vision for smart cities

Hitachi’s Vision for Smart Cities—Seeking the Optimal Balance Among People, Places, Prosperity, and the Planet—

Hitachi, Ltd.Inquiries:Social Innovation Business Project Division Smart City Project Division

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http://www.hitachi.com/products/smartcity/Ver.2

2013.9

All over the world, concrete steps are being taken to

make a special type of city: a smart city. These cities use

new technologies to help them reach their diverse goals

more efficiently. Some cities are being made smarter, and

some new cities are being designed to be smart from

their very beginnings. A common goal is to provide cost-

efficient services to their residents. Another goal is to

make cities that are attractive from a variety of view-

points: for example, to make cities that are both eco-

nomically vibrant and also environmentally friendly. As

environmental and energy problems grow increasingly

severe, and the need for sustainable growth increases,

smart cities are becoming more necessary and more

popular.

In April 2010, Hitachi established an entire division

focused on smart cities. The Social Innovation Business

Project Division (formerly the Smart City Business Man-

agement Division) draws on the experience and expertise

of the companies in the Hitachi group. These companies

have been developing a wide range of social infrastruc-

ture, equipment, and information systems for cities over

many years. The division aims to contribute to smart city

initiatives and work with Japanese and overseas partners

to develop and promote smart-city related businesses.

Through these businesses, Hitachi helps cities plan, imple-

ment, and operate systems that can efficiently resolve

current issues. These systems are also designed to help

resolve future issues: for example, by using modular

designs to ensure easy replacement of parts, and by provid-

ing data to identify and resolve future problems. With

Hitachi's help, smart cities can effectively implement

disaster-resilient systems.

Hitachi’s visionary approach, however, is not just to help

make technologically advanced cities. Narrow technologi-

cal solutions seldom satisfy all of a city’s stakeholders,

which include city administrators, residents, businesses,

and those generating or reflecting world opinion on the

environment. A city’s stakeholders often have different

goals and focus on different issues. Hitachi's approach is to

find solutions that provide the optimal balance among all

these stakeholders. Hitachi first takes into account the eco-

nomic, environmental, and social issues that a city con-

fronts, and then helps to provide smart-city solutions that

help resolve the issues specific to that city. The resulting

systems not only resolve current issues, but also make it

easier to resolve future issues.

Seeking the optimal balance among people, places, prosperity, and the planet

Prologue

4-1 Disassembling and reassembling the daily-life services infrastructure

4-2 Anticipated benefits of disassembly and reassembly

4-3 New ways of life made possible by disassembly and reassembly

3-1 Hitachi’s capabilities

Column: The drive for collaboration in projects

3-2 Management framework

3-3 Use of indicators for urban operations

3-4 Design framework

3-5 Smart city administrators

3-6 Case study: Kashiwa-no-Ha Smart City Project

2-1 Smart city stakeholders

2-2 Optimal balance among people, places, prosperity, and the planet

2-3 Structure of a smart city

2-4 Smart-city management infrastructure

[1] Advanced IT and autonomous decentralized systems for the social infrastructure

[2] Advanced controls for balancing supply and demand

[3] Integrated services delivered in optimal combinations

[4] Creation of new services through innovation

2-5 Smart city requirements

[1] What it takes to be a smart city

[2] Step-by-step objectives of a smart city

[3] Economic growth of a smart city

1-1 The need to handle global environment and urbanization problems

1-2 The need to accommodate changing lifestyles

1-3 The need for a long-term approach to developing sustainable cities

5-1 Smart city development requires partners

5-2 Clarifying directions is crucial

Contents

Why Smart Cities Are Needed Now

Chapter

Hitachi’s Vision for Smart Cities

Chapter

Making Smart Cities

Chapter

Smart City, Smart Life

Chapter

Ever-Evolving Smart Cities

Chapter

All over the world, concrete steps are being taken to

make a special type of city: a smart city. These cities use

new technologies to help them reach their diverse goals

more efficiently. Some cities are being made smarter, and

some new cities are being designed to be smart from

their very beginnings. A common goal is to provide cost-

efficient services to their residents. Another goal is to

make cities that are attractive from a variety of view-

points: for example, to make cities that are both eco-

nomically vibrant and also environmentally friendly. As

environmental and energy problems grow increasingly

severe, and the need for sustainable growth increases,

smart cities are becoming more necessary and more

popular.

In April 2010, Hitachi established an entire division

focused on smart cities. The Social Innovation Business

Project Division (formerly the Smart City Business Man-

agement Division) draws on the experience and expertise

of the companies in the Hitachi group. These companies

have been developing a wide range of social infrastruc-

ture, equipment, and information systems for cities over

many years. The division aims to contribute to smart city

initiatives and work with Japanese and overseas partners

to develop and promote smart-city related businesses.

Through these businesses, Hitachi helps cities plan, imple-

ment, and operate systems that can efficiently resolve

current issues. These systems are also designed to help

resolve future issues: for example, by using modular

designs to ensure easy replacement of parts, and by provid-

ing data to identify and resolve future problems. With

Hitachi's help, smart cities can effectively implement

disaster-resilient systems.

Hitachi’s visionary approach, however, is not just to help

make technologically advanced cities. Narrow technologi-

cal solutions seldom satisfy all of a city’s stakeholders,

which include city administrators, residents, businesses,

and those generating or reflecting world opinion on the

environment. A city’s stakeholders often have different

goals and focus on different issues. Hitachi's approach is to

find solutions that provide the optimal balance among all

these stakeholders. Hitachi first takes into account the eco-

nomic, environmental, and social issues that a city con-

fronts, and then helps to provide smart-city solutions that

help resolve the issues specific to that city. The resulting

systems not only resolve current issues, but also make it

easier to resolve future issues.

Seeking the optimal balance among people, places, prosperity, and the planet

Prologue

Column: The drive for collaboration in projects

3-3 Use of indicators for urban operations

3-4 Design framework

2-3 Structure of a smart city

2-4 Smart-city management infrastructure

[1] Advanced IT and autonomous decentralized systems for the social infrastructure

[3] Integrated services delivered in optimal combinations

[4] Creation of new services through innovation

2-5 Smart city requirements

[1] What it takes to be a smart city

[2] Step-by-step objectives of a smart city

[3] Economic growth of a smart city

5-1 Smart city development requires partners

5-2 Clarifying directions is crucial

Contents

Chapter

Making Smart Cities

Chapter

Smart City, Smart Life

Chapter

A smart city maximizes benefits to city administrators

and residents while minimizing adverse affects on

the environment and economy. The momentum for

smart cities is increasing in both developed and

developing countries as more and more people real-

ize the advantages and lifestyles that a smart city can

provide. A smart city supports lifestyles that are

urban and enjoyable, but also provides efficient sup-

port for disaster resilience and environmentally

friendly, sustainable economic growth.

In many countries, smart cities are needed to handle

undesired changes in the environment and to avoid

or lessen the adverse effects of uncontrolled urban-

ization. This section describes some of these changes

and adverse affects.

Chapter

[1] Global warming and climate changeGovernments, researchers, and businesses have

started focusing considerable attention on the causes

and effects of global warming and associated climate

changes. Climate changes obviously impact ecosys-

tems; however, they also result in major risks to all

societies. These risks include secondary damage, such

as the impact of severe weather events and natural

disasters on economic activity. As an example, when

Hurricane Sandy struck the USA in 2012, the resulting

economic losses were so large that they actually had

an identifiable impact on the finances of the USA

itself.

Global warming is expected to produce an increase in

sea surface temperatures which, in turn, is expected

to increase the frequency and severity of hurricanes.

Global warming and climate changes are closely

linked to the emission of greenhouse gases such as

carbon dioxide and methane, which are often pro-

duced by industrial activities. To minimize and miti-

gate global warming, many government and private

groups are working on measures to reduce green-

house gas emissions. These measures include steps

toward establishing a new global framework for

emissions reductions.

[2] Population increase and resource depletionA combination of economic progress and rapid popu-

lation increase results in faster consumption of

resources which, in turn, results in resource depletion

and increases in prices of the scarce resources. This

problem increases as populations increase. According

to the United Nations Population Fund, the world’s

population increased 2.8 times from 1950 (2.5 billion

people) to 2011 (7 billion people). The population is

expected to reach 9.3 billion in 2050.

[3] Adverse effects of increasing urbanizationUrbanization is increasing very rapidly. The United

Nations estimates that in 2020 the urban population

of emerging economies will surpass the rural popula-

tion, and in 2050 around 70% of the world’s popula-

tion will live in cities (see Fig. 1.1).

As urbanization increases, adverse effects also

increase. Swelling populations will only exacerbate

the numerous problems in urban areas. Problems

include slums, air pollution, water shortages, energy

shortages, traffic congestion, inadequate capacity for

treating waste water and sewage, and inadequate

capacity for disposing of urban and industrial waste.

In addition, developed economies are encountering

new issues: such as the need to make cities more

compact as lower birthrates and aging populations

result in fewer people, and the need to provide mo-

bility options for older residents.

Chapter 1

1950: 2.5 billion 1987: 5.0 billion 1999: 6.0 billion 2011: 7.0 billion 2050: 9.3 billion

Population(×100 million)

(Year)

Fig. 1.1: Trends in urban and rural populations(Source: World Urbanization Prospects, the 2011 Revision, United Nations)

Urban population in emerging economies

Rural population in emerging economies

Urban population in developed economies

Rural population in developed economies

A smart city maximizes benefits to city administrators

and residents while minimizing adverse affects on

the environment and economy. The momentum for

smart cities is increasing in both developed and

developing countries as more and more people real-

ize the advantages and lifestyles that a smart city can

provide. A smart city supports lifestyles that are

urban and enjoyable, but also provides efficient sup-

port for disaster resilience and environmentally

friendly, sustainable economic growth.

In many countries, smart cities are needed to handle

undesired changes in the environment and to avoid

or lessen the adverse effects of uncontrolled urban-

ization. This section describes some of these changes

and adverse affects.

Chapter

[1] Global warming and climate changeGovernments, researchers, and businesses have

started focusing considerable attention on the causes

and effects of global warming and associated climate

changes. Climate changes obviously impact ecosys-

tems; however, they also result in major risks to all

societies. These risks include secondary damage, such

as the impact of severe weather events and natural

disasters on economic activity. As an example, when

Hurricane Sandy struck the USA in 2012, the resulting

economic losses were so large that they actually had

an identifiable impact on the finances of the USA

itself.

Global warming is expected to produce an increase in

sea surface temperatures which, in turn, is expected

to increase the frequency and severity of hurricanes.

Global warming and climate changes are closely

linked to the emission of greenhouse gases such as

carbon dioxide and methane, which are often pro-

duced by industrial activities. To minimize and miti-

gate global warming, many government and private

groups are working on measures to reduce green-

house gas emissions. These measures include steps

toward establishing a new global framework for

emissions reductions.

[2] Population increase and resource depletionA combination of economic progress and rapid popu-

lation increase results in faster consumption of

resources which, in turn, results in resource depletion

and increases in prices of the scarce resources. This

problem increases as populations increase. According

to the United Nations Population Fund, the world’s

population increased 2.8 times from 1950 (2.5 billion

people) to 2011 (7 billion people). The population is

expected to reach 9.3 billion in 2050.

[3] Adverse effects of increasing urbanizationUrbanization is increasing very rapidly. The United

Nations estimates that in 2020 the urban population

of emerging economies will surpass the rural popula-

tion, and in 2050 around 70% of the world’s popula-

tion will live in cities (see Fig. 1.1).

As urbanization increases, adverse effects also

increase. Swelling populations will only exacerbate

the numerous problems in urban areas. Problems

include slums, air pollution, water shortages, energy

shortages, traffic congestion, inadequate capacity for

treating waste water and sewage, and inadequate

capacity for disposing of urban and industrial waste.

In addition, developed economies are encountering

new issues: such as the need to make cities more

compact as lower birthrates and aging populations

result in fewer people, and the need to provide mo-

bility options for older residents.

Chapter 1

1950: 2.5 billion 1987: 5.0 billion 1999: 6.0 billion 2011: 7.0 billion 2050: 9.3 billion

Population(×100 million)

(Year)

Fig. 1.1: Trends in urban and rural populations(Source: World Urbanization Prospects, the 2011 Revision, United Nations)

Urban population in emerging economies

Rural population in emerging economies

Urban population in developed economies

Rural population in developed economies

Smart cities are also needed to handle the ongoing

shifts in the lifestyle values of residents. This section

describes some related aspects.

[1] Valuing usage above ownershipAn interesting trend is the development of sharing

and renting arrangements that enable people to

achieve the benefits of ownership without the demer-

its. A typical example is the increase in the sharing or

renting of motor vehicles, which allows users to use a

vehicle whenever and wherever one is required.

Three specific factors are influencing this trend from

ownership to sharing or renting. The first is that the

nature of what is being offered to residents is

expanding from products to services. The second is

the realization that a sharing or renting arrangement

is preferable in many situations, based on an exami-

nation of the costs of purchasing and maintaining a

product, and the impact of continued ownership on

the environment. The third is that the ownership of

material products brings with it the need for their

maintenance and upkeep, whereas sharing or renting

arrangements can free people from these obligations

while still ensuring that the benefits of using the

products are available whenever the user wants

In the near future, smart cities should take these fac-

tors into account and help provide new systems and

services to match this trend.

[2] Focusing on non-monetary valuesThe way people think about payment for services is

also changing and, in certain situations, exchanging

services for non-monetary returns (including the

satisfaction from helping others) is preferred. For

example, an increasing number of people use the

Internet to find people or places where their skills are

needed, but where the recipients do not have the

ability to pay market rates for the provided services.

The givers do not exchange their expertise or other

skill for money, but rather to satisfy personal values

such as their wish to help people. Voluntary work is

common, and it is anticipated that this trend will

grow. The Internet offers expanded opportunities for

using one’s knowledge or specialist skills to help

other people.

Of course, the systems that enable satisfaction of

non-monetary values need to work with economic

and monetary systems. This greater diversity in how

value is exchanged is likely to give rise to numerous

activities that did not exist in the economic systems

of the past. Such activities will be characterized by a

high degree of freedom and flexibility.

In the future, smart cities must continue to provide

marketplaces in which money can be used for the

exchange of value, but should also provide mecha-

nisms and infrastructure to allow other complex and

diverse forms of value exchange to occur smoothly.

[3] Having wider opportunities for work and studyTechnology is making it possible to expand opportu-

nities for work and study just as the demand for such

opportunities is increasing. For example, the Internet

is expanding opportunities for online learning and

for delivery of offline-learning materials. This is

making it possible for everyone, from children to the

elderly, to study when and where they want.

Expanded opportunities are particularly important in

Japan, which will be one of the first countries in the

world to face the challenge of an aging population.

By 2025, it is estimated that one in three people in

Japan will be 65 or older. Japan’s challenge is to pro-

vide an environment in which more elderly people

can utilize their skills and knowledge in employment.

This will help mitigate the problem of a shrinking

working population and reduce the burden on the

young and middle-aged.

Smart cities will need to increasingly expand the

number and diversity of opportunities for work and

study.

[4] Overcoming restrictions of time and placeNew technologies are providing new services regard-

less of time or place. For example, broadband access

and smartphones can give people access to a wide

variety of services from any location at any time.

