 Hi, folks. Thanks for joining us today, our last breakout session here before we get into the plenary discussions. My name's Pedro Mocrian. I'm one of the organizers of this event. And actually, a Stanford grad myself was one of Jim Sweeney's Ph.D. students back in the day. And I actually helped him put together the Precord Institute for Energy Efficiency. So energy efficiency is actually a topic that's near and dear to my heart personally. And one of the things that's interesting about efficiency is now it's becoming a big theme and a big thesis in a lot of aspects. Because as people are talking about energy, there's less discussions other than the one that we had this lunch session on nuclear. But it's less and less discussions on the supply side and more focus on the demand side. And this year for the first time we're actually thinking about what does it look like when you think of the broad picture of how energy is actually consumed and what we do with it, in particular when you think about the notion of cities. And so this is the first time ever that we're actually trying to do a very specific theme at the Energy Summit focused on digital cities and hopefully it'll be the first of many. And I'm extremely honored and pleased to have a distinguished panel up here with me. Folks that are actual true experts when it comes to the notion of digital cities and smart cities. And I'll let them make their own introductions. And ideally, because especially since we have a tight audience and a small audience here, we want to keep it a conversation as much as we can versus just me asking questions. So the threat is that if you don't ask questions, then I just continue to talk. And so we don't want that to happen. So with that, I'd like to introduce Rich, Mike and Jay and have you guys just say a few words. And then Jay has some slides that he'd like to show as well. Should we begin with Jay? Yeah, sure. Jay, would you like to start? Sure. Good afternoon. My name is Jay Witherspoon and I'm with CH2M Hill. In my past life I was the program manager for Mazdar City, which is in the Abu Dhabi United Arab Emirates. And it was going to be one of the first sustainable cities in the world. And so we took a lot of lessons from that. My talk is I wanted to kind of set the panel stages. Kind of old thinking is really not working. We still have time to make changes. So in the old thinking, if you were all farmers, and let's pretend that you are farmers, you would want to grow a crop, right? And all you would really worry about in California today is water. Energy is pretty cheap. And carbon, what's carbon? Oh, I don't know what that is. That's something that happens in Australia or New Zealand or in Europe. And so you go along and that's the old thinking. The new thinking which I'm proposing you to kind of step back and look at is you need water. The water has to be pumped to your farm and you also may have to treat the rainfalls that come off there or the water that comes off your runoff, off your farm product. So now you need to think about how you're going to manage that. And then energy. Well, you need energy to pump that water to your farm. You also need energy to treat any type of wastewater or stormwater comes on your farm. And then carbon. So what does carbon really mean? Well, carbon could be a sink or it could be a carbon footprint positive. If it's a positive, you might be growing renewable products such as bamboo. And so you need to think about, okay, bamboo is working quite well for me. I could have a carbon sink for that or get carbon credit for that. And if I was growing some other products, that might be a carbon sink. Meaning I'm growing the product not adequately proper for that environmental climate that you're dealing with. So the new thinking is really kind of balance all those three. And what I kind of want to do is I won't tell you how to do it but I'll leave you with a question. And the question is, why would you grow dates in the middle of a desert? And so you could put any food product you want in there but why would you grow it in a climate that's not suitable for that? And so that's the old thinking and the new thinking is let's think about carbon footprint when we look at the whole approach of going forward. Another area to kind of look about is new cities are really based on mega trends. We're seeing a lot of rapid urbanization. People are coming back to the cities. We're seeing a lot of modernization going on. We're seeing a lot of environmental improvement. When you come back to the city, you want to have a clean environment. You want to make sure that you're healthy. You could go outside and enjoy yourself. And also we're seeing a lot more social citizenship which means that we need to figure out the diversity and how we move forward. So those mega cities of the future might be compact. They'll have a lot of integration. They'll have a lot of resource efficiency and they have to be sustainable. This is an example of what we did some work at Mazdar City. So we're seeing a combination of solar panels along with designs that allow you to, for example, cooling is a major component in a lot of the environment. So you need to have air conditioning almost year-round in the desert. And so to help offset that, we did some passive controls where you have shading on a porch and then your window is behind that. But you always have the ability to feel like you get some direct sunlight. And the shading allows you to reduce the amount of cooling demand because the building as it's supposed to sun is much cooler. That middle part right in here, this is an Arabic chimney. So it takes the hot air down in this area from the chimney and pulls it, hot air from there and pulls it through the chimney and cools it off as you go. And we got so fancy that we added a temperature gauge coloring on the lights to show you as the hot air came at the top, it got cooler as it came back down. Some of the areas of focus are really solid state lighting. Sustainable data collection and city operation management. Looking at solar thermal heating and cooling. Security and green supply chain. Kind of thinking about new thinking on water. And I have water energy carbon nexus. It's really the old ways aren't going to work. The conventional water and wastewater treatment are heavily energy intensive. So this curve kind of shows you, this is the energy use over here and this is water demand as we go forth with reductions to try and get down to some of the levels we heard in the session earlier next door. You can only get so far with water conservation and then you have to reapply energy because you're now dealing with more impaired waters and waters that need further treatment like salt water or waters that are contaminated with hydrocarbons and you can see your energy level coming back up even though you're getting closer to the 100% water reclamation. This dotted line is representing some of the innovations that you need such as solar power, solar thermal heating, reverse osmosis those type of things to get your water so that you're reducing your energy and also meeting your water needs. Next is we do a lot of stove pipes city planning. We have a separate group for parks and recs. We have a separate group for wastewater. We have a separate group for wastewater treatment. And so what I'm suggesting, I'll show you a further slide is that we have to have an integrated approach that really looks at the resource balancing so that you don't have a winner or a loser. So you may take that impaired water and you have to use more energy but you need that water for something else. You have to look at the full balance and there will always be a winner and loser in that balance whether it's the energy, carbon or the water side of it. And then kind of thinking beyond just accepting past practices I did some work for the Qatar 2020 World Championship and one of the ideas was supposed to happen during the summertime now they moved it to the fall which is the first time that Paya had done that is to put a drone cloud that allows the shading of the area here versus