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How six companies are using technology and data to transform themselves

The next normal: The recovery will be digital

A study referenced in the popular magazine Psychology Today concluded that it takes an average of 66 days for a behavior to become automatic. If that’s true, that’s good news for business leaders who have spent the past five months running their companies in ways they never could have imagined. The COVID-19 pandemic is a full-stop on business as usual and a launching pad for organizations to become virtual, digital-centric, and agile—and to do it all at lightning-fast speed.

Now, as leaders look ahead to the next year and beyond, they’re asking: How do we keep this momentum going? How do we take the best of what we’ve learned and put into practice throughout the pandemic, and make sure it’s woven into everything we do going forward? “Business leaders are saying that they’ve accomplished in 10 days what used to take them 10 months,” says Kate Smaje, a senior partner and global co-leader of McKinsey Digital . “That kind of speed is what’s unleashing a wave of innovation unlike anything we’ve ever seen.”

“The crisis has forced every company into a massive experiment in how to be more nimble, flexible, and fast.” Kate Smaje, senior partner, McKinsey & Company

That realization is coming not a moment too soon. Even before the global health crisis hit, 92 percent of company leaders surveyed by McKinsey thought that their business model would not remain viable at the rates of digitization at that time. The pandemic just put that whole scenario on steroids. The companies that are leading the way out of this crisis, the ones that will grab market share and set the tone and tempo for others, are the ones first out of the gate. “The fundamental reality is that the accelerating speed of digital means that we are increasingly living in a winner-take-all world,” Smaje says. “But simply going faster isn’t the answer. Rather, winning companies are investing in the tech, data, processes, and people to enable speed through better decisions and faster course corrections based on what they learn.”

Large incumbents who are winning the digital transformation battle get lots of things right. But McKinsey research has highlighted a few elements that really stand out:

• Digital speed. Leading companies just operate faster, from reviewing strategies to allocating resources. For example, they reallocate talent and capital four times more quickly than their peers.
• Ready to reinvent. While businesses need to maintain the profitable elements of their business, business as usual is a dangerous posture. Leading businesses are investing as much in upgrading the core of their business as they are in innovation, often by harnessing technology.
• All in. These companies aren’t just making decisions faster; the decisions themselves are bolder. Two of the most important areas where this kind of commitment shines through are major acquisitions (leaders spend three times more than their peers) and capital bets (leaders spend two times what their peers do).
• Data-driven decisions. “The road to recovery is paved with data,” Smaje says. Data is providing the fuel to power better and faster decisions. High-performing organizations are three times more likely than others to say their data and analytics initiatives have contributed at least 20 percent to EBIT (from 2016–19).
• Customer followers. Being “customer centric” is well established. But competing pressures and priorities mean that the customer can often be sidelined. Top companies that sustain a comprehensive focus on the customer (in addition to operational and IT improvements) can generate economic gains ranging from 20 to 50 percent of the cost base.

The companies you’re going to meet here are adopting and deploying these digital strategies and approaches at warp speed. Aside from moving thousands of employees from the office, call center, and factory floor to home overnight, they’re using these technologies to rejigger supply chains, stand up entirely new e-commerce channels, and leverage AI and predictive analytics to unearth smarter and more sustainable ways to operate.

I have clients saying that they’ve accomplished in 10 days what used to take them 10 months. Kate Smaje, senior partner, McKinsey & Company

Speed of digital

Most people don’t think of real estate as a particularly tech-savvy sector, but RXR Realty is proving that assumption wrong. Even before the pandemic hit, the New York City–based commercial and residential real estate developer began investing in the digital capabilities that would set it apart from competitors. “Historically, real estate has been a very transactional business,” explains Scott Rechler, CEO of RXR. “We felt that by leveraging our digital skills, we could create a unique and personalized experience for our customers similar to what they’re used to in other aspects of their lives.”

Prior to the global health crisis, RXR had established a digital lab . The company now has more than 100 data scientists, designers, and engineers across the organization working on digital initiatives. The investment in those capabilities—an app that enables move scheduling, deliveries, dog walking, and rent payments on the residential side, and real-time analytics on heating, cooling, and floor space optimization for tenants on the commercial side—allowed RXR to pivot quickly once the pandemic hit. Suddenly, physical distancing and the need for contactless interactions became paramount for RXR’s tenants.

Today, this team is working around the clock to put in place the health and safety protocols that allow tenants to feel safe as they return to the office. Its platform—RxWell—includes a new mobile app that provides information about air quality and occupancy levels of a building, cleaning status, food delivery options, and shift times for worker arrivals. Employees have their temperatures taken via thermal scanners when they enter a building, and heat maps are available online that show how full a restroom or conference room is at any given time. “The investments we made in our digital capabilities before the pandemic are why we’re able to give people peace of mind now as they begin to return to work,” Rechler says.

Reinventing yourself

The exponential growth in digitization coupled with consumer dissatisfaction with traditional brick-and-mortar banking has been driving the launch of fintechs with amazing speed over the past decade. That fact wasn’t lost on investment banking giant Goldman Sachs, which launched Marcus by Goldman Sachs in 2016. Marcus, the firm’s digital consumer business is, as global head Harit Talwar likes to describe it, “a 150-year-old startup that allows people to take control of their financial lives from their phone.” Over the past four years, this digital-first business has grown deposits to $92 billion and $7 billion in lending balances through a combination of organic growth, acquisitions, and partnerships with the likes of Apple and Amazon. Marcus has millions of customers in the United States and United Kingdom.

