The Journal The Authority on Global Business in Japan

Urban populations around the world continue to rise. By 2050, the number of people living in large cities is projected to reach 66 percent of the total global population according to the 2014 revision of the United Nations’ World Urbanization Prospects. The current ratio is 54 percent.

With such rapid expansion of cities comes a number of challenges, including overcrowding, environmental pollution, congestion, damage to infrastructure, and increased demand for energy.

For Japan—and many other countries—smart cities are seen as a panacea for these ailments. These future cities promote a new industrial era brought about by the internet, and take steps toward improving the efficiency of the workforce and energy sector.

A notable feature of smart cities is that they are built around information and communications technology (ICT)—from Wi-Fi to the Internet of Things (IoT) to big data to artificial intelligence (AI) to cloud computing.

Given the strategic importance of smart cities, one would think the concept had a solid foundation. However, even the very definition of a smart city can vary greatly, differing from country to country and even institution to institution.

According to IHS Technology, a global business intelligence service provider, “smart cities encompass a broad range of different aspects to describe cities that have deployed—or are currently piloting—[ICT] solutions across three or more different functional areas of a city.”

A similar definition is adopted by the Japan Smart Community Alliance, an industry facilitator supported by the Ministry of Economy, Trade, and Industry (METI).

According to this definition, there are currently 88 smart cities around the world (up from 21 in 2013), according to IHS. What is more, investment in such projects reached over $1 billion globally in 2013. IHS projects the figure will surpass $12 billion by 2025. Other projections—which may rely on a different definition of a smart city—put the figure in the trillions of dollars.

In Japan, smart cities are largely funded via subsidies from METI. The smart cities market here, which stood at around ¥1.12 trillion in 2011, is expected to grow to ¥3.8 trillion by 2020. METI also invests in Japanese business involvement in smart city projects globally.

Speaking to The Journal, a spokesperson from Fujitsu said, “We think of smart cities as areas in which ICT can be used to make social infrastructure, such as energy infrastructure, smarter.

“It involves being able to solve regional issues and come up with revitalization methods together with regions themselves, and is about pursuing a better standard of living for the citizens of a region by creating sustainable social value.”

To achieve these aims, the government seeks to use smart cities as a vehicle to create—and to experiment with—cutting-edge technologies, products, and services. Moreover, development projects will boost industrial competitiveness by ensuring cross-sector innovation and creating new value for consumers as well as jobs for local populations—quite apart from creating vibrant communities.

Yokohama has been selected as a “Future City” by the Government of Japan and is a case study in the 2015 book Ageing in Cities, by the Organisation for Economic Co-operation and Development.

Speaking to The Journal, Masato Nobutoki, former executive director of future city promotion at Yokohama’s Climate Change Policy Headquarters explained, “By leveraging new industries in close cooperation with the private sector, Yokohama shed light on the many difficulties Japan faces today—problems that must be handled in unison.”

Nobutoki, who will be speaking on the topic of smart cities at the upcoming MIPIM Japan international property conference in Osaka in September, also talked about environmental impact. “The Yokohama Walking Point project, which has seen more than 150,000 participants,” he said, “is an example of positive influences on commercial activities to reduce CO2 emissions.”

Intended to encourage an aging society to be more active, the project also helped the city study the environmental impact of factors such as population density, distance to the nearest station, and the average elevation of neighborhoods by counting steps.

Ultimately, Japan sees projects to develop smart cities—of which there are 11 so far around the country—as leading the way in finding solutions that will not only meet domestic challenges, but international ones as well. The hope of the government is that it will be able to share the fruits of its labors with the rest of the world.

Chiba's Kashiwa-no-ha plans to be ecologically friendly as an Environmental-Symbiotic City.

Chiba’s Kashiwa-no-ha plans to be ecologically friendly as an Environmental-Symbiotic City.

KASHIWA-NO-HA
One sector of the economy in which smart cities are set to play a key role is energy. For instance, the Kashiwa-no-ha Smart City, a 273 hectare-wide area in Chiba Prefecture’s Kashiwa City, seeks to lead innovation in this space.

Selected by the government in 2011 as a Comprehensive Special Zone for Regional Revitalization and an Environmental Future City, the new development currently has 21 action programs underway.

“Within the energy management of Kashiwa-no-ha, we want to build a track record for the best possible model in energy optimization methods,” a spokesperson from Mitsui Fudosan, developers of the city, told The Journal.

Apart from Kashiwa-no-ha, the company is developing smart city model communities in the Nihonbashi and Hibiya areas of Tokyo. Plans for overseas projects are also in the works, the spokesperson added.

