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ABI Research: Smart Cities and Cost Savings

Smart city technologies could save enterprises, governments and citizens globally over US $5 trillion annually by 2022. This is the conclusion reached by ABI Research in this new white paper, which analyzes the scope for cost savings and efficiency as a driver for smart city deployments, smart technologies and the IoT.

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Smart Cities and Cost Savings www.abiresearch.com Dominique Bonte Vice President, Markets 2 SMART CITIES AND COST SAVINGSwww.abiresearch.com TABLE OF CONTENTS 1. Executive Summary ........................................................................................................................................................................................................4 1.1. Scope and Background ...........................................................................................................................................................................4 1.2. Main Findings and Metrics ......................................................................................................................................................................5 1.3. Conclusion ................................................................................................................................................................................................6 2. Cost Savings for Governments and Service Providers .........................................................................................................................................................7 2.1. Energy ........................................................................................................................................................................................................7 2.1.1. Smart Street Lights ................................................................................................................................................................................................................................ 7 2.1.2. Buildings ............................................................................................................................................................................................................................................... 8 2.1.3. Next-Generation Power Grids .............................................................................................................................................................................................................. 8 2.2. Utilities: Water ..........................................................................................................................................................................................8 2.3. Transportation .........................................................................................................................................................................................8 2.3.1. Transportation Infrastructure .............................................................................................................................................................................................................. 9 2.3.2. Public Transport ................................................................................................................................................................................................................................... 9 2.3.3. Mobility as a Service (MaaS) ................................................................................................................................................................................................................. 9 2.3.4. Government Fleets ............................................................................................................................................................................................................................... 9 2.3.4.1. Smart Waste Collection ................................................................................................................................................................................................................ 9 2.3.4.2. Street Cleaning ........................................................................................................................................................................................................................... 10 2.3.4.3. Emergency Services ..................................................................................................................................................................................................................... 10 2.4. Administrative Services ........................................................................................................................................................................10 2.4.1. eGovernment and Information Portals ............................................................................................................................................................................................... 10 2.4.2. AI Assistants ........................................................................................................................................................................................................................................ 11 2.4.3. Smart Contracts and Blockchain ......................................................................................................................................................................................................... 11 2.5. Crime and Vandalism Reduction and Prevention .............................................................................................................................11 2.5.1. Safety Cameras and Smart City Surveillance ........................................................................................................................................................................................ 11 2.5.2. Information Crowdsourcing and Intelligence Gathering ..................................................................................................................................................................... 11 3. Cost Savings for Citizens ................................................................................................................................................................................................ 12 3.1. Mobility ....................................................................................................................................................................................................12 3.1.1. Affordable Multimodal MaaS Replacing Car Ownership ..................................................................................................................................................................... 12 3.1.2. Mileage Costs and MaaS ..................................................................................................................................................................................................................... 12 3.2. Utilities: Energy, Water, and Communications ...................................................................................................................................13 3.3. Housing ...................................................................................................................................................................................................13 3.3.1. Smart Home Technologies .................................................................................................................................................................................................................. 14 3.3.2. Home Sharing ..................................................................................................................................................................................................................................... 14 3.4. Insurance ................................................................................................................................................................................................14 3.5. Healthcare ...............................................................................................................................................................................................14 3.6. Education ...............................................................................................................................................................................................14 4. Cost Savings for Enterprises .......................................................................................................................................................................................... 