Smart cities: A human-centered approach 2018 Engineering and Construction Conference June 20 22, 2018
Agenda Topic Smart City Overview Content Drivers, Framework, Evolution Client Stories Success Factors & Funding Key Observations & Success Factors Funding Internet of Things & Sales Tax Internet of Things Overview Information Value Loop Benefits to Consumers Transaction Taxation Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 2
Smart City Overview
Smart City Drivers Five key forces driving smart cities 1 UN World Population Prospects: The 2017 Revision 2 US Census Bureau Projections of the Size and Composition of the U.S. Population: 2014 to 2060, March 2015 3 UN 2018 Revision of the World Urbanization Prospects 4 Texas A&M 2015 Urban Mobility Scorecard 5 International Air Transport Association 2017 20-Year Air Passenger Forecast: 6 World Economic Forum: How can we bridge the $1 trillion infrastructure gap?, Oct 2015 7 2017 American Society of Civil Engineers Infrastructure Report Card Unprecedented Urbanization Trending Green Safety and Security Transparent Government Exponential Innovation 2.2B world population by 2050 1 40 hrs/yr = avg. time in traffic in the US 4 98M more Americans between 2014 and 2060 2 50% in Airline Passengers by 2037 5 43 megacities >10 million residents by 2030 3 $1T global annual infrastructure deficit 6 2.5B in urban residents by 2050 3 D+ US infrastructure grade, ACSE 7 Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 4
Smart City The Evolution The journey towards citizen-centricity 1.0 2.0 Strategic roadmaps Overwhelming amounts of data Focusing on a citizen-centric approach Emergence of IoT technologies Experimental/pilot solutions Using a data-driven strategy Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 5
Smart City Enhanced Constituent Experience Integrated. Intelligent. Intuitive. The journey towards citizen-centricity Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 6
Smart City Smart City Framework Start with why outcomes based Holistic view Focus on who Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 7
Smart City Client Stories
Outcome Solution Objective Smart City Client Stories Integrated Roadmap Innovation Accelerator Responsive City Strategic Plan / Platform Implementation USA Netherlands Argentina Spain Columbus, OH Amsterdam Buenos Aires Santander To be the model for connected cities of the future To establish an innovation vision and strategy To improve maintenance of city assets and responsiveness to citizens To improve public service delivery and transform the city Developed integrated Smart Columbus roadmap and workstream charters Designed and implemented Innovation Accelerator Implemented asset management platform Developed roadmap and implemented digital technology Enabled Smart Columbus to effectively execute against its goals Seven innovative ideas produced through public, private, academic collaboration Improved operational efficiency, response times, and citizen satisfaction Mapped recommendations and began platform development Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 9
Smart City Success Factors & Funding
Smart City Success Factors Often technology is not the hardest part - alignment with strategic vision, clarity, communication, and continued engagement with stakeholders are essential NETWORKED LEADERSHIP COMPELLING BUSINESS CASE OUTCOMES BASED INCLUSION AND ACCESS DYNAMIC APPROACH TO REGULATORY FRAMEWORK DATA GOVERNANCE INTEGRATED TECHNOLOGY PLATFORM Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 11
Smart City Funding Capital intensive smart city projects likely require various funding mechanisms to supplement government budgets Concession build and operate Public-Private Partnerships Contractual partnership Institutional partnership Concession model Special Purpose vehicle Joint Enterprise Government Funding Municipal Bonds Industrial Revenue Bonds Self financing Most adopted smart city funding mechanism Private Funds* 1% Government Funds User fees Other Innovative Funding Special development funds Green Bonds Tax Increments Green Revolving Crowdfunding Others** 40% *Private funds are the funding done by private companies alone. **Special development funds form a major portion of others category Based on sample survey done by Frost and Sullivan on 15 smart city projects in 2012 PPPs 37% Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 12
Smart City The Internet of Things (IoT) and Sales Tax
IoT What is the Internet of Things? Internet of Things (IoT) refers to a world of intelligent, connected devices that generate data for automating business processes and enabling new services Physical devices and objects intelligently connected Delivery of the right information to the right place at the right time Things Process People Analytics Connection of people in more relevant and valuable ways Individual data streams are processed and analyzed with algorithms Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 14
IoT Deloitte s Information Value Loop This is a framework for thinking about IoT solutions and is based on recognition that value lies in the DATA generated by sensors and connected devices Things Augmented behavior Act Sensors Applications Analyze Magnitude Scope Scale Frequency Create Augmented Intelligence Risk Security Reliability Accuracy Network Aggregate Time Timeliness Latency Communicate Standards Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 15
IoT Benefits to Consumers Consumers are benefitting from IoT right now Speed & Convenience Personalization Unique Experience Optimized shopping experiences Convenience of payment Ease of identifying product and location Tailored shopping experiences Meaningful recommendations Surprise and delight the customer Experience aligned with customer passions Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 17
IoT What Does It Mean? IoT and tectonic shifts in technology lead to a real redefining of company boundaries Unclear/undefined marketplace New products New partners, ventures, relationships New customers New competitors New markets New industry implications/concerns Faster change in product mix, focus, strategic direction Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 18
IoT Transaction Taxation What is Being Sold? Not only important to define what it is not, but must also be able to identify what it is! Computer service, computer exchange service Sale, rental, or access to prewritten software Data processing Jurisdictions could characterize into any of the following taxable categories: Data storage service Canned information service, "personalized" information service Digital automated service Communications service Digital equivalent to traditional tangible personal property aka digital goods Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 19
IoT South Dakota v. Wayfair, Inc. et al. (US Supreme Court) Suggests the Court may be ready to reconsider the decades old physical presence nexus standard required in order for a state or locality to impose a use tax collection duty on a remote seller Single issue is a direct challenge to the current physical presence requirement as the anti-quill statute requires sellers that exceed $100,000 or 200 or more separate transactions are required to be registered and remit taxes In granting certiorari, the Court may be prepared to provide its view on the relevance of the physical presence sale and use tax nexus standard in a 21 st Century e-commerce Environment Potential fallout if physical presence standard is overturned: New nexus standard? How will States respond? Uniformity? Or a multitude of varying economic nexus thresholds? Timeline for compliance? Retroactivity? Copyright 2018 Deloitte Development LLC. All rights reserved. 2018 Engineering and Construction Conference June 20-22, 2018 20
Questions?
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