technology smart city opportunity - india
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This report is solely for the use of Zinnov Client and Zinnov Personnel. No part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov
Technology Opportunityin Smart Cities: India
Oct, 2016
1
Government of India aims to leverage “Smart Cities” to improve the economy
Note: 1Cities: Areas having population more than 100K | 2Urbanization Rate: % of the total population living in urban areas | Urban area is the region surrounding a city with most inhabitants having non-agricultural jobsSource: World Bank | IMF | Zinnov Analysis
# of Cities1
300+ 70+ 650
+500+
Urbanization Rate2
82% 83% 56% 33%
35 269 146 441Population Density
(Population /Sq.Km)
Area (Mn Sq. Km)
9.8 0.2 9.6 3.3
GD
P PP
P (B
n)
Population (Bn)
0 225
0
UK
India
China
US
Size of bubble indicated GDP PPP/Population
Infrastructure Overview by Country-2015 India has Weaker GDP PPP Per Capita-2015
2
Massive urbanization and plaguing challenges are augmenting the demand for smart cities
Note: 1Urban Population for 500+ cities in India | 2GIS: Geo Spatial Information System Source: Press Releases | Zinnov Analysis
India is trying to address its urban challenge
s by building Smart Cities
Transportation
Power &
Energy
Water
Sanitation
• 2nd largest road network but ranks 76th for its quality
• Limited dependency on public transport
• ~$62 Bn expenditure on crude oil imports in FY16
• ~18% of total energy output lost in distribution
• ~80% of sewage directly flows into the rivers
• ~54% of cultivable land is dependent on monsoons
• ~76Mn citizens have limited access to water
• ~7.5% of urban population1 uses open defecation
Smart Cities will Leverage Technology to Address Challenges
Water
• Analytics: Real time analysis of water availability patterns
• GIS2: Assessment of water consumption patterns
Power &
Energy
• Analytics: Predict demand and analyze operations
• Smart Meters: Reduce theft and pilferage
Transportation
• Smart tolls: Efficiently reduce the queues and collect user charges
• Smart traffic lights: Regulate traffic based on real-time traffic conditions
3
Waste Managem
ent
• Maintenance Decision Support Systems: Provides intelligence on roads and pavements for repairs
• Analytics: Projections about capacity management
“Smart City” program is supported by various other government initiatives for faster results
• 100 Smart cities being developed across 6-industrial corridors
• 90 Mn new jobs to be created by 2022
• 16 Technology Business Incubators being planned in smart cities
• 7 Research centers and 13 startup centers being built in smart cities
• Leverage GIS1, Big Data/Analytics to deliver direct benefit transfer schemes
• 500Mn+ Broadband users by 2020
• $20 Bn investment in Metro rail projects by 2020
• $10.5 Bn investment for 534Km Mumbai-Ahmedabad high speed rail project
Transportation• $26 Bn investment by Power Grid
Corporation of India by 2020• 8 Smart Grid projects being
implemented
Power & Energy
Note: 1Geographical Information SystemSource: Press Releases | Zinnov Analysis | USD to INR conversion: $1 = 65INR 4
100 potential cities have been identified based on the recommendations from the States/UTsJammu & Kashmir* 1
Chandigarh 1
PunjabAmritsar, Jalandhar, Ludhiana
3HaryanaFaridabad, Karnal 2
New Delhi Municipal Corporation
1RajasthanAjmer, Jaipur, Kota, Udaipur
4
Madhya PradeshBhopal, Gwalior, Indore, Jabalpur, Sagar, Satna, Ujjain
7
GujaratAhmedabad, Dahod, Gandhinagar, Rajkot, Surat, Vadodara
6
Daman & DiuDiu
1Dadra & Nagar HaveliSilvassa
1MaharashtraAmravati, Aurangabad, Thane, Greater Mumbai, Kalyan-Dombivali, Nagpur, Nashik, Navi Mumbai, Pune, Solapur
10 Goa
Panaji 1
LakshadweepKavarrati
1 Tamil NaduChennai, Coimbatore, Dindigul, Erode, Madurai, Salem, Thanjavur, Vellore, Thoothukudi, Tiruchirapalli, Tirunelveli, Tiruppur
12Kerala
Kochi 1KarnatakaBelagavi, Davanegere, Hubballi-Dharwad, Mangaluru, Shivamogga, Tumakuru
6
Himachal PradeshDharamshala
1
UttarakhandDehradun
1
Uttar Pradesh*
Agra, Aligarh, Allahabad, Bareilly, Ghaziabad, Jhansi, Kanpur, Lucknow, Moradabad, Rampur, Saharanpur, Varanasi
13
BiharBhagalpur, Biharsharif, Muzaffarpur
3SikkimNamchi
1
Arunachal PradeshPasighat
1AssamGuwahati
