Mayors: I’m begging you to harvest these 3 Chinese innovations

Tue, 2016-01-05 13:01 -- Jesse Berst

Yinchuan is the capital of the Ningxia Hui Autonomous Region in China. It has an area of 4,467 km2 (1,725 mi2) and a population of 2 million. In recent years, it has become one of the world’s top smart cities.

I recently met with the Vice Mayor of Yinchuan during a U.S. / China event in Guangzhou. I was struck how well they are overcoming three smart city challenges: 1) how to pay for it, 2) how to take an integrated, holistic approach and 3) how to handle the technology challenges.

As you will read, Yinchuan is letting the private sector pay for the capital costs, then “leasing” back the services they need. They have also implemented a holistic, top-level design that allows (and requires) different departments to share the costs and benefits of the sensor network and other assets. And they are using graphical information systems and the cloud to overcome the technical hurdles.

We’ve been advocating these same approaches for years, in the Smart Cities Readiness Guide and elsewhere. I hope you’ll study and harvest these important ideas for your own city. – Jesse Berst

 Due to continued urbanization, the city of Yinchuan in western China finds itself facing the same challenges as other large cities in China:

  • When a city expands and car ownership rises, the limited road resources are unable to meet the increased demand, resulting in traffic jams
  • As a city grows in size and becomes increasingly crowded, safety monitoring and crime control become more difficult
  • Additionally, the increase in population density strains the local eco environment with air and water pollution

China has been promoting smart cities development to solve the social, economic and environmental issues for better citizen services, business environment, and city administration. According to recent statistics, nearly 400 Chinese cities, including all provincial capital cities and most of the second-tier cities, are working on city-level smart city projects. However, they all have to tackle the prevalence of the same problems - investment, data sharing, and operations.

The city of Yinchuan set four objectives for its smart cities plan:

  1. A livable city for citizens
  2. Smart administration for the city government
  3. Workable environment for local industries and businesses
  4. Business models to fund the projects and recover investments.

To resolve the problems and achieve the goals, Yinchuan has teamed with ZTE, one of the largest technology companies in China and the world, to conduct a trial to innovate on 1) the business model, 2) the implementation and 3) the technical architecture.

1. Business model innovation: "Public/private partnership + capital market"
The city government purchases services from private companies. Those companies are responsible for the costs of building and operating those smart city functions. This business model solves the government’s financial problem of having to raise a large amount of initial investment as well as the need to constantly update government technical knowledge systems. The investment is recovered and revenue is generated through the smart city operation and asset securitization. This also brings earnings in stock appreciation to provide continuous capital to support smart city development.

2. Implementation innovation: "Top-level design + closed-loop positive feedback"
Instead of following the traditional "single/vertical section" model, the Smart Yinchuan is built by implementing a holistic top-level design for the entire city, utilizing various existing information resources, and vigorously promoting interoperability, data integration, information sharing, business collaboration, and intelligent services. To push this new innovation, a model "Research Institutes + Enterprises + Standards Organizations" is employed. The research institutes are responsible for innovations that are then delivered to industrial companies, which transfer their best practices to international/national standards organizations. The international/national standards are applied to the smart city projects and new requirements are fed back to the institutes, forming a “closed-loop positive feedback” ecosystem.

3. Technical architecture innovation: "Map-Network-Cloud"
The "Map" positions the space nodes of various elements of the city through IoT sensors together with a panoramic true 3D map which supports visual presentation of multi-sector applications based on one single map, and provides the city administrators with visualization and dynamic management capabilities. The "Network" refers to a transmission and sensor network shared by multiple departments that enables direct dialogue between the "ground" and "cloud" through a high-speed broadband network. The “Cloud" centralizes all available basic urban data resources in the city, allowing multi-service data exchange, massive data storage and mining, and big data analytics.