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Social Value Creation Report "Safer Cities & Public Services"

facilitated by digitalization
Urban development that enables sustainable economic growth

The population of the world continues to concentrate in cities as urbanization advances, with two thirds of all people predicted to live in urban areas by 2050. The improvement of infrastructure to support the growth stage is an urgent issue in emerging countries, while the realization of new social models for the mature stage is a key issue in developed countries. As urbanization advances, competition among cities for capital, companies, and human resources is also heating up globally, and economic disparities are widening. Cities around the world are engaged in leveraging ICT to develop compelling urban spaces, and are undertaking a variety of projects to succeed against the competition.
Japan, an advanced country in tackling issues, is accelerating the government-led "Society 5.0" initiative to achieve a super-smart society that makes maximum use of digital technology. To secure industry, employment, consumption, and financial resources, and to optimize these through the economic cycle model, it is important that future urban development lies in digitalizing urban functions and information as well as realizing a society that makes sustainable economic development possible. This report discusses NEC's thoughts and initiatives on promoting a paradigm shift from existing social platforms that depend on hardware to the “Flexible social platform” based on data usage.

A sustainable perspective is vital to resolving issues accompanying urbanization

Facing up to the serious issues introduced by urbanization worldwide

According to the World Urbanization Prospects 2014 report issued by the United Nations, 54% of the global population in 2014 lived in urban areas. That number is expected to rise to 66% by 2050.
Urbanization is also advancing in emerging countries in Asia, Africa, and elsewhere. According to UN statistics*1, the urbanization rate in emerging countries with high growth rates was over 60% in 2013, and is expected to rise to nearly 80% in 2050. In emerging countries that are undergoing rapid population growth and urbanization, pressing issues include traffic congestion, disaster readiness, waste treatment, and the securing of energy, water resources, and other lifeline functions.
According to UN statistics*2, the urbanization rate in developed countries was over 80% in 2013. With the advance of aging in the cities of developed countries, it is a key issue to make safe, secure societies with development potential while maintain existing social infrastructure.
According to UN statistics*1, Japan's urbanization rate will greatly exceed 90% in 2020 and is expected to continue rising gradually through 2050. The National Institute of Population and Social Security Research*3 notes that while the concentration of population in the three major urban zones of Tokyo, Nagoya, and Kansai will continue to rise, Japan's urban population itself is on a declining trend. In addition to urbanization, Japan is under pressure to respond to population decline.

Resolving issues calls for a sustainable economic development perspective

As urbanization advances, the competition among cities to attract capital, companies, and human resources is heating up globally. The Organization for Economic Cooperation and Development (OECD) points out that, between the 10% most productive regions and the 75% least productive regions within OECD nations, the disparity in average gross national product (GDP) per worker is growing wider*4.
Success in this intensifying competition calls for resolving the issues of urbanization and enhancing the attractiveness of cities. As urbanization surges in both developed and emerging countries, to provide all residents with lifelines, transportation, environment, education, medical care, housing, employment, and other amenities, there is a need for urban development that enhances urban functions and creates opportunities for economic development. The realization of equitable services and safe, secure urban infrastructure will be a key point in enhancing the value of cities for not only residents but also for business persons and tourists from overseas.
Worldwide, a variety of initiatives are taking aim at compelling urban development and the resolution of urbanization issues. It has become important that we not only resolve the issues that we face but also transform our vision of social systems from a sustainable perspective, creating new social and business models.

  • *1 Source:
    World Urbanization Prospects (2014 Revision)
  • *2 Source:
    World Urbanization Prospects: The 2014 Revision, World Bank, World Development Indicators
  • *3 Source:
    For 2010 and earlier: Ministry of Internal Affairs and Communications Statistics Bureau, "Population Census"; 2015 and later: National Institute of Population and Social Security Research, "Future Population of Japan by Region (March 2013 estimates)"
  • *4:
    OECD Regional Outlook 2016