In addition to promoting health awareness and supporting startups, Kashiwa-no-ha plans to be ecologically friendly as an Environmental-Symbiotic City. This in part means managing electric energy from power production, batteries, and power consumption at the local level.

To this end, the city has implemented energy saving and optimization measures via three main platforms: an energy management system (EMS); a CO2 reduction roadmap; and a sustainable design and renewable energy policy.

An EMS is a computerized platform used by electricity companies to monitor, control, and optimize generation and transmission of electric loads. Via advances in IoT and AI (which has led to real-time communication between devices), customers have greater monitoring and control over the energy loads running to and from a home or office.

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A home energy management system (HEMS), for instance, utilizes a “smart reader” within a home to display “energy consumption so residents can become more aware of their contributions to power conservation, thereby fostering environmentally friendly lifestyles.” They also permit various devices within the home—such as a television, refrigerator, oven, hairdryer, and lighting—to communicate with each other and provide data in real time.

Such information can be viewed via tablets, computers, smartphones, and other devices. The customer can also control the lighting or setting of a device—such as an air conditioner—even when away from home.

Another use for a HEMS is to enhance disaster management through demand response functions, which ask for residents’ help in reducing demand during emergencies. This functionality would be of use in a situation such as Japan faced following the loss of the Fukushima Daiichi Nuclear Power Plant in 2011, which led to calls for a 15 percent cut in energy consumption. The subsequent shutdown of the country’s nuclear operations resulted in a 30 percent drop in power generation nationally.

A building energy management system (BEMS), meanwhile, provides similar functions for an entire building, such as an office or a factory. An area energy management system (AEMS) allows utility companies to have citywide control over, and management of, supply and demand. Such EMSs are being developed in Kashiwa-no-ha.

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AUTOMATION
Automation of the energy demand and supply cycle is a key component of Japan’s overall efforts to improve efficiency in the sector. On the demand side, the country is to see the installation of smart meters—which monitor household energy consumption in real time—in all homes by the end of 2024; HEMS, meanwhile, are scheduled for installation nationally by 2030. However, most industry analysts believe the hurdles to meeting this goal are too high.

On the supply side of the equation, the goal is to separate power generation from transmission via smart grids between 2018 and 2020. This is on top of liberalization of the energy retail market, which took effect in April 2016, allowing customers to choose their energy provider, for example.

Changing providers, however, comes with the requirement to install a smart meter—if one is not already scheduled to be installed by the existing provider—said Ken Haig in an interview with The Journal. Haig is vice-chair of the energy committee of the American Chamber of Commerce in Japan (ACCJ). He and the ACCJ welcome the liberalization of the market.

It is hoped that cost savings and efficiencies from such measures can also feed into the rest of the economy, which has not recovered fully from the triple disaster of 2011.

As noted by METI in its Strategic Energy Plan (2014): “[Cessation] of nuclear power plants [after 2011] has caused the expansion of Japan’s trade deficit by the increase of imports of fossil fuels and so on compared to the pre-earthquake period.

“Such a rise of fossil-fuel dependency leads to an increase in energy costs … which puts a burden on economic activities and the household economy, and even affects employment and people’s disposable income.”

To ameliorate the problems, the Tokyo Electric Power Company (TEPCO), which is the country’s largest electricity provider and owner of the ill-fated Fukushima Daiichi Nuclear Power Plant, plans to deploy 27 million smart meters across the country as part of its energy optimization strategy.

Overall, Japan hopes to have some 70 million such devices in homes and businesses by 2024 (the original target date was 2020), Haig says.

Kashiwa-no-ha is utilizing large-scale storage batteries “to stabilize and use unstable power such as solar.” The goal is to improve the self-sufficiency ratio of energy from multiple-source stream, including solar and gas generators.

The city is also experimenting with a variety of new intelligent transportation systems—including park-and-ride systems, on-demand bus services, light rail transit services, and two-wheeled, battery-powered vehicles—to optimize and reduce energy consumption.

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SECURITY AND SMARTNESS
“In a world where more devices are connected to IoT, who will be ensuring its security?” a spokesperson from JIPDEC (the Japan Information Processing Development Center) asked The Journal. JIPDEC is a general incorporated foundation. Part of its goal is to develop mechanisms and structures to ensure safety and security in ICT-related industries.

For Minoru Etoh, part of the answer lies in ensuring accountability. Etoh said, “What we need is to create a role for someone who will be responsible and answerable to the community, such as a chief information officer or a chief digital officer.”

