment (14 variables), Political and regulatory environment (9 variables), Infrastructure environment (7 variables)

Readiness (33%)Individual readiness (9 variables), Business readiness (10 variables), Government readiness (4 variables)

Usage (33%) Individual usage (5 variables), Business usage (5 variables), Government usage (5 variables)

Division Weight Major Contents

Technologyadoption readiness

17%

Expert SurveyAvailability of latest technologies, Firm-level technology absorption, Regulations regarding ICT, and FDI and tech-nology transfer

ITU The numbers of Internet users, Broadband internet sub-scriptions, Internet bandwidth, Fixed telephone lines, and Mobile telephone subscriptions

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government policy and vision, and consumer and business adoption. Each sub-index is weighted

differently

▶���Thirty-five sub-categories belong to the six sub-indices and the final index is calculated based on all

of the factors

< Indicators of the E-readiness Index >

▶���The quantitative data for each sub-index are mainly collected from EIU, Pyramid Research, World

Bank, United Nations, and WIPO. The qualitative data are collected by regional experts of EIU

▶���Note that the sub-indices are clearly indicated but the 35 sub-categories are not indicated in the

original report

●�The IT Industry Competitiveness Index by EIU measures each nation’s competitiveness on IT

via evaluation of overall business environment, IT infrastructure, human capital, R&D envi-

ronment, legal environment, and support for IT industry development

▶���Data from ITU and IDC are used for quantitative indices, and data from EIU database are used for

qualitative indices

▶���More weight is given to the qualitative indices than the quantitative indices, with the ratio being

41:59

Sub-Indices Weight Category Criteria

Connectivity and technology infrastructure

20%Broadband penetration, Broadband quality, Broadband affordability, Mobile-phone penetration, Mobile quality, Internet user penetration, etc.

Business environment 15%Overall political environment, Macroeconomic environment, Market op-portunities, Policy towards private enterprise, etc.

Social and cultural environment

15%Educational level, Internet literacy, Degree of innovation, Degree of en-terpreneurship, Technical skills of workforce

Legal environment 10%Effectiveness of traditional legal framwork, Laws covering the Internet, Level of censorship, etc.

Government policyand vision

15%Government spending on ICT as a proportion of GDP, Digital develop-ment strategy, E-governing strategy, etc.

Consumer andbusiness adoption

25%Consumer spending on ICT per head, Level of e-business development, Use of Internet by consumers, etc.

Academic Column

U-City e-Report 18

< Indicators of the IT Industry Competitiveness Index >

●�The IMD (Swiss International Institute of Management and Development) has published na-

tional competitiveness indices evaluating how nations compete in the world market based

on the four factors of economic performance, government efficiency, business efficiency,

and infrastructure, since 1989

▶���Twenty-one indices concerning ICT are located under the Technical Infrastructure pillar

▶���Data from various sources such as ITU, Computer Industry Almanac Inc., and World Development

Indicators are used

●�The United Nation’s e-Government Development Readiness Index evaluates the readiness

for e-Government based on the results obtained from visiting national portals and from in-

ternational statistics

▶���The research team visits national portals and assesses four components corresponding to the four

stages of e-Government development for the Online Service Index

▶���Data from international statistics such as ITU and UNESCO are used for the Telecommunicaton In-

frastructure Index and the Human Capital Index

▶���Each sub-index has the same weight of 33 percent and the ratio for the quantitative and qualita-

tive assessment is 1:2

▶���“korea.kr” and “chuncheon.go.kr” have been introduced by the UN as good examples of e-Gov-

ernment

Category Weight Indicator

Overall business environment

10%Foreign investment policy, Private property protection, Government regula-tion, Freedom to compete

IT infrastructure 20% IT investment, PC ownership, Broadband penetration, Mobile penetration

Human capital 20%Enrollment in higher education, Enrollment in science, Employment in IT, Quality of technology skills

R&D environment 10% Public sector R&D, Private sector R&D, Patents, Royalty and license fees

Legal environment 25%Intellectual property protection, Enforcement of IP rights, Electronic signa-ture, Data privacy and spam, Cybercrime

Support for IT industry development

15%Access to investment capital, E-government strategy, Pubic procurement of IT, Government technology neutrality

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< Details of the United Nations e-Government Development Index >