Similarly, video streaming services and advances in

recording functions allow viewers to watch video or

TV content whenever they want, and do not require

viewers to be present at specific times. Such technolo-

gies are a boon for busy people struggling with full

schedules.

Meanwhile, the ability to work outside the office is

creating new ways of working that are not restricted

to particular times and places. This can improve both

productivity and the work-life balance.

These technologies and associated trends allow

people to obtain what they want, at any desired loca-

tion or time.

Smart cities will need to ensure access to these tech-

nologies and the new services they provide.

[5] Being both a consumer and a producerFormerly, consumers of a product were seldom pro-

ducers of that product. Recently, however, a new

bidirectionality has emerged whereby the same

person or group can be both a consumer and a pro-

ducer. For example, many sites on the Internet allow

participants to view information uploaded by others

and also to upload information to be viewed by

others. As another example, in the energy field,

people who install their own solar power generator

can act as both a user and a supplier.

This bidirectionality requires communication

between the parties involved and an awareness of

each other’s circumstances. Future urban operations

will no longer be able to assume a unidirectional

relationship with the consumer.

Smart cities will need to ensure that such bidirec-

tional communication is available in a variety of

forms, both automated and otherwise.

Chapter

Smart cities are also needed to handle the ongoing

shifts in the lifestyle values of residents. This section

describes some related aspects.

[1] Valuing usage above ownershipAn interesting trend is the development of sharing

and renting arrangements that enable people to

achieve the benefits of ownership without the demer-

its. A typical example is the increase in the sharing or

renting of motor vehicles, which allows users to use a

vehicle whenever and wherever one is required.

Three specific factors are influencing this trend from

ownership to sharing or renting. The first is that the

nature of what is being offered to residents is

expanding from products to services. The second is

the realization that a sharing or renting arrangement

is preferable in many situations, based on an exami-

nation of the costs of purchasing and maintaining a

product, and the impact of continued ownership on

the environment. The third is that the ownership of

material products brings with it the need for their

maintenance and upkeep, whereas sharing or renting

arrangements can free people from these obligations

while still ensuring that the benefits of using the

products are available whenever the user wants

In the near future, smart cities should take these fac-

tors into account and help provide new systems and

services to match this trend.

[2] Focusing on non-monetary valuesThe way people think about payment for services is

also changing and, in certain situations, exchanging

services for non-monetary returns (including the

satisfaction from helping others) is preferred. For

example, an increasing number of people use the

Internet to find people or places where their skills are

needed, but where the recipients do not have the

ability to pay market rates for the provided services.

The givers do not exchange their expertise or other

skill for money, but rather to satisfy personal values

such as their wish to help people. Voluntary work is

common, and it is anticipated that this trend will

grow. The Internet offers expanded opportunities for

using one’s knowledge or specialist skills to help

other people.

Of course, the systems that enable satisfaction of

non-monetary values need to work with economic

and monetary systems. This greater diversity in how

value is exchanged is likely to give rise to numerous

activities that did not exist in the economic systems

of the past. Such activities will be characterized by a

high degree of freedom and flexibility.

In the future, smart cities must continue to provide

marketplaces in which money can be used for the

exchange of value, but should also provide mecha-

nisms and infrastructure to allow other complex and

diverse forms of value exchange to occur smoothly.

[3] Having wider opportunities for work and studyTechnology is making it possible to expand opportu-

nities for work and study just as the demand for such

opportunities is increasing. For example, the Internet

is expanding opportunities for online learning and

for delivery of offline-learning materials. This is

making it possible for everyone, from children to the

elderly, to study when and where they want.

Expanded opportunities are particularly important in

Japan, which will be one of the first countries in the

world to face the challenge of an aging population.

By 2025, it is estimated that one in three people in

Japan will be 65 or older. Japan’s challenge is to pro-

vide an environment in which more elderly people

can utilize their skills and knowledge in employment.

This will help mitigate the problem of a shrinking

working population and reduce the burden on the

young and middle-aged.

Smart cities will need to increasingly expand the

number and diversity of opportunities for work and

study.

[4] Overcoming restrictions of time and placeNew technologies are providing new services regard-

less of time or place. For example, broadband access

and smartphones can give people access to a wide

variety of services from any location at any time.

Similarly, video streaming services and advances in

recording functions allow viewers to watch video or

TV content whenever they want, and do not require

viewers to be present at specific times. Such technolo-

gies are a boon for busy people struggling with full

schedules.

Meanwhile, the ability to work outside the office is

creating new ways of working that are not restricted

to particular times and places. This can improve both

productivity and the work-life balance.

These technologies and associated trends allow

people to obtain what they want, at any desired loca-

tion or time.

Smart cities will need to ensure access to these tech-

nologies and the new services they provide.

[5] Being both a consumer and a producerFormerly, consumers of a product were seldom pro-

ducers of that product. Recently, however, a new

bidirectionality has emerged whereby the same

person or group can be both a consumer and a pro-

ducer. For example, many sites on the Internet allow

participants to view information uploaded by others

and also to upload information to be viewed by

others. As another example, in the energy field,

people who install their own solar power generator

can act as both a user and a supplier.

This bidirectionality requires communication

between the parties involved and an awareness of

each other’s circumstances. Future urban operations

will no longer be able to assume a unidirectional

relationship with the consumer.

Smart cities will need to ensure that such bidirec-

tional communication is available in a variety of

forms, both automated and otherwise.

Chapter

City competitiveness

Growth phase

Mature phase

Transformation phase

City that takes a conventional approach(Ongoing decline)

Smart city(Sustainable development)

・Measures to make the city more attractive

・Repair and replace infrastructure

Early phase

(Fiscal year)

(Trillion yen)

Note: Methods used to produce estimatesThe following assumptions were made for the 2011 fiscal year onwards for activities administered by the eight divisions (roads, ports, airports, public housing, sewage, urban parks, catchment management, and coastlines) of the Ministry of Land, Infrastructure, Transport and Tourism and also for the activities they subsidize, and for self-funded activities of regional governments.・The expenditure on upgrades assumes that, on reaching the end of its operational life, a facility will be upgraded to provide its original functions, with the cost being determined based on the cost of the original construction adjusted in accordance with the practical considerations of an actual upgrade. The values used for operational life spans are based on life spans specified by the Ministry of Finance for taxation purposes, adjusted in accordance with practical considerations for the particular facility being upgraded.・The expenditure on maintenance is estimated based on correlation with the value of social capital stock. (The estimated expenditures on upgrading and maintenance take account of the actual results of recent cost cutting measures.)・The expenditure on disaster recovery is the average of past annual expendi-tures.・The expenditure on new construction (funds available for appropriation) was obtained by subtracting expenditures on maintenance, upgrading, and disaster recovery from the total investment, and does not represent the demand for new construction.・Land and compensation costs are not included. Independent administrative agencies such as public corporations for highways are not included.Note that the estimates are likely to vary based on factors such as future budgetary changes or the accumulation of technical expertise.

1965 70 75 80 85 90 95 2000 05 10 15 20 25 30 35 40 45 50 55 60

Expenditure on new construction (funds available for appropriation)Expenditure on disaster recoveryExpenditure on upgradesExpenditure on maintenanceAmount by which maintenance and upgrades exceeds the total 2010 expenditure on investment

Fig. 1.3: Estimates of social capital assuming continuation of current practices for maintenance and upgrading

・Assuming that, from 2010 onwards, there is no further growth in total investment, and assuming that expenditure on maintenance and upgrading continues as before, the cost of maintenance and upgrading will exceed the total investment in 2037. (Source: Japan’s Ministry of Land, Infrastructure, Transport and Tourism White Paper, 2012)Fig. 1.2: City lifecycle and competitiveness

The third reason why smart cities are needed is that

cities are always evolving. Only a smart city is

designed to ensure the flexible, dynamic approach

needed to ensure the sustainable existence of the

Different cities have different needs. Some cities are

in a growth phase and require ongoing expansion

and new infrastructure, which many cities struggle to

achieve. Other cities have reached a stage of maturity

in which aging infrastructure requires repairs and

upgrades, and where high value-added services need

to be provided to residents. These differences make it

important to look at cities in terms of their lifecycles,

and to manage urban development appropriately by

taking a long-term approach.

[1] Managing the lifecycles of citiesCities evolve, with different circumstances and

requirements in each phase of their development.

Some infrastructure requirements at different phases

are as follows:

① Early phase: Provide the infrastructure needed for

the operation of the city.

② Growth phase: Expand and intensify the infra-

structure to ensure that supply can keep pace with

the increasing demands of the growing population.

③ Mature phase: Enhance infrastructure to ensure

the delivery of high-quality services based on criteria

such as ease-of-use and comfort.

④ Transformation phase: Integrate infrastructure

systems to satisfy social values such as aiding, or at

least avoiding damage to, the natural environment.

In the early and growth phases, it is important to pro-

vide infrastructure capable of meeting the rising

demand for basic services, such as electric power and

water, that support minimum living standards. How-

ever, once a city enters the mature or transformation

phases, the infrastructure will start to deteriorate

unless something more is done. In these later phases,

in addition to repairing the aging infrastructure, the

city needs to focus on generating new added value,

boosting competitiveness, and strengthening the

economy (see Fig. 1.2).

[2] Improving economic performance over the entire lifecycle

In development planning, cities need to focus on how

circumstances will change over the long term. Focus-

ing just on resolving the immediate issues of one life-

cycle phase can result in extra burdens on later gen-

erations in later phases.

For example, short-term pursuit of economic growth

has often led to problems, such as pollution, that are

very expensive to clean up later. Similarly, the hasty

provision of housing and other infrastructure to cope

with a rapidly growing city has resulted, several

decades later, in problems such as a skewed genera-

tional balance, a loss of vitality, and financial pres-

sures caused by a bulge in the cost of maintaining

and upgrading the now aging infrastructure.

As with so many situations, prevention is better than

cure. Attempting to deal with full-blown urban prob-

lems is almost always more expensive that the careful

planning that would have prevented such problems

from occurring. The costs of a cure can be very high.

For example, in many developed economies, expen-

ditures on maintenance and repairs are likely to out-

weigh expenditures on new development (see Fig.

Accordingly, to achieve sustainable cities, there is a

need to anticipate and identify the underlying causes

of potential problems, and to mitigate the risks by

measures such as upgrading infrastructure and finan-

cial planning.

[3] Enhancing city competitivenessCities need to boost their competitiveness and appeal

relative to other cities. In addition to retaining their

residents and businesses, cities need to make them-

selves attractive to newcomers. This has become

more important because people can now choose

where they want to live. In his book “Who’s Your

City?: How the Creative Economy Is Making Where to

Live the Most Important Decision of Your Life,” Rich-

ard Florida of the University of Toronto wrote, “Still,

the miracle of our modern age is that we do have a

choice. For the first time ever, a huge number of us

have the freedom and economic means to choose

our place.” “The place we choose to live affects every

aspect of our being. It can determine the income we

earn, the people we meet, the friends we make, the

partners we choose, and the options available to our

children and families. People are not equally happy

everywhere.”

Enhancing a city’s competitiveness requires a multi-

faceted approach to achieve qualitative improve-

ments in society, the economy, and the environment.

Goals include ensuring a rich cultural and economic

environment and ensuring that residents can achieve

long and healthy lives, a harmonious coexistence

with the environment, and safety and security. City

administrators cannot achieve these goals on their

own. Hitachi believes that an effective approach is to

pursue a variety of measures that cover systems,

management, and technology. The result is a com-

prehensive range of hard and soft features. We need

an approach that works from both supply and

demand, and enables the active participation of resi-

dents and encourages changes in behavior.

The next chapter looks at Hitachi’s vision for smart

cities.

Chapter

City competitiveness

Growth phase

Mature phase

Transformation phase

City that takes a conventional approach(Ongoing decline)

Smart city(Sustainable development)

・Measures to make the city more attractive

・Repair and replace infrastructure

Early phase

(Fiscal year)

(Trillion yen)

Note: Methods used to produce estimatesThe following assumptions were made for the 2011 fiscal year onwards for activities administered by the eight divisions (roads, ports, airports, public housing, sewage, urban parks, catchment management, and coastlines) of the Ministry of Land, Infrastructure, Transport and Tourism and also for the activities they subsidize, and for self-funded activities of regional governments.・The expenditure on upgrades assumes that, on reaching the end of its operational life, a facility will be upgraded to provide its original functions, with the cost being determined based on the cost of the original construction adjusted in accordance with the practical considerations of an actual upgrade. The values used for operational life spans are based on life spans specified by the Ministry of Finance for taxation purposes, adjusted in accordance with practical considerations for the particular facility being upgraded.・The expenditure on maintenance is estimated based on correlation with the value of social capital stock. (The estimated expenditures on upgrading and maintenance take account of the actual results of recent cost cutting measures.)・The expenditure on disaster recovery is the average of past annual expendi-tures.・The expenditure on new construction (funds available for appropriation) was obtained by subtracting expenditures on maintenance, upgrading, and disaster recovery from the total investment, and does not represent the demand for new construction.・Land and compensation costs are not included. Independent administrative agencies such as public corporations for highways are not included.Note that the estimates are likely to vary based on factors such as future budgetary changes or the accumulation of technical expertise.

1965 70 75 80 85 90 95 2000 05 10 15 20 25 30 35 40 45 50 55 60

Expenditure on new construction (funds available for appropriation)Expenditure on disaster recoveryExpenditure on upgradesExpenditure on maintenanceAmount by which maintenance and upgrades exceeds the total 2010 expenditure on investment

Fig. 1.3: Estimates of social capital assuming continuation of current practices for maintenance and upgrading

・Assuming that, from 2010 onwards, there is no further growth in total investment, and assuming that expenditure on maintenance and upgrading continues as before, the cost of maintenance and upgrading will exceed the total investment in 2037. (Source: Japan’s Ministry of Land, Infrastructure, Transport and Tourism White Paper, 2012)Fig. 1.2: City lifecycle and competitiveness

The third reason why smart cities are needed is that

cities are always evolving. Only a smart city is

designed to ensure the flexible, dynamic approach

needed to ensure the sustainable existence of the

Different cities have different needs. Some cities are

in a growth phase and require ongoing expansion

and new infrastructure, which many cities struggle to

achieve. Other cities have reached a stage of maturity

in which aging infrastructure requires repairs and

upgrades, and where high value-added services need

to be provided to residents. These differences make it

important to look at cities in terms of their lifecycles,

and to manage urban development appropriately by

taking a long-term approach.

[1] Managing the lifecycles of citiesCities evolve, with different circumstances and

requirements in each phase of their development.

Some infrastructure requirements at different phases

are as follows:

① Early phase: Provide the infrastructure needed for

the operation of the city.

② Growth phase: Expand and intensify the infra-

structure to ensure that supply can keep pace with

the increasing demands of the growing population.

③ Mature phase: Enhance infrastructure to ensure

the delivery of high-quality services based on criteria

such as ease-of-use and comfort.

④ Transformation phase: Integrate infrastructure

systems to satisfy social values such as aiding, or at

least avoiding damage to, the natural environment.

