advancing societal improvement in south america ... - hitachi€¦ · social-innovation.hitachi...

In partnership with Hitachi South Americasocial-innovation.hitachi

Advancing Societal Improvement in South America through Social Innovation

Whitepaper


© 2017 Frost & Sullivan

www.frost.com2

Table of Contents

Urbanization: The World’s Most Compelling Mega Trend,

Concentrated in South America ....................................................................3

Transportation Leading from the Front ......................................................4

Prioritizing Safety for Healthier Communities .........................................8

The Successes and Strains of Modern Healthcare ................................9

The Energy to Grow Cities and Economies ..........................................11

Grid Concerns as Significant as Power Generation Gaps ................13

Water as Necessary Resource and Key Challenge to

Economic Development...................................................................................14

Looking at the Road Ahead for South America.....................................15

Hitachi’s Proposition on Social Innovation .............................................16



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URBANIZATION: THE WORLD’S MOST COMPELLING MEGA TREND,

CONCENTRATED IN SOUTH AMERICA

South America has one of the world’s youngest and fastest growing

populations, and most vibrant cultures. It is a region defined by a significant

amount of raw materials and human talent, innovation and challenges. These

factors, along with a largely urbanbased population, make South America an

exceptional opportunity for economic growth and prosperity while

improving societal conditions through Social Innovation.

Urbanization is, indeed, one of the most compelling Mega Trends that Frost

& Sullivan tracks due to its profound impact on society. South America is

one of the most urbanized regions in the world; 83.3% of the population

already lives in urban areas, and that percentage is expected to increase to

88.7% by 2050. The percentage is even higher in some countries; Brazil has

anticipated urbanization of 91.0% by 2050, and Argentina already has

91.8%—a third of which is concentrated in and around Buenos Aires.

By 2030, according to the United Nations Department of Economics and

Social Affairs, 45 cities in South America will have over 1 million residents

each. Sao Paulo, Buenos Aires, Rio de Janeiro and Lima are mega cities and

already have over 10 million inhabitants each. The pace of urbanization in

South America has been astounding. In 1950, about 48 million people in the

region lived in cities. By 2025, that number is expected to be 385 million.

SOUTH AMERICA MEGA CITIES. POPULATION IN 2030

Source: UN Database 2016; Frost & Sullivan

"South America is one

of the most urbanized

regions in the world;

83.3% of the

population already

lives in urban areas,

and that percentage is

expected to increase to

88.7% by 2050." Bogotá

11.9 million

Belo Horizonte

6.4 million

Brasilia

4.9 million

MEGA CITIES IN 2030 C S Lima

12.2 million Rio de Janeiro

14.2 million

Santiago

7 1 million

Sao Paulo

23.4 million

URBANIZATION RATE (2030)

>75% 50% 75% 25% 50% <25%

7.1 millionBuenos Aires

16.9 million

>75% 50% - 75% 25% - 50% <25%

EMERGING MEGA CITIES (4-8 MILLION POPULATIONIN 2030)



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"South America is a

prime region for rail

market growth and

investment, with about

$280 billion in

investments expected in

the market from 2013

through 2020"

This paper will explore how the rapidly expanding and evolving economies

in South America will test cities, governments, businesses, and residents, and

how the region can flourish through these new opportunities through

collaborative creation, understood as the process of innovating with partners

in order to create new value for business stakeholders, customers, and

society.

Urbanization presents both challenges and opportunities to the

governments and companies that serve city residents and businesses. Frost

& Sullivan research has found that higher-density urban populations,

compared to lower-density rural areas, tend to have higher incomes;

consume more goods, energy, and services; and produce more waste. Some

of these factors result in higher awareness of environmental concerns and

the need for general infrastructure improvements. No one is ever happy

sitting in a smoggy traffic jam, for example.

However, this can create a multitude of opportunities as well. Sensors and

monitoring across a city—in street lights, in utility meters, and across public

transportation—create an Internet of Things (IoT) that enables a city to be

safer, cleaner, and more appealing to its residents, visitors, and businesses.

Urbanization, and the economic growth that drives it, can put a strain on

energy supply and water quality. These finite resources can be better

managed and distributed through improved and predictive data analytics.

