From building to area, and from smart to sustainable and stakeholders - Van Gebouw naar Gebied, en van smart naar sustainable en stakeholders Lucas Carmody Senior Manager, Urban Development and Smart Cities PwC
01 Drivers of change 02 The challenge 03 Urbanists and technologists 04 The emerging response Introduction 05 From building to area and from smart to sustainable 06 Why PwC? PwC’s Digital Services 2
01 Drivers of change
A lot of people love cities; Key challenges cities are facing during the coming decades: they’re centers of culture and business and life. More than half the world’s population now lives in cities, and that figure will go to about two-thirds of humanity by the year 2050. Cities are getting bigger. In 1990 there were ten “mega - cities” with 10 million inhabitants or more. In 2014, there were 28 mega-cities, home to 453 million people. The coming decades, this increasing urbanization comes together with the challenge of sustainable competitiveness : a city’s ability to keep growing and developing over time while keeping the city a livable place , fostering social cohesion and environmental quality . Confidential information for the sole benefit and use of PwC’s client. PwC’s Digital Services
In the Netherlands, we are facing a substantial need to invest in new infrastructure and buildings in the coming decades ICT infrastructure Energy transition Real estate • 1 million new residential houses • An entirely new, decentralized • Increased demand for ICT needed until 2040, on top of smart energy grid structure will infrastructure to enable self renewal unfold in the next decades driving cars & smart mobility systems, smart buildings, sensor • Renovation : >55% of corporation • Large-scale retrofitting of the built networks and new data centers housing stock is over 35y old environment required • Telecom: Fiber network • 71% of pension funds indicates a • 25% of the houses must change gas backbones; Densifying mobile wish to invest in new buildings for into alternative energy supply in networks, elderly and 2030 • Connecting street furniture sheltered accommodation • Electrifying current heating needs • Challenges in cyber security 10x the capacity of new energy in 20 years • Incoming 5G roll out • Challenges in sufficient alternative supplies (e.g. data centers) Sources: 1) EIB studie over de toekomst van de bouw: 1 miljoen woningen nodig in 2040, feb 2015; 2) Energierapport - Transitie naar Duurzaam,, Ministerie van Economische Zaken, 18 jan, 2016; 3) Heel Nederland van het gas af, hoe gaan we dat doen? Duurzaamnieuws.nl, 4 juli 2017, 4) Koers 2025: Ruimte voor de stad, April 2016, 4) 4 juli 2017; 5) Roadmap Next Economy for the Metropolitan Region Rotterdam-The Hague: an example of transition governance, Jan Rotmans, March 2017
Solution • Energy transition Smart utilities management • Citizen engagement • Problem • Surveillance, sensor and better urban • Climate change design Resource scarcity • • Social inclusion • Public safety
02 The challenge
New and Traditional domain of urban development innovative approaches from Commercial Residential real estate housing outside the traditional urban Public safety & City emergency infrastructure services domain is needed 8 PwC’s Digital Services
New domain of urban development Ecosystem of multiple Sustainability Smart mobility stakeholders and Traditional domain of criteria (ESG/SDG) solutions urban development interests Many Commercial Residential real estate housing interdependencies Renewable energy, Citizen centric between actors and electrification design, citizen involvement sub-systems Public safety & City emergency infrastructure services New business models & integrated Sensor networks & Circularity, zero value cases smart solutions emission Smart buildings 9 PwC’s Digital Services
03 Urbanists and technologists
Technologist Urbanist New urban domain Traditional urban domain Understand how cities work and use traditional levers Understand how digital technology can be applied to of policy, urban planning and architectural design to VS existing systems to improve urban lives and address improve urban lives and solve urban issues urban issues Slow and calculated, view the city more as a set of Fast and impatient, view the city as a system of systems social constructs and deeply ingrained behaviors that and looking for ways of optimizing systems take time to change and influence Limited ability to understanding their end user Intimate understanding of their end user with ability to (e.g. pedestrian movement in a development, generate big data and live insights neighborhood post development) PwC’s Digital Services
Urbanist and technologist speak a different language • Technologists prefer to approach problems Case study 2 - IBM and Portland from first principles, rather than existing • predictive model for urban planning practice. • using historical data to generate innovative • Urbanists, prefer existing practice, as a policies for city planning mechanism to get things built in the system that currently exists. • result was promote active transport to reduce obesity Lost in translation When tech doesn’t understand urban: • Why integration between tech technology is develop that is urban in When urban doesn’t understand tech: application but doesn’t actually make cities and urban isn’t so simple • Uber better • Airbnb • introducing new tech and smart city solutions to problems that don’t exist or you don’t • Sidewalk Labs properly understand Case study 1 - Songdo, South Korea PwC’s Digital Services
We are giving you our data, what do we get back? Local community We are giving you our product/ service, what do we get paid? Who pays? Tech company Multiple stakeholders requires identifying value and how to We have to accommodate monetize this value new technology, how do we get paid? Urban developer How do we fund this untested technology on a city wide-scale? Public sector PwC’s Digital Services
04 The industry response
What has the response been by the traditional urban domain? Bury Build Buy • Buy and invest in proptech that • Build , some companies are investing • While there remains many in the sector in their own dedicated proptech who have decided to bury their heads in improves the way traditional built investment and R&D facilities. the sand. environment sector operates and introduces new revenue streams to • Embracing digital disruption, urban • The sector is too large and fragment to the existing business model. development companies are looking to see true disruption. hire tech talent from outside the PwC’s Emerging Trends in Real Estate • Despite talk of disruptive technologies urbanist mould. and technical innovations, urban development remains fundamentally unchanged. • Where is the Uber, Amazon or Booking.com? Unthinkable business models remain relatively absent in the real estate industry (except retail).
Blurred lines – merging of old business models with new Real estate into tech Tech into real estate Multifamily properties that can be Development of city region in Toronto rented out on Airbnb through Sidewalk Labs Modular high-end housing startup that Platform that empowers retailers to digitize sales could be potentially integrated with Alexa technology. Cloud-based platform allows landlords Enables long-term tenants to sublease to track repair projects/vendors across apartments portfolio VC fund and tech accelerator Tech fund invests in ‘real estate’ business Tech-based leasing and management Partners with managers to provide co- platform working space/ workplace services Real time network for office space. Plans to create a mixed-use campus Connecting growing teams and town profession looking for space.
05 From building to area, and from smart to sustainable
Building Area TO Isolation and silos Connected precincts 1. Siloed approach – Individual solutions (e.g. 1. Put people first – Understanding how the energy, mobility, housing, communication) are community uses existing spaces to inform new executed as individual projects solutions (e.g. infrastructure, facilities and services) 2. Single use – Companies offer individual products and solutions for singular use 2. Connections driven – create vibrant and productive places where people want to live , work 3. Individual business model – targeted at and play maximizing profitability or position in the value chain 3. Partnership models – Municipalities and market parties function as partners, together in eco-systems with diverse stakeholder objectives and interests (e.g. solutions are developed in ‘innovative partnerships’ in PPP models) PwC’s Digital Services
Smart precincts provide a greater opportunity for sustainability What is the point of While there are The next step is working, living or barriers preventing going from learning in a 5 star investment in benchmarking self- Green Building if sustainable sufficient precincts people are leading 1 technology at a large and from there, star lives once they scale, it’s at the precincts that can leave the building? precinct level that export their energy we go from barriers and water resources to benchmarks to surroundings neighbourhoods
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