In the early and growth phases, it is important to pro-

vide infrastructure capable of meeting the rising

demand for basic services, such as electric power and

water, that support minimum living standards. How-

ever, once a city enters the mature or transformation

phases, the infrastructure will start to deteriorate

unless something more is done. In these later phases,

in addition to repairing the aging infrastructure, the

city needs to focus on generating new added value,

boosting competitiveness, and strengthening the

economy (see Fig. 1.2).

[2] Improving economic performance over the entire lifecycle

In development planning, cities need to focus on how

circumstances will change over the long term. Focus-

ing just on resolving the immediate issues of one life-

cycle phase can result in extra burdens on later gen-

erations in later phases.

For example, short-term pursuit of economic growth

has often led to problems, such as pollution, that are

very expensive to clean up later. Similarly, the hasty

provision of housing and other infrastructure to cope

with a rapidly growing city has resulted, several

decades later, in problems such as a skewed genera-

tional balance, a loss of vitality, and financial pres-

sures caused by a bulge in the cost of maintaining

and upgrading the now aging infrastructure.

As with so many situations, prevention is better than

cure. Attempting to deal with full-blown urban prob-

lems is almost always more expensive that the careful

planning that would have prevented such problems

from occurring. The costs of a cure can be very high.

For example, in many developed economies, expen-

ditures on maintenance and repairs are likely to out-

weigh expenditures on new development (see Fig.

Accordingly, to achieve sustainable cities, there is a

need to anticipate and identify the underlying causes

of potential problems, and to mitigate the risks by

measures such as upgrading infrastructure and finan-

cial planning.

[3] Enhancing city competitivenessCities need to boost their competitiveness and appeal

relative to other cities. In addition to retaining their

residents and businesses, cities need to make them-

selves attractive to newcomers. This has become

more important because people can now choose

where they want to live. In his book “Who’s Your

City?: How the Creative Economy Is Making Where to

Live the Most Important Decision of Your Life,” Rich-

ard Florida of the University of Toronto wrote, “Still,

the miracle of our modern age is that we do have a

choice. For the first time ever, a huge number of us

have the freedom and economic means to choose

our place.” “The place we choose to live affects every

aspect of our being. It can determine the income we

earn, the people we meet, the friends we make, the

partners we choose, and the options available to our

children and families. People are not equally happy

everywhere.”

Enhancing a city’s competitiveness requires a multi-

faceted approach to achieve qualitative improve-

ments in society, the economy, and the environment.

Goals include ensuring a rich cultural and economic

environment and ensuring that residents can achieve

long and healthy lives, a harmonious coexistence

with the environment, and safety and security. City

administrators cannot achieve these goals on their

own. Hitachi believes that an effective approach is to

pursue a variety of measures that cover systems,

management, and technology. The result is a com-

prehensive range of hard and soft features. We need

an approach that works from both supply and

demand, and enables the active participation of resi-

dents and encourages changes in behavior.

The next chapter looks at Hitachi’s vision for smart

cities.

Chapter

Smart cityconcept

World opinionon the environment

ResidentsCity administrators and developers

Fig. 2.2: Optimal balance among people, places, prosperity, and the planet

EcologyContribution to

global environment

ExperienceProsperous urban lifestyles

offering a good quality of life

Establish a well-balanced harmony between the environment (with goals such as reducing the burden on the environment)

and residents’ experiences (with goals such as improving convenience, safety, prosperity, and the quality of life)

Chapter

Hitachi sees its smart city approach as the best way to

resolve the problems faced by individual cities. The

approach takes into account both the economy and

the environment, can handle changing times and

social trends, and supports safe, interesting, and

prosperous lifestyles.

For this approach to work, we first need to identify

the stakeholders and the structures and organizations

that make up a smart city, and to understand their

different points of view. Hitachi views the smart city

as having a hierarchical structure comprising a vari-

ety of infrastructure with different functions and

roles, and believes that, if each layer of this infra-

structure hierarchy is highly integrated, the city can

resolve problems and provide services more effi-

ciently and more effectively.

Smart city stakeholders include city administrators,

developers, residents, and groups sharing world

opinion on the environment. Such stakeholders have

different interests and interact with the city in

different ways, and stakeholders need to recognize

the existence of standpoints that might differ from

their own. For example, residents need to be aware

that people living well beyond the city borders might

be very concerned at the environmental problems of

the city. Similarly, when developing smart city

concepts and plans, city administrators need to take

into account the needs and concerns of residents and

other parties involved.

[1] ResidentsThis group represents the people who are active

within a city: living, working, learning, or traveling.

They are seeking to fulfill their own needs, and to

achieve a better quality of life that is comfortable,

prosperous, convenient, interesting, and safe.

[2] City administrators and developersCity administrators include the local government and

other agencies that seek to boost the long-term com-

petitiveness and appeal of the city while focusing on

factors such as convenience, comfort, and accessibil-

ity. They include the agencies involved in managing

the city, but also need to keep in mind the achieve-

ment of national or international targets such as

those for reducing carbon emissions. City administra-

tors emphasize aspects like industrial vitality, achiev-

ing a cohesive society, and efficient urban operation.

Developers have objectives that include achieving

higher efficiency and attracting people to the city,

which they achieve by adding value and working with

policies set by the local government. Developers

include people and groups engaged in the planning,

coordination, and construction of the urban environ-

ments that support the activities of residents. They

emphasize aspects like efficient urban development

and increasing added value.

[3] World opinionThose sharing world opinion on the environment

include groups that desire to help protect the local,

national, and international environments. These

groups are often focused on goals such as maintain-

ing biodiversity, reducing carbon emissions, making

effective use of natural resources, and preventing

global warming.

The conflicting standpoints and interests of these

different stakeholder groups mean their needs will

not necessarily coincide. For example, to reduce traf-

fic congestion and local pollution, city administrators,

developers, and world opinion on the environment

might want to restrict access to the central city to EVs

(electric vehicles) only. They might also want to

implement systems for sharing EVs and for providing

charging stations at commercial facilities to attract

users and stimulate the local economy. However,

residents might oppose such policies because they

would no longer have the convenient option of driv-

ing their gasoline-powered cars into the city.

Making a smart city (or making a city smarter)

requires a balance among the diverse needs of differ-

ent stakeholders (see Fig. 2.1).

Hitachi believes that the best approach to develop

smart cities is to take all the stakeholder viewpoints

into account. For example to make a city smarter

requires examination of ecological, economic, and

people-oriented factors. But implementing these

insights is not the end of the process. Making a city

smarter provides the tools and systems to efficiently

resolve a wide variety of problems in the future.

Smart cities considered desirable by all stakeholders

need to have the optimal balance between the eco-

logical (“Eco”) needs of the global environment and

the experiential values of the city residents who want

prosperous urban lifestyles that offer a good quality

of life (see Fig. 2.2). Combining lifestyle convenience

with consideration for the environment will be essen-

tial for the sustainable development of cities. This

balance is a very important aspect of urban policy.

Fig. 2.1: Optimizing stakeholder values

Chapter 2

Smart cityconcept

World opinionon the environment

ResidentsCity administrators and developers

Fig. 2.2: Optimal balance among people, places, prosperity, and the planet

EcologyContribution to

global environment

ExperienceProsperous urban lifestyles

offering a good quality of life

Establish a well-balanced harmony between the environment (with goals such as reducing the burden on the environment)

and residents’ experiences (with goals such as improving convenience, safety, prosperity, and the quality of life)

Chapter

Hitachi sees its smart city approach as the best way to

resolve the problems faced by individual cities. The

approach takes into account both the economy and

the environment, can handle changing times and

social trends, and supports safe, interesting, and

prosperous lifestyles.

For this approach to work, we first need to identify

the stakeholders and the structures and organizations

that make up a smart city, and to understand their

different points of view. Hitachi views the smart city

as having a hierarchical structure comprising a vari-

ety of infrastructure with different functions and

roles, and believes that, if each layer of this infra-

structure hierarchy is highly integrated, the city can

resolve problems and provide services more effi-

ciently and more effectively.

Smart city stakeholders include city administrators,

developers, residents, and groups sharing world

opinion on the environment. Such stakeholders have

different interests and interact with the city in

different ways, and stakeholders need to recognize

the existence of standpoints that might differ from

their own. For example, residents need to be aware

that people living well beyond the city borders might

be very concerned at the environmental problems of

the city. Similarly, when developing smart city

concepts and plans, city administrators need to take

into account the needs and concerns of residents and

other parties involved.

[1] ResidentsThis group represents the people who are active

within a city: living, working, learning, or traveling.

They are seeking to fulfill their own needs, and to

achieve a better quality of life that is comfortable,

prosperous, convenient, interesting, and safe.

[2] City administrators and developersCity administrators include the local government and

other agencies that seek to boost the long-term com-

petitiveness and appeal of the city while focusing on

factors such as convenience, comfort, and accessibil-

ity. They include the agencies involved in managing

the city, but also need to keep in mind the achieve-

ment of national or international targets such as

those for reducing carbon emissions. City administra-

tors emphasize aspects like industrial vitality, achiev-

ing a cohesive society, and efficient urban operation.

Developers have objectives that include achieving

higher efficiency and attracting people to the city,

which they achieve by adding value and working with

policies set by the local government. Developers

include people and groups engaged in the planning,

coordination, and construction of the urban environ-

ments that support the activities of residents. They

emphasize aspects like efficient urban development

and increasing added value.

[3] World opinionThose sharing world opinion on the environment

include groups that desire to help protect the local,

national, and international environments. These

groups are often focused on goals such as maintain-

ing biodiversity, reducing carbon emissions, making

effective use of natural resources, and preventing

global warming.

The conflicting standpoints and interests of these

different stakeholder groups mean their needs will

not necessarily coincide. For example, to reduce traf-

fic congestion and local pollution, city administrators,

developers, and world opinion on the environment

might want to restrict access to the central city to EVs

(electric vehicles) only. They might also want to

implement systems for sharing EVs and for providing

charging stations at commercial facilities to attract

users and stimulate the local economy. However,

residents might oppose such policies because they

would no longer have the convenient option of driv-

ing their gasoline-powered cars into the city.

Making a smart city (or making a city smarter)

requires a balance among the diverse needs of differ-

ent stakeholders (see Fig. 2.1).

Hitachi believes that the best approach to develop

smart cities is to take all the stakeholder viewpoints

into account. For example to make a city smarter

requires examination of ecological, economic, and

people-oriented factors. But implementing these

insights is not the end of the process. Making a city

smarter provides the tools and systems to efficiently

resolve a wide variety of problems in the future.

Smart cities considered desirable by all stakeholders

need to have the optimal balance between the eco-

logical (“Eco”) needs of the global environment and

the experiential values of the city residents who want

prosperous urban lifestyles that offer a good quality

of life (see Fig. 2.2). Combining lifestyle convenience

with consideration for the environment will be essen-

tial for the sustainable development of cities. This

balance is a very important aspect of urban policy.

Fig. 2.1: Optimizing stakeholder values

Chapter 2

Fig. 2.3: Hierarchical structure of a smart city

Residents

Daily life

Daily-life services infrastructure

Healthcare, education, administration, finance, etc.

Social infrastructure

Electric power distribution, intra-city transportation, water and sewage

Electric power transmission, inter-city transportation, water management

Smart-city managementinfrastructure

Daily-life servicesinfrastructure

Urban infrastructure

National infrastructure

Dwelling

Learning

Working

Transportation

Chapter

[1] Ecology: Concern for the global environmentCurrent urban development must handle changes in

the global environment while also reducing the

burden on the environment. Indeed, one of the

defining features of a smart city is how it responds to

global environmental concerns. Challenges include

the creation of a low-carbon society to mitigate

climate change, the efficient use of water resources to

resolve imbalances in supply and demand, and

responding to the depletion of fossil fuels and other

mineral resources by making effective use of energy.

[2] Experience: A prosperous urban lifestyle that offers a good quality of life

An extremely important factor when considering the

sustainability of cities is how to enhance people’s

experiences (such as in living, working, studying, and

traveling). It is necessary to support prosperous urban

lifestyles that offer a good quality of life in a way that

is also balanced in economic terms, and that can

cope with changes in people’s lifestyles. Such an

approach can also be viewed as a means to help

resolve problems such as demographic changes and

problems faced by cities directly.

The following subsections give examples of what is

meant by and what is required for an optimal bal-

ance among the needs of different stakeholders.

(a) Optimizing the values of residents and developersToo much emphasis on economics and efficiency

risks damaging the distinctiveness and attractiveness

of a city. For example, in a historic township, simply

replacing traditional buildings with high-rises might

increase operational efficiency, but it will also detract

from the city’s value and its attractiveness to resi-

dents. A different approach is to preserve traditional

elements and have them co-exist with the new. This

encourages new values and enhances the value

added to the city.

To maintain an attractive urban environment, it is

important to seek common ground and mutual

understanding between residents and developers.

(b) Optimizing the values of city administrators and world opinion

Giving excessive precedence to economic consider-

ations tends to result in environmental problems,

and conflicts with world opinion on the environment.

For example, conventional coal-fired power plants

have excellent economics, but they also emit large

quantities of carbon dioxide. Similarly, discharging

factory wastewater into the ocean might reduce

immediate economic costs, but cleanup may prove

expensive. Forging the optimal relationship between

the economy and the environment requires restruc-

turing the urban infrastructure, and coordinating

supply and demand through sophisticated controls.

(c) Optimizing the values of residents and world opinion

Giving excessive precedence to the benefits of indi-

viduals tends to exacerbate problems such as climate

change and the depletion of natural resources, and

to conflict with world opinion on the environment.

For example, when large numbers of people choose

the convenience of their own cars, the result is higher

energy use and increased carbon dioxide emissions.

Similarly, if everyone uses a lot of electric power at

the same time, supply cannot meet demand.

Resolving such issues requires focusing on multiple

factors. For example, people will often eliminate

waste if they are provided with timely easy-to-

understand information on their energy usage. In

addition, sophisticated controls on supply and

demand are required across all of society.

Hitachi models smart cities as a hierarchy of infra-

structures that have different functions and purposes.

The national infrastructure and urban infrastructure

layers contain the most basic parts of the social infra-

structure. The daily-life services infrastructure layer

supplies services directly to residents. The smart-city

management infrastructure layer coordinates these

various layers through the use of IT (information

technology). The following sections give details about

the role of each type of infrastructure.

Hitachi’s vision is that each infrastructure layer will

interoperate under the control of the smart-city man-

agement infrastructure to support a way of life for

residents that takes into account the global environ-

ment, safety, and convenience (see Fig. 2.3).

[1] National infrastructureThis layer contains infrastructure that covers areas

larger than a single city. In addition to providing the

foundational layers of energy, transportation, water,

and communications that keep people safe and sup-

port their day-to-day activities at a national or

regional level, this is also the level at which coordina-

tion between different cities is managed.

Japan’s fast Shinkansen (the “bullet train”) inter-city

train service is an example of national infrastructure,

while the commuter transportation services that use

Shinkansen stations as hubs (such as subway and bus

services) are examples of urban infrastructure.

[2] Urban infrastructureThis layer contains infrastructure that supplies actual

services to residents and is organized into optimal

functional units based on the geographical and

physical characteristics of individual cities.

For example, the area covered by a single sewage

treatment plant would constitute one of these units.