Traffic is often an issue, and public transportation, especially when coupled

with green energy, can be touted as a way to relieve congestion, decrease

an environmental footprint, and improve a population’s health and safety.

TRANSPORTATION LEADING FROM THE FRONT

One of the most visible changes across infrastructure is also one of the most

fundamental to society—the expansion in the transportation of people and

goods that accompanies economic growth. Mass transit in par ticular is

central to urban and economic growth, whether it be urban subway systems

or transcontinental railways. They are as relevant and critical now as they

were when they revolutionized the global socioeconomic landscape nearly

150 years ago. A new revolution is now taking place across intermodal rail,

driven by changing economic conditions, environmental priorities and IoT

advances. According to Frost & Sullivan research, “software and Big Data

investments” is one of the top priorities for the global rail industry, along

with modernizing infrastructure and meeting environmental standards

(Global Rail Market Outlook, Frost & Sullivan, 2016).



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"South American cities

need to adequately

address two main areas

for improvement: the

quality of service and

the integration into

full-scale, integrated

transport systems."

Due to global urbanization trends, intercity and highspeed rails are expected

to have the fastest growth rate in mainline passenger rail markets, while

individual transportation options are expected to decline. However, all rail

segments are grappling with, and trying to take advantage of, the cost,

efficiency, and operational benefits of strategic IoT solutions. Rail is

consistently a cheaper and cleaner option for transportation of people and

goods, as compared to cars, trucks, and aviation, for example, but low

margins and aging infrastructure mean the industry needs to find ways to

drive more efficiency for bottom-line growth. Nonetheless, South America

is a prime region for rail market growth and investment, with about $280

billion in investments expected in the market from 2013 through 2020

(Strategic Analysis of the South American Rail Freight Market, Frost &

Sullivan, 2014).

Much of this investment—about 70%—is expected to go to physical

infrastructure such as new lines, extensions, and upgrading current

infrastructure. However, these investments will also need to be “smart” and

integrated with sensors that enable remarkable improvements in efficiency

and scheduling.

South American cities need to adequately address two main areas for

improvement: the quality of service and the integration into full-scale,

integrated transport systems.

One of the most serious transport problems in Buenos Aires is the drop in

public transport usage, which has fallen from 67% of total trips in the early

70s to 40% in 2012. The rail system in particular has suffered, with a decline

in users of nearly 40% in the past decade, though bus ridership increased

and is now 80% of public transportation. This rapid expansion of motorized

trips, coupled with the growing predominance of private vehicle transport,

generates traffic, security and pollution problems for the more than 12

million inhabitants of the Buenos Aires metropolitan area.

Investment in better-quality service is important to keep these systems

attractive to the public and offer them as a real alternative to cars and

motorcycles. Studies from the Center for the Implementation of Public

Policies Promoting Equity and Growth (CIPPEC) suggest that an

improvement in the quality of service of the metropolitan train system

would add more than 100,000 passengers and would take out nearly 45,000

cars from circulation in the Buenos Aires metropolitan area.



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Moreover, the introduction of bus rapid transit (BRT) in key street corridors

would generate a drop of about 90,000 cars and the incorporation of

170,000 passengers to the public transport system.

Sao Paulo is another example of a South American city with considerable

growth in population and vehicles, and has not had proper investment to

improve the quality of the public transportation system. Similar to Buenos

Aires, Sao Paulo has also lost riders in the past decades. In the metropolitan

area of Sao Paulo, more than 43 million motorized trips are taken daily and

less than 50% of them are done using public transport. Buses are used in

75% of all public transport trips, while the train and subway are the resulting

25%. This, along with a car culture and auto-centric urban development, make

Sao Paulo a heavily congested road network, with common traffic jams up

to 100km long and average car commute clocking in at 1.5 hours.

In Lima, even though more than 80% of Lima residents use public transport,

the system is often described as “chaotic.” Residents spend an average of

two to three hours a day in the creaking transit system. A key problem is

underinvestment in transport infrastructure, which limits access to jobs and

services in many urban areas, especially for the poor, who tend to live in

peripheral areas. The vast majority of motorized trips are still made with

largely unregulated, low-capacity vehicles that compete for customers on

the street.

