Research on the Smartification of Japanese Cities and Regional Revitalization in the DX Era, Aizuwakamatsu City, Japan

Abstract

The purpose of this study is to analyze the implementation process of retrofitting smart cities in Japan, identify issues at each stage, and apply a corporate R&D process model to evaluate and study smart city planning. Specifically, a literature review was conducted using Aizuwakamatsu City, Fukushima Prefecture, as the target model, and interviews were conducted and discussed. As a result, we found that there are four phases in the process, from planning to operation, and that there are valleys (problems to be solved) to overcome in each phase. It can be concluded that Aizu Wakamatsu City is currently in the process of crossing Darwin’s Sea in the monetization phase. The relationship between each stakeholder in the progress of DX in Aizuwakamatsu City was clarified.

1. Introduction

In recent years, the importance of smart cities has been growing as a global trend, and countries are promoting “smart city” initiatives. In Japan, smart city plans have been promoted since around 2003, and examples of new urban-type smart cities in which new urban areas are constructed on vacant land (greenfield) include “Kashiwanoha Smart City” in Kashiwa City, Chiba Prefecture, and “ Fujisawa Sustainable Smart Town (SST)” in Fujisawa City, Kanagawa Prefecture. Another example of a retrofit smart city that converts an existing urban area (brownfield) into a smart one is “Smart City Aizu Wakamatsu” in Aizu Wakamatsu City, Fukushima Prefecture. In Japan, where urban areas already exist on most of the plains, and most municipalities are in a difficult financial situation, the construction of new urban-type smart cities in the future will be subject to significant technical and financial constraints. Therefore, it is highly likely that Japan’s smart city plan will promote retrofit-type smart cities, in which existing brownfields are converted into smart cities. Although smart city planning is expected to be a key to DX for regional development in response to changes in socioeconomic conditions caused by changes in regional social structures due to rapid population decline and super-aging, it has been found that various issues have arisen upon its introduction. Therefore, the purpose of this paper is to analyze the process of introducing retrofit-type smart city plans in Japan, identify issues at each stage, and evaluate and discuss smart city plans by adapting them to a corporate R&D process model. Specifically, we conducted a literature review using Aizuwakamatsu City, Fukushima Prefecture, as the target model and clarified the relationship among each stakeholder in Aizuwakamatsu City.

2. Smart city

2.1 What is a smart city

Recently, the term “smart city” is often used to refer to cities that have been made smarter through the use of information and communication technology. In other words, the definition of “smart city” is determined by the business policies of those who implement smart city plans, and thus, a wide variety of definitions exist. In fact, there are cases where a “smart city” includes “smart community,” “smart infrastructure (smart grid),” or “smart mobility. Incorporating advanced technologies such as the Internet of Things (IoT), big data robots, artificial intelligence (AI), automated driving, and 5G in urban planning is simply to achieve economic development and solve social issues by utilizing these advanced technologies. The reason for incorporating advanced technologies such as AI and 5G is to achieve economic development and solve social issues by utilizing these advanced technologies in urban planning. Economic development here means strengthening the competitiveness of existing industries and creating new industries. In Japan, economic development and the solution to social issues utilizing smart cities are in full swing, as proposed in the Fifth Science and Technology Basic Plan (FY2016-2020), which is called “Society 5.0 (super-smart society)“. In this paper, we would like to adopt the following definition of a smart city. A “sustainable city or district where management (planning, maintenance, management, operation, etc.) is conducted using new technologies such as ICT to address various urban issues, and overall optimization is achieved. Replace the entirety of this text with the main body of your chapter. The body is where the author explains experiments and presents and interprets data from one’s research. Authors are free to decide how the main body will be structured. However, you are required to have at least one heading (Figure 1) [1, 2].

Figure 1.

Venn diagram of the elements that make up a smart city. Source: T. Kono, M. Saito, T. Fujii, and TianBao Guo, “Current Status and Issues of Retrofit Smart City Planning in Japan: A Case Study of Aizu Wakamatsu City, Fukushima Prefecture (Prepared by the author) [1].