For transportation, it would be the region accessible

by foot from a railway station or bus stop. Urban

infrastructure also includes waste disposal, telecom-

munications, and other services for a particular

district. Tasks such as balancing infrastructure func-

tions and the autonomous and decentralized coordi-

nation of functions are achieved using a building

block approach in which basic units are defined and

then combined.

[3] Daily-life services infrastructureThis layer is made up of a city’s facilities and other

services, including healthcare, education, administra-

tion, and finance. The daily-life services infrastructure

coordinates with the urban infrastructure to supply

residents with a range of different services.

By using the Internet, services such as those for bank

transfers or for completing administrative procedures

can be provided without the need to go to specific

facilities. Services can be combined and provided in a

variety of contexts to match the needs of the resi-

dents.

2-3. Structure of a smart city

Fig. 2.3: Hierarchical structure of a smart city

Residents

Daily life

Daily-life services infrastructure

Healthcare, education, administration, finance, etc.

Social infrastructure

Electric power distribution, intra-city transportation, water and sewage

Electric power transmission, inter-city transportation, water management

Smart-city managementinfrastructure

Daily-life servicesinfrastructure

Dwelling

Learning

Working

Transportation

Chapter

[1] Ecology: Concern for the global environmentCurrent urban development must handle changes in

the global environment while also reducing the

burden on the environment. Indeed, one of the

defining features of a smart city is how it responds to

global environmental concerns. Challenges include

the creation of a low-carbon society to mitigate

climate change, the efficient use of water resources to

resolve imbalances in supply and demand, and

responding to the depletion of fossil fuels and other

mineral resources by making effective use of energy.

[2] Experience: A prosperous urban lifestyle that offers a good quality of life

An extremely important factor when considering the

sustainability of cities is how to enhance people’s

experiences (such as in living, working, studying, and

traveling). It is necessary to support prosperous urban

lifestyles that offer a good quality of life in a way that

is also balanced in economic terms, and that can

cope with changes in people’s lifestyles. Such an

approach can also be viewed as a means to help

resolve problems such as demographic changes and

problems faced by cities directly.

The following subsections give examples of what is

meant by and what is required for an optimal bal-

ance among the needs of different stakeholders.

(a) Optimizing the values of residents and developersToo much emphasis on economics and efficiency

risks damaging the distinctiveness and attractiveness

of a city. For example, in a historic township, simply

replacing traditional buildings with high-rises might

increase operational efficiency, but it will also detract

from the city’s value and its attractiveness to resi-

dents. A different approach is to preserve traditional

elements and have them co-exist with the new. This

encourages new values and enhances the value

added to the city.

To maintain an attractive urban environment, it is

important to seek common ground and mutual

understanding between residents and developers.

(b) Optimizing the values of city administrators and world opinion

Giving excessive precedence to economic consider-

ations tends to result in environmental problems,

and conflicts with world opinion on the environment.

For example, conventional coal-fired power plants

have excellent economics, but they also emit large

quantities of carbon dioxide. Similarly, discharging

factory wastewater into the ocean might reduce

immediate economic costs, but cleanup may prove

expensive. Forging the optimal relationship between

the economy and the environment requires restruc-

turing the urban infrastructure, and coordinating

supply and demand through sophisticated controls.

(c) Optimizing the values of residents and world opinion

Giving excessive precedence to the benefits of indi-

viduals tends to exacerbate problems such as climate

change and the depletion of natural resources, and

to conflict with world opinion on the environment.

For example, when large numbers of people choose

the convenience of their own cars, the result is higher

energy use and increased carbon dioxide emissions.

Similarly, if everyone uses a lot of electric power at

the same time, supply cannot meet demand.

Resolving such issues requires focusing on multiple

factors. For example, people will often eliminate

waste if they are provided with timely easy-to-

understand information on their energy usage. In

addition, sophisticated controls on supply and

demand are required across all of society.

Hitachi models smart cities as a hierarchy of infra-

structures that have different functions and purposes.

The national infrastructure and urban infrastructure

layers contain the most basic parts of the social infra-

structure. The daily-life services infrastructure layer

supplies services directly to residents. The smart-city

management infrastructure layer coordinates these

various layers through the use of IT (information

technology). The following sections give details about

the role of each type of infrastructure.

Hitachi’s vision is that each infrastructure layer will

interoperate under the control of the smart-city man-

agement infrastructure to support a way of life for

residents that takes into account the global environ-

ment, safety, and convenience (see Fig. 2.3).

[1] National infrastructureThis layer contains infrastructure that covers areas

larger than a single city. In addition to providing the

foundational layers of energy, transportation, water,

and communications that keep people safe and sup-

port their day-to-day activities at a national or

regional level, this is also the level at which coordina-

tion between different cities is managed.

Japan’s fast Shinkansen (the “bullet train”) inter-city

train service is an example of national infrastructure,

while the commuter transportation services that use

Shinkansen stations as hubs (such as subway and bus

services) are examples of urban infrastructure.

[2] Urban infrastructureThis layer contains infrastructure that supplies actual

services to residents and is organized into optimal

functional units based on the geographical and

physical characteristics of individual cities.

For example, the area covered by a single sewage

treatment plant would constitute one of these units.

For transportation, it would be the region accessible

by foot from a railway station or bus stop. Urban

infrastructure also includes waste disposal, telecom-

munications, and other services for a particular

district. Tasks such as balancing infrastructure func-

tions and the autonomous and decentralized coordi-

nation of functions are achieved using a building

block approach in which basic units are defined and

then combined.

[3] Daily-life services infrastructureThis layer is made up of a city’s facilities and other

services, including healthcare, education, administra-

tion, and finance. The daily-life services infrastructure

coordinates with the urban infrastructure to supply

residents with a range of different services.

By using the Internet, services such as those for bank

transfers or for completing administrative procedures

can be provided without the need to go to specific

facilities. Services can be combined and provided in a

variety of contexts to match the needs of the resi-

dents.

2-3. Structure of a smart city

Energy

Data center

Transportation

CommunicationsWater

Logistics

IndustryCommerce

Research, universities

Dwell Work

Trans-portation

Tourism, leisure Agriculture, fisheries

Industrialwastewatertreatment

Sewagetreatment

Watertreatment

New energy

Gas Aviation

Shipping

Telephony

InternetBroadcasting

Railways

Batteries

Large centralpower plant

Smart-citymanagementinfrastructure

Retailers Recyclingfacilities

Factories

Energy stations

Railway stations

Hotels

HospitalsSchools

Residences

Public facilities

Buildings

Financialinstitutions

Fig. 2.4: Relationships between smart cities and IT

Equipment managementOperational informationAnalysis and simulation

By utilizing IT to coordinate operation of the urban

infrastructure layer and the daily-life services infra-

structure layer, the smart-city management infra-

structure can provide access to more information on

supply and demand than was available in the past.

Not only is there more information, but techniques

such as data visualization make this data easier to

understand quickly. The balance between supply and

demand can be managed instantaneously, with high

precision.

(a) Control of demandBy guiding and controlling demand-side needs, it is

possible to smooth the utilization of urban infrastruc-

ture equipment, without changing total demand. For

example, this approach can reduce traffic congestion

by controlling peaks in road demand, or can manage

demand in situations where supply-side control is

difficult, such as the output from solar power genera-

(b) Control of supplySupply of scarce resources can be provided even

during times of shortages by using system-wide con-

trol of supply levels to manage the supply for indi-

vidual demands. In the case of electric power, for

example, the available supply might be allocated

according to public priorities, or by allocating only

the exact minimum needed at that time.

[3] Integrated services delivered in optimal combi-nations

By using IT to seamlessly interlink resources, func-

tions, and services, a smart city can provide a single

integrated service that is optimized to take advantage

of the characteristics of each component.

Consider transportation, for example. A smart city

can provide transportation services that deliver

people to their destination and satisfy user require-

ments for safety, convenience, and economy by simu-

lating the combined operation of trains, buses and

other public transportation, car rental or sharing

arrangements, and private cars. Or consider energy. A

smart city can achieve a flexible and reliable supply

of electric power by making maximum use of solar,

wind, and other forms of renewable energy in addi-

tion to thermal, hydro, and other base-load electric

power generation facilities.

As in these examples, IT is essential to delivering the

optimal combination of services that meets demand

and suits regional circumstances.

[4] Smart-city management infrastructureThis infrastructure uses IT to provide information

platforms for linking within and between different

types of infrastructure. Its roles include information

management, operational management, and equip-

ment operation within the city.

The smart-city management infrastructure handles

information and controls across the different types of

infrastructure needed by a city. Examples include

smart grids in the energy sector, navigation systems

and green mobility involving the use of EVs in the

transportation sector, and advanced water manage-

ment systems using water from rain and recycling in

the water sector.

[5] Daily lifeThis represents the resident’s way of life and how

people use the infrastructure to live, work, study, and

travel. Hitachi seeks to improve the quality of life by

understanding residents’ genuine needs and then

disassembling and reassembling the functions of the

corresponding layer (daily-life services infrastructure)

accordingly.

Hitachi sees smart cities as emerging from combina-

tions of elements that make up the hierarchy

described above. The smart-city management infra-

structure plays a key role as the common platform

enabling various combinations. For example, this

management infrastructure can ensure that services

are available when and where they are needed, and

can help residents achieve a good quality of life with

the minimum impact on the environment. The man-

agement infrastructure can coordinate both the

physical and system components of the common ele-

ments that make up a city (such as buildings, roads,

railways, and utilities) and those elements that differ

by region (such as residential areas, central business

districts, and commercial areas) (see Fig. 2.4).

[1] Advanced IT and Autonomous Decentralized Systems for the social infrastructure

Hitachi believes that a fusion of two different types of

IT can resolve the issues confronting social infrastruc-

ture and help develop smart cities that are secure

and comfortable while taking the environment into

account. These two types of IT are control systems,

which can operate the social infrastructure safely,

efficiently, smoothly, and in harmony with the envi-

ronment; and information systems, which help

deliver the security, convenience, and comfort of a

smart city lifestyle.

For example, information systems can collect opera-

tional data from various areas of life, and then trans-

form this data into information and knowledge that

applications can use to provide smart services. For

example, data can be used to predict demand spikes

that require extra resources. Similarly, control

systems can use this information for more finely

grained management and operation. This can

enhance the operation of factories, electric power

systems, railways, and other services. Through this

integration of information, it is possible to develop

infrastructure systems that are optimized across the

whole of society.

Also, when the urban infrastructure is being con-

structed, the scope of each function should be kept

as small as possible, and the individual functions

should be independent. This is in accordance with

Hitachi’s concept of Autonomous Decentralized Sys-

tems, which Hitachi has successfully implemented in

multiple projects. Such systems can be developed in

modular steps, and the resulting systems are

extremely robust and disaster resilient. Autonomous

Decentralized Systems prevent faults from spreading

across an entire system, and avoid service outages

during construction work or when local malfunctions

occur.

These Autonomous Decentralized Systems can be fur-

ther developed into symbiotic systems that facilitate

interoperations between systems and communities,

leading to cities that can dynamically adapt long into

the future, while still maintaining uninterrupted 24/7

operation.

2-4. Smart-city management infrastructure

Chapter

Energy

Data center

Transportation

CommunicationsWater

Logistics

IndustryCommerce

Research, universities

Dwell Work

Trans-portation

Tourism, leisure Agriculture, fisheries

Industrialwastewatertreatment

Sewagetreatment

Watertreatment

New energy

Gas Aviation

Shipping

Telephony

InternetBroadcasting

Railways

Batteries

Large centralpower plant

Smart-citymanagementinfrastructure

Retailers Recyclingfacilities

Factories

Energy stations

Railway stations

Hotels

HospitalsSchools

Residences

Public facilities

Buildings

Fig. 2.4: Relationships between smart cities and IT

Equipment managementOperational informationAnalysis and simulation

By utilizing IT to coordinate operation of the urban

infrastructure layer and the daily-life services infra-

structure layer, the smart-city management infra-

structure can provide access to more information on

supply and demand than was available in the past.

Not only is there more information, but techniques

such as data visualization make this data easier to

understand quickly. The balance between supply and

demand can be managed instantaneously, with high

precision.

(a) Control of demandBy guiding and controlling demand-side needs, it is

possible to smooth the utilization of urban infrastruc-

ture equipment, without changing total demand. For

example, this approach can reduce traffic congestion

by controlling peaks in road demand, or can manage

demand in situations where supply-side control is

difficult, such as the output from solar power genera-

(b) Control of supplySupply of scarce resources can be provided even

during times of shortages by using system-wide con-

trol of supply levels to manage the supply for indi-

vidual demands. In the case of electric power, for

example, the available supply might be allocated

according to public priorities, or by allocating only

the exact minimum needed at that time.

[3] Integrated services delivered in optimal combi-nations

By using IT to seamlessly interlink resources, func-

tions, and services, a smart city can provide a single

integrated service that is optimized to take advantage

of the characteristics of each component.

Consider transportation, for example. A smart city

can provide transportation services that deliver

people to their destination and satisfy user require-

ments for safety, convenience, and economy by simu-

lating the combined operation of trains, buses and

other public transportation, car rental or sharing

arrangements, and private cars. Or consider energy. A

smart city can achieve a flexible and reliable supply

of electric power by making maximum use of solar,

wind, and other forms of renewable energy in addi-

tion to thermal, hydro, and other base-load electric

power generation facilities.

As in these examples, IT is essential to delivering the

optimal combination of services that meets demand

and suits regional circumstances.

[4] Smart-city management infrastructureThis infrastructure uses IT to provide information

platforms for linking within and between different

types of infrastructure. Its roles include information

management, operational management, and equip-

ment operation within the city.

The smart-city management infrastructure handles

information and controls across the different types of

infrastructure needed by a city. Examples include

smart grids in the energy sector, navigation systems

and green mobility involving the use of EVs in the

transportation sector, and advanced water manage-

ment systems using water from rain and recycling in

the water sector.

[5] Daily lifeThis represents the resident’s way of life and how

people use the infrastructure to live, work, study, and

travel. Hitachi seeks to improve the quality of life by

understanding residents’ genuine needs and then

disassembling and reassembling the functions of the

corresponding layer (daily-life services infrastructure)

accordingly.

Hitachi sees smart cities as emerging from combina-

tions of elements that make up the hierarchy

described above. The smart-city management infra-

structure plays a key role as the common platform

enabling various combinations. For example, this

management infrastructure can ensure that services

are available when and where they are needed, and

can help residents achieve a good quality of life with

the minimum impact on the environment. The man-

agement infrastructure can coordinate both the

physical and system components of the common ele-

ments that make up a city (such as buildings, roads,

railways, and utilities) and those elements that differ

by region (such as residential areas, central business

districts, and commercial areas) (see Fig. 2.4).

[1] Advanced IT and Autonomous Decentralized Systems for the social infrastructure

Hitachi believes that a fusion of two different types of

IT can resolve the issues confronting social infrastruc-

ture and help develop smart cities that are secure

and comfortable while taking the environment into

account. These two types of IT are control systems,

which can operate the social infrastructure safely,

efficiently, smoothly, and in harmony with the envi-

ronment; and information systems, which help

deliver the security, convenience, and comfort of a

smart city lifestyle.