In order to give a boost to public transport, authorities in Lima designed a

new plan of action that involves the addition of two subway lines to the

municipal transport network. The implementation of Metro Line 2, now

under way, is one of the most important projects of the Peruvian capital and

will only be possible through the collaborative effort of different ecosystem

partners. Ansaldo STS and Hitachi Rail Italy are part of the consortium that

was awarded the 35-year PPP concession to finance, build, operate, and

maintain Line 2. The line will connect in a 35km corridor the cities of Lima

and Callao in the Pacific Coast, the country’s chief seaport and international

airport, and is expected to carry 644,000 passengers per day with an end-

to-end journey time of 45 minutes. The project will improve the accessibility

of jobs, services, and markets for 2.3 million people, and provide a backbone

for more efficient urban development.



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"Improving operations

is a strong theme

across the global rail

industry, and South

American markets will

need expert guidance

under a collaborative

approach to create its

road map to a modern

rail future."

The second area of improvement for South American advanced systems is

integrating with other modes of transports. As advanced bus corridors

developed, they also lacked the connections with other public transport

services. Sao Paulo’s municipality was one of the pioneers in the region to

implement a unified ticketing system in 2006. The Bilhete Unico (single ticket)

integrates buses, subways and trains, allowing passengers to commute during

three hours using a single ticket.

SOUTH AMERICA INTEGRATED MOBILITY ON THE RISE

Source: Frost & Sullivan

Improving operations is a strong theme across the global rail industry, and

South American markets will need expert guidance under a collaborative

approach to create its road map to a modern rail future. Hitachi has a long

history in the rail industry, and Hitachi Data Systems (HDS) has been

working with Russian Railways since 2008 to help the colossal, yet critical,

system achieve extraordinary advances in everything from planning

operations to customer interactions. Russian rail systems operate in an

environment with several similarities to South America:

Periods of economic uncertainty yet huge potential, concerns about carbon

footprint needing to be balanced with the strong will and desire for rapid

economic development, a substantial base of natural resources, and a

strongly urban-centric population. HDS was able to provide Russian Railways

with a comprehensive solution that generated better accuracy and efficiency

across departments, from Electronic Document Exchanges and Transport

Documents, all the way to Finance and Human Resources.

BRAZIL• City-level Integration:

A number of cities having single ticket

COLOMBIA• City-level Integration: Tullave, Bogota

M d lli M t d M d lli i i d

cards that primarily integrate buses and subways

• Bike sharing and bike sheds also integrated in Sao Paulo

• E.g.: Bilhete Unico, Sao Paulo; Bilhete• Medellin: Metro de Medellin commissioned a complete ticketing system for trolley, subway, bus, and metro-cable; private mobility service providers expected to partner post 2016

E.g.: Bilhete Unico, Sao Paulo; BilheteUnico, Rio; BOM Card, Sao Paulo

ARGENTINAARGENTINA• National-level Integration:

A number of different mobilityservices (including toll payments) used in increasing number of cities and provinces in Argentina via a SUBE Card

CHILE• City-level Integration: Integration across metros and buses in Santiago

• E.g.: bip! Card, SantiagoArgentina, via a SUBE Card



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"One of the biggest

concerns in areas of

economic hardship is

public safety.

According to the

Igarapé Institute, in

2015, most of the top

50 global cities with

the highest murder

rates were in South

America; Brazil had 32

cities in the list."

The HDS solution sharply reduced processing time for key systems, such as

a monthly cost-allocation analysis that went from three days to 20 minutes,

and database access that sped up 300 times. The far-reaching improvements

have resulted in improvements in everything from customer ticket

purchasing to energy usage, and are applicable to South America as it

embarks on massive investments across mass transportation infrastructure.

Digital video and monitoring solutions are another key area for

transportation companies to enhance operations, as is the case with NY

Waterway, which applied Hitachi Visualization solutions to support a unified,

digitally optimized solution for monitoring and communicating with its

vessels. The NY Waterway solution applies both Hitachi Visualization Suite

(HVS) software, designed to aggregate data from incoming sources in a

central, operational dashboard in real time, with Hitachi Visualization

Platform (HVP) gateways to manage data integration, transcoding and ingest

services from various sources, including NY Waterway’s cameras, sensors

and public safety systems. The new solution has helped NY Waterway

enhance passenger safety, improve mobile network connectivity and stability,

and dramatically increase operational efficiency by providing consistent real-

time and remote visibility across its fleet.

