CCID Consulting: Smart City — Innovative Application and Driving Effect of New Information Technologies

Construction of smart city driven by the application of new information technologies

Along with the development and application of new information technologies, the construction of smart city is seeing a new upsurge. In 2011, the number of China’s ongoing smart city projects reached 36, mostly located in the Bohai Rim Area, the Yangtze River Delta and the Pearl River Delta, which altogether hosted 74% of the country’s smart city projects. Wherein, 9 were located in the Bohai Rim Area, accounting for 26% of the total; 11 in the Yangtze River Delta, accounting for 31%; and 6 in the Pearl River Delta, accounting for 17%. In addition, the Midwest region including the Wuhan-centered cluster, the Chengdu-Chongqing economic circle and the Guanzhong-Tianshui economic circle has also shown trends of rapid growth.

Figure 1 Distribution of China’s Smart City Projects Source: CCID Consulting

CCID Consulting regards smart city as an innovative application of the new information technologies in the urban areas, with the following features:

(1) Smart city is a new exploration of new information technologies in the field of public services. The purpose of constructing smart cities is to improve the capability, universality and equality of public services. The application of new information technologies allows automation and intellectualization for information gathering, processing and supply, triggering the transformation of the public service pattern, which will greatly change the lifestyle of urban residents and improve the quality of life.

(2) Smart city means changing the city management pattern with the application of new information technologies. New information technologies such as cloud computing and Internet of Things can promote trans-departmental innovation and application in the fields of city management and operation, which will play key roles in improving the efficiency of city operation and promoting the bearing capability of the city.

(3) New information technologies and other elements function jointly in the smart city system. Information technologies are the core element in the construction of smart city. However, due to its complexity, the construction also requires an organic combination of information technologies with other resources such as system and mechanism, funds and talents.

Development of Smart City-related Industries Driven by Application of New Information Technologies

Figure 2 Smart City-related Industries Source: CCID Consulting

Guided by the trend of “focusing on new demand of smart city”, profound transformations will take place in the traditional electronic information industry in the following aspects with the overall application of new technologies:

(1) Smart city applications will lead to integrated and interdisciplinary, emerging industries. Under the background of great development of intelligent terminals and cloud computing services, the micro ISV industry has emerged at the right moment. With the development of smart city, the demand for integrated operation services will increase. These changes will bring new markets as well as challenges to vendors. As a result, vendors must make changes and innovations in strategy, positioning, R&D, product and organization so as to adapt themselves to the new situation.

(2) Smart cities applications will lead to vertical integration of related industry chains, especially in the downstream sectors. In face of huge market demand, enterprises in good conditions will launch vertical integration through cooperation and merger, in order to cope with the fierce market competition. In addition, the borders between hardware product suppliers, solution providers and operators will become vague, and they will finally overlap with each other.

Article from Market Watch