having direct cooling such as air conditioning at your seat. So one of the ideas is to put the suns right here you have this nice drone cloud blocking the sun so that it will keep the temperature down in the stadium and you could able to keep the game to go forward. So you need to think about some past practices and go way beyond that. So another area is the new systems really have to be optimized the total water sources for the city. So you want to build a new digital city but you need to also look at how the water is being supplied and also what happens to the water as it goes back into the receiving stream. So you want to come up with a solid balance that looks all your input outputs and how you would manage that city as you move forward so that's sustainable. These brand new ones will be out in the middle of wilderness. So you really need to think about that and then thinking about how you would also manage your brownstone cities as you move forward. So you have to kind of think about the whole cycle of water. And then the last slide I have is this one water concept for smart digital city really looks at its generation, conversion, integration and system balances and distribution. So you need to do a total balance on the energy side on the potable water side and on how you manage your wastewater treatment as you move forward. Again, this is a picture of Mazdar City but we came up with an integration model that allowed us to balance out who won and who lost. And so we're able to come up with a way that we would balance the city out so we could get closer to carbon neutrality both in the operation of carbon as well as in the embedded carbon. Mazdar City wanted to take an account for all the embedded carbon that's in the buildings as well as its operating carbons that are used to convert the waste or treat the water or generate electricity and then make that neutral, pure carbon neutral instead of just looking at operating carbon. That's all I had to kind of open up the door and get people to start thinking about it. Perfect. Thank you, Jay. Thanks, Steve. Mike, you're here to sit if you want. Okay. So my name is Michael Steep and I'm Senior Vice President for Global Business Operations for Xerox PARC. PARC is a noted innovation center that has done a lot of work in the technology space and I also have other roles including sitting on the Greater London Authority's smart city board. So the City of London decided several years ago that they wanted to do a overview of all the technology that was being developed within the city including in an infrastructure and have an oversight board that would essentially help them figure out how to solve a number of digital cities problems. So they spend, they have a budget of roughly 200 billion US dollars a year which are being spent right now on rather significant infrastructure development within the city and also on digital technologies. They've also put together a series of incubators that are what I would call crossing the chasm of data. So the eventual goal and vision of the smart city board is basically to cross data layers throughout the city. So data layer for example might be the subterranean utilities but water supply and energy supplies with surface data including things like Telefonica and O2 cellular data on people and people movement to airspace. So the interesting thing about the board is for the first time they're actually able to do a 35,000 foot view of what is happening throughout the city and see coordination which is providing insights into how to better manage the investment dollars that they're spending across the board. One of the major issues that we experience here in the United States is that our definition of a smart city pales in comparison to what some of the European and Asian cities are actually undertaken and have undertaken in the last couple of years. So as an example of that, the global spend for infrastructure development last year was roughly $4 trillion. 6% of that is technology embedded spend which means technology being employed in the infrastructure to do things like monitoring, heat monitoring and so forth. And that percentage is likely to double in the next several years. So one of the disconnects that has occurred is that in the United States at least so if you talk to the city of San Francisco or some of the cities in the Bay Area, the level and magnitude of investment in Europe is beyond belief compared to what we do here. Part of that is because of the tax funding. The infrastructure is very different on how they fund all of this. But secondly, what's really remarkable is that here in Silicon Valley with all this technology disruption, we aren't looking at how to do investment in a way that would actually support some of these monetizable projects abroad to increase the embeddedness of technology. So a lot of people are simply unaware of what is happening abroad. And secondly, in this valley with all the money and technology and expertise, there's almost no focus that's being put on figuring out how to get digitally enabled technologies to help cities build and cross that chasm of data layers. So I'll give you an example of one creative project that's underway. And what happens to these crazy board meetings? And they are kind of crazy at times. There's 22 members, mostly corporate members. Park's role in that is actually to advise on emerging technology. One example. So one question that came up from the city is it possible for us to essentially move heat from the tube into the buildings, reducing carbon footprint, taking the credits from that, offering to buy Starbucks coffees for people who are traveling. In other words, use commuters as thermostats and regulate the time that they actually hit the tube. So that project has now been funded. And one of the major implications of that is, building on Jay's comment, is that the carbon element is monetizable. And in addition to that, one of the major objectives of the Smart City Board, and the reason it's called Smart City is because IBM coined that term many, many years ago. I think it's a misnomer, actually. I prefer to use digitized city or digitally enabled city. I think it's a much more accurate term. You don't become smart until you actually do something. And so, I don't think we should actually claim the adjective as ours unless we're significant. And so, you know, the idea of monetization and how to build predictable models is built into a number of the projects. So let me give you an example of a couple other things just briefly and then I'll pass the torch a bit to Rich and crew. One example is the Crossrail project. How many people in this room know about the Crossrail project? We've got about three or four out of the audience. You're not alone. Actually, that's more a higher percentage than if you went into our venture community. So the Crossrail project is one of the largest construction projects underway in Europe. It's 14 billion pounds, that's roughly 20 plus billion US dollars to construct a high-speed train system under the quote, ancient city of London connecting up all of the train stations that come into the city with Europe so that you can make a journey, for example, from Manchester to Brussels or to Paris seamlessly. So that high-speed system that's being built under the city, I think over 150 kilometers of new tunnel will also employ digitally enabled signage called follow me signage. So for example, when I leave my home in Cambridge and I'm on my smartphone and I decide to move on to my journey and I come to London and I get on a Crossrail station, which is the first one scheduled to open next year, it follows me to give me information about my journey and to customize it. And then when I enter the escalator and go down into the station, digital signage follows me. It follows me as I'm going down the escalator, panel to panel. So it informs me. So for example, if I'm going to Brussels and it turns out that I'm going to be at a particular location, it might tell me about tourists and then the person behind me sees information that's relevant to them but not