4. Conclusion

●�Indicators concerning humans are included in evaluating both the U-City Index and ICT In-

dex according to the analysis of the existing research projects

▶���Because establishment of indicators concerning human capital uses both quantitative and qualita-

tive data, the careful combination of the two types of data is required

●�Indices must also reflect the status of the service provided from infrastructure and the U-City

●�Some of the indices are distorted by the presence of inappropriate indicators used to cal-

culate those indices. Therefore, in evaluating the U-City Competitiveness Index, only those

indices that have been proven to show appropriate correlations should be used

●�In order to better analyze U-City competitiveness in Korea, further research reflecting cur-

rent national policies or societal phenomena is needed

▶���By establishing the 「Act on Ubiquitous City Construction」 in 2008, the legal basis of constructing

U-City has been established in Korea. However, in reality, the development has been limited to bare

management of the cities using ICT technology due to the lack of support and technical limitations

●�As ICT devices such as smartphones and tablet PCs are becoming more popular, the need

and ease for providing more user-friendly services has been emphasized in recent days. This

phenomenon is regarded as both an opportunity and a threat to the U-City

●�Further research on Green Growth and Energy Efficiency is also needed since the concept of

U-City has expanded to the U-Eco City as an environment-friendly city

●�Careful consideration must be given to the distinct characteristics of each local government

to take into account different U-City development plans developed by local governments

Subindexes Details

Online service index - Assessment for a minimal level of web content accessibility - National website and the websites of the ministries are tested by the research team

Telecommunication infrastructure index

- Assess infrastructure concerning telecommunication - Measured by five indicators including numbner of personal computers per 100 per-

sons, number of Internet users per 100 persons, number of telephone lines per 100 persons, number of mobile cellular subscriptions per 100 persons, and number of fixed broadband subscribers per 100 persons

Human capital index Aims to evaluate the natons’ intellectual capacity, such as adult literacy rate, and the combined primary, secondary, and tertiary gross enrollment ratio

03Implications for Promoting Korean U-City from the Perspective of Systems Thinking

Methodology Series

1. Systems Thinking

●��(Origin) Systems thinking is originated from system dynamics

which analyze the effects of policy alternatives by modeling the

structure of systems and simulating them using a computer

▶ Scholars suggested system dynamics as a framework for thinking

which could replace the existing way of thinking

●��(Significance) Systems thinking is a tool, language, and ana-

lytical framework which enables a better understanding and

communication of problems that arise from correlated feed-

back relationship

▶ Systems thinking allows us to understand the fundamental struc-

ture (pattern and causal relationship) of various human, organiza-

tional, and social problems to help resolve them

Understanding Research Methodology

U-City e-Report

2. Process of Understanding the Structure of a System

●��(Procedure) What is the problem? What are the main variables?

How do the main variables change? Create the causal loop diagram

3. Understanding the Causal Loop Diagram

●��(Significance) Causal loop diagram represents the causality between variables us-

ing signs and feedback loops

●��Example

Birth DeathPopulationR

S

S O

S

B

Sign Meaning

orStrengthened loop or positive feedback loop: Consistently increasing or decreasing feedback loop

orBalanced loop or negative feedback loop: Generally stabiliz-ing or goal-seeking feedback loop

S stands for “same direction”; As x increases, y increases and as x decreases, y decreases

O stands for “opposite direction”; As x increases, y decreases and as x decreases, y increases

R +

B -

X Y

S

X Y

O

U-City e-Report 22

Methodology Series

1. Direction of Evolvement of the Future City and Information Communication Technology

U-City is designed to create fusion/complex industry via a combination of cutting-edge IT and archi-

tecture. Following the discussion regarding development of U-City began in 2006, [The Act on de-

velopment of Ubiquitous city] was enacted in 2008 and related projects have been in the works ever

since. The U-City especially has received much attention from the central and local governments as

new growth power for the future by boosting city management efficiency and improving quality of

life of the citizens. Following the completion of the U-City in Hwasung Dongtan in September 2008,

the U-City development project is currently under construction in 36 local governments and 53 local

districts throughout the nation.

The fusion of IT with city infrastructure has already been made in many parts of the world. The most

well-known examples include MSC in Malaysia, One-North in Singapore, Ubiquitous project in Ueno

park in Japan, Internet city in Dubai, Cyberport in Hong Kong, Antwerp in Belgium, and Copenha-

gen in Denmark (Lee Y.K., 2009).