15 4.1. Freight Transportation ..........................................................................................................................................................................15 4.2. Commercial Building Management and Smart Manufacturing Plants............................................................................................15 4.3. Business Climate ....................................................................................................................................................................................15 3 SMART CITIES AND COST SAVINGSwww.abiresearch.com 5. Smart City IoT Cost-Saving Technologies and Paradigms ................................................................................................................................................... 16 5.1. Sharing Economy ...................................................................................................................................................................................16 5.1.1. Car and Bike Sharing: MaaS ................................................................................................................................................................................................................ 16 5.1.2. Accommodation and Office Space Sharing .......................................................................................................................................................................................... 16 5.1.3. Microgrids and Distributed Energy Networks ...................................................................................................................................................................................... 16 5.1.4. Other Cost-Saving Sharing Applications ............................................................................................................................................................................................... 16 5.2. Artificial Intelligence ..............................................................................................................................................................................16 5.2.1. Automated Machine Vision ................................................................................................................................................................................................................ 17 5.2.2. Analytics and Intelligence Gathering .................................................................................................................................................................................................... 17 5.2.3. Virtual Personal Assistants ................................................................................................................................................................................................................... 17 5.3. Multipoint Solutions and Cross-Vertical Optimization .....................................................................................................................17 5.4. IT/OT Convergence ................................................................................................................................................................................17 5.5. Sensors, Analytics, and Data Sharing ..................................................................................................................................................17 5.6. Automation, Closed-Loop Systems, Dynamic Pricing, and Demand-Response Solutions ............................................................17 6. Cost Savings and ROI..................................................................................................................................................................................................... 18 6.1. Financing Sources ..................................................................................................................................................................................18 6.2. Smart Financing through Accelerated ROI ..........................................................................................................................................18 6.3. Beyond ROI: Value Chain Complexities and Ecosystem Resistance ...............................................................................................18 6.4. The Role of Smart City Marketplaces and Open Platforms ..............................................................................................................19 7. Case Studies ................................................................................................................................................................................................................. 20 7.1. Smart Transport: oneTRANSPORT .......................................................................................................................................................20 7.2. Smart Street Lights ................................................................................................................................................................................20 7.3. Smart Waste Management ..................................................................................................................................................................21 7.4. Water Management ...............................................................................................................................................................................21 8. Metrics ........................................................................................................................................................................................................................ 22 8.1. Types of Metrics .....................................................................................................................................................................................22 8.2. Cost Savings for a Smart Mega City of the Future ............................................................................................................................22 8.2.1. Cost Savings for Government ............................................................................................................................................................................................................. 23 8.2.2. Cost Savings for Citizens ..................................................................................................................................................................................................................... 24 8.2.3. Cost Savings for Enterprises ............................................................................................................................................................................................................... 24 4 SMART CITIES AND COST SAVINGSwww.abiresearch.com 1. EXECUTIVE SUMMARY 1.1. SCOPE AND BACKGROUND While the global urbanization trend seems to be unstoppable, with cities continuing to be poles of attraction for social and economic opportunity across the globe, the cost of living in cities is skyrocketing, threatening to increase social inequality, slow down economic growth, and push up crime levels. Increasingly, ensuring the availability of affordable accommodation, services, and mobility is listed as a priority on cities’ political agendas. One of the key benefits and objectives of smart city projects is to reduce costs. Cost savings can be identified on three levels: governments, citizens, and enterprises. City governments can save costs related to services and infrastructure that they manage and operate themselves. Examples include energy savings for public infrastructure through smart street lights and demand-response-based grids, and optimized use of road and transportation infrastructure based on ITS technologies like V2X, intelligent traffic lights, multimodal transport, and mobility as a service (MaaS). The adoption and stimulation of the sharing economy allows avoiding infrastructure extensions for roads and parking garages through a reduction in the number of vehicles operating in city centers and the overall better use of existing infrastructure. The sharing economy can also be leveraged for addressing peak demands for mobility, energy, and other services, avoiding having to over-dimension supply networks. AI-based video cameras for traffic management can replace manual operators. Similarly, both citizens and enterprises will enjoy cost savings through lower prices for energy, transportation, communication (public Wi-Fi services), healthcare (remote monitoring), and other services, made possible by the very same paradigms as the sharing economy. Smart