PRIORITIZING SAFETY FOR HEALTHIER COMMUNITIES

While urbanization has been a result of economic growth for the region, it

has brought with it challenges on infrastructure, safety, and the environment.

The rapid growth of South America’s urban areas has put a strain on

infrastructure. The most densely populated areas are typically low income

and struggle to gain access to key services such as security, transportation,

and water and sanitation. The gap between those who have access to these

services and those who do not creates peripheralization—the segregation

and marginalization of poor areas. Governments recognize these issues and

have made poverty reduction a top priority; however, it is difficult to address

because nearly 20% of the urban population—about 110 million inhabitants,

according to the United Nations—live in economically disadvantaged slums.



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"More than 80% of

adults over the age of

60 have at least one

chronic disease; in

South America, the

proportion of people

over the age of 60 will

increase from 11.7% in

2015 to 26.6% by

2050."

One of the biggest concerns in areas of economic hardship is public safety.

According to the Igarapé Institute, in 2015, most of the top 50 global cities

with the highest murder rates were in South America; Brazil had 32 cities in

the list. Urban dwellers in the region will overwhelmingly note that their top

priority is security.

But South America is not alone in these concerns; even the “safest” city in

Europe or the United States will have a corner where tourists are told not

to venture at night. Through its converged hardware and software

Visualization solutions for public safety and smart cities, Hitachi has

collaborated with municipalities, governments and private entities to create

scalable solutions that enable security forces to quickly detect, analyze, and

act appropriately.

THE SUCCESSES AND STRAINS OF MODERN HEALTHCARE

Modern medicine continues to make incredible strides to improve human

life expectancy and quality. South America’s economic advances have helped

improve the welfare of its population, and life spans have increased along

with global rates. However, with increased life spans come new challenges

for an aging population. Chronic diseases such as hypertension, diabetes, and

cancer tend to increase as people live longer, and obesity has become a

consequence of the modern lifestyle the world over. More than 80% of

adults over the age of 60 have at least one chronic disease; in South America,

the proportion of people over the age of 60 will increase from 11.7% in

2015 to 26.6% by 2050. Most of these individuals will be part of the growing

urban population, thereby changing the types of services that a city needs

to provide its citizens.

Source: UN Database 2016; Frost & Sullivan

DEMOGRAPHIC TRENDS IN SOUTH AGING SOUTH AMERICANDEMANDS

GROUP, 2015-2050

500 0

600.0Pharmaceuticals and health supplements

Elderly care

49.083.2 134.8

400.0

500.0

S)

y

E-healthHEALTH

CARE

S i t i

266.4 292.4 288.0

300.0

(IN

MIL

LIO

NS

LEISURE

Senior tourism

Senior social services

Eld l d i

100.0

200.0

PU

LA

TIO

N ( Elderly education

Life insurance103.0 95.3 84.5

0.02015 2030 2050

PO

P

PRODUCTSHealthcare equipment for the elderly

60+ 15-59 0-14

DEMOGRAPHIC TRENDS IN SOUTHAMERICA: POPULATION BY AGE

AGING SOUTH AMERICAN DEMANDS



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"Frost & Sullivan

research found that the

hub-and-spoke model

of hospital care, with a

central hospital and

clinics distributed

among residential

areas, is a key

component of the

overall Health,

Wellness, and Well-

being Mega Trend."

According to the World Economic Forum, approximately 30% of the

population in South America and the Caribbean cannot afford healthcare.

This number may increase as more people retire and live on set incomes

that cannot keep pace with inflation. Cities will be at the center of this

dilemma, with an aging population that has a high likelihood of chronic

diseases, falling incomes, and living in high-density areas that may be less

healthy (due to traffic, pollution, lack of water, and security issues).