Etoh is a senior executive at NTT Docomo and CEO of NTT Docomo Ventures, Inc. Via the latter company, he oversees investment in startups within smart cities.

Venture capitalist and government adviser William Saito, meanwhile, said a greater concern, and one that government policies alone cannot solve, lies in the ultimate goal of smart cities.

“The problem is that the very definition of ‘smart’ will change over time at the pace of Moore’s Law,” he explained—Moore’s Law being the observation that, in technology, processing power doubles every 18 months. “So you might do things that are smart one year, but obsolete the next. The question should be: How to achieve our goals on the assumption that Moore’s Law will hold true.”

But why have a discussion about the use of electric vehicles, Saito asks, when, in a few years, the shared economy and automation in transportation will make the use of cars—and carparks for that matter—largely obsolete?

Further, Saito said, “You can call yourself a smart city, but if no one necessarily comes to the city, then have you attained your goal? If you look at clusters of successful ventures or Silicon Valley-type places, it is that mix of smart cities and their ability to attract and keep businesses and smart people that nurtures and maintains their success in a sustainable way.”

For Saito, the “smart” in smart cities ought to place a premium on people rather than policies or technologies.

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VISIONS OF THE FUTURETomorrow’s cities could take many forms, like Kohn Pedersen Fox Associates’ Next Tokyo 2045 (above). But must technology be the exclusive driving force in a city that better serves residents and the environment? The Journal asked two science fiction authors to share their vision of a smart city.

Dr. Una McCormack
The city has always been about barriers between rich and poor. There are always too many people and not enough space. Cultural capital becomes attached to certain areas, because of their age, or proximity to resources and attractions, or fashion. Some people gain entrance. Others are shifted further and further away.

What could a city look like that did not have barriers like this? Dispersed, I think, like the garden cities of early 20th-century Britain, or bigger experiments like Canberra, Brasilia—or Milton Keynes. But planned cities have never quite sparked to life. Something about the city is spontaneous and unplanned—that’s part of the attraction.

The city of the future will look much like our cities now, I think. Rich and poor, cheek and jowl. Green thirsty spaces. Fossilized layers of the past, built up over millennia, walked upon briefly by the living.

Dr. McCormack holds a PhD in sociology from the University of Surrey (UK), teaches creative writing at Anglia Ruskin University in England, and previously taught in the Cambridge University Engineering Department. She is a New York Times bestselling author of TV tie-in novels.

Dr. Athena Andreadis
Cities are de facto fragile open ecosystems, heavily dependent on environs for functioning (just witness the desertification and collapsing water tables around Los Angeles). The current concepts of smart cities are completely centered on networked expert systems. These, despite their obvious potential, can increase the intrinsic brittleness and rigidity of the structures they’re intended to optimize. They also carry the danger of magnifying dysfunctional tendencies (inflexible implementation, lack of human-level accountability, excessive surveillance, selective policing, ghettoizing).

My own vision of a smart city is one that’s as self-sufficient as possible, organic (rather than created by top-down planning), responsive to the needs of all its inhabitants (not just the human ones) and reliant on robust, low-impact, non-intrusive technology. We already know we need well-coordinated traffic lights, subways and bike lanes; hospitals with reliable back-up generators; small parks, grocery shops, and schools that are down the block from our house. We will also need heavy-duty recycling, composting, and efficient heating/cooling systems; mixed-use zoning, which results in much better safety and maintenance of shared spaces than CCTV cameras; as many street trees as street lights and as many solar panels as gas-driven boilers; community and roof gardens (growing vegetables, not just flowers); and even a rational admixture of wildlife—not just pigeons and rats, but also peregrine falcons and coyotes.

Smart cities will not result exclusively from advances in IT; they will also come about from breakthroughs in material science and from the revitalizing of civic will and local hubs of work. Cities will never be optimized or efficient (in fact, it’s counterproductive to try for these attributes); at best, they will be livable and vibrant while leaving a smaller footprint.

Dr. Andreadis is a molecular biologist and former associate professor at the University of Massachusetts Medical School. She is also author of To Seek Out New Life: The Biology of Star Trek, has written for The Harvard Review and other publications, and distributes science fiction through Starship Reckless and her publishing company Candlemark & Gleam.

 

John Amari is a writer and editor from the UK who specializes in articles on startups, entrepreneurs, science, tech, and business.
The government seeks to use smart cities as a vehicle to create—and to experiment with—cutting-edge technologies, products, and services.