to me. Follow me entertainment, so to speak, or directions. So concepts like this and prototyping is well underway. Approximately a billion pounds worth of sensor technology and technology in general built into the total project. Now what venture capitalists in this valley wouldn't kill to get a billion dollar opportunity to develop some new sensor capability? Well the first thing is you actually have to know that it exists and that's one of the two, you know, the 200 billion dollars worth of projects underway in the city right now. Others include a complete virtualization model, data model of the city of London in real time, so you can actually measure physical information against virtual information to see how the city is actually functioning. And another long term goal is to have a complete unity of systems so that when vehicles with LTE networks in the United States or vehicles abroad with their equivalent wireless capability will be able to interconnect directly with the city systems and seamlessly you'll be able to see all the traffic patterns and redirect them which means that the privacy issue is going to become a real, well it's not an issue, it's a non-issue because there won't be any privacy that develops as we think it will with the commercial companies involved. So in the United States, a lot of the car manufacturers are developing these wireless systems but there hasn't been a crossing of the data which is occurring in London and some of the other areas on a testing basis. So when we think about this it's really interesting and then lastly I think the other major areas is emerging technology. There is some really revolutionary stuff happening in material sciences and other predictive analytics. So I'll give you an example and we are looking at new metamaterials that just the structure of the material itself can harvest energy from the atmosphere and self-power and become its own disruptor without the inornate craziness of printed circuits and power and everything else that you normally would have to do to put it in a tunnel. So in our example of putting sensors in a tunnel if this metamaterials develops as we see it you'll be able to do the same thing for roughly one thousandth of the cost per square meter of today's technology and you will be delivering roughly 20% more data no power required. That's one example. Another example is using metamaterials that literally when you build something like a tarp place it on a over material as long as it has access to the atmosphere reduces ambient temperature by 5 to 10 degrees Celsius. So think about that for a second. You have the ability then to start impacting the carbon footprint pretty substantially. So why do we know about all this? Well, because a lot of the emerging technologies at the lab level are scattered and in some cases we do know about some of this and are trying to employ it. And we have a very conservative process on the way that construction companies, planning companies and others think about it. You know, they don't want to necessarily experiment with some of the new technologies until it's well proven, but then again you need an incubation capability to make sure you're ready for it when it's here. So there's a lot of disintermediation occurring across the board in emerging technology and what we're trying to do is figure out a way to do a connecting bridge. So one of the other roles that I have at Stanford at least is to create a technology fund of approximately a hundred million dollars to connect up technologies and venture money here to help develop solutions for problems elsewhere if necessary and perhaps even someday in the United States if we ever get to the point where we can accept higher taxes to pay for the infrastructure that we lack. And so with that I'm going to pass the torch to Rich. Great. Hi. Pleasure to be here. My name is Rich Lechner. I spent 33 years with IBM working on smarter cities amongst other things. And I would agree that smarter cities isn't necessarily the best term. It's trademarked. But the idea of digital cities I don't think captures the concept entirely either because I think it leaves out a very important dimension of a smarter city or a more intelligent city which is the human component and the role of the citizens as part of that for a moment. At IBM I was responsible for standing up our sustainability portfolio which grew to be about a $4 billion business that's ranged from smarter buildings to intelligent transportation networks to smart grid or participation in smart grid to optimizing logistics and supply chains. As well I was responsible on the topic of efficiency because I know there was a lot of talk about that here at this function. I was responsible for leading IBM's internal energy efficiency efforts around IT and any discussion around digital cities of course and energy of course you need to consider the energy signature and requirements of this intelligent infrastructure including some of the renovations that Michael mentioned. At IBM as you may know the IT itself is grossly inefficient and it's getting much better thanks to innovations like cloud technology but still grossly inefficient and at IBM through the program we implemented we're saving over $180 million a year in IT energy costs alone. So pretty significant savings potential. Some of the programs that I had the opportunity to work with around the world included cities like Singapore where we were implementing an intelligent transportation network using analytics and both static as well as mobile sensors to predict traffic with an accuracy of 90% 30 minutes in advance of where traffic congestion would occur and then being able to use things like pricing mechanisms to divert and variable pricing in terms of a bridge or a tunnel to divert the flow of traffic to those areas that were less congested. Lots of ideas about how we can fly here I'll stop commenting now so we can get on to the question part but hopefully we'll be able to answer some of your questions. So there's definitely a series of themes that have emerged in just the introductory discussions thus far so the global perspective on digital cities the data component, the enabling technologies and I just want to start with just one particular point that hopefully you'll sort of leave this discussion with which is this notion of two thirds. So what does that mean? Where am I trying to get to this? Urbanization is the critical driver behind this notion of digital cities smarter cities right so as we become more urbanized we need to think more around how does our infrastructure cope with that. So two thirds of the global GDP currently is derived from urban environments and within the next few years we're going to have two thirds of global population living in urban environments right so these are cities. Now what does this mean? This is roughly equivalent to about 600 cities across the world. Now the most interesting part of all this again with two thirds is that two thirds of these cities are going to be in emerging markets. So there's a huge opportunity globally to think about not only how do we take existing cities like the ancient city of London and make them smarter and more efficient in terms of the way they deal with the operations, quality of life, security, safety of the citizens but also how do we imagine and design entirely new cities to cope with the global urbanization we're going to see in emerging markets as well. So I have my list of questions and hopefully I won't get a chance to go through them because I'd like to get you guys involved in one thing which is this notion, this discussion going back and forth. Digital cities, smart cities, smarter cities, the smart citizen, how do you guys see this definition? What do you think the scope of smart cities actually is and should be in terms of the conversations that we're going to have such that we kind of get a strong foothold because it's kind of nebulous? I'll start. So I would say that you need to think of a city as a system of systems, sort of an interconnected set of systems that include energy, water, the built