2.2 Aizuwakamatsu city, Fukushima Prefecture

In May 2012, Aizu Wakamatsu City established the Aizu Wakamatsu Smart City Promotion Council (hereafter, the “Promotion Council”) to advance this plan. The Council is currently involved in specific smart city projects, such as the operation of the Aizu Wakamatsu+ urban OS, digital DMO projects, and satellite office operations. The impetus for the establishment of the council dates back to before the March 2011 earthquake. In Aizu Wakamatsu City, the formation of an industrial cluster was envisioned around the University of Aizu, a university specializing in ICT established in 1993. The aim was to create jobs for young people, thereby curbing the outflow of the working population to the cities and the decline in the population, which is a regional issue. Aizu Wakamatsu City, which had been suffering from a decline in tourism due in part to harmful rumors about the nuclear power plant caused by the earthquake, was one of the first cities in Japan to choose a smart city as a solution to these problems. However, Aizu Wakamatsu City did not participate in the initial promotion council. At the time, it was concluded that a private-sector-led smart city plan, rather than a government-led one, would be more likely to succeed in terms of not relying on public funds. Today, an organization called the Smart City Aizu Wakamatsu Promotion Council (hereafter “the Council”), established only a year or so after the inauguration of the Council, is proposing measures and sharing its vision of a smart city with the citizens. However, there is a separate entity promoting Smart City Aizu Wakamatsu. The industry part is the AiCT Consortium (hereafter referred to as “the Consortium”), a general incorporated association of about 90 companies involved in the smart city planning of Aizu Wakamatsu City. The government and academia are the city and the University of Aizu, respectively. The consortium is positioned as an organization that explores the functionality and ideal form of a smart city, such as businesses and services, now that the data linkage infrastructure has begun to operate. It is a corporation that encourages collaboration, not competition, among companies. For example, when cashless payment systems such as PayPay are introduced in a city, the flow of money is that the fees go to companies outside the city. Therefore, the companies participating in the consortium can join hands to create a new digital local currency to protect the economy within the community. In this way, the existence of the consortium is an accelerator that accelerates the creation of local-only businesses [3].

3. Public hearing on investment

Based on a study by Kono [1], the following four points were important turning points in the construction of Smart City Aizu Wakamatsu. ①Aizu Region Smart City Promotion Council, ② “Initiatives for Revitalizing Regional Vitality – Stage 2” formulation, ③ Data for Citizen, and ④ Regional Citizen Portal Introduction Project (Regional Development) Aizu Wakamatsu. The contents of the hearings are summarized below (Table 1).

①-1	How was the “Aizu Region Smart City Promotion Council” formed?
①-2	What is the role of the “Aizu Area Smart City Promotion Council” in the Aizu Wakamatsu City Smart City? What is the composition of its members? If the Council is the driving force behind the project, what kind of decision-making will take place?
②-1	I believe you have decided on specific projects related to the Smart City Plan.
②-2	Projects that have been planned but have been abandoned; Please let us know if you have a project that was planned but was abandoned.
③-1	In March 2014, the data sharing platform (urban OS) “DATA for CITIZEN” was launched as a technology demonstration site. Please tell us why you decided to create it.
③-2	Please tell us about any key points or innovations in the development process and any issues that arose before completion.
③-3	I heard that in Aizu, there is an idea (the Aizu Model) that “data belongs to the citizens. Please tell us about the background that led to this idea.
③-4	Please let us know if there are any current issues (or expected issues in the future).
③-5	Please provide any examples of venture companies that have used DATA for CITIZEN to create new businesses.
③-6	Do you have any plans to continue updating the urban OS, including the implementation of AI in the future? Please share any thoughts you have regarding the creation of a competitive urban OS.
④-1	Please tell us about the background and any innovations in the development of the service. Also, please tell us about the situation after the service was launched.
④-2	Did you encounter any challenges before the launch of the service? And how did you overcome them?

Table 1.

Survey summary (prepared by the author) [1].