1ManipurImphal
1
TripuraAgartala
1
MeghalayaShilong
1
JharkhandRanchi
1
OdishaBhubaneshwar, Raurkela
2Andaman & Nicobar IslandsPort Blair
1
ChhattisgarhBilaspur, Raipur
2Andhra PradeshKakinada, Tirupati, Vishakhapatnam
3PuducherryOulgaret
1 TelanganaGreater Hyderabad, Greater Warangal
2
NagalandKohima
1MizoramAizawl
1
West BengalBidhannagar, Durgapur, Haldia, New Town Kolkata
4
Note: *1 city each in UP and J&K to be decided later on by the Government of India | Madhya Pradesh is considered to be a part of West Region Source: Press Releases | Zinnov Analysis
# Shortlisted Smart Cities in that StateColour represents Region of the State
5
Current Persona of 100 Shortlisted Cities
100Cities
Contribution to India’s GDP
Population of 100 cities
Tier-III1 cities
Cities having population over 1 Mn
Cities from UP, Tamil Nadu & Maharashtra
$190Bn
125Mn
41
65
35
Shortlisted cities are a mix of urban, semi-urban, business and financial hotspots
Note: 1Definition of City Categories by Population : Tier I – >5 Mn, Tier II – 1-5 Mn, Tier III - <1 MnSource: Press Releases | Zinnov Analysis | USD to INR conversion: $1 = 65INR 6
Key Components of Smart City
Global MNCs, Indian enterprises and startups have capabilities to address the rising demand
Power
Transportation
Video Surveillance
Traffic Management
Water & Wastage
Start-upsLarge Enterprises
*Illustrative List of Companies
Source: Press Releases | Zinnov Analysis 7
Global Technology MNCs
Smart Buildings
Total Spending (E)
(Across 100 Smart Cities during 2015-2020)
$31 Bn investment would be required to build 100 cities sustainable and future ready
33%
22%
19%
13% 2% 11
%
Transportation Power Water & Sewage Governance Waste Management Others
100-120 100-120 130-15030-50 20-30
140-160
430-450240-260 170-190
170-1903-5
30-40
Pan-city
ABD
3
530-570
340-380 300-340200-240
23-35
160-200
%age of TotalTechnology Spend
TechnologySpend by
Key Categories($ Mn)
Note: ABD : Replacing the existing built-up portion of a city and enabling co-creation of a new layout ; Pan-city : Development and implementation of smart solutions to the existing city-wide infrastructure |1Cloud includes Public, Private & Hybrid | 2Governance include Infrastructure, Security & Surveillance, Traffic Management etc. | 3Others include Education, Healthcare, Cross functional elements such as Thematic Mapping etc. | E denotes estimated valuesSource: Analysis based on Proposals of Top 20 Smart Cities | Press Releases | Zinnov Analysis
$31 Bn
$800-900Mn
Cloud based service delivery platforms for E-Governance initiatives
20% of Indian smart city solutions will be IoT-enabled by 2020
Cloud based Analytics solutions for smart grids and tax collection systems
Technology SpendCloud1 Spend
2
Area Based De-velopment (ABD)Pan-city
60-70%
30-40%
$1.5-2Bn70-75%
25-30%
8
West# Smart Cities: 30
Population1: 62 Mn (49%)
Total Spend: 10,000-11,000 (36%)
Technology Spend: 540-590 (34%)
Sout
h
# Smart Cities: 27
Population: 28 Mn (22%)
Total Spend: 7,200-7,500 (24%)
Technology Spend: 430-470 (27%)
East
# Smart Cities: 19
Population: 8 Mn (7%)
Total Spend: 4,200-4,400 (14%)
Technology Spend: 200-250 (14%)
# Smart Cities: 24
Population: 27 Mn (22%)
Total Spend: 8,000-8,200 (26%)
Technology Spend: 380-430 (25%)
North
Spending Split By Region ($ Mn)
Note: 1Population of Smart Cities in that StateSource: Press Releases | Zinnov Analysis
Of total & technology spending will be driven by UP, Maharashtra & Tamil Nadu
~44%
Of total technology spending will be on tier-III cities>60%
Of total spending will be on tier II and III cities91%
Tier-III cities will witness maximum spending for transforming into a Smart City
(%) Represents share in Total Spend Value
9
Low
High
Tech
nolo
gy
Spen
d
HighLow Total Spend
Total Spend vs. Technology Spend for Smart Cities
States in West India are expected to lead the overall spend followed by states in South India
A&N Islands
Arunachal Pradesh
Assam
Andhra PradeshBihar
Chandigarh
Dadar & Nagar Haveli
Daman & Diu
New Delhi
Goa
Chhattisgarh
Haryana
Himachal PradeshJammu & Kashmir
Jharkhand
Gujarat
Karnataka
Kerala
Lakshadweep
Madhya Pradesh Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Odisha
Puducherry
PunjabRajasthan
Sikkim
Tamil NaduWest Bengal
Telangana
Tripura