infrastructure, the transportation infrastructure, the public services, waste management, etc. And then secondly I would say the attributes as IBM and others define smarter cities is instrumented, it's connected and getting that connectivity is critical. It's the application of analytics to the data that's being collected in both historical and in real time, both big data and so-called small data. It's collaborative in nature, I think that's incredibly important collaboration between the public sector and the private sector, between the public sector, the government agencies and the citizens is an important attribute. And it's again to my point of view, in terms of the life of the citizen, it's engaging. A smarter city or an intelligent city is engaging. It engages the citizens actively. And to the point of a lot of discussions that we've heard earlier, including the debate over lunch, I would say that a smarter city is distributed in nature. Services are distributed. The notion of centralized services that are talking about healthcare or power generation and storage, these services are increasingly going to be distributed. So the idea of a nuclear power plant in every home probably isn't scalable whereas solar perhaps is, as an example, or renewable storage is. So I would suggest that those things be included. The last thing is it needs to be inclusive. Too often the notion of a smart phone, our smart phone is held up as the access point, the passport to a smarter city whether it be for transportation or what have you. And unfortunately, not everyone has a smart phone. And so not all of our citizens have those devices and those capabilities. So as we define smart cities, they need to be inclusive by nature. I'm going to take someone different to. That is this. The human centered design approach is incorporated in digital technology to a really significant extent that it's so disruptive. I think that the citizens themselves will redefine how a city gets managed just by what they do. So I'll give you kind of an example of two different ways of thinking about it. There's this really old institution called Loys of London. And they have a fabulous reputation for dealing with insurance risk. And they have a really modern architect building and inside of it they have all of various insurance companies. And they still carry things around called books to negotiate deals. The biggest problem that they're facing right now is that predictive analytics and some of the work that's being done in the technology is completely disrupting not only their user model but their business model as well. So one example, the National Healthcare Service took a look at distribution of pharma throughout the city. And with the assumption, government's assumption was everything's working fine. And in fact, everyone's being treated equally in the way that we distribute pharma. So they gave the data sets over to the Open Data Institute, looked at it and 200 companies started doing the equivalent of hackathons on the data and did visual maps and discovered it was complete inequality in the way that pharma was being distributed. So that was a possible service. And when Lloyds took a look at that and some of the other insurance companies suddenly discovered the kind of power that they could have in figuring out how to get the healthcare services, the hospitals and everything else changed in the way that they thought about this primary cost in the healthcare system. If you could actually predict where the problem is based on current information you could then change the strategy of how you would approach it. That was driven pretty much by user data that was submitted into the system and by citizens basically asking for more ability to drive change in the system. And so I think the other component of it is also the commercial companies because the governments are always playing catch up and technology's moving more rapidly than the ability of the policy makers actually to contain it. And we can see that with Apple today just something like the privacy cases against the government. Apple pushes the smartphone technology in their most hands. Now they're actually challenging whether the government of the United States or any other government could actually get access to the technology themselves. So in many cases commercial companies inside of the city are actually responding to consumers and the citizens in changing policy before the government actually has a chance to catch up with it. And I actually think that's a good thing to access perhaps not but we need more of the technology disruption to come into the mainstream so that citizens can determine how their city operates more efficiently than in many cases the way that the government operates it. So I'll push back on that one. My spin on it is I think those cities are going to be carbon takers and the smarter we get towards carbon neutrality the smarter our digital city is. What I mean by that I'm a big person that understands the one planet living that came out of the UK and so the idea is that if we go at the current rate we're going to we need seven planets to supply all our resources. And so the closer we get to carbon neutrality that'll be the carbon neutrality that's the smarter city to me. For example we really don't know what our true footprint of these cities are as far as water. We take water and clothing we don't realize it may be water that was used to wash the clothing in another country and it's imported into our country. When it was in the Middle East 90% of the water footprint came from outside the UAE and so we really need to have a baseline of what we call our footprint is either on carbon, water or energy. And then we look at all the things that we import. We've been talking a lot about the demands of a digital city. The big one is the data management systems and the security associated with that. That was one of the areas we had a big discussion with is what is Bank X, Y and Z need their own data management system which takes up a lot of energy and resources when we could just have one big database that would be able to match them and put a firewall between them but we can't do that so thank you. The other areas we're looking at demands on the heating cooling, lighting and other areas that these digital cities will have to have and play and how can we get them closer to carbon neutrality. So once we establish what the baseline is, how do we get them closer to neutrality and that to me is a smart city. So that's my spin on that. That's great. And Mike Steep, I actually want to go back to the point that you just made which is this notion of getting the commercial organizations involved as being the spearheads of pushing for change. And as you can see my bias in selecting this panel, I don't have any politicians on here. I just have technologists. And one of my strong KSGS and yes capitalists. Capitalism at work. And one of the things here which I believe is true is the fact that we are now getting into a point where technology is evolving so quickly that it's even difficult for the commercial organizations to keep up with it let alone the policy makers and the politicians and the folks that may not even have that on their radar. Not just the politicians even the corporations in particular don't have it. Absolutely. And so as we're thinking about the introduction of new technologies to help get us to the point of carbon neutrality when we're thinking of the cities what do you guys see as being the barriers to adoption and where have you actually seen things work well? Make me all begin with you and then you guys all have global experience on this. I think where it works well is when you have more of the disruptive technologies coming up from below either through entrepreneurs or startups. And then within the commercial companies when you have what I would call Maverick leaders. So I'll give you an example of what I mean by that. So BMW went through a fairly major change in the way that manufacturers cars in the something called the i-Series. It wasn't just about building electric cars