(As prepared for delivery)
Important Partnerships Delivering Results
Thank you Mr. Ravi Parthasarathy. It’s always a pleasure to be part of CII’s deliberations and I appreciate that we have such an esteemed gathering of experts and officials to address an important and timely topic. It’s also wonderful to see Secretary Gauba, who I had the pleasure of meeting in his prior role in Ranchi. I look forward to hearing from Minister Naidu and my colleagues from the British High Commission and the Embassies of Japan, Korea and Spain.
Let me also say at the outset I appreciate the long and fruitful partnership we have had with CII to help grow the levels of bilateral trade and investment across India – and the U.S. – over recent years. Our work is proving successful.
2015, was the highest year of bilateral trade between the US and India, crossing over $107 billion, and as our Assistant Secretary of Commerce Arun Kumar reported yesterday, U.S. companies have invested $15 billion in the past 2 years, and will sign deals worth some $27 billion in the next two years. And, thanks to a CII report published last year, we know the extent of Indian companies’ investments in the US – also topping $15 billion, with 100 companies spread across 35 states, and employing nearly 100,000 Americans.
We aim to deepen and broaden that economic and trade relationship across multiple domains, and I am excited about potential new announcements that could come in the next few weeks. All of these initiatives have at their root a commitment to improve the economic condition and opportunities for people in both our countries, particularly for those looking to advance up the economic ladder.
We have been a close partner with the GOI on a wide range of its initiatives, .but we are particularly excited on our work together on Smart Cities – an aim to make India’s cities more efficient, cleaner, safer, heathier, greener, and modern.
The Trends Driving Us to Focus on Smart Cities
The world is undergoing a demographic transition unprecedented in history. Urbanization is increasing across the world, including and especially here in India, as more and more people flock to metropolises in search of greater opportunity and a better future.
Technological innovations are transforming society, facilitating greater migration from rural areas. Affordable transportation networks enable people to move more easily from rural to urban areas. The spread of cellular networks/advances in communications technology have exposed rural populations to the allure of cities. Changing weather patterns and rising temperatures are affecting economic conditions, prompting flight to cities.
The ongoing shift in population from rural to urban areas is unprecedented in human history. A hundred years ago, just 2 out of 10 people lived in cities. Today, more than half of the world’s population lives in cities. Worldwide, approximately 200,000 people per day are migrating from rural to urban areas. This is uncharted territory. By 2050, 70 percent of the world’s population will live in cities, and the most rapid growth will be in Asia and Africa, and of course, right here in India.
300 million people are expected to move to India’s rapidly expanding cities over the next 20 years – roughly the entire population of the United States. India’s urban population will grow more rapidly than in China, South America, or the West. India will soon lead the world in the growth of megacities (cities with more than 10 million people) by 2030.
70-80% of Indian cities are yet to be built, according to a McKinsey report. The combined market potential for smart infrastructure in segments of energy, transportation, water, healthcare, and governance is enormous: upwards of $1.5 trillion dollars over the next 5 years according to a recent industry study.
The fact is India will be one of the world’s leaders in the growth of its cities in the coming years – at a scale and pace that few have witnessed before. This will present enormous challenges and opportunities. Challenges on governance, safety, pollution, health and order. But also significant opportunities. This is why the Prime Minister’s Smart Cities initiative is so important – so India’s urban centers can be transformed for those who live there.
What Are We Doing About It?
I’m proud of the role that the US has played in the Smart Cities initiative, and we are pleased to share our experience in this area. And American consumers, companies and cities have been leaders in the smart city arena.
According to a Forbes Magazine profile, New York City is turning its phone booths into Wifi hotspots, as the city sets out to build the world’s largest wifi network; San Francisco now has 100 charging stations across the city to promote hybrid and electric cars; citizens in Boston can use 5 different municipal aps to report problems in their neighborhood or find parking, and Seattle residents can monitor their own power usage on any given day — and make adjustments through their handheld devices.
On a typical day in Washington where I’m from, a resident might travel to work using a neighborhood bike share, ride on a new bike lane to the metro, knowing in advance whether bikes were available and whether the metro had any delays; at work he might pay his utility bill, order groceries, turn up the heat in his house, and use Uber to get home, and of course, with the driver avoiding those roads that were too congested — information provided to him in real-time on his smart phone.
There is no turning back on the smart cities revolution – it’s not just the big cities; citizens across America, and now across the globe are demanding smarter, more connected and efficient living spaces.
So, what are we doing here in India to share our experiences? We are pleased to be the leading partner in helping to develop three cities in particular: Vizag, Ajmer and Allahabad.