A digital-first philosophy, Talwar says, means that decisions on new products and services happen quickly. For instance, when the pandemic hit, Marcus realized that some of its customers were going to need assistance. The team decided to allow folks to defer payments on loans and credit cards for several months, without accruing interest. “The real news is not that we did this, but that we took just 72 hours from the time we realized customers needed help to when we rolled it out,” Talwar says. “We were able to do this because of our agile digital technology model.”

For Indonesian mining company Petrosea, the stakes involved in digital transformation were nothing less than survival. Industry changes, increased regulatory requirements, and society’s pushback on mining’s environmental footprint had culminated in what President Director Hanifa Indradjaya calls “an existential threat” for the company. “We’re not the biggest player in the industry, so that left us quite vulnerable,” he says. “If we were to survive, the status quo was not an option.”

In 2018, the company embarked on a three-pronged approach that addressed diversification away from coal, digitization, and decarbonization of its operations. At its Tabang project site, located in a remote area of East Kalimantan, Indonesia, the company employed a suite of advanced technologies, including artificial intelligence (AI) , smart sensors, and machine learning. The sensors enable predictive maintenance of its fleets of trucks, allowing the company to use fewer trucks and address breakdowns before they happen.

To move away from coal and toward copper, nickel, gold, and lithium—the minerals that are required as electrification of developing countries continues—the company is developing a suite of AI-enabled digital technologies to find these metals faster and more efficiently. Addressing its considerable reskilling needs—the majority of Tabang’s workers have no more than a high school education—resulted in the development of a mobile app with popular gamification elements, ensuring that employees would stay engaged and complete their training. The upshot: within six months, Tabang became one of the company’s most profitable operations by reducing costs and increasing production. “Technology enabled us to innovate our business model and remain relevant,” Indradjaya says. “A digital mindset now percolates through every aspect of the company.”

Data-driven decisions

Freeport-McMoRan is combining the power of AI and the institutional knowledge  of its veteran engineers and metallurgists to take its operations to another level. Harry “Red” Conger, chief operating officer of the Phoenix-based company, says real-time data is allowing Freeport to lower operating costs, stand more resilient in tough economic climates (and when commodity prices are falling) and make faster decisions. “A learn-fast culture means we put things into action,” he says. “We don’t sit around thinking about it.”

Case in point: in 2018, Freeport was looking to add capacity at one of its more efficient copper mines—the sprawling complex in Bagdad, Arizona. A $200 million expansion plan, it figured, would enable the company to extract more copper from the site. But a few months later, copper prices dropped—and so, too, was the expensive expansion plan.

Quickly, the company figured out another way. Rather than a huge capital outlay, Freeport began building out an AI model that would allow it to wring more productivity out of the Bagdad site. Decades of mining data—what Conger calls “recipes”—had always dictated the mining process, including how machines and other equipment were run. Data scientists were now being brought in to challenge those long-standing processes.

“Our engineers thought that it was blasphemy that data scientists, who don’t know anything about metallurgy, were proposing that they knew how to run the plant better than they did,” Conger says. But what the AI data showed was that some of the historical recipes were limiting what Freeport was getting out of the Bagdad plant. “The AI model was telling us how much faster the equipment could be run and its maximum capacity,” he adds. By analyzing every aspect of the mining process, the AI models were showing what was possible.

The engineers and metallurgists worked hand in hand with the data scientists. Over the next few months, they began to trust more of the AI recommendations on how to optimize the Bagdad plant. Today, the mine’s processing rate is 10 percent higher than it’s ever been, Conger says, and this same agile AI model is being used at eight of the company’s other mines, including one in Peru that has five times the capacity of Bagdad. Says Conger: “I have people tell me this is the only way they want to work.”

A follow-the-customer mindset

One of the biggest transformations that’s occurred throughout the pandemic is how customers shop. Store closings pushed millions of consumers online, many for the first time. Adapting to this shift quickly and seamlessly became the order of the day for so many retailers the world over. Among them: Levi Strauss and Majid Al Futtaim Retail.

As a company that’s been around for more than 100 years, Levi Strauss knows how to pace itself. But the pandemic threw into overdrive initiatives that were planned out for later this year and beyond. Chief Financial Officer Harmit Singh says the San Francisco–based apparel company was ready. Investments in digital technologies, including AI and predictive analytics, before the pandemic hit allowed Levi’s to react quickly and decisively as consumers switched to e-commerce channels in droves.

To meet demand, the company began fulfilling online orders not just with merchandise in fulfillment centers but from its stores. Prior to the health crisis, Singh says it would have taken weeks or months to work out the logistics of such a move, but as the pandemic rolled across the country, Levi’s was able to accomplish the shift in a matter of days. It quickly launched curbside pickup at about 80 percent of its roughly 200 US-based stores. And while it launched its mobile app before the appearance of COVID-19, the company has leveraged it in creative ways to connect with consumers during the pandemic. “It was important for us to enhance our engagement and stay connected with customers who were at home,” he says.

Even before the global health crisis hit, 92 percent of company leaders surveyed by McKinsey thought that their business model would not remain viable at the rates of digitization at that time.

Last year, Levi’s began making investments in AI and data in order to get a better handle on when and how to run promotions. A campaign that ran in May throughout Europe was launched using information gleaned from an AI model and wound up driving sales that were five times higher than in 2019. “AI gives us the ability to quickly transform data and facts into action,” Singh says. “We’re using this intelligence alongside our own consumer expertise and judgment to drive better results.”

