Smart Cities – Hype or Reality?Unlocking the (smart) value of cities

2

Smart City, what's the buzz all about?There is no one definition of ‘Smart City’

Smart City is an urbanized area where multiple

sectors cooperate to achieve sustainable

outcomes through the analysis of contextual,

real-time information shared among sector-

specific information and operational technology

systems.

A Smart City is one that has digital technology

embedded across all city functions

A Smart City is the place where citizens enjoy

sustainable quality of life through

technology: economy and productivity, mobility,

environment, education, health and security.

A Smart City is a city seeking to address public

issues via ICT-based solutions on the

basis of a multi-stakeholder, municipally based

partnership

A Smart City is one which develops and implements

resource-saving, energy-efficient hard infrastructure

to improve urban administration and ensure sustainable urban

development, while also making effective use of Information and

Communication Technologies to increase civic

engagement and public participation, ensuring an

inclusive, accessible city for all.

What is a ‘Smart City’?

We have collected more than 120 Definitions

“I don’t really know what a Smart City is,

I don’t think anyone knows”, Mayor of a leading Israeli city

3

Smart City = The Digital Transformation of Cities

But what does it really mean?

4

Digital Transformation = Leveraging digital

technologies to fundamentally change the way we do

things

IoT CloudSocial CyberDataMobile

5

Private Sector Central GovernmentThe Private Sector

and Central

Government have

come a long way

6

But cities are

sometimes even more

complex

Smart City | Smart Nation framework

7

Initial Intentional Integral Transformed

Being Smart is a

journey –

Deloitte’s

Maturity Model

Strategy & Vision

Financing

Skills and capabilities

Technology & Data

Culture and DNA

Collaboration

8

“…Cities have begun to play a vital role

in determining our nation's reputation

as a global superpower” Michael R.

Bloomberg

Why cities must “go

Smart”?

Sustainability

Competition

Scarce Resources

Urbanization

Citizens’ expectations

9

And in Israel ….The municipalities

in a nutshell

256municipalities in

Israel with budgets that

sum up to ILS 70B

Top 15 cities account for

45% of the total

municipalities’ budget

Weak municipalities vs.

strong central

government

High inequality among

municipalities

10

buzz

Central Government

Tel Aviv #1 Beer Sheva – national

pilot

The “Smart” buzz in

Cities

Dozens of projects in various municipalities throughout the country

More then ILS 70M public funding (17-18)

11

Digital services Level

Digital services in the Israeli municipalities -

Based on Deloitte’s Digi-Locally Index1

(1) The Digi-Locally index is based on a survey conducted by Deloitte and measures the digital services level in all 254 municipalities in Israel

But before going

Smart, municipalities

have to improve their

e-muni capabilities

5

38

104 107

Comprehensive Partial Low Very Low

96% operate a website

74% operate Facebook page

51% facilitate online kindergartens registration

31% dedicate a special section on their websites for businesses

28% support online parking ticket payment

Only 24 (9%) have online queue management system

12

Let’s drill down to the

main issues based on

our Maturity Model…

Strategy & Vision

Financing

Skills and capabilities

Technology & Data

Culture and DNA

Collaboration

13

…Which is

helping us

to expose

weakness…

• Unclear vision

• Not a real top priority

• Basic Digital skills

• Short in digital professionals

• Data importance underestimated

• Lack of IT platforms

• Lack of funds

• Difficulty in forming partnerships

• Minimal risk taking / Conservatism

• Lack of openness for innovation

Strategy & Vision

Financing

Skills and capabilities

Culture and DNA

Technology & Data

Collaboration

14

Strategy & Vision

Financing

Skills and capabilities

Culture and DNA

Technology & Data

Collaboration

- Cross organization effort

- Focus on immediate pain, think long term

- Governmental Support

- Creative financial solutions (BOT, SCaaS)

- Private sector (PoC)

… And offer the

right remedies

15

- Engage divisions and stakeholders

- Import "talents" & build your own

- Built strong networks of champions

- Adopt portfolio / VC approach

- Fail fast and cheap

- Enable risk taking & innovation

Strategy & Vision

Financing

Skills and capabilities

Culture and DNA

Technology & Data

Collaboration

… And offer the

right remedies

16

… And offer the

right remedies

- Citizen as the greatest partner

- Build mechanisms for collaboration

- Sand box

- Open data and support usage

- Set a Data driven policy in city council

Strategy & Vision

Financing

Skills and capabilities

Culture and DNA

Technology & Data

Collaboration

17

The Smart City

market is huge

and growing…$342B

(2016)

$425B(2017)

$575B(2014)

$600B(2017)

$622B(2016)

$387B(2014)

$700B(2016)

$773B(2016)

18

…And the

market is

targeted by

players from

different sectors

Assets & capabilities

Motivation

Business model

Value chain

…Each has

different goals

and aspirations

19

Example: Telco

service providers

point of view

Assets & capabilities

Motivation

Business model

Value chain

• New B2B effort

• Create new revenue stream beyond M2M…

• … in order NOT to become dump pipe

• Where to play on the value chain?

(communication ,platform, verticals or

integration)

• Can telcos compete with IT integrators?

• Should telcos bet on verticals or stick to

horizontal (generic) solutions

20

Lots of huge numbers are

thrown into the air

Everyone wants a piece

of the pie

SO…

Hype or

Reality…?

Hype? For sure!

No Clear Definition

Definitely!

Money is starting to flow….

BUTNo Silver bullet Different models are needed for

different segments / domains

Need to solve the way to

collaborate and cooperate

(new value chain)

Reality?

Thank you!

Shally Tshuva | stshuva@deloitte.co.il