city cost-saving technologies and paradigms include the digital sharing economy, such as car and accommodation sharing, as well as microgrids, AI-based monitoring, and automated smart city platforms. Many of the findings in this report do not exclusively apply to cities but more widely to urbanized environments. In a B2B technology survey of 455 United States-based companies across nine vertical markets conducted in March 2017, the reduction of operational costs ranked highest on the list of key benefits expected from implementing innovative technologies, with 30% of local government respondents ranking it first. RANK 1 RANK 2 RANK 3 RANK 4 Not Ranked 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Reduce operational costs Promote workforce collaboration (nhance process efficienc\ Centralized IT and operation frameworks Better customer experience Reduce the carbon Iootprint related to \our organi]ation inIrastructure :orNIorce mobilit\ Workforce automation %etter assets and resource management )aster and more efficient decision maNing Tap into new revenue streams and adopt new business models 5 SMART CITIES AND COST SAVINGSwww.abiresearch.com 1.2. MAIN FINDINGS AND METRICS One main principle running across this entire whitepaper is how to optimize the use of existing assets and resources, using IoT and smart cities technologies to enable new sharing and service economy paradigms to unlock the value of surplus resources. This requires a more holistic approach, exploring synergies across and between verticals to maximize efficiencies on a wider scale. Finally, automation and the use of AI are going to be instrumental to reducing costs by reducing the number of employees, but also through closed-loop demand-response systems, automatically adapting and reconfiguring systems and networks to match fluctuating demand levels. From a (city) government perspective, achieving cost savings through automation-enabled employee reduction often comes at the cost of lost political capital with both unions and citizens. On the other hand, the adoption of technology has shown to invariably result in economic development, a key driver of smart city deployments and offsetting the direct loss of government-paid employees with new jobs created in the private sector. More generally, city governments always have the choice to redirect savings obtained in one area as CAPEX/ OPEX funds for more productive investments in projects aimed at offering better services for citizens. This applies in particular to the redeployment of human resources having become redundant through technological automation. The diagram below provides a summary of smart city cost-saving stakeholders, categories, technologies, and paradigms. • Freight • Commercial Buildings • Business Climate • Mobility • Energy • Housing • Insurance • Healthcare • Education • Energy • Water • Gas • Communication • Energy • Security • Transportation • Administration • Public Services Governments Smart Waste Smart Street Lights eGovernment Smart Surveillance MaaS Service Providers Distributed Power Generation Market adjacencies Demand-response Enterprises Freight as a Service Smart Manufacturing Citizens Smart Home Car as a Service Micro-grids Artificial Intelligence Driverless Vehicles Closed Loop Crowd Sourcing 6 SMART CITIES AND COST SAVINGSwww.abiresearch.com In terms of metrics, this whitepaper presents the aggregated absolute cost-saving potential for the three main stakeholders in a typical smart mega city of the future with 10 million inhabitants (see the table below and Section 8 for more details and methodology). From these data, it is clear that cost savings are very significant, even on a per-city basis, both in relative (cost savings as percentage of total city, citizen, or enterprise expenses) and absolute terms. As a proxy for the global smart city cost-saving opportunity, the table below also shows the yearly savings achievable for all 75 cities with a total urban population of more than 5 million. These cities are equally spread across developed and developing regions, with an average population of more than 10 million, and a total population across the 75 cities of more than 850 million. While this still only represents a fraction of the global urban population, it does account for around 50% of the cost-saving opportunity, due to the decreasing scalability of smart city technology deployments across the long tail of smaller cities. Finally, the table shows the estimated total global smart city cost-saving potential across all cities, which amounts to more than US$5 trillion. Yearly Cost Saving ($Trillions) (Source: WorldAtlas) 1.3. CONCLUSION Cost savings are a key driver and incentive for smart city technology deployments. The scope for efficiency improvements across all urban sectors and segments is staggering, amounting to more than US$5 trillion in yearly cost savings globally. High concentrations of people and enterprises in a rapidly increasing number of mega cities and an overall shift towards urbanization allows unlocking the power of service and sharing paradigms, achieving higher asset utilization rates, obtaining economies of scale, and ultimately a more sustainable environment on a level never seen before. For technology suppliers, this opens up a huge opportunity to position solutions and justify smart city projects and deployments by demonstrating fast ROI driven by direct cost savings. This whitepaper provides a powerful message for both the IoT and smart city ecosystems as to the size and scale of the opportunity and, more important, the strength of technology investment business cases. Smart City Stake Holder Per Mega City All cities > 5 million All Cities Savings % (Mega city) Citizens 0.0267 1.50 3.15 19.0% Enterprises 0.0141 0.79 1.66 25.3% City Government 0.0050 0.28 0.58 24.8% Total 0.0457 2.57 5.40 21.1% 7 SMART CITIES AND COST SAVINGSwww.abiresearch.com 2. COST SAVINGS FOR GOVERNMENTS AND SERVICE PROVIDERS This section explores how smart city technologies can be used to reduce expenditures by the city government itself. This is where technology can have a direct impact on how efficiently taxpayer money can be used. The following sections will examine cost-saving opportunities for service providers, enterprises, and consumers. The level to which city governments control, own, and manage public services and infrastructure varies from city to city depending on outsourcing policies to private companies or participation in public-private partnerships. 2.1. ENERGY Energy savings are among the most obvious and direct cost benefits of smart cities IoT technologies. From a city government perspective, street lights and buildings offer the largest potential for reducing energy bills. From a power utility’s perspective, adjacencies with smart home (microgrids) and automotive (electric vehicles) allowing (peak) load balancing and improved demand-response performance decrease the need for capacity expansion to meet peak consumption levels. 2.1.1. SMART STREET LIGHTS With smart street lights having become something like the flagship smart city project, it is important to distinguish between the cost savings accomplished by replacing traditional lights with LED technology and turning street lights into smart, connected systems. While LED lighting on its own results in savings of 50% or more, adding connectivity services can yield an additional 30% cost saving, the bulk of which is achieved through intelligent, centralized trimming (on/off cycles). Adaptive dimming at night and activity-based triggering also contribute to energy savings. Over and beyond energy savings, smart street lights can shave 30% off repair and maintenance costs through advanced, real-time diagnostics. Interestingly, the current LED replacement wave often coincides with the deployment of IoT tech at a very small incremental cost. Moreover, smart street lights can serve as a platform or backbone for additional applications like air quality monitoring, smart bins, drains and gullies, traffic analysis, and smart parking. While non-low-latency, low-energy UNB technology allows connecting street lights at minimal cost, it does limit the number and nature of additional applications. In any case, with an estimated global number of 370 million street lights, this smart city technology represents a major opportunity combining predictable, though not necessarily fast, ROI with potential for additional services. 8 SMART CITIES AND COST SAVINGSwww.abiresearch.com 2.1.2. BUILDINGS Governments typically own large numbers of buildings for accommodating both employees and equipment and vehicles. Both building and/or upgrading buildings according to energy efficiency building regulations and optimized building energy management result in important energy savings. The deployment of microgrids and cross-vertical approaches like vehicle-to-grid solutions can yield further cost savings. In this respect, city governments can be a role model for both citizens and enterprises, not just imposing regulations but also taking the lead in energy management themselves. 