For example, information systems can collect opera-

tional data from various areas of life, and then trans-

form this data into information and knowledge that

applications can use to provide smart services. For

example, data can be used to predict demand spikes

that require extra resources. Similarly, control

systems can use this information for more finely

grained management and operation. This can

enhance the operation of factories, electric power

systems, railways, and other services. Through this

integration of information, it is possible to develop

infrastructure systems that are optimized across the

whole of society.

Also, when the urban infrastructure is being con-

structed, the scope of each function should be kept

as small as possible, and the individual functions

should be independent. This is in accordance with

Hitachi’s concept of Autonomous Decentralized Sys-

tems, which Hitachi has successfully implemented in

multiple projects. Such systems can be developed in

modular steps, and the resulting systems are

extremely robust and disaster resilient. Autonomous

Decentralized Systems prevent faults from spreading

across an entire system, and avoid service outages

during construction work or when local malfunctions

occur.

These Autonomous Decentralized Systems can be fur-

ther developed into symbiotic systems that facilitate

interoperations between systems and communities,

leading to cities that can dynamically adapt long into

the future, while still maintaining uninterrupted 24/7

operation.

2-4. Smart-city management infrastructure

Chapter

Sustainable growth

Progress in steps while avoiding shocks and upheavalsRenewal

Link different types of systems so they can interoperateDevelopment

Expand geographical scope and optimize overall operation across a wide area

Rapidly deploy systems within regions

Growth

Fig. 2.5: Infrastructure systems in a growing smart city

For objectives such as the sustainable growth of infrastructure

and business continuity planning (BCP), systems should be

designed, built, and operated in ways that allow repeated

cycles of growth, development, and renewal in accordance

with the stage of development that a city has reached.

[2] Step-by-step objectives of a smart citySmart cities should aspire to different objectives at

different stages of a city’s development.

(1) Minimum objectivesAt the lowest stage, the city aims to provide the

society’s infrastructure at a level that provides people

with the minimum they need to live a civilized life.

The provided services are primarily essential services.

(2) Basic objectivesAt the next stage, the city aims to achieve various

objectives or standards (such as reducing carbon emis-

sions) agreed on at a national or international level.

The goals include providing an adequate shared

public infrastructure.

(3) City-specific objectivesAt the next stage, in addition to providing the daily-

life services infrastructure, the city aims to achieve

specified benchmarks (such as numerical indicators

that measure the crime rate or congestion). However,

it is up to the city itself to decide which criteria or

benchmarks to use. If objectives or standards are

changed, it is necessary to be able to respond quickly

to the new requirements.

(4) High-level objectivesAt this high-level stage, the values of a city and its

residents include many qualitative concepts and

things of an emotional nature, such as lifestyle values

and a sense of attachment to the neighborhood. As it

is unlikely that all benchmarks can be achieved

adequately, it is desirable to adopt mechanisms for

assessing the level of achievement that are based on

weighted averages of a number of indicators, such as

Japan’s Top Runner program for improving energy

efficiency.

These objectives can be thought of in terms of the

self-actualization theory that categorizes human

wants into five stages. This theory was proposed by

American psychologist Abraham Maslow, who

hypothesized that human beings continuously move

towards self-actualization. In this case, the minimum

objectives can be thought of as corresponding to

what Maslow calls “physiological needs,” the basic

objectives to “safety needs,” the city-specific objec-

tives to “social needs,” and the high-level objectives

to “esteem needs” and “self-actualization needs.”

[3] Economic growth of a smart cityWhen considered from an economics viewpoint, a

city can be thought of as an entity that enables eco-

nomic or business groups to obtain income from out-

side its geographical region by selling products and

goods, and then enables the obtained revenues to

circulate within its region. Accordingly, the economic

performance of a city can be viewed from two view-

points: its industrial competitiveness relative to other

regions, and the soundness of the finances within its

region.

Industrial competitiveness can be thought of in rela-

tion to the flow of economic activity in the city. A city

can boost the competitiveness of its industries by

making the flow of people, products, money, and

information more efficient, so that they circulate

more freely. For example, cutting traffic congestion

can reduce opportunity costs and increase the city’s

productivity.

The soundness of city finances, meanwhile, can be

related to the stock of economic activity in the city.

Effects such as depopulation caused by aging, lower

birth rates, and the concentration of populations in

urban areas can leave cities with an excess of

unneeded urban infrastructure, with the result that

the cost of its maintenance and upgrading places

pressure on finances. Waste can be reduced and eco-

nomic performance enhanced through measures

such as sharing equipment and other facilities or

reassigning them to where they are most needed.

Important factors in encouraging economic growth

include identifying and minimizing misuse and

waste, flexibly adapting to changing city circum-

stances, and optimizing not only how systems are

built but also how they are used.

Measures to make a city into a smart city require

taking an integrated long-term approach to design,

development, and operation. The assessment of costs

and benefits needs to look 10 or even 20 years ahead.

This allows cities to not only provide comfort, conve-

nience, and security for their residents, but also to

continue to remain attractive to businesses.

[4] Creation of new services through innovationThe use of IT in smart cities can lead to exciting innova-

tions and creation of new services. A smart city gener-

ates extensive data from its infrastructure via sensors

and other means. Access to this data opens up possibili-

ties for innovations and services within the daily-life

services infrastructure. For example, a traffic manage-

ment system could determine traffic conditions by

using vehicle-mounted devices to collect information

on car locations and speeds.

Naturally, individuals would have to give explicit per-

mission before allowing third parties access to certain

types of personal information acquired from the social

infrastructure. Robust security would be needed to pre-

vent data leakage and monitoring would be needed to

ensure that the information is used for agreed purposes

only. However, with the right security and privacy safe-

guards, access to such data can lead to many types of

new services. For example, if a car insurance company

could access the information on car locations and

speeds, the company could use it to assess the driving

of policy holders. In addition to using conventional pro-

file information such as age, gender, mileage, and

license type, this ability to evaluate each policy holder’s

driving patterns would allow the company to set appro-

priate premiums based on a better assessment of

actual risk.

The availability of such data has the potential to lead to

a wide variety of new applications. In addition to com-

mercial innovations, health and welfare services can

use the data to better focus their limited resources on

those most in need. This open approach to data can

unleash smart innovation that provides both public

and personal benefits.

The idea of a smart city is an abstract one, and the

ideal form changes through each stage of a city’s

development. To achieve a sustainable balance and

harmony between the values of residents and the

environment, urban development must proceed in a

far-sighted and planned manner with a focus on

achieving the objectives specific to each particular

city. The city must also operate within the relevant

constraints, including budgets, space, and each city’s

individual priorities (see Fig. 2-5).

[1] What it takes to be a smart city The process of creating an actual smart city requires

the identification of the right level of “smartness” for

that city, and requires undertaking long-term projects

aimed at achieving this. Hitachi considers this ques-

tion of a city’s “smartness” from three different per-

spectives. As mentioned above, the first is to optimize

conflicting costs and benefits to achieve a well-

balanced relationship between the various stakehold-

ers and their economic, environmental, and people-

oriented viewpoints. The second is to expand the

scope of optimization to include nearby cities. This

means achieving a balance not just between the

interests of a particular city’s stakeholders, but also

taking into account relationships with neighboring

cities. The third is to take a lifecycle-based approach

to optimization described in the next section. This

section examines the process of urban growth over

the lifecycle of a city and describes optimal solutions

to suit each stage of development.

2-5. Smart city requirements

Chapter

Sustainable growth

Progress in steps while avoiding shocks and upheavalsRenewal

Link different types of systems so they can interoperateDevelopment

Expand geographical scope and optimize overall operation across a wide area

Rapidly deploy systems within regions

Growth

Fig. 2.5: Infrastructure systems in a growing smart city

For objectives such as the sustainable growth of infrastructure

and business continuity planning (BCP), systems should be

designed, built, and operated in ways that allow repeated

cycles of growth, development, and renewal in accordance

with the stage of development that a city has reached.

[2] Step-by-step objectives of a smart citySmart cities should aspire to different objectives at

different stages of a city’s development.

(1) Minimum objectivesAt the lowest stage, the city aims to provide the

society’s infrastructure at a level that provides people

with the minimum they need to live a civilized life.

The provided services are primarily essential services.

(2) Basic objectivesAt the next stage, the city aims to achieve various

objectives or standards (such as reducing carbon emis-

sions) agreed on at a national or international level.

The goals include providing an adequate shared

public infrastructure.

(3) City-specific objectivesAt the next stage, in addition to providing the daily-

life services infrastructure, the city aims to achieve

specified benchmarks (such as numerical indicators

that measure the crime rate or congestion). However,

it is up to the city itself to decide which criteria or

benchmarks to use. If objectives or standards are

changed, it is necessary to be able to respond quickly

to the new requirements.

(4) High-level objectivesAt this high-level stage, the values of a city and its

residents include many qualitative concepts and

things of an emotional nature, such as lifestyle values

and a sense of attachment to the neighborhood. As it

is unlikely that all benchmarks can be achieved

adequately, it is desirable to adopt mechanisms for

assessing the level of achievement that are based on

weighted averages of a number of indicators, such as

Japan’s Top Runner program for improving energy

efficiency.

These objectives can be thought of in terms of the

self-actualization theory that categorizes human

wants into five stages. This theory was proposed by

American psychologist Abraham Maslow, who

hypothesized that human beings continuously move

towards self-actualization. In this case, the minimum

objectives can be thought of as corresponding to

what Maslow calls “physiological needs,” the basic

objectives to “safety needs,” the city-specific objec-

tives to “social needs,” and the high-level objectives

to “esteem needs” and “self-actualization needs.”

[3] Economic growth of a smart cityWhen considered from an economics viewpoint, a

city can be thought of as an entity that enables eco-

nomic or business groups to obtain income from out-

side its geographical region by selling products and

goods, and then enables the obtained revenues to

circulate within its region. Accordingly, the economic

performance of a city can be viewed from two view-

points: its industrial competitiveness relative to other

regions, and the soundness of the finances within its

region.

Industrial competitiveness can be thought of in rela-

tion to the flow of economic activity in the city. A city

can boost the competitiveness of its industries by

making the flow of people, products, money, and

information more efficient, so that they circulate

more freely. For example, cutting traffic congestion

can reduce opportunity costs and increase the city’s

productivity.

The soundness of city finances, meanwhile, can be

related to the stock of economic activity in the city.

Effects such as depopulation caused by aging, lower

birth rates, and the concentration of populations in

urban areas can leave cities with an excess of

unneeded urban infrastructure, with the result that

the cost of its maintenance and upgrading places

pressure on finances. Waste can be reduced and eco-

nomic performance enhanced through measures

such as sharing equipment and other facilities or

reassigning them to where they are most needed.

Important factors in encouraging economic growth

include identifying and minimizing misuse and

waste, flexibly adapting to changing city circum-

stances, and optimizing not only how systems are

built but also how they are used.

Measures to make a city into a smart city require

taking an integrated long-term approach to design,

development, and operation. The assessment of costs

and benefits needs to look 10 or even 20 years ahead.

This allows cities to not only provide comfort, conve-

nience, and security for their residents, but also to

continue to remain attractive to businesses.

[4] Creation of new services through innovationThe use of IT in smart cities can lead to exciting innova-

tions and creation of new services. A smart city gener-

ates extensive data from its infrastructure via sensors

and other means. Access to this data opens up possibili-

ties for innovations and services within the daily-life

services infrastructure. For example, a traffic manage-

ment system could determine traffic conditions by

using vehicle-mounted devices to collect information

on car locations and speeds.

Naturally, individuals would have to give explicit per-

mission before allowing third parties access to certain

types of personal information acquired from the social

infrastructure. Robust security would be needed to pre-

vent data leakage and monitoring would be needed to

ensure that the information is used for agreed purposes

only. However, with the right security and privacy safe-

guards, access to such data can lead to many types of

new services. For example, if a car insurance company

could access the information on car locations and

speeds, the company could use it to assess the driving

of policy holders. In addition to using conventional pro-

file information such as age, gender, mileage, and

license type, this ability to evaluate each policy holder’s

driving patterns would allow the company to set appro-

priate premiums based on a better assessment of

actual risk.

The availability of such data has the potential to lead to

a wide variety of new applications. In addition to com-

mercial innovations, health and welfare services can

use the data to better focus their limited resources on

those most in need. This open approach to data can

unleash smart innovation that provides both public

and personal benefits.

The idea of a smart city is an abstract one, and the

ideal form changes through each stage of a city’s

development. To achieve a sustainable balance and

harmony between the values of residents and the

environment, urban development must proceed in a

far-sighted and planned manner with a focus on

achieving the objectives specific to each particular

city. The city must also operate within the relevant

constraints, including budgets, space, and each city’s

individual priorities (see Fig. 2-5).

[1] What it takes to be a smart city The process of creating an actual smart city requires

the identification of the right level of “smartness” for

that city, and requires undertaking long-term projects

aimed at achieving this. Hitachi considers this ques-

tion of a city’s “smartness” from three different per-

spectives. As mentioned above, the first is to optimize

conflicting costs and benefits to achieve a well-

balanced relationship between the various stakehold-

ers and their economic, environmental, and people-

oriented viewpoints. The second is to expand the

scope of optimization to include nearby cities. This

means achieving a balance not just between the

interests of a particular city’s stakeholders, but also

taking into account relationships with neighboring

cities. The third is to take a lifecycle-based approach

to optimization described in the next section. This

section examines the process of urban growth over

the lifecycle of a city and describes optimal solutions

to suit each stage of development.

2-5. Smart city requirements

Chapter

Government

Developmentconcept

Infrastructureplan

Civil engineering andconstruction design

Civil engineering andconstruction work

Master plan Finance System designSystem

implementation

Operation and maintenance

services

Public agencies

System integratorProducers

Total engineering

Constructioncompanies

Collaborativeconsortium

Trading companies

Administrators/operators

Machinery andequipment

manufacturers

Residential buildersUniversities and research institutions

(Master developers)

Making Smart Cities

Chapter

3Chapter 3

A significant part of Hitachi is at work making smart

cities and making cities smarter. Its smart city busi-

ness is a key pillar in the field that Hitachi calls the

social innovation business. Hitachi participates in

smart city projects from the concept stage. It brings

together the combined strengths of the Hitachi

Group, which has products and research in areas of

energy, transportation, public industry, urban devel-

opment, information and telecommunications, and

information and control. Nevertheless, smart city

initiatives cover a vast area and Hitachi cannot

always achieve its objectives on its own. In its global

activities, Hitachi works with local governments, busi-

ness partners, local companies, and others to contrib-

ute to the making of smart cities. It acts in a range of

different roles, from urban planning to handling

operations.

While different cities face different challenges, the

process of investigating and deciding what sort of

smart city to develop is one that can be applied to

many cities. The design framework described in this

chapter provides useful guidelines on how Hitachi

engages in dialog with cities, and works with them to

identify issues and to determine the direction that

the development should take. Hitachi can apply its

accumulated expertise to identify the best solutions

for each city.

Hitachi also believes that the new solutions it pro-

vides will serve as a nucleus for overcoming the chal-

lenges faced by other cities, and for achieving smart

cities in the future.