3.1 Aizu region smart city promotion council

At the center of the structure responsible for promoting the 2020 Smart City Plan in Aizu Wakamatsu is the Smart City Aizu Wakamatsu Promotion Council (hereafter referred to as the “Council”), which was established in July 2013. The Council consists of representatives from Fukushima Prefecture, Aizuwakamatsu City, the University of Aizu, and various industries, and in regular meetings, shares with citizens the ideal shape of Smart City Aizuwakamatsu, proposals for measures necessary to realize Smart City Aizuwakamatsu, and a concrete image of Smart City Aizuwakamatsu. The Promotion Council is a joint project of Fukushima Prefecture and Aizu Wakamatsu City. The Promotion Council provides advice to the “Smart City Aizuwakamatsu Promotion Council Study Group” (hereinafter referred to as the “Study Group”), which is composed of deputy director-level officials and the University of Aizu, who are capable of cross-disciplinary discussions in each department of Fukushima Prefecture and Aizu Wakamatsu City Hall. However, the “Aizu Region Smart City Promotion Council” (hereinafter referred to as the “Promotion Council”) was established in May 2012, the year prior to the establishment of the Promotion Council, and as of 2020, it is responsible for specific smart city projects such as the operation of the Aizu Wakamatsu urban OS, the digital DMO project, and satellite offices. The Promotion Council includes the Aizuwakamatsu City Council. The Council is comprised of 22 organizations, including Aizu Wakamatsu City, and was established for the purpose of building a smart city model that solves issues faced by local governments through the use of ICT and other means, with industry, government, academia, finance, labor, and language working in unison. First, let us explain how the Council was established. The Council was established in May 2012, prior to February 2013, when Aizu Wakamatsu advocated “Smart City Aizu Wakamatsu” in its “Initiatives for Revitalization of Regional Vitality – Stage II” and before July 2013, when the Promotion Council was established. Aizu Wakamatsu City has been suffering from a declining population since 1995. The Great East Japan Earthquake and Tsunami followed in its wake, and the socioeconomic situation was worsening due to factors such as a decline in the number of tourists caused by harmful rumors associated with the nuclear power plant disaster. In fact, since the opening of the University of Aizu in 1993, the city of Aizu Wakamatsu had been planning the formation of an industrial cluster centered on the University of Aizu, as proposed by its first president, Kunii, and had been planning from this stage to address population decline by creating employment for young people through the creation of an industrial cluster. Against this backdrop, the University of Aizu, a university specializing in ICT, and local private companies, including ICT venture companies founded by graduates of the University of Aizu, decided to promote the Smart City Plan as an approach to solving regional issues and the Promotion Council played a central role in this effort. It is a fact that Aizu Wakamatsu City was not a participant in the council when it was first established. This is because Aizu Wakamatsu City had judged that the smart city plan would have a better chance of success if it were led by the private sector, rather than by the government, which was dependent on public funds as in conventional government projects. However, Accenture Corporation (hereinafter referred to as “Accenture”) participated in the Council in an advisory capacity by encouraging each stakeholder to participate in the Council and proposed to Aizu Wakamatsu City to promote the Smart City Plan through industry-government-academia collaboration, to which Aizu Wakamatsu City responded by joining the Council after the Council was formed. Aizu Wakamatsu City later joined the council in response. Accenture is playing the role of a facilitator by using its consulting firm expertise to analyze the current status of the region and propose solutions, especially through the promotion council, while Aizu Wakamatsu City is developing the core system, including the urban OS.

It is an undeniable fact that Aizu Wakamatsu City plays a central role in the Smart City Aizu Wakamatsu, and as mentioned earlier, the Promotion Council was established mainly by ICT venture companies. Ltd. are the only two companies that have knowledge of ICT technology. Rather, the majority of the members are from different industries other than ICT, such as medical care, hospitality, electric power and gas, and electrical transportation. To put it simply, the reason for this is that the promotion council itself is a “place for discovering local needs. ICT services (applications, etc.), which are tools for solving local issues, can be developed without depending on a specific IT vendor, so there is no need to enclose the companies that develop ICT services, especially IT vendors in Aizu Wakamatsu, in advance. In fact, it is important to identify local issues. Rather, it is important to identify local issues, and it is essential to encourage the participation of stakeholders who are in charge of areas other than ICT in order to discover and accumulate local needs and to solve them in a cross-sectoral manner. For this reason, the majority of the members of the Council are companies that operate businesses in areas other than ICT. In summary, the Council plays a central role in “promoting smart city planning based on needs adaptation” and serves as a conduit for stakeholders from a variety of fields.