Majid Al Futtaim, the Dubai-based conglomerate that operates the Carrefour grocery chain in the Middle East, Africa, and Asia, was building its digital muscle long before COVID-19. It decided back in 2015 that it needed to be as prominent online as it is in its 315 brick-and-mortar stores across 16 countries, says Hani Weiss, CEO of Majid Al Futtaim Retail. The company was making progress, but Weiss says there was little urgency to move any faster.

Then the pandemic hit. Online grocery orders for the company exploded, and they are now 400 percent higher than what they were in 2019. “The pandemic pushed us to accelerate our digital transformation,” Weiss says. “We are implementing in the coming 18 months things we originally said we wanted to achieve in five years.”

To accommodate increased online shopping demand, the company quickly converted some physical stores to fulfillment centers. When data showed that more capacity was needed, logistics managers quickly arranged to have a 54,000-square-foot online fulfillment center tent erected and operational in five weeks. Complete with rooms for frozen and chilled food, the facility stocks more than 8,000 items and is now handling 3,000 online orders a day, making it the latest and largest of 75 fulfillment centers launched this year.

Weiss says the company expanded delivery services through initiatives such as Click and Collect, redesigned its app to make it easier for customers to use, and launched contactless payment options such as Mobile Scan and Go in its stores, which allow customers to scan items on, and pay with, their smartphones. It also launched an online marketplace with 420,000 new products from other retailers whose stores were closed during the lockdown, enabling them to continue to sell their products online.

“No matter how our customers want to shop, we can be there for them,” Weiss says. “We developed this agility through the pandemic, and I want to keep it as we go forward.”

The road ahead will certainly have challenges, these leaders acknowledge. But there’s also a tremendous amount of hope because of the doors that a digital-first strategy can open. “The companies that are winning aren’t making incremental improvements,” Smaje says. “They’re harnessing technology to reimagine how business runs and committing resources at sufficient scale to make sure the change sticks.”

Go behind the scenes and get more insights with “ Kate Smaje: Why businesses must act faster than ever on digitization ” from our New at McKinsey blog.

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Case study on adoption of new technology for innovation: Perspective of institutional and corporate entrepreneurship

Asia Pacific Journal of Innovation and Entrepreneurship

ISSN : 2398-7812

Article publication date: 7 August 2017

This paper aims at investigating the role of institutional entrepreneurship and corporate entrepreneurship to cope with firm’ impasses by adoption of the new technology ahead of other firms. Also, this paper elucidates the importance of own specific institutional and corporate entrepreneurship created from firm’s norm.

Design/methodology/approach

The utilized research frame is as follows: first, perspective of studies on institutional and corporate entrepreneurship are performed using prior literature and preliminary references; second, analytical research frame was proposed; finally, phase-based cases are conducted so as to identify research objective.

Kumho Tire was the first tire manufacturer in the world to exploit the utilization of radio-frequency identification for passenger carâ’s tire. Kumho Tire takes great satisfaction in lots of failures to develop the cutting edge technology using advanced information and communication technology cultivated by heterogeneous institution and corporate entrepreneurship.

Originality/value

The firm concentrated its resources into building the organization’s communication process and enhancing the quality of its human resources from the early stages of their birth so as to create distinguishable corporate entrepreneurship.

• Corporate entrepreneurship
• Institutional entrepreneurship

Han, J. and Park, C.-m. (2017), "Case study on adoption of new technology for innovation: Perspective of institutional and corporate entrepreneurship", Asia Pacific Journal of Innovation and Entrepreneurship , Vol. 11 No. 2, pp. 144-158. https://doi.org/10.1108/APJIE-08-2017-031

Emerald Publishing Limited

Copyright © 2017, Junghee Han and Chang-min Park.

Published in the Asia Pacific Journal of Innovation and Entrepreneurship . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial & non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licenses/by/4.0/legalcode

1. Introduction

Without the entrepreneur, invention and new knowledge possibly have lain dormant in the memory of persons or in the pages of literature. There is a Korean saying, “Even if the beads are too much, they become treasure after sewn”. This implies importance of entrepreneurship. In general, innovativeness and risk-taking are associated with entrepreneurial activity and, more importantly, are considered to be important attributes that impact the implementation of new knowledge pursuing.

Implementation of cutting edge technology ahead of other firms is an important mechanism for firms to achieve competitive advantage ( Capon et al. , 1990 ; D’Aveni, 1994 ). Certainly, new product innovation continues to play a vital role in competitive business environment and is considered to be a key driver of firm performance, especially as a significant form of corporate entrepreneurship ( Srivastava and Lee, 2005 ). Corporate entrepreneurship is critical success factor for a firm’s survival, profitability and growth ( Phan et al. , 2009 ).

The first-mover has identified innovativeness and risk-taking as important attributes of first movers. Lumpkin and Dess (1996) argued that proactiveness is a key entrepreneurial characteristic related to new technology adoption and product. This study aims to investigate the importance of corporate and institutional entrepreneurship through analyzing the K Tire’s first adaptation of Radio-frequency identification (RFID) among the world tire manufactures. Also, this paper can contribute to start ups’ readiness for cultivating of corporate and institutional entrepreneurship from initial stage to grow and survive.