Smart City and Intelligent City, which are similar to U-City, have been developed enterprise-wide in

order to improve the quality of life of the citizens. Global consulting company, Accenture, especially

has developed sustainable city infrastructure solutions based on Intelligent Network through their IT

technology and management skills. It has also suggested seven components of the future city (mobil-

ity, energy, water, waste, safety, cooling/heating, buildings) and been pursuing the development of

Intelligent City.

IBM suggested six primary factors (people, business, transport, communication, water, energy) for

city infrastructure through the “A Vision of Smarter Cities.” It is said that the city operates based on

various systems including facilities, network of the systems and their surroundings related to the pri-

mary factors. It is, therefore, claimed that the effects and efficiency of these systems would

Implications for Promoting Korean U-City from the Perspective of Systems Thinking

Yeon Seungjun : Senior Researcher, ETRI, sjyeon@etri.re.kr

Yi Misook : Associate Research Fellow, KRIHS, mslee@krihs.re.kr

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Source: Websites of each organization (NIA(2010), Future City via Smart City, Adapted)

ultimately decide the functions of the city as well as the success or failure of the goal attainment.

Because these systems depend on each other, it is suggested that they must be considered separately

and altogether according to the figure below.

< Correlations among the Main Systems of City >

Source: IBM(2009), A Vision of Smarter Cities

Name of Organization Components of Smart City

- Smart Grid (Key technology enabler)- Energy, Heating, Buildings, Mobility, Water, Waste (Components)- Regulatory environment, financial framework, stakeholders (Environment)

Transportation, public safety, energy & utilities, healthcare, education, develop-ment

Smart economy, smart mobility, smart environment, smart people, smart living, smart governance

Interoperability of technical solutions through open standards

Management and transaction processing, foundational technologies for business intelligence, data integration, infrastructure shared services

*Note: ICT=Infomation and communications technology. Source: IBM Center for Economic Development analysis.

Communication

Human capital determines speed of ICT* adoption

Water quality affects the health of citizens

Energy is the reason for a substantial part of all

water withdrawals

Transportation is one of the primary consumers of energy demand

Greater commerce increase use of transport

infrastructure

The degree of ICT adoption affects the attractiveness of a city's business environment

Industry accounts for a large proportion of water withdrawals

Commuting affects quality of life

People

Water

Energy

Transport

Business

< Components of Smart City defined by Various Organizations >

U-City e-Report 24

Methodology Series

When the rate of adoption of Information Communication Technology (ICT) is high, the attractive-

ness of the business environment increases. This in turn leads to promotion of growth of industry

and an increase in the usage of transportation facilities. Increases in traffic increase the energy ex-

penditure, leading to an increased amount of water spent on generating energy, and the quality of

water in turn has a direct relationship with the health of citizens. The number of residents is a main

factor in determining the speed of adoption of ICT and the adoption of ICT is related to business.

As can be seen, resolving problems in parts of the system cannot be a long-term solution, because

various correlations exist between different systems. Therefore, all problems must be prioritized and

resolved according to the set priority.

In summary, considerations must be given to each part from the perspective of the whole as well as

the correlations among different parts rather than seeing the city as a simple aggregate of differ-

ent parts of the system. There is also a need for an analysis on the mechanisms of the feedback and

overall correlations on expansion of the U-City project and adoption of ICT as ICT has a significant

impact on the main system of the city. In this document, adoption of new technology and the prolif-

eration structure and policy implications of the U-City project will be discussed from the perspective

of systems thinking.

2. Diffusion of the U-City

In general, the growth in the technology adoption cycle can be explained by using an S-curve. How-

ever, Gartner has suggested the limitations of the S-curve in explaining such growth as many grow-

ing companies fail to appropriately time the market entrance and exit (Gartner, 2007). This can be

explained by the way in which companies mistakenly assess the attention given to the technology

rather than assessing the market size. Therefore, they rush into entering the market thinking that

it entered the growth phase when the interest in the new technology peaks. On the other hand, as

the interest declines, they let competitors take the market during the peak growth phase thinking

that the market has already matured. This mistake originates from the assessment of the growth and

maturity based on the interest in the market rather than the potential societal causes present in each

organization such as quality, punctuality of payment, and consumer response. In actuality, growth

limitations are due to potential internal variables that come with growth rather than the physical limi-

tations on market acceptance.

Therefore, Gartner conceptualized the phenomenon in which new technology is adopted by the so-

ciety as a hype cycle. The hype cycle represents the visibility of the market for the new technology as

time passes. What is interesting is that there is a phase of inflated expectation in the beginning de-

spite its early stage in the cycle.