2.1.3. NEXT-GENERATION POWER GRIDS Both governments and service providers can achieve important cost savings by adopting new power generation and distribution paradigms: • Distributed power generation and microgrids • Cross-vertical exchange and optimization • Demand-response automation The above trends are mutually interdependent and together enable efficiencies and cost savings on a large scale, both in terms of integrating locally generated renewable energy and closed-loop optimization amidst a disruptive transformation moving away from exclusively centralized generation and management of energy resources. 2.2. UTILITIES: WATER Prices of water have skyrocketed over the past 30 years, driven by shortages through prolonged periods of drought, stricter water quality legislation, and increased consumption. For water utilities, this offers additional incentives for deploying advanced water leak detection systems as well as improved waste water management. While this represents both direct (manual inspection) and opportunity cost (waste prevention) savings, it is instrumental to help reduce consumer prices. Water utilities can also play an important role in providing technology solutions to help customers view, manage, and reduce their water consumption and cost through advanced smart metering solutions alerting about anomalies in real-time and via monthly reports as well as tiered rating to encourage conservation. However, this could end up hitting their bottom line. Moreover, water utilities face huge costs to repair and upgrade aging storage and distribution infrastructure, often dating back to the first half of the 19th century. Leakage detection sensors allow extending its lifetime but cannot avoid replacement in the longer term. 2.3. TRANSPORTATION From a city government perspective, transportation is a major part of the budget relating not only to the direct transportation needs of government service teams but also linked to transit and the maintenance and upgrading of existing transportation infrastructure. 9 SMART CITIES AND COST SAVINGSwww.abiresearch.com 2.3.1. TRANSPORTATION INFRASTRUCTURE One of the main benefits of the ride-sharing economy and in the future driverless car sharing is the reduction of the number of vehicles in operation, avoiding future infrastructure expansion. Additionally, fewer parking garages will be needed, freeing up valuable real estate for the city. Similarly, the existing road infrastructure can be equipped with smart technology ranging from ETC and vehicle-to-infrastructure (V2I) to intelligent traffic lights allowing optimized use of existing road capacity, avoiding future extension. 2.3.2. PUBLIC TRANSPORT Transit is another expensive item on the budget of city and local governments, to the extent that it is owned or subsidized by them, and is another area of huge potential cost savings. The arrival of private ridesharing and driverless car sharing will allow cancellation of non-profitable scheduled services. Alternately, cities can deploy their own flexible driverless shuttle services at much reduced costs without sacrificing the public service function. However, in the longer term, more integrated forms of multimodal transportation under the new MaaS paradigm will allow increasing profitability of transit through increased utilization rates, while stimulating private car-sharing services in a win-win situation and blurring the lines between private and public transportation. It could ultimately lead to very affordable flat-fee monthly mobility plans aimed at optimizing existing transportation assets and traffic flow, providing increasingly convincing incentives to citizens for abandoning car ownership. 2.3.3. MOBILITY AS A SERVICE (MAAS) Governments needs to play a key role in stimulating car-sharing services, cooperating whenever possible with private providers of ride- and car-sharing services while at the same time modernizing and integrating public transport in an overall MaaS approach. This is already happening with MaaS Global offering services in Helsinki and East Midlands in the United Kingdom. 2.3.4. GOVERNMENT FLEETS City governments deploy vehicles fleets for a variety of services such as waste collection, public park maintenance, cleaning services, infrastructure and buildings repair and maintenance, and emergency services. The deployment of telematics services on government vehicles allows considerable efficiency improvements with short ROI periods. More generally, mobile resource management (MRM) allows dispatching, managing, and monitoring field workers. 2.3.4.1. SMART WASTE COLLECTION Smart waste collection and more generally waste management is a critical public service offered by cities. It is closely linked to the deployment of smart bins, allowing real-time remote fill-level monitoring and the timely dispatching of garbage collection trucks. This avoids bins overflowing and causing odor pollution, especially common during events and warm weather. At the same time, it allows running waste collection fleets more 10 SMART CITIES AND COST SAVINGSwww.abiresearch.com efficiently, not dispatching trucks to empty half-full bins, potentially even resulting in fewer trucks needed. Reported haulage cost savings can reach up to 30%. Similar to smart street lights, smart bins can support additional functionality like Wi-Fi hotspots, which are already available in the United Arab Emirates, London, and New York. 2.3.4.2. STREET CLEANING An entire different level of (employee) cost savings can be achieved through the deployments of autonomous/driverless vehicles and other types of utility equipment for general cleaning and maintenance tasks in cities. 2.3.4.3. EMERGENCY SERVICES Emergency service is another area where fleet management is instrumental in providing efficient services, though the focus here is more on timely arrival than on cost savings. 2.4. ADMINISTRATIVE SERVICES With governments typically still characterized by manual processes and a fair amount of bureaucracy, the use of technology to reduce employee and other costs involved in the provision of services and information for citizens is important. Conversely, technology can be used to increase the efficiency of existing workforces, or redeploy them towards more rewarding activities. 2.4.1. EGOVERNMENT AND INFORMATION PORTALS In a B2B technology survey of 455 United States-based companies across nine vertical markets conducted in March 2017, eGovernment ranked second on the list of top technology priorities for governments, with 26% of respondents ranking it as their first priority. Using technology to provide seamless and cost-effective administrative services is important for both citizens and enterprises and often constitutes the most visible part of smart city approaches. Smart infrastructure E-government Smart Mobility Smart grid Smart transportation systems Smart education Smart buildings Smart healthcare Smart streets �smart bins� smart street lights� smart traffic lights� Public safety and security Environmental technologies 36% 26% 12% 10% 8% 4% 4% 4% 4% 8% 8% 8% 8% 8%6% 6% 24% 18% 18% 26% 20% 14% 18% 12% 12% 14% 16% 16% 16% 16% 16% 10% 10% 12% 2% 2% 6% 4% 64% 40% 44% 38% 50% 48% 70% 64% 2% 6%8% 4% 58% 54%2% 2% 6% 6% 6% 4% RANK 1 RANK 2 RANK 3 RANK 4 RANK 5 Not Ranked 11 SMART CITIES AND COST SAVINGSwww.abiresearch.com 2.4.2. AI ASSISTANTS One level up from information portals is the use of AI assistants or chat bots, replacing human operators with machine equivalents as already trialed by the city of Los Angeles. This allows either freeing up employee resources for other tasks or reducing the number of employees altogether. 2.4.3. SMART CONTRACTS AND BLOCKCHAIN Another important area ripe for disruption is commerce, in particular as it moves to massive amounts of micropayments and the need for smart contracts in order to allow governments to organize and cost-efficiently manage the new economy. This is very much linked to the paradigms explained above, in particular the sharing economy, cross-vertical cooperation, and distributed networks. This is where the distributed ledger blockchain technology could provide a future-proof and scalable technology. 2.5. CRIME AND VANDALISM REDUCTION AND PREVENTION With public safety and security increasingly higher on the priority list of smart cities, driven by mounting terrorist and crime threats, the use of advanced technology will be critical to maintain high levels of security at acceptable cost. 2.5.1. SAFETY CAMERAS AND SMART CITY SURVEILLANCE With the deployment of surveillance cameras expected to continue aggressively, the downstream employee cost of monitoring and analyzing video footage in real time risks becoming prohibitive, prompting the deployment of AI-based automation. Data storage also will need to be optimized. 