© IBM Corporation 2010 Get Smarter for a New Economy: Smarter Transportation for Smarter Cities Martin Fleming, Vice President, Corporate Strategy April

© IBM Corporation 2010

Get Smarter for a New Economy: Smarter Transportation for Smarter Cities

Martin Fleming, Vice President, Corporate StrategyApril 26, 2010


IBM Corporate Strategy

Get Smarter for a New Economy:

In the years ahead, economic growth will increasingly rely on the merger of creativity, technology and innovation.

Addressing this challenge will require cities to provide services that meet the needs and expectations of the highly skilled and diverse population.

Making a city’s transportation system smarter is one of the most important steps a city can take to significantly improve the quality of life of its residents and the productivity of its work force.



Emerging Economies

Advanced Economies

0

10,000

20,000

30,000

40,000

50,000

0 20 40 60 80 100

Human Capital (% enrolment in tertiary education)

Inc

om

e, G

DP

pe

r c

ap

ita

, P

PP

Human capital is important worldwide with notable differences between regions

Higher education enrolment has a strong positive impact on per capita income in advanced economies

Positive impact of human capital on income per capita is present, but weaker amongst the emerging economies

Data Source: UNESCO and Analysis: IBM’s Institute for Business Value

Links between human capital and income, emerging and advanced

economies, 2005



Data Source: UNESCO and Analysis: IBM’s Institute for Business Value

Future economic growth will arise from the creative power of the new urban workforce.

Skills specialization, with the need for greater investment and diversification of the human capital, is critical for success.

As reflected in diversification scores, there is a strong positive correlation with city’s income per capita.

In the future economic growth will arise from the creative power of a diversified urban workforce Determinants of Income per Capita

50 top cities, US 2007

y = 238.73x + 13428

15,000

17,000

19,000

21,000

23,000

25,000

27,000

29,000

31,000

0 10 20 30 40 50 60 70

Diversification Score



By end of 2008, half the global population lived in cities and by 2050 70% will live in cities

0

20

40

60

80

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2006 Revision and World Urbanization Prospects: The 2007 Revision, http://esa.un.org/unup

Urban Population Forecast China, now 40% urban, will become 70% urban by 2050.

In Africa, the urban population will triple over 40 years, from 340M to 900M.

Currently there are 1.6B people living in Asia’s urban areas, increasing to 3.4B by 2050, where the growth will be highly concentrated.



Economic Outcome Relationship with Broadband

Employment Positive and Large

Working Age Population Positive

Employment Rate (Employed residents/working age population

None

Average Pay per Employee None

Median Household Income Negative

Telecommuting None

Bringing Work Home None

Having Home-based Business None

Note: Employment data are from NETS; population, employed residents, employment rate, average pay and median household income data are from Census/BLS; telecommuting, bringing work home and having home-based business data are from Forrester

Source: Jed Kolko, Does Broadband Boost Local Economic Development?, January 2010, Public Policy Institute of California.

A growing body of research indicates a positive relationship between broadband expansion and economic growth



How much energy we waste: 6% to 10% lost because grids are not smartHow gridlocked transportation in cities is: $78B annual loss in U.S. in wasted gas and time

How antiquated our healthcare is: no linkage from diagnosis to providers to insurers to employersHow our water supply is drying up: 6 fold increase at twice rate of population growth

Crisis in financial markets: inability to track risk has undermined confidence

“The digital and physical

infrastructures of the world are

converging. We must make the

mundane processes of

business, government and life sustainable.”

Inefficiency of our supply chains: $40B annual loss in CPG & Retail industries, 3.5% of sales

A Smarter Planet: The Next Leadership Agenda

Source: Sam Palmisano remarks to the Council on Foreign Relations, New York City, November 6, 2008

Prime areas to consider for improvement



Measuring, Monitoring, Modeling and Managing

MeteringMeteringSensingSensing

Real Time Data Integration

Real Time Data Integration

Real Time + Historical Data

Real Time + Historical Data

Data Modeling + Analytics

Data Modeling + Analytics

Visualization + DecisionsVisualization + Decisions

Data modeling and analytics to create insights from data to feed decision support and actions

Feed

back

to u

ser a

nd d

ata

sour

ce;

Ince

ntive

s an

d ac

tions

to c

hang

e be

havio

r

Feedback to user and data source;Incentives and actions to change behavior

Comparison of historical data, with newly collected data

Data collection

Data Integration

Source: IBM Corporate Strategy

Something more profound is now happening with the infusion of intelligence into the way cities work



Additional capacity by using pricing to manage demand for the road network

Reduce accidents and congestion by balancing traffic across routes or modes

Raise funds for other transport programs that serve your customers

Road User Charging Solutions

Business challenge:Despite a progressive public transport network serving 70% of commuters in this Scandinavian city, the roads in the central business district handled 450,000 vehicles per day, making major traffic congestion a fact of life.

Solution:IBM engaged to design, build and operate a automated road use charging with automatic license plate recognition and radio frequency identification technologies.

Benefits: 25% reduction in traffic volume 15% reduction in CO2 emissions Significant reduction in economic costs

associated with traffic congestion Generation of €50M per year,

channeled into reducing congestion



Create a single payment structure for multiple modes of transport

End-to-end journey pricing – seamless mobility within a city

Integrated Fare Management Solutions

Business challenge:A European city wanted to create a seamless mobility experience to travelers using all modes of transportation. This required integrating buses, metro and associate parking facilities using a single payment mechanism.

Solution:IBM engaged to design, and build a smart-card integrated fare management system that used a back office and settlement engine to process and settle multi-modal fares.

Benefits: Single view of the transportation end-user

across multiple transportation modes Cost reductions with revenue management

across public transportation modes Higher customer satisfaction among users

of the transportation network



Better align demand and supply within the transport network

Manage traffic using predictive analytics to ascertain scenarios and potential mitigation

Use powerful analytics to gain deeper insights into the use of assets and infrastructure

Transport Information Management Solutions

Business challenge:Real time is often too late in an Asian city that thrives on movement of people and goods across its boundaries. Traffic planners wanted to be able to maintain free flow of cars on its roads and reduce congestion.

Solution:IBM built a Traffic Prediction Tool that accurately predicted traffic scenarios on main roads in 15, 30, 45 and 60 minutes intervals.

Benefits: Maintain free flow by using predictive

insights to manage signal timing and ramp metering

Increase accuracy of public transit arrivals using predictive insight to inform travelers of wait times

Use the predictive insight to dynamically change road pricing to proactively manage congestion on key roadways.



The rail industry is struggling to meet the increasing demand for freight and passenger transportation

Railroads need to become even more instrumented. – Monitor acoustic signatures,

heat and wheel impact. – Passengers and maintenance

can be charged based on use.

Rail networks - examples of an interconnected system with vast opportunities exist for improvement. – Block train scheduling can create greater utilization of assets

and capacity for both passengers and freight. Putting data to work requires more intelligence.

– Mobile condition-based monitoring systems provides real-time data capture and analysis -- health of rolling stock, operational data, manifest verifications, freight condition, intrusion detection.



Smarter Cities Roadmap

1. Develop your city’s long-term

strategy

5. Discover new opportunities for growth

and optimization 2. Prioritize a few high-value projects

4. Optimize your services and operations

3. Integrateacross your systems

13



14

The new leadership requirements:

CollaborationStandardsOpenness and Innovation

These three elements are key to your city’s long-term strategy and road-map to success.



A Smarter Planet

Documents

© IBM Corporation 2010 Get Smarter for a New Economy: Smarter Transportation for Smarter Cities Martin Fleming, Vice President, Corporate Strategy April