Hitachi boasts extensive experience and total engineer-

ing capabilities in many fields such as finance, service

design, system design, and operation and mainte-

nance. These capabilities have been built up over

many years of involvement in social infrastructure sec-

tors such as electric power, transportation, water and

sewage, and industrial systems. Hitachi also has a track

record that includes delivery of a wide range of differ-

ent solutions, including solutions in the information

and telecommunications sectors. By utilizing this expe-

rience and expertise, together with advanced technolo-

gies from Hitachi’s research laboratories, Hitachi is able

to achieve an advanced fusion of infrastructure control

with information and telecommunications systems.

These systems that fuse system controls and informa-

tion technologies are at the core of smart city develop-

ment. One of Hitachi’s greatest strengths is that it

brings together all of these core technologies in a single

corporate group. In terms of project execution, Hitachi

has also worked with customers on a number of major

projects where its involvement extended from identify-

ing the issues through to defining requirements, pro-

posing and implementing solutions, and providing

support for operation and maintenance.

By drawing on these in-house capabilities, Hitachi

intends to proceed with the development of smart

cities by working with the developers, construction

companies, manufacturers, trading companies, and

other organizations involved in urban development,

and taking a leading role in projects from the initial

planning stages.

Fig. 3.1: Smart city development based on collaborative consortiums

Making a smart city requires long-term involvement by a wide

range of stakeholders, who work together on many aspects

from development to operation and maintenance (see Fig. 3.1).

This means that such projects need to be handled by collabora-

tive consortiums made up of industry, government, and

academia, each of whom brings a variety of different skills and

knowledge. Of particular importance are the master develop-

ers, including the government, public agencies, or financial

institutions who act as “producers” (project organizers), and the

system integrators who put together the overall system. It is

essential for these two groups to work together. By members

working together to make a better city, a collaborative consor-

tium can handle the challenges of developing a smart city that

is constantly evolving.

Hitachi is actively involved as a system integrator in smart city

demonstration projects underway in Japan and elsewhere. Its

business model includes involvement in a variety of urban

projects in which it maintains close links with other businesses

and with national and local governments, and it then feeds this

experience back into its technology and development work.

Along with initiatives that are designed to suit the characteris-

tics of cities throughout the world, Hitachi is also establishing

indicators (also called indices or indexes) that give an objective

view of cities, and is participating in the formulation of rules

and international standardization for their application to other

cities.

《 The drive for collaboration in projects 》

Government

Developmentconcept

Infrastructureplan

Civil engineering andconstruction design

Civil engineering andconstruction work

Master plan Finance System designSystem

implementation

Operation and maintenance

services

Public agencies

System integratorProducers

Total engineering

Constructioncompanies

Collaborativeconsortium

Trading companies

Administrators/operators

Machinery andequipment

manufacturers

Residential buildersUniversities and research institutions

(Master developers)

Making Smart Cities

Chapter

3Chapter 3

A significant part of Hitachi is at work making smart

cities and making cities smarter. Its smart city busi-

ness is a key pillar in the field that Hitachi calls the

social innovation business. Hitachi participates in

smart city projects from the concept stage. It brings

together the combined strengths of the Hitachi

Group, which has products and research in areas of

energy, transportation, public industry, urban devel-

opment, information and telecommunications, and

information and control. Nevertheless, smart city

initiatives cover a vast area and Hitachi cannot

always achieve its objectives on its own. In its global

activities, Hitachi works with local governments, busi-

ness partners, local companies, and others to contrib-

ute to the making of smart cities. It acts in a range of

different roles, from urban planning to handling

operations.

While different cities face different challenges, the

process of investigating and deciding what sort of

smart city to develop is one that can be applied to

many cities. The design framework described in this

chapter provides useful guidelines on how Hitachi

engages in dialog with cities, and works with them to

identify issues and to determine the direction that

the development should take. Hitachi can apply its

accumulated expertise to identify the best solutions

for each city.

Hitachi also believes that the new solutions it pro-

vides will serve as a nucleus for overcoming the chal-

lenges faced by other cities, and for achieving smart

cities in the future.

Hitachi boasts extensive experience and total engineer-

ing capabilities in many fields such as finance, service

design, system design, and operation and mainte-

nance. These capabilities have been built up over

many years of involvement in social infrastructure sec-

tors such as electric power, transportation, water and

sewage, and industrial systems. Hitachi also has a track

record that includes delivery of a wide range of differ-

ent solutions, including solutions in the information

and telecommunications sectors. By utilizing this expe-

rience and expertise, together with advanced technolo-

gies from Hitachi’s research laboratories, Hitachi is able

to achieve an advanced fusion of infrastructure control

with information and telecommunications systems.

These systems that fuse system controls and informa-

tion technologies are at the core of smart city develop-

ment. One of Hitachi’s greatest strengths is that it

brings together all of these core technologies in a single

corporate group. In terms of project execution, Hitachi

has also worked with customers on a number of major

projects where its involvement extended from identify-

ing the issues through to defining requirements, pro-

posing and implementing solutions, and providing

support for operation and maintenance.

By drawing on these in-house capabilities, Hitachi

intends to proceed with the development of smart

cities by working with the developers, construction

companies, manufacturers, trading companies, and

other organizations involved in urban development,

and taking a leading role in projects from the initial

planning stages.

Fig. 3.1: Smart city development based on collaborative consortiums

Making a smart city requires long-term involvement by a wide

range of stakeholders, who work together on many aspects

from development to operation and maintenance (see Fig. 3.1).

This means that such projects need to be handled by collabora-

tive consortiums made up of industry, government, and

academia, each of whom brings a variety of different skills and

knowledge. Of particular importance are the master develop-

ers, including the government, public agencies, or financial

institutions who act as “producers” (project organizers), and the

system integrators who put together the overall system. It is

essential for these two groups to work together. By members

working together to make a better city, a collaborative consor-

tium can handle the challenges of developing a smart city that

is constantly evolving.

Hitachi is actively involved as a system integrator in smart city

demonstration projects underway in Japan and elsewhere. Its

business model includes involvement in a variety of urban

projects in which it maintains close links with other businesses

and with national and local governments, and it then feeds this

experience back into its technology and development work.

Along with initiatives that are designed to suit the characteris-

tics of cities throughout the world, Hitachi is also establishing

indicators (also called indices or indexes) that give an objective

view of cities, and is participating in the formulation of rules

and international standardization for their application to other

cities.

《 The drive for collaboration in projects 》

Identify underlying urban issuesand important factors

Issue phase Solution phase

Finance, etc.

Policy

Technology

Monitor Analyze

Control Simulate

Operation phaseFormulate the best mix of solutions Use monitoring to support

operation and management

Triplebottom line

for indicators

World opinion onthe environment

Ecology

Residents

SocietyEconomy

City administratorsand developers

Fig. 3.3: Triple bottom line for indicators

Ecology

Smart City Evaluation concept

Economy

Past indicator value

Current indicator value

New target indicator value

Current direction

Direction array

Society

Fig. 3.4: Use of indicators for urban operations

One difficulty with managing smart cities is that they

have no single ultimate goal. Each city needs to iden-

tify the issues it faces, formulate solutions, and oper-

ate its services, and then to use the results of these

activities as feedback to maintain superior urban

operations. What is important, Hitachi believes, is to

define a management framework consisting of issues,

solutions, and operations at each phase of city man-

agement, and to decide how best to work through

this cycle (see Fig. 3.2).

This management framework is suitable not only for

cities that are embarking on the smart city concept

from scratch, but also for making existing cities

smarter.

By drawing on the experience and expertise it has

built up over time, and by acting as a partner

through the entire lifecycle of a city, Hitachi is able to

encourage innovation from a long-term perspective,

including identifying changing needs quickly and

proposing the best possible solutions.

The management framework can be broadly divided

into the following phases.

[1] Issue phaseSome urban issues and problems are obvious, but

some are latent and hard to identify. In the issue

phase, Hitachi works with local governments and city

administrators to identify, analyze, and determine

directions for resolving latent issues and problems.

Underlying latent urban issues can be identified by

discussions and interactions between a city's special-

ists and Hitachi’s own experts in various fields. Fur-

thermore, simulation tools and other methods can be

used to identify latent issues, analyze their causes

and cause-and-effect relationships, and determine

the key factors that need to be targeted for improve-

Hitachi also has ongoing experience in dealing with

the urban issues that resulted from Japan’s period of

rapid economic growth. This gives it a depth of first-

hand practical expertise that can be drawn on to help

avoid or resolve the issues that are likely to be faced

by rapidly growing emerging economies in the future.

[2] Solution phaseIn this phase, optimal solutions are determined

based on the characteristics of each city and the

high-priority issues. This means choosing the mix of

solutions that is the optimum at this stage of the

city’s lifecycle and dealing with any conflicting needs.

Rather than just providing a collection of individual

products or services, Hitachi can devise and imple-

ment an integrated set of solutions that works with

the city’s existing policies and practices.

[3] Operation phaseThe operation phase does not consist of just deploy-

ing solutions. Hitachi’s support for smart city opera-

tion and management can also deliver ongoing

improvements to city functions and cope with new

requirements that result from the changing environ-

ment. Because continuous monitoring can identify

potential improvements in operational efficiency and

anticipate risks, such items can be dealt with quickly

in the issue phase of the next development cycle.

Fig. 3.2: Management framework

Before the challenges facing a city can be identified

in the issue phase described above, it is first neces-

sary to collect a variety of data on the city’s current

situation. Similarly, when formulating optimal solu-

tions for the city in the solution phase, it is essential

to use support tools such as indicators (also called

indices or indexes) that can give numerical values for

improvements and new targets. Hitachi is currently

working on establishing such indicators by consider-

ing them in terms of the "triple bottom line" (TBL).

TBL aims to measure success from an expanded set of

values and criteria, including economic, ecological,

and social costs and benefits (see Fig. 3.3). In addition

to helping the strategic planning for future urban

operations, this process can be used to clarify the

issues that need to be resolved if particular strategies

are to be adopted, and also to present potential solu-

tions. By monitoring and analyzing the effectiveness

of a variety of solutions as they are being imple-

mented, Hitachi can provide ongoing support for

urban operations.

The new issues that arise during the operation phase

vary as the city advances through the different stages

of development. This makes it necessary to work

through repeated cycles of reassessment and review,

with reference to the direction, rate, and stage of the

city’s growth. Hitachi helps keep the city heading in

the optimal direction by using innovative approaches

such as its Smart City Evaluation concept to estimate

how indicators will vary as the city grows (see Fig. 3.4).

When you consider its constituent elements, a city

3-3 Use of indicators for urban operations can be seen as a system of interlinked functions (the

infrastructure). These elements can be classified into

those common to many other cities and those that

are unique to a particular city. The common ele-

ments are associated with the basic, essential func-

tions of cities, such as commuter transportation and

water treatment.

There are a huge number of elements that make

individual cities distinct. Such elements include

aspects of the natural environment, such as geogra-

phy or climate; the city’s economic health, such as its

finances or stage of development; its structures, poli-

cies, legal systems, and other administrative features;

and various differences in values between stakehold-

ers due to traditions or customs.

While taking into account the elements that are

common to all cities and the elements distinctive of a

particular city, Hitachi approaches the question of

what sort of smart city to design in terms of the

following three steps (see Fig. 3.5).

(1) Specify core principlesThis step draws on shared principles that should form

part of any smart city. It determines the requirements

for the three elements that make up the infrastruc-

ture of a smart city, namely hardware (buildings,

roads, and other public facilities), software (policies

and rules), and systems (management and opera-

tion). Because all of these sectors are closely interre-

lated, it is necessary to adopt a broad-based perspec-

tive from the early planning stages. For each of these

sectors, a variety of issues can be dealt with flexibly

by fleshing out the concepts in dialogs with city stake-

holders from the earliest stages.3-4 Design framework

Chapter

3 Making Smart Cities

Identify underlying urban issuesand important factors

Issue phase Solution phase

Finance, etc.

Policy

Technology

Monitor Analyze

Control Simulate

Operation phaseFormulate the best mix of solutions Use monitoring to support

operation and management

Triplebottom line

for indicators

World opinion onthe environment

Ecology

Residents

SocietyEconomy

City administratorsand developers

Fig. 3.3: Triple bottom line for indicators

Ecology

Smart City Evaluation concept

Economy

Past indicator value

Current indicator value

New target indicator value

Current direction

Direction array

Society

Fig. 3.4: Use of indicators for urban operations

One difficulty with managing smart cities is that they

have no single ultimate goal. Each city needs to iden-

tify the issues it faces, formulate solutions, and oper-

ate its services, and then to use the results of these

activities as feedback to maintain superior urban

operations. What is important, Hitachi believes, is to

define a management framework consisting of issues,

solutions, and operations at each phase of city man-

agement, and to decide how best to work through

this cycle (see Fig. 3.2).

This management framework is suitable not only for

cities that are embarking on the smart city concept

from scratch, but also for making existing cities

smarter.

By drawing on the experience and expertise it has

built up over time, and by acting as a partner

through the entire lifecycle of a city, Hitachi is able to

encourage innovation from a long-term perspective,

including identifying changing needs quickly and

proposing the best possible solutions.

The management framework can be broadly divided

into the following phases.

[1] Issue phaseSome urban issues and problems are obvious, but

some are latent and hard to identify. In the issue

phase, Hitachi works with local governments and city

administrators to identify, analyze, and determine

directions for resolving latent issues and problems.

Underlying latent urban issues can be identified by

discussions and interactions between a city's special-

ists and Hitachi’s own experts in various fields. Fur-

thermore, simulation tools and other methods can be

used to identify latent issues, analyze their causes

and cause-and-effect relationships, and determine

the key factors that need to be targeted for improve-

Hitachi also has ongoing experience in dealing with

the urban issues that resulted from Japan’s period of

rapid economic growth. This gives it a depth of first-

hand practical expertise that can be drawn on to help

avoid or resolve the issues that are likely to be faced

by rapidly growing emerging economies in the future.

[2] Solution phaseIn this phase, optimal solutions are determined

based on the characteristics of each city and the

high-priority issues. This means choosing the mix of

solutions that is the optimum at this stage of the

city’s lifecycle and dealing with any conflicting needs.

Rather than just providing a collection of individual

products or services, Hitachi can devise and imple-

ment an integrated set of solutions that works with

the city’s existing policies and practices.

[3] Operation phaseThe operation phase does not consist of just deploy-

ing solutions. Hitachi’s support for smart city opera-

tion and management can also deliver ongoing

improvements to city functions and cope with new

requirements that result from the changing environ-

ment. Because continuous monitoring can identify

potential improvements in operational efficiency and

anticipate risks, such items can be dealt with quickly

in the issue phase of the next development cycle.

Fig. 3.2: Management framework

Before the challenges facing a city can be identified

in the issue phase described above, it is first neces-

sary to collect a variety of data on the city’s current

situation. Similarly, when formulating optimal solu-

tions for the city in the solution phase, it is essential

to use support tools such as indicators (also called

indices or indexes) that can give numerical values for

improvements and new targets. Hitachi is currently

working on establishing such indicators by consider-

ing them in terms of the "triple bottom line" (TBL).

TBL aims to measure success from an expanded set of

values and criteria, including economic, ecological,

and social costs and benefits (see Fig. 3.3). In addition

to helping the strategic planning for future urban

operations, this process can be used to clarify the

issues that need to be resolved if particular strategies

are to be adopted, and also to present potential solu-

tions. By monitoring and analyzing the effectiveness

of a variety of solutions as they are being imple-

mented, Hitachi can provide ongoing support for

urban operations.