it was actually about completely changing the manufacturing process actually to the throwback days of weaving where they actually weave carbon now using robots to actually assemble bodies that are 20% later but have the same strength as steel for the same amount of steel. So they had to rethink the process. That was driven by an executive inside of BMW of Maverick who wanted to really change the way the companies started thinking about production, green use of carbon and so forth. The other example is Airbus where inside of the company they decided to fly a prototype of the first electric airplane. So that in our minds electric airplane must have heavy batteries and stuff right? Not the case. So they came up with a completely different concept based on sailing. And the America's Cup boat that was designed many years ago with a lot of technology coming out of that was grounds up Larry Ellison had put a $40 million of research into it to really build a completely different type of vehicle that could fly on water and then broke all speed records and we did it. BMW, Airbus took a look at that whole experiment and thought to themselves why can't we do something like that for our industry that's highly disruptive. And so the first electric airplane flew from United Kingdom to France about two months ago and came back 165 miles an hour. It had 25% less weight than a typical aircraft carrying same number of passengers. And the battery technology used an entirely new way of thinking about synthetic casings and with battery sensors built in at the particle level. So they got 30% more efficiency out of the batteries. We used some of the way for technology that Apple's been experimenting with on its MacBook series. So the innovation was led by a really thoughtful CTO who just wanted to break glass and take the disruption and make it possible to change things. So I think, you know, what we have to do now start thinking about this across the spectrum of emerging technology may provide a little more direction and one way of doing that is through the commercialization of it because the biggest factor here is human factor of change and resistance to change and what I would call the flood factor if you're uncertainty doubt. It works both ways. Prevents change from happening inside the company or the city but the other kind, when you have a Maverick who comes in and actually made a possible to make change happen, it has amazing results in the way a company would go forward. So that's one way I would take a look at the problems that I'm not, I don't believe it's going to be central or come down from you know, pre-existing systems or pre-existing learnings alone. I think we have to really think through a different kind of box here out of the box about how we're going to do it. To do that requires tremendous expertise in technology and that's the missing link in the cities in all of the cities including here in Silicon Valley. You do not have a technology focused expertise resident inside the cities to help them figure out, it's not IT what they need to do with some of these new technologies and how to actually make it work and because I lived in Palo Alto you know, someday I'm hoping they'll actually time the lights from the technologies of the 1930s but you know, that's not actually an area of focus despite having all this amazing capability all around them and unfortunately as technologists we're not really interested so much in making that happen unless you know about what's going on abroad but we need to bring all this stuff home and help congress try to break through the barrier but I think it's going to go through the commercial companies first I think the other obstacles are so enormous to try to overcome I sort of have a I agree with the glamorous part I think we need to go back to basic blocking and tackling so we haven't had a breakthrough in wastewater treatment in 40 years or whatever chlorine was about so we really need to go and that will impact all of everybody in this room some of this other stuff wouldn't but we need to take that breakthrough concept and go back to the basics so that would be some of the other stuff I call waste management so we have garbage we generate what do we do with it how do we come up to a point where we can 100% recycle or reuse that waste instead of sending it out we're trying to do it in California but to go to the Midwest we may not find the same type of requirements so how do we get into that basic tackling and blocking the core things that we need on a day-to-day basis and have those innovations come through a lot of work that we are exposed to starting to look at nano technologies biological systems to manage waste water and how do we incorporate those into more carbon neutrality but also looking at how do we have those breakthroughs we haven't had a breakthrough in wastewater treatment or even water treatment in a long long time and I would cite two things if I could one is critical to have open interfaces and open data access I think that that will unleash the private sector to help create the innovations fund some of the investments in the infrastructure improvements that are required I think here in California the green button program is a great example of an open interface open API open data program and you can see lots of different examples Powwow Energy is a Silicon Valley company that I think is a great example of exploiting the green button data to help farmers to identify leaks and irrigation systems by monitoring energy consumption of pumps by tapping into the energy data that the green button program makes available to them all they need is permission from the farmer and they charge the farmers like $50 a month or $5 a month or something for the program so open interfaces and open data is I think the most critical thing the second thing is back to this idea of collaboration and partnership the best possible practices because again not every city has a wherewithal to either be built from scratch like Mazdar or the financial depth like London to make these kinds of investments I think a great example using technology like cloud computing like social media the colleagues in care is a great example of applying healthcare best possible practices given the conditions of the environment started in Haiti after the earthquake to provide physicians with the best possible options, care options given the reality of the conditions in Haiti and now being applied the same best principles across the world to doctors in Africa in Asia and in Latin America and elsewhere so I think that's another very important part of this is this idea of collaborative not collaborative consumption but collaboration and sharing of knowledge sharing using some of the technologies that are available in digital cities and in the digital world So before we get to the rest of the questions I want to see if there is anybody on the audience that might have a question of the panelists in terms of technologies So leveraging off of your comment about everything needs to be open and interface and your comment about the technologies evolving so fast is there anything unique about this digital city or smart city concept that's different than smart anything given that everything getting connected everything's getting smart everything's getting interoperable hopefully and there's a layer that a smart building has on top of it Uber has on top of it that airline has on top of it is there something different about the city concept that that layer is there's some innovation or some uber analytics that make it different than something else or is it just a recognition that it's a customer vertical where there's a government at the other end so it's going to take a totally different approach from a customer point of view because otherwise from a cost and rapid employment and unleashing innovation there's a different approach where may the best thermal staff may the best connected power may the best utility system way and then interoperability I think it comes back to the very first thing I said which is a city is a system of systems