3.2 Formulation of “initiatives for revitalizing regional vitality – stage 2

Initiatives for Revitalizing Regional Vitality – Stage 2″ (“Stage 2“) is a regional vitality revitalization plan formulated by Aizu Wakamatsu City in February 2014. At the time, local governments in the Tohoku region, mainly those that suffered extensive damage from the Great East Japan Earthquake, were formulating reconstruction plans, but Aizu Wakamatsu City did not need to formulate a reconstruction plan because the direct damage from the Great East Japan Earthquake was relatively minor; rather, it proceeded with its regional revitalization efforts as a regional vitality revitalization plan. In 2012, Aizu Wakamatsu City formulated its first regional vitality revitalization plan, “Initiatives for Revitalizing Regional Vitality” (“Stage 1“). Stage 1 was based on the then 6th Comprehensive Plan of Aizuwakamatsu City, and selected ICT-based initiatives. Stage 1, however, failed to attract much attention from residents, and Stage 2, formulated two years later, succeeded in gaining the attention of citizens by following the initiatives of Stage 1 and advocating the “Smart City Aizuwakamatsu” for the first time.

3.3 Data sharing PlatformData sharing PlatformDATA for CITIZEN

DATA for CITIZEN (D4C) is an open data provision platform developed by Aizu Wakamatsu City, named after Mayor Muroi’s philosophy that “data should be used for the benefit of citizens. D4C is a citizen-oriented open data-sharing infrastructure that takes into consideration the privacy of citizens and uses an opt-in method in which only data that citizens have consented to can be used in the city OS or service/application layer. D4C is a citizen-oriented open data-sharing platform that takes into account the privacy of citizens, and is operated in such a way that it is called an “opt-in” type, whereby citizens can use the data in an opt-in manner. D4C was developed by an outside contractor, and the total cost of the system was approximately 1.166 billion yen, 100% of which was covered by the reconstruction grant. The decision to introduce the expensive D4C system was made possible by the existence of this reconstruction grant.

D4C is a data-sharing platform, and one of the reasons why Aizu Wakamatsu City focused on data in the first place was to develop data analytics human resources and foster the data analytics industry. Aizu Wakamatsu City is expected to revitalize the region by having graduates of the University of Aizu, a university specializing in ICT, work in the data analytics industry, which has a high affinity for and high profitability in a regional city with a shortage of labor. The decision was made to implement D4C to provide essential resources for the data analytics industry.

The development of D4C started from vague motives such as “I want to visualize the city” or “I want to make everyday life more convenient,” and the effectiveness of D4C was not clearly identified. When the Information and Statistics Division of Aizu Wakamatsu City, the flagship of the project, asked each department to submit its own data for inclusion in D4C, each department did not know what kind of data to submit and what kind of data to submit, and the Information and Statistics Division was not sure which department to ask for what kind of data. The Information and Statistics Division is also faced with the problem of not knowing what kind of data exists in which department. One example of an application that utilizes D4C data is the “Fire Hydrant Map. Fire Hydrant Map is an application that displays the location of fire hydrants on an online map. A staff member of the Information and Statistics Section was having a chat with a staff member of another department and suggested that it would be a good idea to provide location information on something, and the location of a fire hydrant was brought up as a possible topic. A firefighter who happened to be in the back of the room joined the conversation and mentioned that fire hydrant location information was needed because, in winter, the location of fire hydrants becomes difficult to locate due to snow. An ICT vendor employee who happened to be visiting the meeting joined the conversation and said, “If you just want to display it like this on a map, we can make it for free,” and the conversation quickly progressed to the creation of this fire hydrant map. The fire hydrant map is an example of innovation that is unique to Aizu Wakamatsu City, a relatively small organization that can communicate across multiple departments within the organization. The fact is that D4C is dependent on public funds because it is not monetized, citizens tend to reject the use of information due to concerns about the leakage of personal information, and the data analytics industry that makes use of D4C data has not yet been developed.