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< Social Adoption Phases of the New Technology >

The hype cycle is a typical phenomenon represented when new technology is adopted by the soci-

ety. Its behavior can be explained by the conciliation of the two extremes, excessive expectation and

realization of the actuality and disappointment that follows. Therefore, it is suggested that the in-

vestment and adoption of new technology is most appropriate after the hype is gone. The following

table provides the details of the research by Gartner.

< Phenomenon and Causes According to the Phase of the Hype Cycle >

This originates from discordance between the expectation and realistic achievement as the expecta-

tion increases above a certain level due to visualization of technology. In the case of the U-City proj-

ect, it entered phase 1 (technology trigger) between 2006 and 2007, as the press and other media

Phase Typical phenomenon and causes

Phase 1: Technology Trigger

New technology attracts much attention from the society mainly due to press and media

Phase 2: Peak of Inflated Expectation

Interest in new technology leads to vague expectation and peak of inflated ex-pectation due to some success seen. Typically, more failure is seen than success in this phase.

Phase 3: Trough of Disillusionment

Expectation dips to reach trough as the new technology does not reach the initial expectation leading to disappointment

Phase 4: Slope of Enlightenment

Realization of the new ways of using the technology comes about based on the experiences of success and failure. No media attention is given at this point.

Phase 5: Plateau of Productivity

Realization of the positive aspects of the new technology increases its usage and stabilizes its societal adoption. In this phase, the extent of adoption depends on the value that can be visualized.

Visibility

TimeTechnology

TriggerPeak of Inflated

ExpectationTrough of

DisillusionmentSlope of

EnlightenmentPlateau of

Productivity

U-City e-Report 26

Methodology Series

gave much attention to increase societal interest. Between 2008 and 2009, vague expectations of

the ubiquitous technology led to excessive expectations of U-City. However, in the recent times, dis-

appointment regarding the service provided by U-City has been shown due to excessive expectations

of U-City as a science-fiction city or city of the future. Some people say that the U-City project will

only lead to an increase in housing market prices without providing the necessary services to resi-

dents, and ultimately will become a financial burden to local governments. Therefore, there needs

to be a considerable effort to find a breakthrough solution which will overcome the limitations of

the current U-City project based on new cities. Based on the assessment of these circumstances, it is

thought that the current U-City project has already passed the third phase and is entering the fourth

phase.

3. The Structure of the Hype Cycle from the Perspective of Systems Thinking

Based on previous research, it can be seen that the causes and structure of the hype cycle have con-

sistently been studied from the system dynamics perspective. The hype cycle by Gartner is a typical

phenomenon represented when conciliation occurs between the expectation of new technology and

realization of actuality, carrying the following characteristics. First, technology and society create a

feedback relationship and repeat evolution. Second, there is a considerable delay in time during the

process of societal acknowledgement and adoption of disappointment and conciliation of the tech-

nology (Kim, S.W. and Kim, S.H., 2006; Kim, S.W. and Jung, J.L., 2008; Jung, J.L., 2010). This time

delay causes a hype fluctuation.

< Delay in Maturity Time of Technology and Society >

Technology Maturity : currentBusiness Maturity : current

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

100

75

50

25

0

GapDelay

0 12 24 36 48 60 72 84 96 108 120 Time(Month)1 1 1

11

1

1

1

11 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1222222

22

22

22

22

22

2222222222

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< Causal Loop Diagram Based on Technology >

Technology maturation can be represented by the positive loop which has a self-strengthening char-

acteristic (R1). R1 is a self-strengthening feedback loop which evolves from technology exposure

to media visibility expectation tech investment technology. R1 loop describes the follow-

ing phenomenon: based on the strength of the effect of technology spread after its first appearance,

the media exposure increases. This then leads to a short-term increase in visibility which in turn pro-

motes investment and maturation of technology. Visibility of technology increases the expectation

and societal maturity level through societal adoption of technology. However, this is not an actual

achievement due to societal spread and adoption. In addition, this achievement is not attained in a

short period of time causing activation of B1 loop, which decreases the visibility due to the societal

maturity gap, before formation of R2 loop increasing the visibility as a result of exposure of media

according to societal maturation.