2.5.2. INFORMATION CROWDSOURCING AND INTELLIGENCE GATHERING While the deployment of expensive public surveillance infrastructure will remain critical, it will increasingly be complemented by crowdsourced intelligence, capturing data from social sites as well as relying on active feedback from the citizens themselves. Smartphone cameras will also become an important second source of surveillance technology. All this crowdsourced intelligence will be used to analyze and prevent both physical crime and cybercrime through advanced AI technology. 12 SMART CITIES AND COST SAVINGSwww.abiresearch.com 3. COST SAVINGS FOR CITIZENS With cities built by and for citizens, it is key that urban inhabitants benefit from affordable services, including energy, water, gas, communication, waste collection, street lighting, emergency services, and easy access to government departments. The sharing economy represents a huge opportunity for reducing the cost of living in cities. 3.1. MOBILITY After housing, mobility represents the second largest cost item in family budgets. Urban mobility, while still largely dominated by car ownership, is expected to increasingly shift to sharing and service paradigms such as ridesharing, MaaS, and in the longer term driverless car sharing. 3.1.1. AFFORDABLE MULTIMODAL MAAS REPLACING CAR OWNERSHIP For the mega cities of the future, especially in the booming cities of Asia, maintaining fluent and affordable mobility will be a key requirement for both livability and economic growth. The only way to accomplish this is by embracing shared service models, turning car ownership into mobility as a commodity available for rent any place any time. It will dramatically reduce the number of vehicles operating in urban areas by increasing vehicle utilization rates by a factor of 10 or more, in turn reducing congestion and limiting time lost during commutes. 3.1.2. MILEAGE COSTS AND MAAS While total cost of ownership per mile of consumer-owned vehicles exceeds US$1, for small vehicles, driverless car sharing has the potential to drive costs down to 10 cent per mile, an order of magnitude lower. Better still, all-you-can-eat, flat-fee mobility plans are being explored whereby citizens get unlimited access COST SAVINGS FOR CITIZENS Mobility Utilities Housing Insurance Healthcare Education 13 SMART CITIES AND COST SAVINGSwww.abiresearch.com to all forms of transportation including bike sharing and transit for a fixed fee per month, which could be as low as US$100. Flat-fee mobility plans are already offered by ViaPass in New York, with unlimited ridesharing services priced at US$63 per week or US$234 per month. 3.2. UTILITIES: ENERGY, WATER, AND COMMUNICATIONS The chart below shows trends in consumer prices for utilities. The price of water shows the steepest increase, a fourfold rise in less than 30 years. Combined with an increase of consumption driven by an explosion in the number of appliances, electronic equipment, and other categories deployed and used in houses, this has led to utilities starting to lose their abundant commodity nature and becoming scarce, valuable, and finite resources, urging citizens to become more price sensitive and aware about reducing their consumption. Governments and service providers alike face a huge challenge to maintain the widespread availability of affordable utilities in the wake of rising production costs and/or shortages of water and gas. To this end, they need to stimulate the deployment of microgrids, invest in access to affordable (broadband) communications and free public Wi-Fi access when financially sustainable, and enable energy and water savings through imposing building standards and legislation. Citizens themselves can play a role as well, most importantly through the deployment of home-based microgrids, but also by adopting smart home solutions, in particular energy- and water-saving appliances as well as consumption monitoring and metering equipment. 3.3. HOUSING Housing costs in urban areas are skyrocketing, driving people outside city centers. In order to maintain livable urbanization, governments face a huge challenge to provide affordable accommodation within their cities and maintain a healthy balance between enterprise and citizens, avoiding the development of ghost towns. New developments like Parkmerced in the San Francisco Bay Area are good examples of future Water & sewer (1953) Postage (1935) CPI (1913, 1983=100) Electricity (1913) Natural gas (1935) Tel. services (1997=100) 400 360 320 280 240 200 160 120 80 40 19 78 19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04 20 06 20 08 20 10 Source: Institute of Public Utilities/Michigan State University 14 SMART CITIES AND COST SAVINGSwww.abiresearch.com transformative urbanization approaches whereby urban communities are provided with affordable housing, based on new models for community living as it relates to multimodal transit, shared renewable community grids, and efficient buildings. 3.3.1. SMART HOME TECHNOLOGIES A range of smart home technologies are becoming available, allowing owners to reduce expenses for security, heating, cooling, lighting, electricity, and water. 3.3.2. HOME SHARING House sharing platforms can alleviate the pressure on accommodation capacity, especially for temporary residents, visitors, and tourists. Initiatives like Airbnb are aimed at optimizing utilization rates of housing, especially during events. 3.4. INSURANCE Various forms of insurance add up to a sizable cost burden for citizens. One of the positive side effects of adopting smart cities IoT solutions is the reduction of premiums for car insurance (UBI), home insurance (alarm, security camera, and fire detection systems), and health insurance (remote monitoring) in return for sharing data and/or committing to less risky behavior as preventive measures. 3.5. HEALTHCARE Rising healthcare costs are prompting governments and the healthcare sector across the globe to adopt technology allowing transforming existing practices into new models such as remote healthcare and aging in place, allowing shorter stays in hospitals. This is a win-win situation in terms of cost savings for both consumers (cheaper remote care) and the healthcare sector (higher utilization rates and efficiency rates of equipment and accommodation) while maintaining and in some cases improving healthcare standards. Another key aspect is prevention, a shared responsibility of consumers and the healthcare sector. The link between fitness monitoring and the accompanying behavioral change patterns and the decrease in chronic diseases has been demonstrated clearly. This is also closely linked to aging populations in developed countries. While new healthcare approaches are by no means limited to cities, urban environments face more urgent needs and provide opportunities for benefits and savings in the short term through larger scale and coordinated efforts. 3.6. EDUCATION Education is one of the cornerstones of smart cities capital. Disadvantaged communities in cities often face challenges to find affordable, high-quality education, especially in countries with limited levels of government subsidies. Smart education such as remote, online curriculums can offer a viable alternative. Online universities are gaining momentum in many countries already. Even for established schools and universities, adopting hybrid approaches by adding online capabilities can improve flexibility and reduce the total cost of education. 15 SMART CITIES AND COST SAVINGSwww.abiresearch.com 4. COST SAVINGS FOR ENTERPRISES While many of the cost-saving aspects of smart city technologies for citizens also apply to enterprises, a number of specific, additional opportunities exist. 4.1. FREIGHT TRANSPORTATION The challenge of finding flexible goods transportation at the lowest possible costs is especially challenging in urban environments. In light of quickly growing e-commerce retail models and the necessity of on-time delivery of parcels to both consumers and enterprises, delivery companies are prompted to explore new last-mile delivery modes including the use of drones, robots, and driverless vans. On a wider level, IoT technology also enables the freight as a service paradigm, allowing shippers to select the most flexible and affordable option on real-time portals posting available cargo capacity in a load-matching brokerage environment. In both cases, significant savings in terms of price per mile can be obtained through the use of both more energy-efficient transportation and increased competition. Obviously, any measures resulting in reduced congestion limiting time lost also represent a huge cost savings for enterprises. 