One way to address this challenge is to equip the healthcare system

appropriately. Frost & Sullivan research found that the hub-and-spoke model

of hospital care, with a central hospital and clinics distributed among

residential areas, is a key component of the overall Health, Wellness, and

Well-being Mega Trend. One example is that of the Santa Casa Hospital in

Avaré, Brazil. Thanks to rapid population growth, the hospital was a leading

provider not only to Avaré, but to 16 of its neighboring districts as well.

Fur ther complicating the challenge, Santa Casa did not have an imaging

diagnostic unit (IDU) solution, which meant area residents had to travel 120

kilometers to get magnetic resonance examinations.

Hitachi par tnered with Santa Casa to create an IDU; with it, Santa Casa

exceeded its expectations of providing 66 exams per month to an average

of over 100 per month within its first two months. Hitachi’s IDU success

hinged on its agility in both installation and use, offering exams in a short

period of time, and being a critical asset to the health of the growing local

population.

Another example that has parallels to the South American market is the

Jiangsu Province Hospital in Jiangsu, China. China’s rapidly growing economy

has felt similar trials as South America, in par ticular with keeping an

increasingly urban and concentrated population healthy and close to medical

care. The Jiangsu Province Hospital is a large center, with 3,000 beds and

4,000 employees, and also houses the First Affiliated Hospital of Nanjing

Medical University with over 200 teachers engaged in clinical care. This highly

diversified operation needed a system to accurately and efficiently gather,

sor t, and relay its picture archiving and communications system (PACS)

information across its wide breadth of depar tments. The HDS solution

brought to the center multiple benefits: it replaced an antiquated, slow and

limited system with one that was able to bridge legacy systems, was

exponentially quicker for image retrieval, and even had a smaller footprint.

The system is also scalable and future-proof, and able to adapt to the

hospital’s growing amount of clinical information and plans for expansion.



www.frost.com11

“Countries, utilities,

and businesses are

implementing energy

efficiency solutions to

help lower energy costs

and mitigate

environmental

concerns; however,

power demand will

outgrow these

improvements.”

THE ENERGY TO GROW CITIES AND ECONOMIES

The economic growth that has contributed to greater urbanization also has

created rapidly growing demand for power, both in cities and industrial areas.

Countries, utilities, and businesses are implementing energy efficiency

solutions to help lower energy costs and mitigate environmental concerns;

however, power demand will outgrow these improvements.

In Peru, for example, domestic electricity demand has grown at a yearly

average of 7% over the last decade and is expected to continue growing at

a 5-6% CAGR until 2025. Hydropower generation has been increasing along

with other renewable energy sources, though fossil-fuel power stations will

remain critical, contributing about 80% of the nation’s power.

Peru’s challenges go beyond serving growing urban populations to also

bringing power to underserved rural areas. About 2.2 million people

throughout the country either lack or have an insufficient supply of electricity.

Distributed renewable solutions such as solar panels are being used to help

bridge this gap. For example, a current project to install and operate 500,000

solar panels could increase Peru’s electrification rate from its current 91%

to nearly 100%. Argentina also is expected to significantly increase its

renewable power portfolio, going from less than 3% today to 20% by

2025—an increase of 10MW.

Brazil has made the greatest strides in the region. Small hydropower, biomass,

solar photovoltaic, and wind power renewables will account for an additional

35GW of installed power by 2025, growing at a very rapid 10% CAGR. Brazil

also has one of the world’s most significant hydropower systems, but lower-

than-average rain in 2014 and 2015 left the country on the verge of an

energy crisis. Brazil is still expected to expand hydropower capacity, with

28.3GW added by 2025, but also to rely on thermal power plants to

mitigate future hydropower shortfalls.



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"Hitachi is supporting

the digital

transformation of the

energy industry with

innovative offers (...)

An example of the

company’s success in

this field is its

energysavings-

as-a-service

solution"

ELECTRICITY NEEDS THROUGH 2040 IN MAJOR

SOUTH AMERICAN COUNTRIES

Source: IDB; Frost & Sullivan

Energy monitoring and management is critical for countries to meet their

energy needs and environmental targets. The confluence of power demand

growth with new—and often intermittent—sources of power on the grid

means energy management is critical; it is in the best interest of countries,

along with their utilities and major power users, to work together on these

systems. Through its focus on Social Innovation, Hitachi is supporting the

digital transformation of the energy industry with innovative offers to drive

energy efficiency and optimal integration of renewables. An example of the

company’s success in this field is its energy-savingsas- a-service solution,

based on the model of providing guaranteed energy saving outcomes to

customers.