< Causal Loop Diagram Based on Social Traction >

means ‘delay’. That is, Societal

Maturity does not increases immediately but

increases gradually at a short interval of time

depending on Biz InvestmentSocietal Maturity(Business Maturity)

Exposure toMedia Gap

Biz Investment(Fast-Track Innovation)

SocialEnlightenment

Expectation

Visibility

B1

R2 O

O

S

S

S

S

S

S

S

TechnologyTech Investment

Expectation

Visibility

Exposure ofMedia

R1

S

S

S

S

S

U-City e-Report 28

Methodology Series

The decrease in visibility in turn decreases the investment in technology, which leads to delay in tech-

nology maturation due to the change in the strengthening loop from technology maturation to a

vicious cycle. However, because of the slow growth in societal maturity, the gap between technology

and society decreases. This causes the decrease in the speed of visibility and causes activation of the

loop that reaches the trough and then increases (Gap Visibility Expectation Social Enlighten-

ment Biz Investment (Fast-Track Innovation) Societal Maturity Gap). In addition, based on the

signs of societal maturity recovery, technology adoption success stories get published, increasing the

visibility of technology and leading to the activation of a different type of loop and technological and

societal maturation (Societal Maturity Exposure of Media Visibility Expectation Social En-

lightenment Biz Investment Societal Maturity).

The hype phenomenon provides the fundamental reason for decreasing the overall spread of tech-

nology despite the positive effect of increasing the speed of technology spread in the beginning via

an increase in visibility (Yeon S.J., 2004). The next figure is a graph representing the spread behavior

through an increase in visibility and feedback phenomenon. Spread behavior is decided upon level of

satisfaction based on the expectation and outcome. As the level of expectation increases, the speed at

which spread occurs increases. On the other hand, as the level of satisfaction increases, the faster the

spread occurs. Excessive increase in the level of expectation would lead to excessive growth and de-

cline such as that seen in graph 4. On the contrary, low levels of expectation (as seen in graph 1) may

lead to consistent and stable growth, but lack flexibility and speed of spread in business development.

Therefore, it is important that integrated development be pursued for a successful spread of technol-

ogy while carrying on management of strategic expectations and consistent and stabilized growth.

Visibility

TimeTechnology

Trigger

R1

R1

R2B1+B2, B3

B2, B3

B1

Peak of InflatedExpectation

Trough ofDisillusionment

Slope ofEnlightenment

Plateau ofProductivity

①

②

③

④ ⑤

⑥

Exposure toMedia

VisibilityS

ExpectationS

Gap

TechnologyMaturity

Societal Maturity(Business Maturity)

S

S

S

OO

Biz Investment(Fast-Track Innovation)

S

Tech Investment S

S

S

S

R1 B1

R2B2

Biz Investment(Long-Fuse Innovation)

SocialEnlightenment

S

S

SB3

< Coevolution Model of Technology-Society and Hype Cycle >

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< Diffusion of the U-City and Hype Cycle >

4. Significance of Pursuit of U-City Project

The hype cycle is no exception when it comes to U-City development using ubiquitous technology. In

addition, societal domains such as administration, industry, living, and city intelligence dominate the

U-City project, which highlights the hype cycle phenomenon.

Having said that, what can be done to improve the hype cycle? The first solution is to remove the

inflation of expectations of U-City by suggesting a realistic picture of the city. The second solution is

to decrease the disappointment that may arise by shortening the time delay in societal maturation.

This is possible when forming an environment that is characterized by early societal maturity. The last

solution is to approach it from the level of an overall system to avoid partial suitability.

1) Management of Inflatable Expectation

There is a need for managing the expectations in order to avoid forming excessive expectations from

the beginning of the business development process. Excessive expectations are not only a limitation

for business success, but may also pose a problem in consistent development of the U-City project.

The following three methods can be considered in managing easily inflated expectations.

First, focus on the development of practical values and the provision of necessary services for residents

if there is a reasonable understanding of the need for developing U-City among involved parties.

•‌‌Graph 1: Leads to consistent and stabilized growth but the speed of U-City project spread is slow•‌‌Graph 2: Slower spread than graph 3 but faster recovery can be seen during recession and conciliation•‌‌Graph 3: Faster spread than graph 2 but harsher recession•‌‌Graph 4: Reaches peak fastest due to excessive expectation increase but a harsh recession follows afterwards,

which eventually leads to stabilization‌‌‌Therefore, one should select an appropriate alternative using either graph 2 or 3

Customers: 1-2-3-4-

7000

1

1

2

2

3 3

4

43500

0.00 3.00 6.00 9.00 12.000

U-City e-Report 30

Methodology Series

Second, consistent monitoring of the level of technology maturation and possibility of actualization

is necessary in order to avoid making U-City a wasteful project involving cutting-edge technology. A

U-City project based on immature technology will only increase the expectations, but will not lead to

positive outcomes.