Digitalization to support sustainable urban development

Horizon2020 aims for EU’s sustainable development

The EU is advancing a smart city concept that leverages ICT to meet economic and societal needs, with the aim of a sustainable society. In 2014, the new EU Framework Programme for Research and Innovation, or Horizon2020, entered the implementation phase of a smart city concept that utilizes the IoT.
Horizon2020 calls for participation in smart city projects in cities around the EU. In response, many local governments are joining up to roll out initiatives that contribute to community revitalization as well as sustainable urban development.
Horizon2020 is composed of programs under the three cornerstones of excellent science, industrial leadership, and tackling societal challenges (including smart cities). Its aim is to connect the results of world-class scientific research to innovation, economic growth, and
employment. In addition, the European Commission (EC) has developed FIWARE, an open platform to promote collaboration in services and cross-industry use of the data of local governments and companies that provide the public services that support the sustainable development of cities. The FIWARE Foundation is a non-profit organization, which is working to promote the spread of the platform and move forward with projects that leverage the platform in diverse sectors including cities, agriculture, and industries.

State-led initiatives for smart cities in Asia

Smart city initiatives are spreading in countries around the world. Some countries in Asia are promoting smart cities as state projects. With its urban populations growing rapidly year by year, India is hammering out the Smart Cities Mission, which will construct smart cities in 100 locations in the country by 2022, as a state-led initiative to promote the improvement of lifelines.
Singapore, meanwhile, is engaged in the Smart Nation project that expands the concept of the smart city to the national level. The project sets up various sensors all over the city and using the IoT technology to digitalize information, with the aim of achieving safer and more comfortable cities through the visualization and analysis of various urban conditions in real time. It also seeks to develop human resources and aggregate industry, connecting these to the economic development of Singapore by turning the nation into the "Digital Harbour" for Asia.
From here on, it is important that we develop urban economies sustainably by using equipment and facilities more efficiently and effectively. The digitalization of cities will connect people, information, and things, give rise to value, and support this development.

Japan, an advanced country in tackling issues, aims for "Society 5.0"

Sustainable urban development through digitalization

According to the 2017 Annual Report on the Aging Society*5, Japan's percentage of aged population (the percentage of senior citizens aged 65 and older within the general population) is 27.3%, a number expected to increase to 33.3% in 2036. That will mean one in three persons will be a senior citizen of age 65 or older, creating a highly aging society never before seen in the world. The speed at which China, Brazil, and other nations are aging is forecasted to exceed even that of Japan*6, making the aging of society a common social issue that each region around the world will share.
The Japan Policy Council, a private research organization, notes that the flow of population from local areas to urban zones creates the possibility that half of Japan's local governments will disappear by 2040*7. To resolve the issues of aging, population decline, and cities facing disappearance, sustainable urban development is urgent. The 5th Science and Technology Basic Plan, created by a Cabinet decision of the Japanese government in January 2016, sets forth a national vision under the name "Society 5.0." This is an initiative to realize a "super-smart society led by science, technology, and innovation," which will follow the hunter-gatherer society, agrarian society, industrial society, and information society of the past.
A super-smart society is one that is "capable of providing the necessary goods and services to the people who need them at the required time in just the right amount; a society that is able to respond precisely to a wide variety of societal needs; a society in which all kinds of people can readily obtain high-quality services, overcome differences of age, gender, region, and language, and live vigorous and comfortable lives."
Society 5.0 aims to extend the use of digital technology (the IoT, cybertechnology, etc.) not only to manufacturing but also a variety of fields, leading to the formation of economic growth and a healthy, long-lived society, and even societal transformation.

Promoting Society 5.0 through the utilization of public and private sector data

In May 2017, the Ministry of Economy, Trade and Industry released the New Industrial Structure Vision to achieve Society 5.0. This vision points to four strategic areas in which Japan is called upon to resolve issues at the forefront of the world as an advanced country in tackling issues. These areas are "move" (the movement of people and things), "create / obtain" (smart supply chains, etc.), "maintain health and stay active throughout life" (health, medical care, nursing care), and "live" (new urban area development, etc.). What will be the key to resolving issues through technological innovation is the data utilization cycle by which data is
obtained, analyzed, and used in real society.
The Basic Act on the Advancement of Utilizing Public and Private Sector Data, an act of the Diet enacted and promulgated in December 2016, seeks to promote local governments', companies', and private citizens' utilization of data held by the public and private sector across organizations, with care taken toward personal information. The Act gives a legal basis to local governments nationwide for the promotion of policies and projects that utilize data, and is expected to accelerate the digitalization of cities.