K Tire is the Korean company that, for the first time in the world, applied RFID to manufacturing passenger vehicle tires in 2013. Through such efforts, the company has built an innovation model that utilizes ICTs. The adoption of the technology distinguishes K Tire from other competitors, which usually rely on bar codes. None of the global tire manufacturers have applied the RFID technology to passenger vehicle tires. K Tire’s decision to apply RFID to passenger vehicle tires for the first time in the global tire industry, despite the uncertainties associated with the adoption of innovative technologies, is being lauded as a successful case of innovation. In the global tire market, K Tire belongs to the second tier, rather than the leader group consisting of manufacturers with large market shares. Then, what led K Tire to apply RFID technology to the innovation of its manufacturing process? A company that adopts innovative technologies ahead of others, even if the company is a latecomer, demonstrates its distinguishing characteristics in terms of innovation. As such, this study was motivated by the following questions. With regard to the factors that facilitate innovation, first, what kind of the corporate and institutional situations that make a company more pursue innovation? Second, what are the technological situations? Third, how do the environmental situations affect innovation? A case study offers the benefit of a closer insight into the entrepreneurship frame of a specific company. This study has its frame work rooted in corporate entrepreneurship ( Guth and Ginsberg, 1990 ; Shane and Venkataraman, 2000 ) and institutional entrepreneurship ( Battilana, 2006 ; Fligstein, 1997 ; Rojas, 2010 ). As mentioned, we utilized qualitative research method ( Yin, 2008 ). This paper is structured as follows. Section two presents the literature review, and section three present the methodology and a research case. Four and five presents discussion and conclusions and implications, respectively.

2. Theoretical review and analysis model

RFID technology is to be considered as not high technology; however, it is an entirely cutting edged skills when combined with automotive tire manufacturing. To examine why and how the firm behaves like the first movers, taking incomparable high risks to achieve aims unlike others, we review three kinds of prior literature. As firms move from stage to stage, they have to revamp innovative capabilities to survive and ceaseless stimulate growth.

2.1 Nature of corporate entrepreneurship

Before reviewing the corporate entrepreneurship, it is needed to understand what entrepreneurship is. To more understand the role that entrepreneurship plays in modern economy, one need refer to insights given by Schumpeter (1942) or Kirzner (1997) . Schumpeter suggests that entrepreneurship is an engine of economic growth by utilization of new technologies. He also insists potential for serving to discipline firms in their struggle to survive gale of creative destruction. While Schumper argued principle of entrepreneurship, Kirzner explains the importance of opportunities. The disruptions generated by creative destruction are exploited by individuals who are alert enough to exploit the opportunities that arise ( Kirzner, 1997 ; Shane and Venkataraman, 2000 ).

Commonly all these perspectives on entrepreneurship is an appreciation that the emergence of novelty is not an easy or predictable process. Based on literature review, we note that entrepreneurship is heterogeneous interests and seek “something new” associated with novel outcomes. Considering the literature review, we can observe that entrepreneurship is the belief in individual autonomy and discretion, and a mindset that locates agency in individuals for creating new activities ( Meyer et al. ,1994 ; Jepperson and Meyer, 2001 ).

the firm’s commitment to innovation (including creation and introduction of products, emphasis on R&D investments and commitment to patenting);

the firm’s venturing activities, such as entry into new business fields by sponsoring new ventures and creating new businesses; and

strategic renewal efforts aimed at revitalizing the firm’s ability to compete.

developing innovation an organizational tool;

allowing the employees to propose ideas; and

encouraging and nurturing the new knowledge ( Hisrich, 1986 ; Kuratko, 2007 ).

Consistent with the above stream of research, our paper focuses on a firm’s new adaptation of RFID as a significant form of corporate entrepreneurial activity. Thus, CE refers to the activities a firm undertakes to stimulate innovation and encourage calculated risk taking throughout its operations. Considering prior literature reviews, we propose that corporate entrepreneurship is the process by which individuals inside the organization pursuing opportunities without regards to the resources they control.

If a firm has corporate entrepreneurship, innovation (i.e. transformation of the existing firm, the birth of new business organization and innovation) happens. In sum, corporate entrepreneurship plays a role to pursue to be a first mover from a latecomer by encompassing the three phenomena.

2.2 Institution and institutional entrepreneurship

Most literature regarding entrepreneurship deals with the attribute of individual behavior. More recently, scholars have attended to the wider ecosystem that serves to reinforce risk-taking behavior. Institution and institutional entrepreneurship is one way to look at ecosystem that how individuals and groups attempt to try to become entrepreneurial activities and innovation.

Each organization has original norm and intangible rules. According to the suggestion by Scott (1995) , institutions constrain behavior as a result of processes associated with institutional pillars. The question how actors within the organizations become motivated and enabled to transform the taken-for-granted structures has attracted substantial attention for institutionalist. To understand why some firms are more likely to seek innovation activities despite numerous difficulties and obstacles, we should take look at the institutional entrepreneurship.

the regulative, which induces worker’s action through coercion and formal sanction;

the normative, which induces worker’s action through norms of acceptability and ethics; and

the cognitive, which induces worker’s action through categories and frames by which actors know and interpret their world.

North (1990) defines institutions as the humanly devised constraints that structure human action. Actors within some organization with sufficient resources have intend to look at them an opportunity to realize interests that they value highly ( DiMaggio, 1988 ).

It opened institutional arguments to ideas from the co-evolving entrepreneurship literature ( Aldrich and Fiol, 1994 ; Aldrich and Martinez, 2001 ). The core argument of the institutional entrepreneurship is mechanisms enabling force to motivate for actors to act difficult task based on norm, culture and shared value. The innovation, adopting RFID, a technology not verified in terms of its effectiveness for tires, can be influenced by the institution of the society.

A firm is the organizations. An organization is situated within an institution that has social and economic norms. Opportunity is important for entrepreneurship. The concept of institutional entrepreneurship refer to the activities of worker or actor who have new opportunity to realize interest that they values highly ( DiMaggio, 1988 ). DiMaggio (1988) argues that opportunity for institutional entrepreneurship will be “seen” and “exploited” by within workers and not others depending on their resources and interests respectively.