4.2. COMMERCIAL BUILDING MANAGEMENT AND SMART MANUFACTURING PLANTS Optimizing and maximizing the use and minimizing the cost of limited building and manufacturing plant assets is especially critical within urban contexts characterized by high real-estate prices resulting in a lack of affordable building assets. On the other hand, being present and producing goods close to consumer and business end markets in cities has significant advantages. Technology-enabled cost-saving building and plant management approaches include: • Building Energy Management and Microgrids: Combining energy efficiency through building design with renewable energy generation • Office Space Sharing Marketplaces: Advertise unused office building capacity in order to maximize occupancy and utilization rates • Flexible Home and Remote Working Policies: Minimize need for office space and/or avoid extensions • Reduce Manufacturing Downtime: Smart manufacturing and industrial Internet technologies minimizing lost production output • Distributed Additive Manufacturing and 3D Printing: Moving production closer to customer’s premises; reduced transportation costs through decentralized manufacturing 4.3. BUSINESS CLIMATE While not always directly quantifiable in terms of hard cost savings, an overall positive climate towards businesses is a key characteristic of smart cities, at least from the perspective of enterprises. Availability of and easy access to funding, the presence of a skilled labor market, limited administrative burden for setting up a business, and other formalities all contribute to cost savings for enterprises and can make a difference in terms of companies deciding to establish a presence in a city. 16 SMART CITIES AND COST SAVINGSwww.abiresearch.com 5. SMART CITY IOT COST-SAVING TECHNOLOGIES AND PARADIGMS Below, key smart city technologies and deployment paradigms related to cost savings are discussed. From the examples described above, considerable cost savings can be achieved through sharing economy approaches, the deployment of AI to enhance or replace employees, cross-vertical optimization, autonomous demand-response closed-loop systems, and automation. Underlying all these paradigms is advanced data analytics based on information derived and/or crowdsourced from mobile and embedded sensors. 5.1. SHARING ECONOMY For smart cities, embracing the sharing economy is the most direct and fastest route to significant cost savings by increasing the utilization rates of underused, existing assets. It should be part of every smart city vision. 5.1.1. CAR AND BIKE SHARING: MAAS As explained above, turning cars, bikes, and other types of transportation into services, substituting ownership with much more affordable MaaS offers, will be instrumental in reducing time lost in congestion and the need for parking spaces as well as using existing road infrastructure more efficiently. 5.1.2. ACCOMMODATION AND OFFICE SPACE SHARING The sharing economy can similarly be applied to homes and commercial buildings, increasing utilization rates in order to reduce costs. From Airbnb’s impact on the hospitality industry to digital office co-sharing technologies automatically identifying vacant, unused office spaces via IR detectors, the potential to increase the utilization rates of existing building assets within cities is huge. This is particularly relevant for smart cities that have the scale to make the sharing dynamics work well, both from a supply and demand perspective. 5.1.3. MICROGRIDS AND DISTRIBUTED ENERGY NETWORKS Energy sharing is another cornerstone of the sharing economy, mainly based on the concept of renewable energy microgrids (solar, wind) installed in homes, commercial buildings, and even vehicles and integrated with centralized grids for optimized demand-response balancing. 5.1.4. OTHER COST-SAVING SHARING APPLICATIONS The sharing paradigm can be applied to virtually every single asset from communication (sharing private Wi-Fi access points) to home-based electric vehicle charging stations, from private parking spaces to labor itself. 5.2. ARTIFICIAL INTELLIGENCE While AI is making inroads into all technologies and verticals, it will prove particularly relevant for smart city contexts. 17 SMART CITIES AND COST SAVINGSwww.abiresearch.com 5.2.1. AUTOMATED MACHINE VISION AI-based image and video footage monitoring can be deployed in numerous applications including security surveillance and traffic management operating centers. NVIDIA’s recently announced AI-based Metropolis solution is just one example of how important AI will be for smart cities. 5.2.2. ANALYTICS AND INTELLIGENCE GATHERING Advanced future smart city analytics capabilities will require analyzing huge volumes of data in real-time. This can only be accomplished by deploying AI and deep learning capabilities. 5.2.3. VIRTUAL PERSONAL ASSISTANTS With easy access to public service departments being a key object of smart city strategies, the use of AI-based virtual assistants and chatbots will be critical to keep costs within acceptable limits. 5.3. MULTIPOINT SOLUTIONS AND CROSS-VERTICAL OPTIMIZATION The mere combination of multiple application and use cases from multiple verticals or segments into holistic, multipoint deployments results in almost every case in significant cost-saving synergies. The smart city being first and foremost the focal point for aggregating a wide range of technologies, it is clear that multipoint solutions are a natural way to deploy platforms and solutions, saving significant costs in the process. 5.4. IT/OT CONVERGENCE Applying IT technology to physical “OT” systems is at the heart of the IoT vision, with smart cities representing a particularly important application opportunity. Examples include mobile workforce management (MRM), smart manufacturing plants, and sensors embedded in physical infrastructure. 5.5. SENSORS, ANALYTICS, AND DATA SHARING Collecting information through sensors (smart bins, traffic cameras, road sensors) to optimize operations is at the heart of any smart city platform. However, in view of the importance of multipoint solutions, it will become increasingly important to share and aggregate data from a wide range of systems and verticals, requiring open standards and platforms. 5.6. AUTOMATION, CLOSED-LOOP SYSTEMS, DYNAMIC PRICING, AND DEMAND-RESPONSE SOLUTIONS The biggest challenge for smart cities will be to tie all technologies, platforms, and solutions together into one holistic, automated, closed-loop system that will work autonomously, automatically altering parameters based on data analytics in order to regulate supply to match demand. Examples include imposing maximum speeds on driverless vehicles to optimize traffic flow; dynamic prices for toll, transit, and car sharing to limit demand during peak times; postponing recharging of electric vehicles to grid off-peak periods; and more generally making sure that affordable resources are available when and where they are needed. This represents the end game for smart cities. 18 SMART CITIES AND COST SAVINGSwww.abiresearch.com 6. COST SAVINGS AND ROI 6.1. FINANCING SOURCES As opposed to commercial IoT markets operating according to revenue- and profit-generating initiatives and dynamics, city governments are by definition non-profit institutions, responsible for providing the best possible services at the lowest cost, offering the best possible value for the taxpayers’ money. Obviously, this puts the cost-savings aspects of smart city deployments, as described in this whitepaper, at the forefront. At the same time, cities need to leverage private initiative and stimulate suppliers to offer smart city savvy solutions, whether through public-private partnerships or other measures such as friendly legal frameworks or the development of standards. 6.2. SMART FINANCING THROUGH ACCELERATED ROI The level of smart city cost savings achieved by the technologies and paradigms described above provides a framework against which smart city business cases, projects, and deployments can be justified, in terms of clearly demonstrable short ROI periods, often referred to as immediate ROI, through direct cost savings. Interestingly, many of the paradigms such as the sharing economy and cross-vertical optimization do not involve huge infrastructure investments but are aimed at optimizing the use of existing assets in a holistic way. This form of “smart financing” should become a guideline for smart city project teams, including, or maybe especially, for smaller cities with very limited resources. 