3.4 Urban OS “Aizuwakamatsu+”

Aizu Wakamatsu+ is an urban OS originally developed by Aizu Wakamatsu City, which enables the coordination of multiple service/application layers and data layers using standardized APIs. Among urban OSs, FIWARE has been adopted in increasing numbers in recent years, but it is currently used only for a single purpose. Aizu Wakamatsu+ is focusing on the standardization of APIs to enable interoperability with municipalities that use other city OSs such as FIWARE. In the past, the resident record systems that formed the basis of administrative systems needed to have interoperability and scalability with other municipalities because the specifications differed depending on the vendor adopted by each municipality.

However, if the specifications of the underlying city OS operated by local governments across the country can be standardized and made compatible and interoperable, it will be possible to operate services/applications developed by one municipality in another municipality at low cost or to provide new services that transcend city boundaries. Aizu Wakamatsu City in particular believes that the adoption of services/applications developed by local IT companies by other municipalities will lead to new business opportunities [4].

4. Smart city planning classification

This study aims to elucidate the interest-network relationships in a “retrofit smart city plan” introduced in a city where urban functions are already completed and complex interests among citizens already exist.

We created our own model based on the Smart City Demonstration Experiment typology (Figures 2 and 3) Ikeda and Ooka [5].

Figure 2.

Smart City demonstration experiment type classification. Source: [5] (Prepared by the author).

Figure 3.

Issue model in smart cities. Source: Prepared by the author with reference to the technology development model [6] (Prepared by the author) [1].

5. Problems with smart city planning

5.1 The problem of the river of evil in smart city planning

Based on a study by Kono [1], the “ river of evil “ in smart city planning is “the failure to form a council-style promotion structure” (hereinafter referred to as “council”) with the participation of various stakeholders, including local industry, government, and academia. In order to overcome the river of evil, it was found that two roles are necessary: (1) a promoter to match the solutions of the private sector with local needs and (2) an accelerator, a powerful flag-bearer to verify business models for local technology implementation in collaboration with the private sector.

5.1.1 Collaboration involving a wide range of stakeholders

Promoters to match the private sector’s solutions to local needs are the councils. The river of evil in smart city planning starts with a hazy idea from the local government. In the process of incorporating this hazy idea into a more concrete plan, a council-style promotion system involving various stakeholders, including local industry, government, and academia, is necessary. This is because it is only possible to formulate a concrete plan to address the issues by extracting the issues (needs) of the community from the council. Since retrofit-type smart cities are basically built to address issues that already exist in the community, a mechanism is needed to bring these issues (needs) to the surface. Only by examining and organizing these issues (needs) can private companies adapt their solutions to the needs and begin to introduce and develop smart city-related technologies.

5.1.2 Existence of a strong accelerator

Accelerators, which are powerful flag-bearers that work with the private sector to verify business models for local technology implementation, include consulting firms and other organizations that have the capability to lead the council. In order to match local issues (needs) with existing local resources and propose what can be done specifically, it is necessary to utilize the capabilities of organizations with expertise, such as consulting firms. The innovative solutions offered by consulting firms can be adopted as important guidelines for smart city planning, and the innovative solutions themselves can be the driving force behind smart city planning.

5.2 The problem of the valley of death in smart city planning

The valley of death in smart city planning is “the lack of a data sharing infrastructure and urban OS despite the installation of IoT sensors.” In addition to utilizing IoT sensors in individual areas to make them smarter, a mechanism must be passed that enables the aggregation and utilization of big data from each field to enable cross-field problem-solving. In order to overcome the valley of death, the roles of (1) facilitators who operate data-sharing infrastructures utilizing public citation capabilities and promote big data distribution among related entities and (2) regulators who develop institutional environments that support smart city technology deployment are important [1].