Despite that ambiguity for success was given, opportunity and motivation for entrepreneurs to act strategically, shape emerging institutional arrangements or standards to their interests ( Fligstein and Mara-Drita, 1996 ; Garud et al. , 2002 ; Hargadon and Douglas, 2001 ; Maguire et al. , 2004 ).

Resource related to opportunity within institutional entrepreneurship include formal or informal authority and power ( Battilana, 2006 ; Rojas, 2010 ). Maguire et al. (2004) suggest legitimacy as an important ingredient related to opportunity for institutional entrepreneurship. Some scholars suggest opportunity resources for institutional entrepreneurship as various aspects. For instance, Marquire and Hardy (2009) show that knowledge and expertise is more crucial resources. Social capital, including market leadership and social network, is importance resource related to opportunity ( Garud et al. , 2002 ; Lawrence et al. , 2005 ; Townley, 2002 ). From a sociological perspective, change associated with entrepreneurship implies deviations from some norm ( Garud and Karnøe, 2003 ).

Institutional entrepreneurship is therefore a concept that reintroduces agency, interests and power into institutional analyses of organizations. Based on the previous discussion, this study defines institution as three processes of network activity; coercion and formal sanction, normative and cognitive, to acquire the external knowledge from adopting common goals and rules inside an organization. It would be an interesting approach to look into a specific company to see whether it is proactive towards adopting ICTs (e.g. RFID) and innovation on the basis of such theoretical background.

2.3. Theoretical analysis frame

Companies innovate themselves in response to the challenges of the ever-changing markets and technologies, so as to ensure their survival and growth ( Tushman and Anderson, 1986 ; Tidd and Bessant, 2009 ; Teece, 2014 ). As illustrated above, to achieve the purpose of this study, the researcher provides the following frames of analyses based on the theoretical background discussed above ( Figure 1 ).

3. Case study

3.1 methodology.

It is a highly complicated and tough task to analyze the long process of innovation at a company. In this paper, we used analytical approach rather than the problem-oriented method because the case is examined to find and understand what has happened and why. It is not necessary to identify problems or suggest solutions. Namely, this paper analyzes that “why K Tire becomes a first mover from a late comer through first adoption of RFID technology for automotive tire manufacture with regards to process and production innovations”.

To study the organizational characteristics such as corporate entrepreneurship, institutional entrepreneurship, innovation process of companies, the qualitative case study is the suitable method. This is because a case study is a useful method when verifying or expanding well-known theories or challenging a specific theory ( Yin, 2008 ). This study seeks to state the frame of analysis established, based on previously established theories through a single case. K Tire was selected as the sample because it is the first global tire manufacturer, first mover to achieve innovation by developing and applying RFID.

The data for the case study were collected as follows. First, this study was conducted from April 2015 to the end of December 2015. Additional expanded data also were collected from September 12 to November 22, 2016, to pursue the goal of this paper. Coauthor worked for K Tire for more than 30 year, and currently serves as the CEO of an affiliate company. As such, we had the most hands-on knowledge and directed data in the process of adoption RFID. This makes this case study a form of participant observation ( Yin, 2008 ). To secure data on institutional entrepreneurship, in-depth interviews were conducted with the vice president of K Tire. The required data were secured using e-mail, and the researchers accepted the interviewees’ demand to keep certain sensitive matters confidential. The interviewees agreed to record the interview sessions. In this way, a 20-min interview data were secured for each interviewee. In addition, apart from the internal data of the subject company, other objective data were obtained by investigating various literatures published through the press.

3.2 Company overview

In September 1960, K Tire was established in South Korea as the name of Samyang Tire. In that time, the domestic automobile industry in Korea was at a primitive stage, as were auto motive parts industries like the tire industry. K Tire products 20 tires a day, depending on manual labor because of our backward technology and shortage of facilities.

The growth of K Tire was astonishment. Despite the 1974 oil shock and difficulties in procuring raw materials, K Tire managed to achieve remarkable growth. In 1976, K Tire became the leader in the tire sector and was listed on the Korea Stock Exchange. Songjung plant II was added in 1977. Receiving the grand prize of the Korea Quality Control Award in 1979, K Tire sharpened its corporate image with the public. The turmoil of political instability and feverish democratization in the 1980s worsened the business environment. K Tire also underwent labor-management struggles but succeeded in straightening out one issue after another. In the meantime, the company chalked up a total output of 50 million tires, broke ground for its Koksung plant and completed its proving ground in preparation for a new takeoff.

In the 1990s, K Tire expanded its research capability and founded technical research centers in the USA and the United Kingdom to establish a global R&D network. It also concentrated its capabilities in securing the foundation as a global brand, by building world-class R&D capabilities and production systems. Even in the 2000s, the company maintained its growth as a global company through continued R&D efforts by securing its production and quality capabilities, supplying tires for new models to Mercedes, Benz, Volkswagen and other global auto manufacturers.