6.3. BEYOND ROI: VALUE CHAIN COMPLEXITIES AND ECOSYSTEM RESISTANCE City services such as waste management, outsourced to the private sector, which is often the case in the United States, seem to escape the scrutiny often applied by governments running service operations themselves. A waste management service operator will be less incentivized to adopt smart bin technology when paid by the city on a per-container haulage basis. It’s just another example of longer value chains simply operating less efficiently, though educated city governments can play a key role in maneuvering their suppliers into adopting more efficient, tech-driven practices. Second, and maybe even more important, established supply chain relationships and operational practices fine-tuned over many years often result in inertia, even in the face of huge potential cost savings and quasi-immediate ROI on technology investments. Moreover, vendors face long sales cycles due to formal government sourcing procedures to identify and select suppliers. This makes it harder for smaller startups with limited financing to stay in the game long enough to dislocate established suppliers. The highly disruptive impact of IoT tech on backend processes and overall management are well documented, not just for smart cities, but also for other segments such as fleet operations. Hidden costs related to integration in or replacement of legacy IT systems, employee training and motivation, or simply the emotional cost related to change are often stopping smart city projects in their tracks. 19 SMART CITIES AND COST SAVINGSwww.abiresearch.com While the smart city IoT tech ecosystem definitely needs to keep hammering on the huge cost-saving opportunities, more needs to be done on allaying fears and concerns about the wider implications of embracing technology, including the psychological challenges of innovation and change management, going far beyond mere technical or financial considerations. In the future, the IoT ecosystem needs to profile itself as an enabler and supporter of change, more than anything else. 6.4. THE ROLE OF SMART CITY MARKETPLACES AND OPEN PLATFORMS The new trend of bringing together ecosystem players and tech suppliers in dedicated marketplaces is able to mitigate some of the friction in sourcing smart city technology mentioned above. Aggregating multiple ecosystem partners providing scalable, interoperable, and vendor-agnostic platforms, data services, and applications ensures seamless integration into legacy platforms and future migrations to new platforms at minimal cost. Smart city marketplaces heavily depend on IoT technology vendors’ adoption of open platforms, exposing APIs to third-party developers and/or making code available as open source to further leverage the power of the emerging smart city ecosystem. WATER Utilities Smart lights Street lights Safety Camera Public Transport Car Sharing Transportation Smart Buildings Waste Collection Infrastructure 20 SMART CITIES AND COST SAVINGSwww.abiresearch.com 7. CASE STUDIES 7.1. SMART TRANSPORT: ONETRANSPORT Next to the MaaS examples provided above, the United Kingdom’s oneTRANSPORT initiative based on an open, standardized marketplace for transport data is a good example of governments and the private industry enabling new business models for optimized multimodal transport. It will allow transport authorities to leverage economies of scale, reducing costs in the longer term. 7.2. SMART STREET LIGHTS Smart street lights are the most obvious cost-saving smart city application whereby energy cost saving is the main benefit, next to public safety and real-time maintenance. Streetlights account for up to 40% of all power consumption in some areas. However, ROI is by no means immediate, typically up to 20 years or more, which doesn’t really represent an issue for infrastructure with a long and stable life cycle, but still requires using the cheapest possible connectivity. Power Line Communication (PLC), RF, IEEE802.15.4, NB-IoT, or other proprietary Ultra Narrow Band (UNB) protocols offer only very data throughput at high latency, which is sufficient for the street light use case and can be supported for a very long time in the future. The connectivity trend is to directly connect street lights via wide-area connectivity as opposed to previous approaches based on short-range wireless connections to aggregating gateways. Interestingly, the deployment of smart, remotely controllable street lights is able to ride on the LED replacement wave currently taking place across the globe. It is expected that 200 million of the total number of more than 300 million street lights will be equipped with LED technology by 2020. It’s a typical example of city infrastructure replacement coinciding with IoT deployments, an opportunity not to be missed. However, penetration of smart street light technology is estimated to reach only around 20% in the United States and Europe by 2020. A lot is being made of the possibility of turning smart street light networks into a platform or framework for the deployment of additional services, though going beyond basic air quality and peak noise level sensor telemetry applications would require higher bandwidth connectivity, for example for powering surveillance cameras or public Wi-Fi hotspots. Maybe 5G small cells installed on roadside furniture could provide an opportunity in the future. Adopting multi-application smart street light approaches also has the potential of opening access to new business models with more favorable ROI periods (for example, based on advertising revenues) or indeed further cost savings by using smart street lights for digital signage purposes (for example, to notify road users about approaching emergency vehicles). However, these new business models often only really make sense in dense urban areas, much less in residential neighborhoods. 21 SMART CITIES AND COST SAVINGSwww.abiresearch.com Below, example smart street light projects including typical metrics are listed: • Urbanova, Spokane, Washington: This small-scale trial is unique through its community-based open platform and collaborative data sharing approach making various telemetry sensor data available to a wide range of partners and stakeholders including universities and other cities. Study items include impact of air quality on health, understanding of urban microclimates, and the impact of forest fires on pollution. • Chicago: The city of Chicago recently announced a partnership with Ameresco to replace more than 250,000 street lights with smart LEDs over the next 4 years, representing approximately 85% of the city’s existing street lights. It is the largest city-led wireless smart street light program in the United States. The solution is based on Silver Spring Networks’s platform. The project prioritizes the involvement of Chicago businesses, residents, graduates, and minorities. Energy savings are estimated at between 50% and 75%. The smart street light infrastructure will be integrated into Chicago’s 311 system. 7.3. SMART WASTE MANAGEMENT Although representing a much smaller opportunity compared to smart street lights, with an estimated number of 270,000 smart bins by 2020, smart waste management will become a basic capability of smart cities in the future. Battery-powered bin sensors measure and communicate parameters such as fill level, internal temperature, and tilt, allowing centralized monitoring and optimizing the collection routes so only full containers are emptied. Like many other smart city systems, attempts have been made to add additional functionality to smart bins, including Wi-Fi hotspots and digital outdoor advertising powered by solar energy. The main suppliers of remote monitoring solutions for smart bins and refuse collection include Bigbelly, Enevo, Paradox Engineering, SmartBin, and FarSite Communications: • Bigbelly: United States-based Bigbelly offers solar-powered compacting waste bins, allowing a capacity increase of up to 500% and a reduction of the number of trash bins in a city by 70% to 80% • Enevo: Working with the municipality of Rotterdam, Enevo’s technology has allowed setting a target of increasing the efficiency of waste collection by at least 20% based on the use of real-time fill rate monitoring to enable dynamic waste truck routing 7.4. WATER MANAGEMENT In many parts of the world, water management becomes an increasingly important capability for cities, driven by the combined effect of water shortages due to prolonged periods of drought and increasing water consumption levels. The below case studies illustrate common practices and approaches: • Okotoks, Alberta, Canada: The town of Okotoks has equipped 8,400 residential and commercial properties with Sensus iPERL smart water meters, allowing detailed tracking of water consumption levels and provid- ing insight into water consumption trends but also discussing real-time data with customers over the phone. Okotoks plans to launch a portal to stimulate community-based support for the city’s water sustainability efforts. Okotoks has one of the lowest per capita gross water consumption rates in North America, 50 liters per capita per day lower than the Canadian national average. • Surrey, Canada: The city of Surrey has 56,000 single-family homes with meters and 27,000 without. The metered homes use 40% less water. This shows the power of metering compared with methods to reduce water use such as sprinkler bans, rebates for rain barrel use, and water pricing. • Vancouver, Canada: Vancouver was able to reduce water use by 20% over 10 years through the use of water submeters as a method for increasing water efficiency and reducing water wastage in public and private facilities. 