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Cities of the future: The SmartCity Evaluation Index System

smart-cityChina’s smart city market is expected to reach US$ 10.8 billion in 2013, representing an increase of 18.5% compared to the previous year, according to a study made by research firm International Data Corporation (IDC).

In China 100 Smart Cities Evaluation and Recommendation: Penetrating the Appropriate Target Cities Is Key, IDC identifies target cities with more market opportunities, larger market space and development opportunity based on the maturity level of city informatization and regional characteristics.

In addition, IDC integrated the construction, upfront investment and competition situations of provincial city circles into its findings to create a Smart City Evaluation Index System that provides decision-making support for vendors who are considering to expand into specific target cities.

Key findings of the research include:

  • Understand that certain cities have become the primary focus of many vendors

Opinions differ among vendors on what is the most appropriate smart city strategy, how much should be invested in R&D and marketing, and how to penetrate the market. As vendors look for a sustainable and rapid-developing model, it has become a top priority for many to identify cities they want to target and design a city-specific market strategy around it. In view of different levels of informatization maturity and the competitive environment of different cities, it is crucial for vendors to understand the development status of China’s smart cities, identify target cities with more market opportunities, adopt city-specific solutions to penetrate the market and mobilize resources, and implement proper strategies for inter-city expansion, diversification expansion and national expansion.

  • Identify target cities with a scientific evaluation system

“Local governments have set forth their respective construction goals, major tasks and special plans based on their own basic conditions and development strategy. And it is crucial for vendors to understand each city’s development characteristics and demand, identify appropriate target cities and determine the best way to adapt solutions”, Sun Xihai, Senior Research Manager says.

IDC’s China 100 Smart Cities Evaluation and Recommendation: Penetrating the Appropriate Target Cities Is Key analyzes the current development status, characteristics and industrial layout of China’s smart cities, including selection methods, index systems and rankings of 100 smart cities; introduces the typical special plans, investment and construction opportunities for the development of smart cities, especially comments on 40 representative cities worth recommending; and provides advice for vendors to penetrate target cities.

The research offers the following advice for vendors to penetrate the appropriate target cities:

  • Second- and third-tier cities are good choice for gold panning while first-tier cities need to be selectively penetrated. The construction of smart cities in China varies greatly across different regions, with cities in east and south China taking a lead. However, the market focus has been gradually shifting to cities in west and north China, which is in accordance with the centralized construction of the national e-government system. From the perspective of city size, second- and third-tier cities are gradually becoming popular destinations for smart cities, and major vendors are starting to penetrate these underdeveloped small and medium sized cities where the competition is not as fierce.
  • Understand the characteristics and demand of target cities and actively participate in their top level planning. IDC recommends cities that are strong in various business processes for vendors, such as Shenzhen and Nanjing (with a focus on reform and innovation), Wuhan and Ningbo (with a focus on the development of smart industries), Foshan (with a focus on improving services related to the quality of life of citizens), Shanghai and Hangzhou (with a focus on strengthening the construction of smart infrastructure), and Chengdu and Chongqing (with a focus on committing to the development of culture and life).

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