3.3 Implementation of radio-frequency identification technology

RFID is radio-frequency identification technology to recognize stored information by using a magnetic carrier wave. RFID tags can be either passive, active or battery-assisted passive (BAP). An active tag has an on-board battery and periodically transmits its ID signal. A BAP has a small battery on board and is activated when in the presence of an RFID reader. A passive tag is cheaper and smaller because it has no battery; instead, the tag uses the radio energy transmitted by the reader. However, to operate a passive tag, it must be illuminated with a power level roughly a thousand times stronger than for signal transmission. That makes a difference in interference and in exposure to radiation.

an integrated circuit for storing and processing information, modulating and demodulating a radio frequency signal, collecting DC power from the incident reader signal, and other specialized functions; and

an antenna for receiving and transmitting the signal.

capable of recognizing information without contact;

capable of recognizing information regardless of the direction;

capable of reading and saving a large amount of data;

requires less time to recognize information;

can be designed or manufactured in accordance with the system or environmental requirements;

capable of recognizing data unaffected by contamination or the environment;

not easily damaged and cheaper to maintain, compared with the bar code system; and

tags are reusable.

3.3.1 Phase 1. Background of exploitation of radio-frequency identification (2005-2010).

Despite rapid growth of K Tire since 1960, K Tire ranked at the 13th place in the global market (around 2 per cent of the global market share) as of 2012. To enlarge global market share is desperate homework. K Tire was indispensable to develop the discriminated technologies. When bar code system commonly used by the competitors, and the industry leaders, K Tire had a decision for adoption of RFID technology instead of bar code system for tires as a first mover strategy instead of a late comer with regard to manufacture tires for personal vehicle. In fact, K Tire met two kinds of hardship. Among the top 20, the second-tier companies with market shares of 1-2 per cent are immersed in fiercer competitions to advance their ranks. The fierceness of the competition is reflected in the fact that of the companies ranked between the 11th and 20th place, only two maintained their rank from 2013.

With the demand for stricter product quality control and manufacture history tracking expanding among the auto manufacturers, tire manufacturers have come to face the need to change their way of production and logistics management. Furthermore, a tire manufacturer cannot survive if it does not properly respond to the ever stricter and exacting demand for safe passenger vehicle tires of higher quality from customers and auto manufacturers. As mentioned above, K Tire became one of the top 10 companies in the global markets, recording fast growth until the early 2000. During this period, K Tire drew the attention of the global markets with a series of new technologies and innovative technologies through active R&D efforts. Of those new products, innovative products – such as ultra-high-performance tires – led the global markets and spurred the company’s growth. However, into the 2010s, the propriety of the UHP tire technology was gradually lost, and the effect of the innovation grew weaker as the global leading companies stepped forward to take the reign in the markets. Subsequently, K Tire suffered from difficulties across its businesses, owing to the failure to develop follow-up innovative products or market-leading products, as well as the aggressive activities by the company’s hardline labor union. Such difficulties pushed K Tire down to the 13th position in 2014, which sparked the dire need to bring about innovative changes within the company.

3.3.2 Phase 2. Ceaseless endeavor and its failure (2011-2012).

It needs to be lightweight : An RFID tag attached inside a vehicle may adversely affect the weight balance of the tires. A heavier tag has greater adverse impact on the tire performance. Therefore, a tag needs to be as light as possible.

It needs to be durable : Passenger vehicle tires are exposed to extensive bending and stretching, as well as high levels of momentum, which may damage a tag, particularly causing damage to or even loss of the antenna section.

It needs to maintain adhesiveness : Tags are attached on the inner surface, which increase the possibility of the tags falling off from the surface while the vehicle is in motion.

It needs to be resistant to high temperature and high pressure : While going through the tire manufacture process, a tag is exposed to a high temperature of around 200°C and high pressure of around 30 bars. Therefore, a tag should maintain its physical integrity and function at such high pressure and temperature.

It needs to be less costly : A passenger vehicle tire is smaller, and therefore cheaper than truck/bus tires. As a result, an RFID tag places are greater burden on the production cost.

Uncountable tag prototypes, were applied to around 200 test tires in South Korea for actual driving tests. Around 150 prototypes were sent to extremely hot regions overseas for actual driving tests. However, the driving tests revealed damage to the antenna sections of the tags embedded in tires, as the tires reached the end of their wear life. Also, there was separation of the embedded tags from the rubber layers. This confirmed the risk of tire separation, resulting in the failure of the tag development attempt.

3.3.3 Phase 3. Success of adoption RFID (2013-2014).

Despite the numerous difficulties and failures in the course of development, the company ultimately emerged successful, owing to its institutional entrepreneurship and corporate entrepreneurship the government’s support. Owing to the government-led support project, K Tire resumed its RFID development efforts in 2011. This time, the company discarded the idea of the embedded-type tag, which was attempted during the first development. Instead, the company turned to attached-type tag. The initial stages were marked with numerous failures: the size of a tag was large at 20 × 70 mm, which had adverse impact on the rotation balance of the tires, and the attached area was too large, causing the attached sections to fall off as the tire stretched and bent. That was when all personnel from the technical, manufacturing, and logistics department participated in creating ideas to resolve the tag size and adhesiveness issues. Through cooperation across the different departments and repeated tests, K Tire successfully developed its RFID tag by coming up with new methods to minimize the tag size to its current size (9 × 45 mm), maintain adhesiveness and lower the tag price. Finally, K Tire was success the adoption RFID.

3.3.4 Phase 4. Establishment of the manufacture, logistics and marketing tracking system.

Whenever subtle and problematic innovation difficulties arise, every worker and board member moves forward through networking and knowledge sharing within intra and external.

While a bar code is only capable of storing the information on the nationality, manufacturer and category of a product, an RFID tag is capable of storing a far wider scope of information: nationality, manufacturer, category, manufacturing date, machines used, lot number, size, color, quantity, date and place of delivery and recipient. In addition, while the data stored in a bar code cannot be revised or expanded once the code is generated, an RFID tag allows for revisions, additions and removal of data. As for the recognition capability, a bar code recognizes 95per cent of the data at the maximum temperature of 70°C. An RFID tag, on the other hand, recognizes 99.9 per cent of the data at 120°C.