and it's a living organism and so if you look at the risk of a bottoms up approach and let every the best thermal staff win not that there's anything wrong with a bottoms up approach the risk of that is that you look at discrete elements of the city and fail to capture the benefits associated with taking a more holistic systems wide view and addressing some of the the gross inefficiencies that if you think corporations are inefficient I subject to you that cities are horribly horribly inefficient but that's what scares me, right? that if you do it top down there's a combination of things and again it doesn't the city let me give you an example I was at an event in London Prince of Wales was running a Smarter Cities event and speaking to the mayor of a midsize Midland city and he said to me listen I don't want to be on the front of this I was on the bleeding edge of a smart city before I can't afford to do this I said what did you do? the bus stops I said really? he said oh yeah we put in this with the digital signage I said who wants that and in the future you're not going to do that I said what you're going to do is the back end you as a city will make the back end investments you'll provide access to the data and then you'll let the marketplace provide the front end piece of that to exploit that data it'll be much more cost effective for you it'll harness the innovation capability of the masses while at the same time because you're providing the back end infrastructure and hopefully the data aggregation you'll be able to provide a more holistic view of that data as opposed to a lot of discrete pieces one area one area to follow up on that is I don't think the smart city has to be self sufficient that we need to start thinking about a world collaboration and world hopes and looking at I call it the federal express mentality so if you have a product that's being produced here cheaper and able to bring it in for your immediate needs you need to have that relationship set up so far I've seen a lot more still piping in the political arena as we start to see what's going on versus the other way which should be if I want fruit from Holland I should be able to fly in and I give them something to return to balance that has to go there so if we think that these smart cities have to be completely sustainable on their own that's really difficult to do I tried it with Mastar and it didn't really work out one other thing that makes the city's unique is the massive concentration of people within a network that's easily reachable so when you have IoT and a whole set of devices focus and concentrate in a very small area the thing that really gives you tremendous innovation capabilities is the crossing of the chasm of data layers to completely change everything we think about so if we actually think it's possible to have a centralized top-down approach people will change it instead of trying to get the masses to do something the masses are actually going to get us to do something indirectly through commercialization and so the other problem with a lot of the cities is because of the lack of expertise on the technical side they do silly things instead of thinking holistically across all the different things I could do with technology but I'm going to pick creating smart street lamps alone and that's going to show me that I'm a smart city it's a lack of holistic thinking with expertise associated with it that is actually a major problem everywhere an example, our train system in California Huda would actually build a train system without knowing whether or not it's completed or not that's one of the great attributes that we have here so one of the advisors to that board is the head of the largest rail facility in Japan and he talks on it and says this is craziness it's absolute craziness that you actually don't have the thing financed let alone actually incorporating the latest technologies because the expertise is not resident within the government to actually figure this stuff out yet we have all this great technology and all these great companies here in the valley why aren't we leveraging it why isn't there a tech consortium that can provide advice to the local governments of which are supposed to govern the way we live here in the valley just as an example in our own home base so I think the problem said is really lack of expertise and I think it's a preconceived notion that centralized government planning or any kind of government planning alone is sufficient to actually convert a city into something called digitized I have a question my background in the semiconductor industry here for the last 45 years we have been a technology engine first it was a semiconductor revolution then came the internet then came IOD and cloud computing if you go back it is all developed here right start 0x or HP and all that question to Michael and Jay is why the smart city we have all the component here for the smart cities coming in London Singapore India, why not in Palo Alto actually what's wrong with you guys I don't want to bash America but I have lived abroad in Australia, New Zealand and Abu Dhabi and Michael said the masses from the bottom moving that movement toward upwards versus letting the government try to make those decisions for them the citizens in this group are demanding those type of renewable sources they want to be green they want to have an environment that they think 10 decades from now we think maybe our lifespan but they are thinking 10 lifestans what am I going to give to my children and that is the mentality I see outside the United States in that manner you are going to start looking at how you recycle everything how you reuse everything and how you move forward now you have a tool that helps you to monitor that with the databases that we have up swell from bottom up and people are really demanding that just in corporations we have a legacy a culture so with Prop 13 it's virtually impossible to get any new big project to prove 64% or more of people voting in favor of it it's almost impossible that's why we have problems with one of the contributing problems with funding of BART and some of the other major issues but it goes beyond that we have a bunch of orchard villages from the 1950s we are not coordinating, there is a regional council we have 10 different transportation systems in the area, none of which talk to each other efficiently so it's a human problem it's not something that is it's an infrastructure problem and funding, it's a human problem and understanding what our mission is we live in the most expensive housing place in the country yet in the last 10 years why? because we are building more commercial office space and wiping out existing residential housing and then we don't build enough housing to meet the needs of our citizens so the area went from 2.5 million units of housing in less than a decade and actually dropped 2.1 million units of available housing that's a zoning problem, it's a regional problem and so until we are ready to start tackling some of these issues and either changing the way our government works or relying upon commercial to put pressure like for example Facebook, building housing onto their campus because no one else will let them do it you're going to see this pressure mount and mount and mount it shouldn't take 45 minutes to go the 5 miles across the city of Palo Alto from point A to Z during from 3 to 7 o'clock because imagine the amount of carbon wastage there isn't just the gas idling on engines trying to get from point why is it so hard to do something as basic as time lights so the reason we're not getting to actually solve some of these problems is because we're not actually tackling them we're operating things just the way they were operated almost 30 years ago and our infrastructure is depleted, we're under capitalizing and that's why the city of London which economically isn't doing that great compared to, I mean they have problems, it's like we do has it built into their tax structure so they have the money that's available for it and more interestingly, if you develop