Representatives from the Commerce Department, State Department, USAID, the U.S. Trade Development Agency (USTDA) and the Department of Energy have been involved in multiple efforts with all three cities.
We are also using our convening power to enlist the support of U.S. government finance agencies such as EXIM and OPIC, and also partnering with major Indian business associations such as CII. CII helped organize the first major US industry engagement in Vizag last April; and we have followed up with our own trade mission to India with eighteen U.S. technology and infrastructure companies presenting their solutions on a trade mission across India earlier this year, led by the Deputy Sec of Commerce. And USTDA led a reverse trade mission with officials from the Ministry of Urban Development to the US to see our smart cities in action.
We have also established with our Indian counterparts an “Infrastructure Collaboration Platform” which facilitates private sector participation in Indian infrastructure projects. This consortium of over 30 companies markets specific capabilities that support key components of smart city projects: energy, especially renewables and smart grid technologies; water and sanitation; safety and security; transportation; and healthcare.
Smart City Focus Areas Going Forward?
Let me mention three specific areas on which we should focus in the months ahead:
Local Solutions and Careful Planning – While we want projects to be scalable and we shouldn’t have to reinvent the wheel every time we roll out a new project, the projects do have to be based on locally needed and driven solutions.
That means really understanding what the needs are and what the local community actually wants. I saw this first hand in Vizag, where careful polling and detailed discussions with community groups was undertaken to ensure that the ideas initiated were actually what would best serve the community. This resulted in a well thought out plan that citizens, officials and companies can follow and assess progress. After all, Smart Cities are not destinations, but are part of a process; they are all about continuous collaboration among public and private stakeholders to improve the quality of life for urban dwellers.
Innovation, Technology and Good Governance – Smart cities must continue to use and benefit from the latest advances in innovation and advanced technologies. I had the great privilege to be in Silicon Valley when Prime Minister Modi was there last fall. I heard him speak in several different forums about innovation. He called for bringing together the best minds of India and the United States, who could use the latest advances in science and technology to solve our two countries’ – and the world’s – biggest challenges. In short, he encouraged all of us to look at ways to harness our great networks of entrepreneurs and innovators to improve the condition of ordinary people. He said, “In this digital age, we have an opportunity to transform the lives of people in ways that were hard to imagine just a couple of decades ago.”
But we can’t think of technology as a panacea – it is not a cure-all, and we cannot forget that the fundamentals are still essential. The trusted relationships that we form, the ability to build consensus, and our ability to hear and understand each other still form the core of our interactions and no device or smart application can substitute for that interaction. An app, for example, cannot replace a town hall meeting or eliminate the need for citizens to meet face to face with city and government officials when necessary. Relationships matter. Building trust is imperative. Good governance will continue to be essential.
But as I’ve said before, technology can be the accelerator, the connector and the enabler. I’ve seen first-hand what our companies are doing and the good that our technologies and know-how can provide. We are grateful for all of these efforts.
We also have to keep in mind that the innovations and technologies don’t always come from the large and well-known companies. We have, for example, seen young women from a slum area in Mumbai develop a safety app with a GPS locator and panic function to improve women’s safety; we’ve seen tech innovations from high-schoolers in Chennai who developed an app to help citizens get rid of trash by creating an online marketplace; and I’ve seen what many health NGOs have rolled out in terms of digital health to get advanced diagnostics and treatment for those who could not travel to a clinic or hospital.
These are just a few of the countless important innovations being developed by young Indians and Americans every day. We have to continue to seek-out, support and foster this spirit of innovation in both our countries.
Financing – The biggest challenge consistently identified by our companies and stakeholders relates to financing infrastructure and smart city projects in India.
The Ministry of Urban Development is starting to capitalize the Smart City program with funds for the first tranche winners of its challenge competition, and has mandated that cities establish Special Purpose Vehicles for project management and implementation. These are very positive steps that have resonated with our companies seeking clarity on the path forward.
We have a productive dialogue with the central government and individual states on project finance strategies, including the potential use of municipal bonds and improved Public Private Partnership frameworks. But much remains to be done to attract the levels of private capital and develop the kinds of innovative financing mechanisms that can support large-scale – and often expensive – sustainable urban infrastructure projects. Making progress on all the ease of doing business indicators will continue to be essential in attracting, maintaining and growing investments in Indian smart cities. We are proud to be your partner in smart cities. It is a critically important initiative. We are also proud and grateful for our collaboration with CII and the Ministry. Great things are possible in the months and years ahead with continued innovation, careful planning, hard work, and community involvement. We are excited about the possibilities that lie ahead not only for our businesses, but for the chance to help transform the way people live.