  • *5
    Annual Report on the Aging Society: An annual report submitted yearly by the Japanese government to the Diet, in accordance with the Basic Act on Measures
    for the Aging Society
  • *6
    United States Census Bureau, An Aging World: 2015
  • *7
    Estimated by the Japan Policy Council private research organization in August 2013 on the basis of future population calculations prepared by the National Institute of Population and Social Security Research. (May 8, 2014)

NEC's global initiatives for the digitalization of cities

NEC supports the digitalization of cities

Urban development has traditionally focused on the improvement of infrastructure, such as efficient lifelines. Today, projects aimed at sustainable urban development are taking place in cities around the world, with an emphasis on the digitalization of cities and the realization of collaboration among services and utilization of data that crosses the boundaries of local governments and companies, as well as the creation of new services and business models.
Across the globe, NEC is engaging in a societal solutions business that creates the societal values of safety, security, efficiency, and fairness. By fusing advanced ICT such as image analysis and cloud computing with the knowledge we have earned through the construction of infrastructure, we provide support for planning, design, development, implementation, and operations that facilitate the digitalization of cities.

Contributing to digitalization projects in cities around the world

The city of Santander in Spain is implementing a project to improve urban living in a variety of aspects, including the reduction of traffic volume and energy consumption, the improvement of environmental quality, and the promotion of participation by citizens. As a part of the project, in February 2014 the city adopted NEC's CCOC*8 city operation platform to make temperatures, vehicle speeds, noise, and other urban data visible. The city also uses sensors to monitor the volume of rubbish in the bins and optimize collection intervals and routes.
NEC is leveraging the know-how and knowledge gained in Santander to contribute to the realization of urban digitalization in countries worldwide. As an example, the Portuguese city of Lisbon*9 adopted CCOC in its data center and is undertaking the collection and analysis of various types of urban data (weather, geography, tourism-related information, air pollution, traffic congestion, etc.) in real time, for sharing them among multiple municipal services. The city is also strengthening crime prevention measures, such as the detection of illegally parked vehicles and suspicious objects.
In the United Kingdom, NEC has partnered with Bristol Is Open (BIO)*10, the city of Bristol's smart city project promotion program. Working with BIO, NEC will contribute to the construction of platforms that utilize SDN and IoT sensors, AI technology, and more, as well as engage in providing technology and service demonstrations that contribute to the realization of a smart city. This partnership is paving the way for improvements in a wide range of services, including traffic congestion, waste management, entertainment, e-democracy, and energy supply.
Furthermore, the city of Kawasaki in Japan is undertaking a study to enhance resource recycling utilizing the IoT in Kawasaki Eco-Town. Together with the city, NEC is undertaking a study of the optimization of an industrial waste collection and transport system by utilizing the IoT.

  • *8 CCOC:
    Cloud City Operation Centre, an NEC-developed system that provides a common platform for visualization of the status of industry-specific smart services, data analysis, simulation, and more
  • *9
    Included in the "100 Resilient Cities" selected by the Rockefeller Foundation
  • *10
    Bristol Is Open (BIO) is a joint venture between Bristol City Council and the University of Bristol, and aims to create the world's first open, programmable city to support the creation of innovative new smart services for people, business and academia.