new prototypes there, you get funded you get market research dollars to match the funding so you can take a little bit more risk the problem there is the culture because it's not an inherently risk-taking culture like it is here in the valley Mike also, they do simulations to show what happens if you don't do it they do, they do economic impacts this question is for Michael so you talked about Singapore traffic information that the capital or summary is getting I did not know about Singapore how is that different than Google Maps information for example here it's not significantly different it's the differences is that in Singapore they're collecting the data both from fixed scantries as well as from mobile sensors based on cabs etc and then we implemented an analytics system for the Singapore transport authority that's actually doing the prediction and they had the will to implement pricing mechanisms that would influence driver behavior so some of this to Michael's point it's a technology issue so it's a behavioral issue as well are you willing to make those trade-offs to have variable by the way we accept it with Uber, we all accept surge pricing, we may not be happy about it but we all accept it anyone here who uses Uber essentially that's what Singapore is doing surge pricing to influence and they have the backend infrastructure they've invested in the IT infrastructure so instead of doing what was done in smart transportation systems here in the US 20 years ago which is put in these stupid gantry systems very expensive fixed assets they spent very little on the data collection and they invested the money on the data analysis and the data analysis capability of the backend and then they had the will to implement the variable charging that would change behavior and like I said 90% accuracy they can predict and prevent traffic congestion with 90% accuracy up to 30 minutes in advance so you're implying you could have surge pricing on the highways here? sure, on the bridges? sure why wouldn't you have variable pricing on the Golden Gate Bridge versus the San Mateo Bridge versus Dunn Barton Bridge based on traffic conditions we have it today up in Bellevue the other thing with Singapore is they started out limiting based on license plate number where there are and even when you come into the city and then they also have a program where you could it's reverse tag fees so when you have a brand new car which has the best air mission controls you have a very low price when you get to 10 years it's so expensive to own that car we have the opposite of our situation here we reward you for driving that 20 year old Ford Escort but you know Stanford is looking at making his campus smarter and I'm just curious what you're talking about the backbone looking at an entire city what backbone other than the internet capabilities that we have do you see needing to exist that's being offered either through public regulating agency or what's that backbone look like beyond what we have with internet capabilities basically I would think I know what it looks like for a campus because I'm familiar with building energy internet systems and Jace's and I'm just curious as to what technologies are so at Mastar City they have a Mastar Institute which is incorporated into the core of the city and they looked at the individual dorm rooms to look at smart appliances that was a GE term that allows them to have electrical loads based on the peak power so if you're trying to boil water at peak hour it takes you 20 minutes versus off non-peak it would take you 2 minutes so they looked at how the user or the behavior would be adjusted to these strengths to keep the peak power down so that meant that you don't have all the brown electrons going forth the other areas they looked at is the balance between passive and active air conditioning so you can have a really thick wall but no air inside it or you can have a very thin wall and have your air conditioner on all the time so you have to kind of figure out at Stanford what kind of balance it would be I guess I'm asking why in terms of IT investment or like we have regular things about electric utility, gas utilities telephone, there's lots of standards regulations, that system regulates everything up to a meter and then down to a meter it's really a customer that makes decisions about their technology you've got a smart city, is there some parallel network that's a 19 network or a smart city data collection network or something beyond what's already in place in London? there are multiple networks with massive amounts of data so for example I think there's over 20 million oyster current records for the last 10 years of travel data coming into the city and meeting so the difficulty is crossing the chasm so getting one organization, that's a government organization to read to across with other data like street level data to actually do something with it the power once you do that is enormous that's not the issue, it's as simple as this we have all this data, it's ours telephone, we have all this data, it's ours and we'll find every reason why not to cooperate to actually use this there's a new technology under development called query into encrypted data so the first thing I want to do if I'm a government agency that does not want to share data even though I have to appear that I am going to share data is raise my hand and say, privacy issue the reason we can't do this is because of privacy there's a new technology that's starting to be applied called query into encrypted data it makes it possible to normalize data it's already encrypted without violating privacy rules so if we think about it as an IT problem alone, it's insufficient to actually solve the problem what we have to do is step out of that framework and think more broadly about what is the expertise I need to know about to make the right kinds of decisions and how do I acquire the expertise and then I need to deal with the political problems and missile silo cultures and other things that you have to deal with and that's the real challenge and what commercial companies are trying to do somewhat successfully, unsuccessfully across the chasm by breaking down some of those barriers by getting commercial demand people getting fed up with the community people wanting to actually share out their data and opt in so once again using the citizens themselves and the demand to change their lifestyle to actually drive change at the government level because it's a business unless it's commercially developed so on that same topic London is the most video-monitored city on the planet for good reason so you kind of opened by talking about how you're going to have the opportunity to enter your data step into one of these systems where they're going to track you and give you information at some point is it going to be mandatory for you to participate maybe take some major event the answer I think is yes I don't think there's an opt-out unless you want to somehow do you remember the big short movie there's a renegade trader who's fed up with Wall Street decides to figure out how to cut loose and become his own man going out into the wilderness it's going to get a lot more out of control for the individual because information is everywhere by every one and the cross and the chasm only make it worse so we're actually inherently trusting that these people will actually use the data for good and not bad so right now the national security laws of a number of companies mean that when I land into Heathrow airport I'm actually all my conversations are being recorded along with all my texts secret courts that basically have to decide whether to allow them to do that but we already know what that's like so you know I think we have to make the assumption that the world has changed drastically from the time that we grew up and that for this generation privacy is no longer an opt-in and I think that people find shocking but I think that's the reality of it you know the head of Microsoft's R&D for online search tried an experiment she had three different pieces of information