Yokohama: Smart and Forward-thinking

MBA Energy Club learns from World Smart City Award-winner



With roughly 3.7 million inhabitants, the coastal city of Yokohama ranks as Japan's second most populous metropolis after Tokyo. Despite its size, however, Yokohama - which won the World Smart City Award in 2011 - stands out today as one of the world's most innovative cities.

New knowledge and technologies contributed by leading Japanese companies have helped the city develop successfully, said Shiro Hamano, Executive Director of Climate Change Policy Headquarters, who addressed members of the MBA Energy Club at a special presentation on IESE's Barcelona campus.

"It (the award) was recognition for our efforts of implementing the Smart City concept to a developed megacity, which is far harder than applying it to a new city," he said.

Established in 1859, Yokohama is relatively young. Yet its role as an international gateway to Japan and the rapid urbanization of the municipality has led to a flexible city, with active citizens willing to pursue new approaches to improving standards of living.

"Yokohama has been leveraging its active citizens to experiment with the Smart City concept and relevant technologies," said Hamano.

Prior to the creation of the Smart City concept, Yokohama had already launched an initiative to reduce city waste by 30 percent. Officials "had to have over 10,000 informative sessions with citizens every year" to gain their cooperation, which resulted in reaching the city's target in 2005, five years ahead of plan, he said.

Building on this experience, the city began advocating the benefits of the Smart City concept in a way that was understandable to citizens. City officials stressed the potential drop in households’ electricity payments, since the initiative's primary objective - a reduction of CO2 gas emission - was not a top priority for average citizens.

Other projects, which are led by a strong project team, have also started bearing fruit, he said. The introduction of the Home Energy Management System (HEMS) to some 1,000 households has led to an 8 percent reduction of electricity use through visualized usage data. This reduction could be increased to 20 percent, he said, by sending consumers Demand Responses, which are requests to save electricity usage in a certain period of time with an incentive.

Moreover, the city has been introducing electric vehicles for several purposes including car-sharing in shopping areas and visiting medical care by doctors.

Hamano said the biggest challenge the project faces is regulation related to electricity, which is complicated in Japan. Once, for example, the city came up with the idea of using solar panels already installed on a factory roof to transmit electricity during non-peak times to an adjacent hospital. However, the city faced not only the challenge of implementing the required infrastructure, but battling those who claimed the transmission was illegal. Due to existing regulations, the city has had to limit the transmission agreement to cases of emergency.

"We face a lot of challenges through the project. But we are committed to overcoming them to create value for all stakeholders - environmentally, economically and socially - and to solve urban problems the world is now facing, as a leading model of Smart City," he said.

Hamano's visit underscored IESE Business School's ties with Japan, as well as commitment to the Smart City initiative. Japan plays a key role in the school's global activities, through IESE's local Alumni Chapter in Japan and ongoing executive education initiatives carried out there.