The manufacture and transportation information during the semi-finished product process before the shaping process is stored in the RFID tags, which is attached to the delivery equipment to be provided to the MLMTS;

Logistics Products released from the manufacture process are stored in the warehouses, to be released and transported again to logistics centers inside and outside of South Korea. The RFID tags record the warehousing information, as the products are stored into the warehouses, as well as the release information as the products are released. The information is instantly delivered to the MLMTS;

As a marketing, the RFID tags record the warehousing information of the products supplied and received by sales branches from the logistics centers, as well as the sales information of the products sold to consumers. The information is instantly delivered to the MLMTS; and

As a role of integrative Server, MLM Integrative Server manages the overall information transmitted from the infrastructures for each section (production information, inventory status and release information, product position and inventory information, consumer sales information, etc.).

The MLMTS provides the company with various systemic functions to integrate and manage such information: foolproof against manufacture process errors, manufacture history and quality tracking for each individual product, warehousing/releasing and inventory status control for each process, product position control between processes, real-time warehouse monitoring, release control and history information tracking across products of different sizes, as well as link/control of sales and customer information. To consumers, the system provides convenience services by providing production and quality information of the products, provision of the product history through full tracking in the case of a claim, as well as a tire pressure monitoring system:

“South korea’s K Tire Co. Inc. has begun applying radio-frequency identification (RFID) system tags on: half-finished” tire since June 16. We are now using an IoT based production and distribution integrated management system to apply RFID system on our “half-finished products” the tire maker said, claiming this is a world-first in the industry. The technology will enable K Tire to manage products more efficiently than its competitors, according to the company. RFID allows access to information about a product’s location, storage and release history, as well as its inventory management (London, 22, 2015 Tire Business).

4. Discussions

Originally, aims of RFID adoption for passenger car “half-finished product” is to chase the front runners, Hankook Tire in Korea including global leading companies like Bridgestone, Michaelin and Goodyear. In particular, Hankook Tire, established in 1941 has dominated domestic passenger tire market by using the first mover’s advantage. As a late comer, K Tire needs distinguishable innovation strategy which is RFID adoption for passenger car’s tire, “half-finished product” to overcome shortage of number of distribution channels. Adoption of RFID technology for passenger car’s tire has been known as infeasible methodologies according to explanation by Changmin Park, vice-CTO (chief technology officer) until K Tire’s success.

We lensed success factors as three perspectives; institutional entrepreneurship, corporate entrepreneurship and innovation. First, as a corporate entrepreneurship perspective, adopting innovative technologies having uncertainties accompanies by a certain risk of failure. Corporate entrepreneurship refers to firm’s effort that inculcate and promote innovation and risk taking throughout its operations ( Burgelman, 1983 ; Guth and Ginsberg, 1990 ). K Tire’s success was made possible by overcome the uncountable difficulties based on shared value and norms (e.g. Fligstein and Mara-Drita, 1996 ; Garud et al. , 2002 ; Hargadon and Douglas, 2001 ; Maguire et al. , 2004 ).

An unsuccessful attempt at developing innovative technologies causes direct loss, as well as loss of the opportunity costs. This is why many companies try to avoid risks by adopting or following the leading companies’ technologies or the dominant technologies. Stimulating corporate entrepreneurship requires firms to acquire and use new knowledge to exploit emerging opportunities. This knowledge could be obtained by joining alliances, selectively hiring key personnel, changing the composition or decision-making processes of a company’s board of directors or investing in R&D activities. When the firm uses multiple sources of knowledge ( Branzei and Vertinsky, 2006 ; Thornhill, 2006 ), some of these sources may complement one another, while others may substitute each other ( Zahra and George, 2002 ). Boards also provide managers with appropriate incentives that better align their interests with those of the firm. Given the findings, K Tire seeks new knowledge from external organizations through its discriminative corporate entrepreneurship.

When adopting the RFID system for its passenger vehicle tires, K Tire also had to develop new RFID tags suitable for the specific type of tire. The company’s capabilities were limited by the surrounding conditions, which prevented the application of existing tire RFID tag technologies, such as certain issues with the tire manufacturing process, the characteristic of its tires and the price of RFID tags per tire. Taking risks and confronting challenges are made from board member’s accountability. From the findings, we find that entrepreneurship leadership can be encouraged in case of within the accountability frame work.

Despite its status as a second-tier company, K Tire attempted to adopt the RFID system to its passenger vehicle tires, a feat not achieved even by the leading companies. Thus, the company ultimately built and settled the system through numerous trials and errors. Such success was made possible by the entrepreneurship of K Tire’s management, who took the risk of failure inherent in adopting innovative technologies and confronting challenges head on.