Uttar Pradesh
Uttarakhand
Source: Press Releases | Zinnov Analysis
North
West
South
East
# States/UTs : 13
# Smart Cities : 75
Total Spend : $26 Bn
Technology Spend : $1.4 Bn
Leader Zone
# States/UTs : 17
# Smart Cities : 19
Total Spend : $4.1 Bn
Technology Spend : $218 Mn
Contenders Zone
10
Bubble Size indicates Number ofSmart Cities in the respective State
~$200Bn
Additional contribution ofshortlisted cities in the GDP after
transformation >10%Real-Estate industry’scontribution to Indian GDPby 2020 from 6% in 2015
Source: Press Releases | Zinnov Analysis
40% Contribution of Smart Cities inurban population of India
(70% in the economy) by 2020
Smart Cities will have positive impact across key development areas
Number of jobs created due toSmart City initiative, a rise of
10-15% in the employment
>10Mn
Savings in traffic congestion withthe help of smarter technology
>$10Bn
Reduction in energy consumptiondue to smarter infrastructure,
15% saving in water losses 40%
Impact of 100 Smart Cities by 2020
11
Entity
Role
Initiative2
Note: 1Technology Vendors include Product Vendors, System Integrators, Network Service Providers & Managed Service Providers | 2Illustrative initiativesSource: Press Releases | Zinnov Analysis
Participating entities are adopting various measures to win “Smart City” contracts
Cross-Border Collaboration
s
1
Cross-border government
agencies that are willing to invest in
upcoming Smart City projects
India, Japan signed MoU to develop
Varanasi into a Smart City
Technology Vendors1
2
Partnering with government to
execute Smart City projects
Cisco and IL&FS collaborated to utilize IoT to develop digital solutions for India's infrastructure and
Smart Cities
Real Estate Developers
3
Building Smart Cities in a defined premise
In Pallava project, Lodha builders
partnered with GE for treatment of waste
water, to be re-used in flushing, landscaping,
etc.
Government owned Bodies
4
Government forms bodies such as
Special Purpose Vehicle (SPV), local
municipal corporations etc. to
manage the implementation of Smart City projects
Delhi Development Authority is building Delhi’s first flagship Smart City project in
East Delhi
Industry Associations
5
Taking initiatives to build platforms for pilot testing and
encouraging/ inviting stakeholders to
participate
CII, Siemens and Hitachi formed
consortia to lead the conceptualization and
implementation of pilot projects in Smart
Cities
12
Limited technology vendors have offerings across key focus areas of the initiative
Note: 1Capability is measured on the basis of solution offerings and case studies available across each category globally | 2Others include Healthcare, Education etc.Source: Press Releases | Company Websites | Zinnov Analysis
High Very Low
Capability1 Mapping of Key Vendors across Smart City Components
13
*Illustrative List of Companies
Transportation
Governance
Water & Sewage
Power
Waste Management
Others2
SystemIntegrators
Technology
Vendors
Note: 1Subject Matter Experts | 2Banking, Financial Services and InsuranceSource: Press Releases | Zinnov Analysis
Regulations Managemen
t
3 Set up its datacenters in India to cater verticals like Government and BFSI2 etc.
Setting up a surveillance system and integrating it with existing CCTV cameras for Lucknow Police Department
Open to Flexible Payment Options
Special Focus on Regulated Industry Verticals
Adherence to
Local Laws
Technology vendors need to augment their capabilities to address the Smart City opportunity
14
Development of Local
Ecosystem
1 Consultants
Local Government
Bodies
India based ISV
Partnerships
SME1 on Best Practice
Applications
Developing multiple solutions around waste & water management
Ebix & Educomp have partnered to set-up Smart Classroom and E-learning solutions in Udaipur
Solution Customizati
on
2 Scale & Requirement
of Indian citiesFocused towards Key Pillars (smart
energy, waste management, etc.)
Addresses NativeIndian
LanguagesIntegration
withExisting
Initiatives
Reduced the prices of its LED products following Governments initiative to replace bulbs with LEDs and resulted in ~4X increase in
revenue
Allowing local users to create and consume content in regional Indian languages
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