Third, various opportunities for discussion, such as conferences and seminars, are needed to increase

the possibility for actualization of U-City rather than promotion of the project. Adequate preparation

for possible problems is necessary even before beginning the project to avoid side effects that may

arise from quick resolution, as U-City development requires connecting various systems together.

2) Societal Maturation through Minimization of Time Delay

There needs to be societal and consumer research regarding various solutions to problems that may

arise in the future city. Societal maturity will only increase when the services focus on the demands

of the consumers, not when it is centered on suppliers and commercialization of the technology

without considering the consumers. In order to boost societal maturity, the following methods can

be considered: actualization of necessary services, societal agreement, development of a profitable

model, and redesign of process. The details are as follows.

First, there is a need for service-oriented business that residents feel necessary and useful rather than

that focused on building U-Cities in new cities. In order to make this possible, much research should

be done in service demand. If there is no consideration given to the service users, the rate of usage

of the system will be low, leading to loss of economic efficiency.

Second, adequate responses should be given to any requests for change in development according

to the business environment change and methods for reaching agreements among involved parties

are in need. Until science and technology are considered important in social constructions, it may

take time for people to acknowledge the technology and its methods of usage, and there may be a

need for actual experience and societal agreement.

Third, there is a need for the development of a profitable model to find sustainable management

methods. Recently, general advertising profit models and U-City information marketing models have

been suggested, but more detailed profitable model development and revisions of related regulations

are needed to keep U-City from being idle.

Fourth, suggesting a strong alternative using IT technology via redesign of the process rather than

simply converting the existing system to a new one will provide a stepping stone for increasing the

societal readiness for the adoption of U-City.

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3) Approaching from the Overall System Perspective

There has been a focus on the superficial change of the city via cutting-edge information and com-

munication technology application in U-City development rather than providing efficient solutions of

problems that arise in the city space by actualizing U-City. Therefore, this has limited the applicability

of U-City to simple functional changes rather than resolving fundamental problems of the city.

A city is an overall system governing interactive components such as transportation, environment,

healthcare, wellbeing, and industry. Thus, systems thinking approach is needed to provide solutions for

fundamental problems of the city. Rather than resolving problems of each system separately, systems

thinking looks for the interconnections and finds and resolves individual parts as part of a whole by

analyzing the network and patterns. Therefore, systems thinking which allows for looking at the big

picture rather than the details, is an indispensable research method in the resolution of city problems.

Therefore, the utmost importance is given to forming societal agreements via consistent research and

development of various alternative policies from the perspective of system dynamics. Because a city

is a complex web of various interconnections and correlations, unforeseeably serious results can be

caused by pursuing a policy with little consideration to these various aspects. The behaviors of sys-

tems based on the feedback relationship of various factors can suggest alternative policies that can

analyze outcomes of policy pursuit via delicate simulation techniques and resolve city problems.

References

•Gartener(2007), Gartner’s Hype Cycle Special Report for 2007.

•IBM(2009), A Vision of Smarter Cities.

•NIA(2010), Future City via Smart City.

•Kim, S.W. and Kim, S.H. (2006), “A Thought on the Dynamic Mechanism of Coevolution between IT

and Society and Its Policy Implications,” Journal of Korean System

Dynamics Review 7(2).

•Kim, S.W. and Jung, J.L. (2008), “A System Simulation for Investigation of IT and Society Co-evolu-

tion Dynamics and Its Policy Implications,” Journal of Korean System

Dynamics Review 9(2).

•Yeon, S.J. (2004), System Dynamics Approach to Building and Integrated Diffusion Model Combining

Expectation Management and Customer Satisfaction, Thesis (Ph. D.), Chungbuk

University.

•Lee, Y.K. (2009), “Strategic Planning of Raising Fund for Operating Cost of U-City: Focusing on New

Town,” Korean Public Management Review 23(1).

•Jung, J.L. (2010), System Simulation Approach to Exploring the Dynamics of Hype Cycle and Policy

Leverages for Hype Management, Thesis (M.A.), Chungbuk University.