22 SMART CITIES AND COST SAVINGSwww.abiresearch.com 8. METRICS 8.1. TYPES OF METRICS Metrics capturing the quantitative impact of cost-saving smart city technologies and approaches can take multiple forms: • Total cost savings for a particular city • Cost savings linked to public services offered by governments • Average cost savings per citizen • Average cost savings per enterprise From the examples above, it is clear that there is a huge scope for efficiency improvements and related cost savings. It is fair to assume that cities could reduce costs by at least double-digit numbers, in many areas even up to 50% by fully embracing smart city technologies. Similarly, both citizens and enterprises could enjoy comparable levels of savings. But this is not the only way to look at metrics. A pure cost-saving perspective explores offering existing services at a lower cost. Conversely, the approach could consist of offering more and better services within the same budgetary envelope, or more likely, something in between. But there is a twist to this story. Before any cost savings or service improvements can be realized, hard cash has to be invested first, approval for which is hard to obtain within the constraints of conservative and inflexible government organizations and elaborate and cumbersome decision processes. For the GovTech vendor community, it will be critical to approach governments with very sound, proven, and verifiable cost-saving metrics. Over and above the direct impact of technology on costs and/or the quality of service, a multiplier effect exists in terms of a multiple of the technology investment value being created additionally in terms of jobs and economic growth, a critical aspect of smart city deployments that will be analyzed in more detail in another whitepaper. It can serve as additional justification for approving investments in projects. 8.2. COST SAVINGS FOR A SMART MEGA CITY OF THE FUTURE This section provides cost savings metrics for a typical future smart mega city with 10 million inhabitants in a developed region. Data are calculated using a high-level model of an average city with basic assumptions on budgets, spending patterns, and cost-saving percentages achievable through the deployment of advanced smart city solutions. Total absolute cost savings are calculated from a government, citizen, and enterprise perspective. Obviously, variations exist across cities. The data presented should be seen as averages, with important deviations in terms of specific circumstances within particular cities. 23 SMART CITIES AND COST SAVINGSwww.abiresearch.com 8.2.1. COST SAVINGS FOR GOVERNMENT Traditional smart city solutions are mostly aimed at allowing governments to provide public services in a more efficient way at reduced cost. Examples include smart street lighting and waste management with important savings on energy, maintenance, and transportation. More advanced smart city technologies based on automation, eGovernment, artificial intelligence, and blockchain offer important additional savings, mainly achieved through reduced employee costs, which traditionally represent a huge portion of the total city budget, whether related to personnel directly employed by the city or third-party providers. However, direct reduction of employment might not always be feasible or desirable in view of the cost of political capital. Redeployment of human resources towards tasks that cannot be automated but provide substantial value to citizens might often be the more realistic approach. Alternatively, technology can be used to enhance employees to execute existing manual job tasks more efficiently. In either case, overall efficiency in terms of output per employee still increases. In terms of potential savings on CAPEX, the deployment of intelligent transportation solutions such as intelligent traffic lights, cooperative mobility, and driverless transit allows reducing expensive road infrastructure extension efforts by optimizing and maximizing the use of existing assets. In other words, retrofitting ITS capabilities allows delaying or even avoiding CAPEX investments by increasing utilization rates of existing road and transit infrastructure. The table below shows cost savings across main OPEX and CAPEX items, with total yearly savings amounting to close to US$5 billion, representing around 25% of the total city budget. City Government Yearly Cost Savings From a tech investment, a multiple of this amount is available, depending on within how many years ROI needs to be achieved. OPEX 3.825 Employees 2.625 Energy 0.9 Other 0.3 CAPEX 1.125 Transportation Infrastructure 0.7 Buildings, Squares, and Parks 0.35 Other 0.075 TOTAL 4.95 24 SMART CITIES AND COST SAVINGSwww.abiresearch.com 8.2.2. COST SAVINGS FOR CITIZENS Citizens can benefit from important cost savings across many typical family budget items as shown in the table below. While housing typically represents the highest cost for a family, the highest absolute cost savings can be achieved on mobility with the emergence of ride and car sharing and, in the future, advanced multimodal MaaS offered at a flat monthly mobility fee. MaaS is the most spectacular instance of a more general trend towards services replacing ownership, reducing CAPEX spending in favor of OPEX. On the other hand, monetizing owned assets like cars, houses, and microgrids represents an important cost-savings opportunity for citizens. Family Cost Savings per City per Year ($Billion) The aggregated yearly potential cost savings for all families living in a smart city with 10 million residents is estimated at more than US$26 billion, representing a savings of around 20% on the total family budget across all cost categories. 8.2.3. COST SAVINGS FOR ENTERPRISES This section is closely related to the very important smart city aspect of supporting and stimulating economic development by creating a favorable investment environment for businesses. First and foremost, this comes down to the availability of affordable essential services such as transportation, logistics, communication, and energy, critical for running a business but also minimizing the time and cost spent on administrative tasks. Category Savings Mobility 9.60 Electricity 1.56 Water 0.29 Communication 2.88 Housing 4.80 Healthcare 0.96 Education 1.80 Food and clothing 0.96 Entertainment 2.88 Other 0.96 TOTAL 26.69 25 SMART CITIES AND COST SAVINGSwww.abiresearch.com For enterprises located within large cities, many of which are active in the services sector, transportation is critical, both for the logistics supply chain and delivery to customers, but also for the employees themselves. Energy, buildings, and communication represent other important cost items. However, the largest cost is the employees themselves. This is where automation in manufacturing, client interaction, and administration comes in. In a way, enterprises located within cities can benefit from both consumer- and government-type smart city approaches combining service paradigms for transportation (freight as a service, freight brokerage), compliance (eGovernment), and buildings (office space sharing) with corporate approaches to achieve cost savings. The smart city context will provide the local legal framework within which enterprises can operate their businesses in a much more efficient way, increasing competitiveness, not just for a single enterprise but for the city as a whole. The table below shows aggregated potential cost savings for enterprises within a mega city. With total potential cost savings of US$14 billion, this represents 25% of total enterprise costs. Aggregated Enterprise Cost Savings per City per Year ($Billion) From a government perspective, investing in smart city technologies that attract new businesses results in an important multiplier effect in terms of increased tax revenues, in turn further decreasing the ROI period of the investment. Transportation 2.4 Energy 0.4 Water 0.09 Communication 0.2 Buildings 1.5 Employees 9 Other 0.5 Total 14.09 Published October 19, 2017 ©2017 ABI Research 249 South Street Oyster Bay, New York 11771 USA Tel: +1 516-624-2500 www.abiresearch.com © 2017 ABI Research • abiresearch.com • Used by permission. ABI Research is an independent producer of market analysis and insight and this ABI Research product is the result of objective research by ABI Research staff at the time of data collection. The opinions of ABI Research or its ana- lysts on any subject are continually revised based on the most current data available. 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