5.2.1 Strong promotion of facilitators

Facilitators who operate the data-sharing infrastructure with public citation power and promote big data distribution among related entities refer to local governments. In the valley of death in smart city planning, a decision must be made on whether or not to proceed to the commercialization phase, where the data-sharing infrastructure and urban OS are developed and services/applications are enhanced. Once in the commercialization phase, the plan must be executed with an eye toward market exit, i.e., the establishment of services/applications that operate on the data-sharing infrastructure and the city OS. First of all, a data-sharing infrastructure will be established. In order to handle citizens’ data online, appropriate risk management is necessary, and local governments need to carefully explain the risk/reward relationship of handling data online and obtain consent from citizens. It is obvious that the data sharing infrastructure may contain sensitive information and that local governments, which have been trusted by citizens for a long time for handling their sensitive information and do not pursue profit, must properly manage big data and establish rules for distribution, such as an opt-in system. In addition, the leadership of the chief executive and the funding of the local government are essential. In addition, the leadership of the sheik and the availability of funds will also be important. By encouraging the implementation of data-sharing infrastructures and urban OSs, which require huge funds, local government officials can introduce data-sharing infrastructures and urban OSs without any confusion. It is also necessary to make the use of big data, including data sharing infrastructure and urban OS, an issue in mayoral elections to attract citizens’ interest in the use of big data and to provide them with opportunities to express their will on the use of big data through voting.

5.2.2 Provision of funds to lead to the operational phase

The regulator needs to play a role in creating an institutional environment that supports the deployment of smart city technology. The main roles of the regulator, including the government, will be to provide hardware support, such as the development of an institutional environment that supports the technological deployment of smart cities, and software support, such as the relaxation of laws and regulations and provision of funds to promote the distribution of big data. Especially for local governments that are in a difficult financial situation, financial support such as government subsidies are extremely important, and subsidies are the key to whether or not local governments will be able to introduce data-sharing infrastructure and urban OS.

5.3 Darwin Sea problem in smart city planning

The Darwin Sea in smart city planning is “the lack of a gradual increase in the number of services/applications and users that are truly accepted by citizens. In order to overcome the Darwin Sea, it is important to (1) provide a demonstration field and development environment for technology and (2) play the role of an accelerator to verify business models for technology implementation in cooperation with private companies [1].

5.3.1 Dissemination to citizens, who are the main actors

Accelerators, which provide technology demonstration fields and development environments and work with private businesses to verify business models for technology implementation, mainly refer to local governments. Accelerators played the role of verifying what kind of local issues the service/application would solve from the perspective of citizens during the period of the River of Evil. However, accelerators in the Darwinian Sea period are assigned new roles, such as verifying whether services/applications have marketability and facilitating competition in the market for services/applications. More specifically, local governments need to provide not only data-sharing infrastructure, city operating systems, and standard APIs to the private sector but also information on local needs and technical and financial support. The goal is to start swimming in the Darwin sea, and at the finish line, a dramatic change awaits us, where society actually moves, and great demand is created, changing people’s lives. To achieve this, we need to devise ways to encourage as many citizens as possible to use our services/applications, and by creating a successful case study, other companies will enter the market, and the services/applications market will become more active, leading to a more advanced smart city. In the case of a gradual increase in the number of services/applications that reach Darwin’s sea stage, it will be impossible to increase the number of users without attracting not only the initially expected targets but also sub-targets. For example, even if a service/application is developed with the main target being housewives in their 30s and 40s who own smartphones, the number of users will plateau, and it will be necessary to devise a way to provide services to attract the elderly, who are the sub-target. Therefore, it will be necessary to devise new ways to provide services to attract the elderly, who are the sub-target.

5.3.2 Further investment of funds

Monetization of services/applications is the most important factor in swimming through the Darwin Sea. It is obvious that profit-seeking private companies will only be able to maintain services if a sustainable business model is established, and if it is determined that no profit can be expected, the value of smart cities will be severely damaged as people exit the market.

6. Conclusion

Relationships among the Aizu Wakamatsu Smart City are shown in Figure 4. Various stakeholders, led by Aizu Wakamatsu City, have joined to form the Smart City Promotion Council. In collaboration with the private sector, the accelerator is a major driving force behind the council. The local government will manage the data obtained through the use of apps/services by citizens. It will play the role of facilitator to explain and obtain consent from citizens to handle such data online. Then, they need to obtain government support through laws, regulations, and funding to facilitate the distribution of those big data. In addition, local governments will collaborate with private companies to promote services/applications to citizens. Municipalities should provide the private sector with data-sharing infrastructure, urban OS, standard APIs, and information on local needs, as well as technical and financial support. This indicates that it is important to actually visit the site and investigate the actual situation.

Figure 4.

Aizu Wakamatsu City network relationships and conceptual diagrams. Source: Prepared by the author.

Conflict of interest

The authors declare no conflict of interest.