The solution combines Hitachi’s skills in technology, consulting and

outsourced services to deliver a customer-centric XaaS solution for

optimized energy management and measurable cost savings. Hitachi

Consulting has been delivering energy savings as a service for AT&T since

2013, reaching nearly 35% of savings compared to previous energy costs.

One of the greatest advantages of Hitachi’s solution is that it frees up capital

for the customer to finance initiatives from its existing energy budget,

generates long-term energy and cost savings, and significantly reduces the

need for upfront capital outlay by the customer.

1000 0

1200.0 1,120.0

549.7800.0

1000.0

400.0

600.0

570.3

139.5 118.3 73.1 64 7

73.5 72.7 101.9 94.3

0 0

200.0213.0

191.0 175.0 159.0

s (T

Wh)

ra

wat

t-hou

rsTe

r

73.1 64.70.0Brazi Argentina Venezuela Chile Colombia

2040 2015



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"Every year roughly

17% of generated

electricity is lost along

the grid before it

reaches the end user."

GRID CONCERNS AS SIGNIFICANT AS POWER GENERATION GAPS

While the region strives to increase power generation to fuel economic and

urban growth, it also has to improve and manage grid quality. One-third of

global power losses occur in South America, equivalent to twice the annual

power consumption of all of Peru. The region has made efforts to improve

its transmission and distribution (T&D) system, but every year roughly 17%

of generated electricity is lost along the grid before it reaches the end user.

Most of these losses occur in power distribution, where electricity has been

stepped down and delivered to neighborhoods, homes, and buildings.

Approximately 80% of grid-related power losses occur in distribution, at an

annual cost between $11 billion and $17 billion. Part of this is due to lower

voltage transmission lines being less efficient than high-voltage lines. Current

flow through the distribution system also is more variable; losses tend to

increase as load increases, so seasonal demand spikes result in higher relative

losses. Being able to monitor and manage power grid efficiency, safety, and

usage, as well as to guard against theft and outages, can be done with smart

sensors embedded at the meter and along the T&D system, such as at

substations and transformers. Hitachi Insight Group’s microgrid team, for

example, focuses its solution on resilience, which is critical when energy—

fundamental to any industry or economy—is under threat due to weather,

performance, or security concerns.

ELECTRICITY LOSSES IN SOUTH AMERICA

Information as of 2012

Source: IDB; Frost & Sullivan

Colombia

5.33 TWh

20%

Venezuela

28.87 TWh

33% loss Guyana

Brazil

35 08 TWhB li i

Ecuador

1.27 TWh

20% loss 0.17 TWh

32% loss

ELECTRICITY LOSSES

35.08 TWh

15% loss

Bolivia

0.28 TWh

14% loss

16% loss

ELECTRICITY LOSSES (2012)

LOSSES ABOVE 26%

LOSSES FROM 17% TO 26%

Argentina

6.34 TWh

Paraguay

2.33 TWh

31% loss

LOSSES FROM 10% TO 17%

LOSSES BELOW 10%

15% loss Uruguay

0.73 TWh

18% loss



www.frost.com14

"Only 20% to 30% of

the region’s sewage

water is treated, and

urban areas tend to be

heavily affected by

unsanitary conditions,

especially where rapid

and unplanned growth

outpaces infrastructure

investments."

WATER AS NECESSARY RESOURCE AND KEY CHALLENGE TOECONOMIC DEVELOPMENT

Clean and abundant water continues to be a major challenge in SouthAmerica. Drought has negatively affected electric power systems, but waterscarcity and water quality concerns go beyond the hydropower industry.Almost one-third of the world’s fresh water resources can be found in SouthAmerica, but most is along the Amazon River and not evenly distributedgeographically. About one-third of the region is arid and another significantpercentage is considered semi-arid. In some cases, these are also areas ofhigh urban density and industrial activity.

