Abstract

Powered by data and facilitated by new digital infrastructure technologies, Smart Cities bring economic development and heighten efficiency of critical systems and networks. A strong and clear business case to justify the capital investment necessary to realise these opportunities, and to encourage innovation in the market is necessary for smart city development.

To help cities develop Smart City solutions and create value in their digital economy, Siemens has developed a new tool – the Digital Value Chain Model, to provide a set of infrastructure priorities in which to invest, and will demonstrate the wider benefits arising to the economy, allow cities to assess these different levels of value which underpin the development of a Smart City and digital economy. Five phases to apply the Digital Value Chain Model has been demonstrated. For Chinese cities, the integrated intelligent infrastructure with digital capability will bring enhanced benefits to allow city services to operate at optimal capacity, thereby becoming a Smart City.

Cities are on the cusp of a revolution in how they plan, build and operate infrastructure and public services, and in their relationship with citizens. This revolution is powered by data and facilitated by new digital infrastructure technologies that allow adaptive decision making to occur in real time. The decreasing cost of collecting and transmitting information can allow cities to generate real operational benefits across sectors, which translate into greater efficiency and financial savings in the long term. However, cities need a strong and clear business case to justify the capital investment necessary to realise these opportunities, and to encourage innovation in the market.

Smart Cities bring economic development and heighten efficiency of critical systems and networks. To tap into this opportunity, cities need to mobilize the private sector to work with them, and do this, they need to understand the business case and employ a new approach to attributing value. A business case that provides not only a financial cost benefit, but one that quantifies all consequential benefit from digital infrastructures and monetizes each to create new levels of value. This approach will highlight the digital value chains that arise from Smart City infrastructure and encourage the private sector and digital entrepreneurs to engage in, and grow the digital economy.

To help cities develop Smart City solutions and create value in their digital economy, Siemens has developed a new tool – the Digital Value Chain Model. Applying the Digital Value Chain modelling approach will give each city a set of infrastructure priorities in which to invest, and will demonstrate the wider benefits arising to the economy which can then be used to engage private sector partners to participate in city development.