The new issues that arise during the operation phase

vary as the city advances through the different stages

of development. This makes it necessary to work

through repeated cycles of reassessment and review,

with reference to the direction, rate, and stage of the

city’s growth. Hitachi helps keep the city heading in

the optimal direction by using innovative approaches

such as its Smart City Evaluation concept to estimate

how indicators will vary as the city grows (see Fig. 3.4).

When you consider its constituent elements, a city

3-3 Use of indicators for urban operations can be seen as a system of interlinked functions (the

infrastructure). These elements can be classified into

those common to many other cities and those that

are unique to a particular city. The common ele-

ments are associated with the basic, essential func-

tions of cities, such as commuter transportation and

water treatment.

There are a huge number of elements that make

individual cities distinct. Such elements include

aspects of the natural environment, such as geogra-

phy or climate; the city’s economic health, such as its

finances or stage of development; its structures, poli-

cies, legal systems, and other administrative features;

and various differences in values between stakehold-

ers due to traditions or customs.

While taking into account the elements that are

common to all cities and the elements distinctive of a

particular city, Hitachi approaches the question of

what sort of smart city to design in terms of the

following three steps (see Fig. 3.5).

(1) Specify core principlesThis step draws on shared principles that should form

part of any smart city. It determines the requirements

for the three elements that make up the infrastruc-

ture of a smart city, namely hardware (buildings,

roads, and other public facilities), software (policies

and rules), and systems (management and opera-

tion). Because all of these sectors are closely interre-

lated, it is necessary to adopt a broad-based perspec-

tive from the early planning stages. For each of these

sectors, a variety of issues can be dealt with flexibly

by fleshing out the concepts in dialogs with city stake-

holders from the earliest stages.3-4 Design framework

Chapter

Example combination for a particular urban development project

Specify core principles

Specify shared principles suitable for many smart cities

Specify the design direction

Decide which direction to take with the basic strategies for growth and development

Provide customized solutions

Solutions and services designed to suit the unique features of a city

(2) Specify the design directionThis step involves considering the diverse characteris-

tics of a city to determine which directions to take for

the basic growth and development strategies. When

deciding the type of smart city that a city should

aspire to become, the desirable requirements differ

both quantitatively (population, density, growth

rates, and so on) and qualitatively (resident’s aspira-

tions) depending on the current lifecycle phase of the

city. (As described in section 1-3, a city lifecycle goes

through the early phase, growth phase, mature phase,

and transformation phase.) Factors such as the city’s

geography or the strength of its economy also influ-

ence its priorities. Another factor to be considered is

whether any useful ideas can be obtained from

development projects that are already in progress.

The directions in which the city should seek to grow

should be clarified after considering the conditions

that need to be met, such as the legal system and

management structures used for running the city.

(3) Provide customized solutionsThis step provides solutions and services designed to

suit the distinctive features of a city. It involves

systems that integrate the various solutions formu-

lated and evaluated during the steps to specify core

principles and the design direction. Adopting a mix of

unrelated solutions to solve problems individually

makes it more difficult for the people who operate

city services to do their job, and such solutions

cannot adapt flexibly to the growth of the city. Fur-

thermore, adopting holistic and comprehensive ways

of overcoming the challenges faced by a city makes it

easier to provide more effective solutions. Rather

than being limited to its own products, Hitachi acts

as a system integrator whose role is to combine vari-

ous city-wide solutions into an integrated system.

A wide variety of organizations are involved in man-

aging a smart city. In some organizations, the

national or local government plays a central role.

However, many different organizational structures

and practices are used in different parts of the world.

Examples include services provided by “third-sector”

organizations (joint corporations that have invest-

ments from both the public and private sectors), ser-

vices in which the administrative body is determined

by a contract with the people who own the asset con-

cerned, and services operated by funds or other

private sector organizations. Other possibilities for

the future include organizations that form part of the

government or to whom the government has del-

egated certain authority. Whatever form these organi-

zations take, they are not just involved in a single

process of developing a smart city, but also in the

ongoing processes of development and operation.

This requires these different organizations to work

together, and to adopt practices and structures that

are designed for the long term and targeted at

enhancing the value of the city.

Through its involvement as a partner from concep-

tual planning to operation, Hitachi uses a variety of

different frameworks as it contributes to the provi-

sion of optimal solutions and the development of

attractive cities. Hitachi is currently involved in

numerous smart city projects in different parts of the

world where it is trialing specific practices and build-

ing experience. In its role of providing support for

smart city development, Hitachi will continue to

supply a wide range of solutions in the belief that it

has an essential role to play among those engaged in

urban development.

Fig. 3.5: Design framework

Hitachi is participating in the Kashiwa-no-Ha Smart

City Project, a major project in Japan. The project

involves public, private, and academic sectors work-

ing together to develop a smart city at Kashiwa City in

Chiba Prefecture. This city is located approximately

30 minutes by train from central Tokyo and has a

population of about 400,000. Mitsui Fudosan Co., Ltd.

is leading the project, and other participants include

Chiba Prefecture, Kashiwa City, the University of

Tokyo, and Chiba University. The aim is to build a

model for future city administration that uses a col-

laborative approach in which the local community is

in an administratively flat structure that everyone can

participate in. The project offers solutions to prob-

lems encountered by cities around the world. The

project goals include developing an environmentally

friendly city, a city of health and longevity, and a city

of new industry creation.

The project is a good example of Hitachi's approach

to smart city development and operation. This

approach is based on extensive experience in Japan

and in other countries. Japan has been a particularly

good test bed for determining the best approach for

such projects because it has experienced a very large

number of issues in a short time: rapid urbanization

due to an economic boom, energy issues, environ-

mental issues related to the increased use of motor

vehicles, and a series of earthquakes that have

heightened awareness of the need for disaster pre-

paredness. Hitachi has had to confront such issues

and social changes in many cities in Japan. Based on

this experience, Hitachi believes that an approach

focused on solving issues, with extensive input from

all stakeholders, is critical for the sustainable devel-

opment of cities in the future. This approach involves

the residents and all of the stakeholders working

together to identify the issues that need to be

resolved and investigating solutions, and then imple-

menting and managing these solutions. Hitachi has

used and encouraged this approach in the Kashiwa-

no-Ha Smart City Project.

As part of the measures for achieving a good balance

with the environment, Hitachi is helping to develop

and implement a system called AEMS (Area Energy

Management System). AEMS is designed to improve

operating efficiency, to fully utilize renewable or pre-

viously underutilized energy, and to help achieve

specific targets for reducing carbon emissions and

saving energy. Some AEMS-related activities are as

follows:

① Promote energy saving activities by providing easy-to-understand visual data on the amount of consumed electric power, gas, and other energy sources. Manage regional energy information, pre-dict demand, and provide information on supply and demand.

② Coordinate electric power generated from renew-able energy, batteries, and the power company to allow flexible allocation of electric power within the area. Make maximum use of renewable energy to reduce daytime peaks in electric power consumption.

③ Use multiple energy sources through technolo-gies such as batteries and gas-fired power genera-tion. Ensure that essential services for residents con-tinue to operate during power outages.

AEMS is designed so that it can incorporate new func-

tions and can expand its coverage area. In the future,

it will be capable of serving the entire Kashiwa-no-Ha

area, and will become a network equipped with

smart grid functions.

Hitachi has participated in this project from the plan-

ning stage as a member of Smart City Planning Inc., a

collaborative consortium of companies aiming at

establishing smart cities. Hitachi is a key player in the

project, and its responsibilities include the develop-

ment of AEMS, one of Kashiwa-no-Ha Smart City’s

core systems.

Image courtesy of Mitsui Fudosan Co., Ltd.

Chapter

Example combination for a particular urban development project

Specify core principles

Specify shared principles suitable for many smart cities

Specify the design direction

Decide which direction to take with the basic strategies for growth and development

Provide customized solutions

Solutions and services designed to suit the unique features of a city

(2) Specify the design directionThis step involves considering the diverse characteris-

tics of a city to determine which directions to take for

the basic growth and development strategies. When

deciding the type of smart city that a city should

aspire to become, the desirable requirements differ

both quantitatively (population, density, growth

rates, and so on) and qualitatively (resident’s aspira-

tions) depending on the current lifecycle phase of the

city. (As described in section 1-3, a city lifecycle goes

through the early phase, growth phase, mature phase,

and transformation phase.) Factors such as the city’s

geography or the strength of its economy also influ-

ence its priorities. Another factor to be considered is

whether any useful ideas can be obtained from

development projects that are already in progress.

The directions in which the city should seek to grow

should be clarified after considering the conditions

that need to be met, such as the legal system and

management structures used for running the city.

(3) Provide customized solutionsThis step provides solutions and services designed to

suit the distinctive features of a city. It involves

systems that integrate the various solutions formu-

lated and evaluated during the steps to specify core

principles and the design direction. Adopting a mix of

unrelated solutions to solve problems individually

makes it more difficult for the people who operate

city services to do their job, and such solutions

cannot adapt flexibly to the growth of the city. Fur-

thermore, adopting holistic and comprehensive ways

of overcoming the challenges faced by a city makes it

easier to provide more effective solutions. Rather

than being limited to its own products, Hitachi acts

as a system integrator whose role is to combine vari-

ous city-wide solutions into an integrated system.

A wide variety of organizations are involved in man-

aging a smart city. In some organizations, the

national or local government plays a central role.

However, many different organizational structures

and practices are used in different parts of the world.

Examples include services provided by “third-sector”

organizations (joint corporations that have invest-

ments from both the public and private sectors), ser-

vices in which the administrative body is determined

by a contract with the people who own the asset con-

cerned, and services operated by funds or other

private sector organizations. Other possibilities for

the future include organizations that form part of the

government or to whom the government has del-

egated certain authority. Whatever form these organi-

zations take, they are not just involved in a single

process of developing a smart city, but also in the

ongoing processes of development and operation.

This requires these different organizations to work

together, and to adopt practices and structures that

are designed for the long term and targeted at

enhancing the value of the city.

Through its involvement as a partner from concep-

tual planning to operation, Hitachi uses a variety of

different frameworks as it contributes to the provi-

sion of optimal solutions and the development of

attractive cities. Hitachi is currently involved in

numerous smart city projects in different parts of the

world where it is trialing specific practices and build-

ing experience. In its role of providing support for

smart city development, Hitachi will continue to

supply a wide range of solutions in the belief that it

has an essential role to play among those engaged in

urban development.

Fig. 3.5: Design framework

Hitachi is participating in the Kashiwa-no-Ha Smart

City Project, a major project in Japan. The project

involves public, private, and academic sectors work-

ing together to develop a smart city at Kashiwa City in

Chiba Prefecture. This city is located approximately

30 minutes by train from central Tokyo and has a

population of about 400,000. Mitsui Fudosan Co., Ltd.

is leading the project, and other participants include

Chiba Prefecture, Kashiwa City, the University of

Tokyo, and Chiba University. The aim is to build a

model for future city administration that uses a col-

laborative approach in which the local community is

in an administratively flat structure that everyone can

participate in. The project offers solutions to prob-

lems encountered by cities around the world. The

project goals include developing an environmentally

friendly city, a city of health and longevity, and a city

of new industry creation.

The project is a good example of Hitachi's approach

to smart city development and operation. This

approach is based on extensive experience in Japan

and in other countries. Japan has been a particularly

good test bed for determining the best approach for

such projects because it has experienced a very large

number of issues in a short time: rapid urbanization

due to an economic boom, energy issues, environ-

mental issues related to the increased use of motor

vehicles, and a series of earthquakes that have

heightened awareness of the need for disaster pre-

paredness. Hitachi has had to confront such issues

and social changes in many cities in Japan. Based on

this experience, Hitachi believes that an approach

focused on solving issues, with extensive input from

all stakeholders, is critical for the sustainable devel-

opment of cities in the future. This approach involves

the residents and all of the stakeholders working

together to identify the issues that need to be

resolved and investigating solutions, and then imple-

menting and managing these solutions. Hitachi has

used and encouraged this approach in the Kashiwa-

no-Ha Smart City Project.

As part of the measures for achieving a good balance

with the environment, Hitachi is helping to develop

and implement a system called AEMS (Area Energy

Management System). AEMS is designed to improve

operating efficiency, to fully utilize renewable or pre-

viously underutilized energy, and to help achieve

specific targets for reducing carbon emissions and

saving energy. Some AEMS-related activities are as

follows:

① Promote energy saving activities by providing easy-to-understand visual data on the amount of consumed electric power, gas, and other energy sources. Manage regional energy information, pre-dict demand, and provide information on supply and demand.

② Coordinate electric power generated from renew-able energy, batteries, and the power company to allow flexible allocation of electric power within the area. Make maximum use of renewable energy to reduce daytime peaks in electric power consumption.

③ Use multiple energy sources through technolo-gies such as batteries and gas-fired power genera-tion. Ensure that essential services for residents con-tinue to operate during power outages.

AEMS is designed so that it can incorporate new func-

tions and can expand its coverage area. In the future,

it will be capable of serving the entire Kashiwa-no-Ha

area, and will become a network equipped with

smart grid functions.

Hitachi has participated in this project from the plan-

ning stage as a member of Smart City Planning Inc., a

collaborative consortium of companies aiming at

establishing smart cities. Hitachi is a key player in the

project, and its responsibilities include the develop-

ment of AEMS, one of Kashiwa-no-Ha Smart City’s

core systems.

Image courtesy of Mitsui Fudosan Co., Ltd.

Chapter

4 Smart City, Smart Life

A smart city provides a way of life that is safe, secure,

convenient, and comfortable. Hitachi defines the ser-

vices and facilities needed to provide this “smart life”

as the daily-life services infrastructure, and sees it as

an additional infrastructure layer on top of the

energy, transportation, and other functions of the

social infrastructure (see Fig. 4.1). An important idea

is that the daily-life services infrastructure can be

broken down (disassembled) into the various differ-

ent services provided by the city, and these individual

functions can then be made smarter (improved) and

put back together (reassembled) to develop a city that

satisfies the genuine needs of residents.

Hitachi sees the disassembly and reassembly of the

daily-life services infrastructure as one way to create

new value for smart cities. With the need to reduce

the burden on the environment as a prerequisite, this

approach can enhance convenience and comfort by

providing residents with integrated combinations of

services. This approach makes the sustainable growth

of cities possible, and can help make smart cities that

satisfy the diverse wants and needs of stakeholders

(the residents, city administrators and developers,

and groups sharing world opinion on the environ-

ment).

[1] Daily-life services infrastructurFrom a resident’s perspective, the services used in

daily life can be broadly divided into two groups. One

group contains those services that are dependent on

equipment or facilities, such as radiography at a hos-

pital. The other group contains services that are

accessible from any location if communications

services are available, such as inter-bank transfers of

funds over the Internet.

When combined with a telecommunications infra-

structure that has been enhanced by IT, even services

that were previously location-specific, such as school

lessons or obtaining forms from city hall, can be rede-

fined as an education service or administrative

service that residents can access from anywhere and

at any time.