For example, in Peru 2% of water resources serve 65% of the population.The challenge with using water from arid areas is compounded whenconsidering its quality and the energy needed to make it safe for use (orthe consequences of not doing so). Water from these arid or semi-arid areashas much higher concentrations of dissolved salts and dangerous elementssuch as boron and arsenic, which have been found across much of theregion.

Water infrastructure also poses difficulties. Water can be corrosive to piping,easily leaks out along the transmission system, and can damage sensors andelectronics employed to monitor its flow and pressure. Water transmissionsystems—not only in South America but around the world—areconsiderably less monitored and managed than the power transmission grid;losses of 30% or more from water plant to end user are common. Brazil,for example, loses about 37% of its water through leaks, theft, and incorrector lack of meters. Wastewater treatment also is a challenge. Only 20% to30% of the region’s sewage water is treated, and urban areas tend to beheavily affected by unsanitary conditions, especially where rapid andunplanned growth outpaces infrastructure investments. In Brazil, over 100million people do not have sewage treatment services and only 15% to 20%of wastewater is treated, causing major pollution problems in rivers andunderground water bodies.

Heavily urbanized Argentina is similar, with only 58% of the population havingaccess to sewage services. As with much of the region, only about 20% ofcollected wastewater is estimated to be treated.

Peru’s water challenges predominantly affect the underserved ruralpopulation, which also lacks electricity and other infrastructure. In rural Peru,3.9 million people do not have access to treated water, and 9.7 million lacksewage services.



www.frost.com15

"Through co-creation

platforms it is possible

to accelerate Social

Innovation and work

faster, smarter and

more creatively toward

the region’s growth."

WASTEWATER TREATMENT PER COUNTRY

Source: UN; Frost & Sullivan

New innovations are needed to address South America’s societal water

challenge. A possible solution is a Hitachi system that enabled a major Hilton

hotel in the mega city of Istanbul to reduce water consumption by 10% over

five years, a major step toward the hotel’s overall sustainability goals. Hitachi’s

Water Business Unit worked with Hilton to co-create a reuse system that

processes up to 85 cubic meters of gray water each day.

The return on investment for the Hilton property was rapid and serves as

a model of how a practical solution for sustainable water management could

benefit an entire urban population.

LOOKING AT THE ROAD AHEAD FOR SOUTH AMERICA

South America may hold the world’s greatest potential for growth and

opportunity. It has a young and growing population, vast amounts of natural

resources, and is home to some of the world’s most beautiful cities and

coastlines. Rapidly increasing urban populations are one of the greatest

strains on its social and economic fabric. Yet, increasing modernization and

long-term rising incomes create a powerful scenario for mitigating these

challenges through technology, processes, and people, through which the

region will build strong and sustained growth for its cities and companies

for decades to come.

.

LESS THAN 20% 20-30% MORE THAN 30%

ARGENTINA BOLIVIA CHILE

PARAGUAY COLOMBIA URUGUAY

BRAZIL PERU

VENEZUELA



www.frost.com16

HITACHI’S PROPOSITION ON SOCIAL INNOVATION

To meet challenges in South America, innovation is no longer a strategic

option, it is a global imperative. But how it is possible to innovate to meet

these growing human and society challenges, with new business models,

products and services that make sense for corporations and benefit each

global citizen? The case studies analyzed in this paper confirm how

collaborative creation effor ts are the most effective way to successfully

navigate the new business conditions and solve society’s most complex

challenges

Social Innovation starts with ideas that have the power to change the world,

and Hitachi is committed to bringing those ideas to life by making use of its

advanced information technologies and infrastructure solutions in a

collaborative effort with governments, academia, communities, and other

corporations. Through cocreation platforms it is possible to accelerate Social

Innovation and work faster, smarter and more creatively toward the region’s

growth.

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Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionaryinnovation that addresses the global challenges and related growth opportunities that will make orbreaktoday’s market participants. For more than 50 years, we have been developing growth strategies for theGlobal 1000, emerging businesses, the public sector and the investment community. Is your organizationprepared for the next profound wave of industry convergence, disruptive technologies, increasingcompetitiveintensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

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