about herself all compartmentalized she wanted to figure out how long would it take for them actually to reassemble all the breadcrumbs to figure out who she was approximately three seconds she gave it as a task to her engineering team and then they decided to encrypt everything and try to break it out even more one and a half seconds on the next round so it's and that was almost six years ago so you know it has changed it's something that we're going to have to live with and our governance model is based on a very old model of governance it's not based on the realities of modern technology so that's one of the biggest disconnects we have in addition to culture that's why I believe that commercial companies are probably the only ones capable of actually driving change through their consumers I don't know about that so Rich on the data side this is something that's near dear to your heart yeah I think I know we're running out of time I would say one of the questions that's come up over and over again is how do you pay for all this and I have a point of view on that that I suspect Michael won't agree with so three data points one the comments you just made about London more monitors per square foot than any other city in the world number two IBM bought the weather channel did you know that forget not the television capabilities but all other assets the weather channel IBM bought why would IBM buy the weather channel and number three number three the speculation that the reason Apple made a billion dollar investment in DD why what's the common thread common thread is data it's all about data IBM bought the weather channel because it's data that is incredibly valuable whether you're talking about smart agriculture predicting retail consumer behavior predicting and they have found a correlation with the airbag the effective airbags the date that the consistent weather patterns on the days where they know that the actual defective airbags were manufactured the same weather patterns existed in every case data why did Apple supposedly or one point of view make this investment in DD not because they want to be the next Uber but because they want to have driverless cars they want to understand the passenger and the driver behavior in China how does that relate to cities think about all the data that cities have access to I think the next grand challenge and the answer to being able to afford the kind of smarter infrastructure we're talking about is monetize is for cities to find a way to monetize the data that they have if they can do that without invading the privacy of the citizens but the fact is they have the data they know the migration patterns of me, of you around the city where we go, where the flow goes how fast we walk what storefronts do we stop in front of as we're walking down Market Street monetizing that data will provide more revenues than they could ever dream of that's all they have to do is follow the pattern in the mantra IBM's new mantra which is data is the new currency I would say I completely agree with your wrench tonight I completely agree and that's all we have time for except I modified predictive analytics is more important than the amount of data you accumulate and the devices are simply enabling us to get more of the same by getting predictive and that's a real hot area by the way for engineering students here predictive analytics is a way to actually see and get insights and that actually can change the model pretty significantly in the monetization example if you just took the Lloyds of London example billions of dollars of savings just from looking at healthcare procedures you can certainly tax that if you want to but it's going to again take a fundamental change on the part of the way we think about governance to do it that's why we're having such a big issue on the national election lack of confidence in our government or the demand that believes the government is going to do everything for us look at what's going on it's nuts actually when you think about it it's not a rational approach hang on enough said so I'm going to do something a little bit more maverick that word was used which is to allow for more time for you guys to actually interact with the panel leading up to the thing but the one thing I actually did want to close to close on actually is one question but one observation to address the penders the other thing that's happening with cities is that the business model is changing and I highly encourage you to actually look into this notion of public-private partnerships actually one of our students here Dave Wingate in the back is actually one of the experts here at Stanford on this notion the notion of a public-private partnership is actually changing the business model with which infrastructure is actually being developed so one of the ones that's actually near us right now is the construction that's happening just on the south side of the Golden Gate Bridge so that new parkway that's in place is privately owned a lot of you probably didn't realize that because there's no associated toll road with it but in fact it's actually a privately owned enterprise it's actually owned by this corporation called the Golden Link Partners where they're responsible for designing building financing and most importantly operating this asset how do you operate something you need to have predictive analytics and data that helps you minimize your costs and for the first time ever we're now starting to get into a world where managing long-term infrastructure costs actually makes sense versus making a political decision hoping you're in office for four years so that's the other thing that could be a lot more of this happening elsewhere this is the first P3 that's actually happening in California it's crazy, it's the first time despite this it's not new we're definitely not originators of this so the one parting question that I want to say aside from the fact that this model is changing is what is one thing that you think that Silicon Valley can help do to contribute to a better quality of life and are pushed towards more living environment cities whatever you want to call them locally is there something that you think that we could do here to help push this is it speaking to the officials, is it designing the technologies is it moving to London maybe I more of a regionalization thinking versus I'm Palo Alto and I'm cool and San Carlos and I'm even better but thinking more on partnerships this is competition so as partners you could have competition to see who's the best but you should really be looking at a regional solution to a lot of these issues versus I'm Palo Alto I'm going to lead by example I would take the 10 billionaires and bring them together and start talking about a new mission besides making money for our shareholders the new mission is to actually start having influence on how to build a community and what the needs are money and it's essentially here accounts for a lot in terms of where things have unfortunately that's just the truth so there's almost no engagement level that I can see of some of the great leaders here that we have on the commercial side whether at Apple and other companies there's built fancy houses well yes and the expertise that's part of it we have such an amazing talent here I mean I'm overwhelmed at the opportunity we have with what's happening with emerging technology so we're not applying it to things that can change the basic quality of life for our citizens and we could and so that's kind of what we need to start thinking about not have this independent view of the government responsible for doing everything I would echo that I think this notion of a a much more U-shaped government where there's the government the citizens and then perhaps the private sector acting as a bomb at that U and facilitating and sharing best practices, sharing technology capabilities ideas on how to monetize data and apply new business models in this space I think is the best thing that Silicon Valley can do to help well great, so on that note I'd like to thank Penel for taking time