[2] Paradigm shift brought about by disassembling and reassembling the daily-life services infra-structure

The term disassembly refers to breaking down

services into specific functions and identifying the

goals of the services and functions. For example, hos-

pital services include functions such as consultation,

admission, meals, surgery, and the issuing of pre-

scriptions. The functions of admission and meals can

also be thought of as being the same as the equiva-

lent functions at a hotel. Also, the fundamental goal

of patients who enter a hospital is to have their illness

cured, and actions like visiting the hospital, being

admitted, or undergoing surgery are only steps

toward this goal.

Once we understand the func tions and goals,

improved services usually become possible. For

example, the introduction of new multi-function

facilities allows medical counseling at a neighbor-

hood center, which can result in better health for resi-

dents at a lower cost. People’s medical needs can be

satisfied in ways that better suit their individual

requirements.

By separating city services from the conventional idea

that the services must be provided at specific facili-

ties, and reassembling the services based on funda-

mental goals and requirements, we can usher in a

paradigm shift in our approach to cities. This new

approach allows city administrators to deliver differ-

ent types of services at a reasonable cost, and resi-

dents can gain one-stop access to various services at

an appropriate price.

Fig. 4.1: Structure of the daily-life services infrastructure layer

Services

Everyday life

Non-face-to-face services

Face-to-faceservices

Equipment andmachinery

Buildings orstructures

Energy,transportation, water,telecommunications

Energy, transportation, water, telecommunications

- Remote medicine- Net banking- Net communities

- Face-to-face medical examination- Cash withdrawal

Facilities

Chapter 4

Chapter

A smart city provides a way of life that is safe, secure,

convenient, and comfortable. Hitachi defines the ser-

vices and facilities needed to provide this “smart life”

as the daily-life services infrastructure, and sees it as

an additional infrastructure layer on top of the

energy, transportation, and other functions of the

social infrastructure (see Fig. 4.1). An important idea

is that the daily-life services infrastructure can be

broken down (disassembled) into the various differ-

ent services provided by the city, and these individual

functions can then be made smarter (improved) and

put back together (reassembled) to develop a city that

satisfies the genuine needs of residents.

Hitachi sees the disassembly and reassembly of the

daily-life services infrastructure as one way to create

new value for smart cities. With the need to reduce

the burden on the environment as a prerequisite, this

approach can enhance convenience and comfort by

providing residents with integrated combinations of

services. This approach makes the sustainable growth

of cities possible, and can help make smart cities that

satisfy the diverse wants and needs of stakeholders

(the residents, city administrators and developers,

and groups sharing world opinion on the environ-

ment).

[1] Daily-life services infrastructurFrom a resident’s perspective, the services used in

daily life can be broadly divided into two groups. One

group contains those services that are dependent on

equipment or facilities, such as radiography at a hos-

pital. The other group contains services that are

accessible from any location if communications

services are available, such as inter-bank transfers of

funds over the Internet.

When combined with a telecommunications infra-

structure that has been enhanced by IT, even services

that were previously location-specific, such as school

lessons or obtaining forms from city hall, can be rede-

fined as an education service or administrative

service that residents can access from anywhere and

at any time.

[2] Paradigm shift brought about by disassembling and reassembling the daily-life services infra-structure

The term disassembly refers to breaking down

services into specific functions and identifying the

goals of the services and functions. For example, hos-

pital services include functions such as consultation,

admission, meals, surgery, and the issuing of pre-

scriptions. The functions of admission and meals can

also be thought of as being the same as the equiva-

lent functions at a hotel. Also, the fundamental goal

of patients who enter a hospital is to have their illness

cured, and actions like visiting the hospital, being

admitted, or undergoing surgery are only steps

toward this goal.

Once we understand the func tions and goals,

improved services usually become possible. For

example, the introduction of new multi-function

facilities allows medical counseling at a neighbor-

hood center, which can result in better health for resi-

dents at a lower cost. People’s medical needs can be

satisfied in ways that better suit their individual

requirements.

By separating city services from the conventional idea

that the services must be provided at specific facili-

ties, and reassembling the services based on funda-

mental goals and requirements, we can usher in a

paradigm shift in our approach to cities. This new

approach allows city administrators to deliver differ-

ent types of services at a reasonable cost, and resi-

dents can gain one-stop access to various services at

an appropriate price.

Fig. 4.1: Structure of the daily-life services infrastructure layer

Services

Everyday life

Non-face-to-face services

Energy, transportation, water, telecommunications

- Remote medicine- Net banking- Net communities

- Face-to-face medical examination- Cash withdrawal

Facilities

Chapter 4

Common-use property

Reserve anduse services

when neededEVs

Meeting places and guest rooms

Solar or wind power generators

Batteries

Recycled water treatment

Waste collection facility

Remote healthcare facilities

Use asrequired

Private property

1. By sharing resources such as EVs, meeting places, guest rooms, and remote healthcare facilities and making them available for residents to reserve when needed, individuals can make the most of their own private property.

2. The cost to individual users can be reduced by aggregating facilities such as solar or wind power generators, batteries, recycled water treatment, and waste collection facilities.

Healthcare example

Prevention

Fitness club/spa Medicalexamination center Clinic/hospital Outpatient center Nursing facility Assisted-living

Diagnosis and treatment Rehabilitation and nursing

ServicesFitness Health

diagnosis

Equipmentand

machinery

FacilitiesDai

Buildingsand

structures

Counseling Tests Medi-cation Nursing

Supportfor

everydayactivities

In-homemedical

assistanceand

nursing

Rehabili-tation

Treatmentor surgery

Bloodpressuremeters,scales

Electronicrecords

Imagingand

diagnosticmachines

Bloodtesting

machinesBeds Security

Surveil-lance

sensors

Rehabili-tation

equipment

In-housepower

generation

Treatmentmachines

People (doctors, nurses, technicians, pharmacists, care providers, etc.)

Fig. 4.2: Example of disassembly of a daily-life services infrastructure

[3] Methods of disassembly and reassemblyThis section uses an example to explain the disassem-

bly and reassembly of the daily-life services infrastruc-

(a) DisassemblyTaking note of the fundamental needs of city resi-

dents, divide the daily-life services infrastructure into

services and facilities, and then further divide the

facilities into a) buildings and structures and b) equip-

ment and machinery. The component elements into

which the infrastructure is divided can be used as

basic elements anywhere in the world (see Fig. 4.2).

(b) ImprovementMap the individual elements to the corresponding

fundamental needs, and then make the functions

smarter so that they can work more reliably and effi-

ciently. Specifically, identify their fundamental pur-

pose and whether they are location dependent. Also,

consider whether they can be improved by techno-

logical advances and new innovations, or by tech-

nologies from other fields.

(c) ReassemblyReassemble the disassembled and improved ele-

ments in ways that satisfy the requirements of the

individual city. For example, you can select only those

functions that are required for the needs of that city’s

residents based on considerations such as its topogra-

phy, culture, religion, nationality, and level of infra-

structure. This allows the reassembly of a smart

daily-life services infrastructure that avoids waste and

only includes the functions that are actually required.

By disassembling and reassembling the functions of

the daily-life services infrastructure in this way, we

can change a city into a smart city that delivers new

value, and in which this infrastructure itself goes

through cycles of growth, development, and renewal.

Smart cities based on the concept of disassembling

and reassembling the daily-life services infrastructure

allow urban development to cater precisely to the

genuine needs of residents. The resulting smart city

provides the following new benefits not only to resi-

dents, but also to the government groups and busi-

nesses involved in urban development, and also to

the operators of various urban operations.

[1] SharingSharing can allow people to enjoy a high level of life-

style services at low cost by aggregating resources at a

central repository and making them available for

shared use. Examples include EVs, gathering places,

and remote healthcare facilities that are not used on

a daily basis, but which everyone might use from

time to time. Other examples include solar power

generators, batteries, or other equipment that is

expensive for people to own on their own. By adopt-

ing billing methods that charge in accordance with

use, and providing reservation systems that are

simple enough for everyone to use, residents can be

given trouble-free access to these services.

Example of shared use of neighborhood facilities

Chapter

Common-use property

Reserve anduse services

when neededEVs

Meeting places and guest rooms

Solar or wind power generators

Batteries

Recycled water treatment

Waste collection facility

Remote healthcare facilities

Use asrequired

Private property

1. By sharing resources such as EVs, meeting places, guest rooms, and remote healthcare facilities and making them available for residents to reserve when needed, individuals can make the most of their own private property.

2. The cost to individual users can be reduced by aggregating facilities such as solar or wind power generators, batteries, recycled water treatment, and waste collection facilities.

Healthcare example

Prevention

Fitness club/spa Medicalexamination center Clinic/hospital Outpatient center Nursing facility Assisted-living

Diagnosis and treatment Rehabilitation and nursing

ServicesFitness Health

diagnosis

Equipmentand

machinery

FacilitiesDai

Buildingsand

structures

Counseling Tests Medi-cation Nursing

Supportfor

everydayactivities

In-homemedical

assistanceand

nursing

Rehabili-tation

Treatmentor surgery

Bloodpressuremeters,scales

Electronicrecords

Imagingand

diagnosticmachines

Bloodtesting

machinesBeds Security

Surveil-lance

sensors

Rehabili-tation

equipment

In-housepower

generation

Treatmentmachines

People (doctors, nurses, technicians, pharmacists, care providers, etc.)

Fig. 4.2: Example of disassembly of a daily-life services infrastructure

[3] Methods of disassembly and reassemblyThis section uses an example to explain the disassem-

bly and reassembly of the daily-life services infrastruc-

(a) DisassemblyTaking note of the fundamental needs of city resi-

dents, divide the daily-life services infrastructure into

services and facilities, and then further divide the

facilities into a) buildings and structures and b) equip-

ment and machinery. The component elements into

which the infrastructure is divided can be used as

basic elements anywhere in the world (see Fig. 4.2).

(b) ImprovementMap the individual elements to the corresponding

fundamental needs, and then make the functions

smarter so that they can work more reliably and effi-

ciently. Specifically, identify their fundamental pur-

pose and whether they are location dependent. Also,

consider whether they can be improved by techno-

logical advances and new innovations, or by tech-

nologies from other fields.

(c) ReassemblyReassemble the disassembled and improved ele-

ments in ways that satisfy the requirements of the

individual city. For example, you can select only those

functions that are required for the needs of that city’s

residents based on considerations such as its topogra-

phy, culture, religion, nationality, and level of infra-

structure. This allows the reassembly of a smart

daily-life services infrastructure that avoids waste and

only includes the functions that are actually required.

By disassembling and reassembling the functions of

the daily-life services infrastructure in this way, we

can change a city into a smart city that delivers new

value, and in which this infrastructure itself goes

through cycles of growth, development, and renewal.

Smart cities based on the concept of disassembling

and reassembling the daily-life services infrastructure

allow urban development to cater precisely to the

genuine needs of residents. The resulting smart city

provides the following new benefits not only to resi-

dents, but also to the government groups and busi-

nesses involved in urban development, and also to

the operators of various urban operations.

[1] SharingSharing can allow people to enjoy a high level of life-

style services at low cost by aggregating resources at a

central repository and making them available for

shared use. Examples include EVs, gathering places,

and remote healthcare facilities that are not used on

a daily basis, but which everyone might use from

time to time. Other examples include solar power

generators, batteries, or other equipment that is

expensive for people to own on their own. By adopt-

ing billing methods that charge in accordance with

use, and providing reservation systems that are

simple enough for everyone to use, residents can be

given trouble-free access to these services.

Example of shared use of neighborhood facilities

Chapter

Remoteclassroom service

ConnectUse a PC or tablet toconnect to the system Receive same lessons

as classmates at school

Use classroom recordingsto take delayed lessons

Use of videoconferencingto discuss remedial

learning plan with doctor

Monitoring systemfor emergencies

HealthcareEducation

Fig. 4.3: How disassembly and reassembly might benefit hospitals or schools

’s re

Comprehensivelearning opportunities

Commuter rush, major event

1. Traffic congestionoccurs

2. Accept alternativetravel method 3. Traffic congestion relieved

Congestionrecords

Change means oftransport and schedule

Data on flow of people

Control traffic signals. Modify timetables.

Forecast congestion

Forecast optimal benefits

Recommendations,equipment controls

Specifydestination.

・Recommended route・Time required・Incentives

Target achievedacross entire region

1. Predict failureto meet target

Electric powerconsumption

predictions

Set targets

Report results

Electric powerconsumption targets

3. Decide if requestcan be met

Railway

NetworkRegion

OfficesFactories

1. Monitoring the electric power usage predicts that the supply to the railway company will be insufficient.

2. Ask factories, offices, and homes in the region whether they can reallocate electric power.

3. Offices that expect to have an excess of electric power during the relevant time period reallocate the power.

4 and 5. The mutual arrangement for reallo-cation of electric power ensures that the total power consumption of the region remains within the target.

1. Use route search information and data on the flow of people to predict when, where, and to what extent traffic congestion will occur, including the commuter rush in the city center.

2. Provide recommendations on avoiding congestion to smooth the movement of people to their destinations, and deliver incentives to those who wish to cooperate (for example, by sending incentives to their phones or other devices). Users select their means of transport and the route they want to travel, and the system modifies related items like traffic signals and bus or train timetables accordingly.

3. The cooperation between users and different forms of transportation infrastructure can alleviate traffic congestion across the city.

[2] Arrangements for mutual assistanceResources for which supply is limited, such as energy,

can be utilized more efficiently through arrange-

ments for mutual assistance. For example, it is pos-

sible to use energy in a waste-free manner by adopt-

ing arrangements whereby the households within a

region coordinate their use of electric power to meet

total consumption targets. This approach uses

advanced techniques for precise demand predictions

and efficient reallocation methods. The approach can

also be applied to the utilization of human resources

such as healthcare workers or volunteers.

[3] CooperationCooperation between users and multiple infrastruc-

ture systems can enable the smooth delivery of infra-

structural services to all parts. For example, coopera-

tion between users and different transportation infra-

structure components can alleviate traffic congestion

across a city. The cooperation might involve providing

congestion information and advice on how to avoid

congested routes, controlling traffic signals, and coor-

dinating bus and train schedules. Another benefit is

that the accumulated data on the effects of different

measures to relieve congestion can lead to ongoing

improvements in performance.

Example of using arrangements for mutual assistance to smooth electric power consumption

Example of user cooperation relieving traffic congestion

This section uses specific examples to describe how

the disassembly and reassembly of the daily-life

services infrastructure will change the everyday lives

of people in smart cities.

[1] Disassembly and reassembly focused on servicesAfter some of the consultation and treatment services

at a hospital (considered as a type of facility) are

disassembled and then reassembled to be indepen-

dent of location, residents can receive various health-

care services without time or location restrictions. For

example, it would become possible to receive remote

treatment, advice, or other assistance at facilities out-

side a hospital, or even on a train. Other possibilities

include children in hospital being able to receive the

same lessons as their classmates at school. Doctors

could provide counseling to children in their homes

or school without leaving the hospital (see Fig. 4.3).

Many innovations become possible in the education

sector, as well. For example, if you separate the provi-

sion of lessons (considered as a service) from schools

(considered as a type of facility), new forms of educa-

tion that overcome time and location barriers

become possible. Such innovations can help people

s tudy whenever and wherever they want: for

example, innovations could provide free access to

library data, or provide teachers with videoconferenc-

ing systems and other communication tools.