NEC's thoughts for the “Flexible social platform” based on data usage

Japan faces a variety of issues ahead of the world

According to a population census in 2017*10, Japan's population declined for the eighth consecutive year, falling to 125.58 million people. This marks a decline of over 300,000 from the previous year, the greatest decline since the beginning of the survey in 1968. As Japan enters an era of declining population and the breakdown of its past economic cycle models, the country is now in need of a transformation in its social platform that has continued since the era of high growth.
Amid society's shift from growth to maturity, what is the ideal for this social platform? Japan is rapidly changing toward a mature society, and the path it chooses will provide a direction for the countries of the world. In a mature society with a declining population, low birth rate, and high level of aging, for achieving a safe, secure, comfortable, and sustainable society, while also overcoming the issue of insufficient resources for social security, it is not required to have a traditional hardware-dependent social platform built of concrete and steel. Rather, what is urgently needed is the construction of the “Flexible social platform” based on data usage that can adapt to changes in the environment.
The aim of the “Flexible social platform” is not the piecemeal optimization of disaster readiness, welfare, and so on, but the overall optimization of government services through the use of data across organizations. In addition, through the improvement of engagement with
citizens, the platform will seek to improve citizen services and to carry out reforms together with citizens, through means such as the formation of consensus on changes to urban planning.
The burden of shouldering social services will not fall upon local governments and large corporations alone. The “Flexible social platform” will create an ecosystem in which companies and universities with rich knowledge of the region will participate, launching initiatives such as urban development councils and giving rise to new services. In addition, by connecting services, the platform will create new values that leverage the services' respective strengths, and will contribute to the development of local economies. It will further collaborate with the new services of the digitalization age, and will promote the creation of new services and the formulation of new business models that are cognizant of "consumption of experiences," which finds value in the experiences gained through the purchase of products and services, rather than the "consumption of things," which finds value in the owning of products.
As in corporate management, a management perspective is also important for cities. Making the data collected under the “Flexible social platform” visible, understanding change in the digitalization age, and setting KPIs (Key Performance Indicators) to effect improvements through the PDCA (Plan-Do-Check-Act) cycle will be necessary.

  • *10
    Demographic change as of January 1, 2017, reported by the Ministry of Internal Affairs and Communications on the basis of Basic Resident Registers

Contributing to the standardization of the EU's open platform

NEC has been actively involved in FIWARE, which is regarded as the data centric platform to support the “Flexible social platform.” In 2009, NEC took part in the proposal of the NGSI (Next Generation Service Interfaces) concept, the interface standard for FIWARE, and from 2011 has taken part in FI-PPP (Future Internet Public-Private Partnership Programme). Our deep involvement has included development of the IoT data brokering function of FIWARE.

Moreover, to accelerate urban digitalization and other projects that utilize the IoT, NEC has participated in the FIWARE Foundation, a private sector-led initiative to spread FIWARE, as the only Japanese company at the highest Platinum Member level (as of July 2017). Doing so, NEC is contributing to functional expansion and enhancement from a technological perspective, and to the spread of FIWARE. These initiatives are only a partial example of the fusion of NEC's advanced digital technologies grounded on FIWARE. We are leveraging the technology and know-how earned through our efforts to develop and spread FIWARE to contribute to urban digitalization in cities around the world.

The economic cycle model that calls for the “Flexible social platform”

NEC is making full use of CCOC, the IoT, AI, facial recognition technology, security solutions, open platforms such as FIWARE, and other digital technologies to help implement the economic cycle model that requires the “Flexible social platform.”
This economic cycle model has a dual-circle structure, consisting of two concentric circles in the form of interrelated cycles: an industry → employment → consumption cycle that constitutes local internal demand, and a population → financial resources → social platform cycle that supports society and the public.
This economic cycle model will be made visible though the social platform, and cities will evolve through the repetition of hypothesis verification with the aim of proactive urban management.
The issues faced by Japan's cities will be faced by the world's cities as well. Such urban development as promotes a paradigm shift through the “Flexible social platform” based on data usage, and performs overall optimization using the economic cycle model, will become a model for the world.
NEC will support urban development that facilitates sustainable economic development through co-creation with local governments, companies, and citizens around the world, and will leverage that know-how to help make Society 5.0 a reality.
While respecting the essential values pursued by society and by their customers, NEC wishes to work together with everyone and use the ICT to design new social values for the sake of a brighter world.
If you have any questions concerning the contents of this report or NEC initiatives, please do not hesitate to contact us.

(February 28, 2020)

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