This is the second in a three part series on Smart Cities. Best to start with Part I.
Urbanization in China Sets the Stage by Defining the Need
According to the World Bank, China's urban population was 191 million in 1980. By 2007, it was 594 million, excluding migrants. About half of China's population now lives in cities, and that trend looks likely to continue particularly as the government relaxes restrictions on internal movement institutionalized in the strict hukou system of residential registration.
And, bigger cities face bigger challenges to meet the needs of their burgeoning populations:
Infrastructure and jobs. Between now and 2025, it's likely that another 200 to 250 million people will migrate to China's cities, adding to an existing mobile or migrant population of about 155 million. Providing infrastructure - housing, roads, hospitals etc. - and jobs for this anticipated inflow of people poses major challenges. With new changes to the hukou system, this migration into cities could be even greater.
Energy. Urban residents use 3.6 times as much energy as rural residents; suggesting that energy use is far from its peak. In China, energy intensity (consumption of energy per unit of GDP) is 7 times that of Japan and 3.5 times that of the United States, and over 70% of electricity use is coal-produced.
On Friday March 5th, the National People’s Congress (NPC) – China’s equivalent of Congress or Parliament – held the opening meeting of its annual full session.At a high level, the agenda of the session will focus on succession planning for government and Communist Party leaders, the stimulus exit strategy and economic initiatives for the coming year.In this, there is much to interest tech vendors.
In one of the opening speeches, Chinese Premier Wen Jiabao presented his work report which summarized some major economic indicators for 2009 and provided a broad outline for the 2010 plans. Technology appeared center stage throughout much of the speech, and the word "innovation” was peppered throughout.
A couple of weeks ago IBM announced its 4th Quarter and Full-Year 2009 results. Their Growth Markets Business Unit which includes 140 of the 170 countries that IBM operates in – grew 14% in Q4 compared to 3% decreases in the Americas. For the quarter, Growth Markets represented 20% of IBM’s revenue. For the year, Growth Markets were 19%, up just slightly from 18% of total IBM revenue in 2008. The signs are clear: Growth Markets are growing, even as other markets fell. Much of the success in Growth Markets has come from “Smarter Planet” solutions which are gaining traction among governments, utilities and private sectors.
NOTE: IBM’s growth markets are those that show increased potential for them. They do not equate to emerging markets according to the financial world’s and economic discipline’s definition. But, there is much overlap.