Second, institutional entrepreneurship not only involves the “capacity to imagine alternative possibilities”, it also requires the ability “to contextualize past habits and future projects within the contingencies of the moment” if existing institutions are to be transformed ( Emirbayer and Mische, 1998 ). New technologies, the technical infrastructure, network activities to acquire the new knowledge, learning capabilities, creating a new organization such as Pioneer Lab and new rules to create new technologies are the features. To qualify as institutional entrepreneurs, individuals must break with existing rules and practices associated with the dominant institutional logic(s) and institutionalize the alternative rules, practices or logics they are championing ( Garud and Karnøe, 2003 ; Battilana, 2006 ). K Tire established new organization, “Special lab” to obtain the know technology and information as CEO’s direct sub-committees. Institutional entrepreneurship arise when actors, through their filed position, recognize the opportunity circumstance so called “norms” ( Battilana et al. , 2009 ). To make up the deficit of technologies for RFID, knowledge stream among workers is more needed. Destruction of hierarch ranking system is proxy of the institutional entrepreneurship. Also, K Tire has peculiar norms. Namely, if one requires the further study such as degree course or non-degree course education services, grant systems operated via short screen process. Third, as innovation perspectives, before adopting the RFID system, the majority of K Tire’s researchers insisted that the company use the bar code technology, which had been widely used by the competitors. Such decision was predicated on the prediction that RFID technology would see wider use in the future, as well as the expected effect coming from taking the leading position, with regard to the technology.

Finally, K Tire’s adoption of the RFID technology cannot be understood without government support. The South Korean government has been implementing the “Verification and Dissemination Project for New u-IT Technologies” since 2008. Owing to policy support, K Tire can provide worker with educational service including oversea universities.

5. Conclusions and implications

To cope with various technological impasses, K Tire demonstrated the importance of institutional and corporate entrepreneurship. What a firm pursues more positive act for innovation is a research question.

Unlike firms, K Tire has strongly emphasized IT technology since establishment in 1960. To be promotion, every worker should get certification of IT sectors after recruiting. This has become the firm’s norm. This norm was spontaneously embedded for firm’s culture. K Tire has sought new ICT technology become a first mover. This norm can galvanize to take risk to catch up the first movers in view of institutional entrepreneurship.

That can be cultivated both by corporate entrepreneurship, referred to the activities a firm undertakes to stimulate innovation and encourage calculated risk taking throughout its operations within accountabilities and institutional entrepreneurship, referred to create its own peculiar norm. Contribution of our paper shows both importance of board members of directors in cultivating corporate entrepreneurship and importance of norm and rules in inducing institutional entrepreneurship.

In conclusion, many of them were skeptical about adopting RFID for its passenger vehicle tires at a time when even the global market and technology leaders were not risking such innovation, citing reasons such as risk of failure and development costs. However, enthusiasm and entrepreneurship across the organization towards technical innovation was achieved through the experience of developing leading technologies, as well as the resolve of the company’s management and its institutional entrepreneurship, which resulted in the company’s decision to adopt the RFID technology for small tires, a technology with unverified effects that had not been widely used in the markets. Introduction of new organization which “Special lab” is compelling example of institutional entrepreneurship. Also, to pursue RFID technology, board members unanimously agree to make new organization in the middle of failing and unpredictable success. This decision was possible since K Tire’s cultivated norm which was to boost ICT technologies. In addition, at that time, board of director’s behavior can be explained by corporate entrepreneurship.

From the findings, this paper also suggests importance of firms’ visions or culture from startup stage because they can become a peculiar norm and become firm’s institutional entrepreneurship. In much contemporary research, professionals and experts are identified as key institutional entrepreneurs, who rely on their legitimated claim to authoritative knowledge or particular issue domains. This case study shows that authoritative knowledge by using their peculiar norm, and culture as well as corporate entrepreneurship.

This paper has some limitations. Despite the fact that paper shows various fruitful findings, this study is not free from that our findings are limited to a single exploratory case study. Overcoming such limitation requires securing more samples, including the group of companies that attempt unprecedented innovations across various industries. In this paper, we can’t release all findings through in-depth interview and face-to-face meetings because of promise for preventing the secret tissues.

Nevertheless, the contribution of this study lies in that it shows the importance of corporate entrepreneurship and institutional entrepreneurship for firm’s innovative capabilities to grow ceaselessly.

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Acknowledgements

 This work was supported by 2017 Hongik University Research Fund.

Corresponding author

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Top 40 Most Popular Case Studies of 2021

Two cases about Hertz claimed top spots in 2021's Top 40 Most Popular Case Studies

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All of this year’s Top 40 cases are available for purchase from the Yale Management Media store .

And the Top 40 cases studies of 2021 are:

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Digital Transformation in Healthcare: Technology Acceptance and Its Applications

Angelos i. stoumpos.

1 Healthcare Management Postgraduate Program, Open University Cyprus, P.O. Box 12794, Nicosia 2252, Cyprus

Fotis Kitsios

2 Department of Applied Informatics, University of Macedonia, 156 Egnatia Street, GR54636 Thessaloniki, Greece

Michael A. Talias

Associated data.

Not applicable.

Technological innovation has become an integral aspect of our daily life, such as wearable and information technology, virtual reality and the Internet of Things which have contributed to transforming healthcare business and operations. Patients will now have a broader range and more mindful healthcare choices and experience a new era of healthcare with a patient-centric culture. Digital transformation determines personal and institutional health care. This paper aims to analyse the changes taking place in the field of healthcare due to digital transformation. For this purpose, a systematic bibliographic review is performed, utilising Scopus, Science Direct and PubMed databases from 2008 to 2021. Our methodology is based on the approach by Wester and Watson, which classify the related articles based on a concept-centric method and an ad hoc classification system which identify the categories used to describe areas of literature. The search was made during August 2022 and identified 5847 papers, of which 321 fulfilled the inclusion criteria for further process. Finally, by removing and adding additional studies, we ended with 287 articles grouped into five themes: information technology in health, the educational impact of e-health, the acceptance of e-health, telemedicine and security issues.

1. Introduction

Digital transformation refers to the digital technology changes used to benefit society and the healthcare industry. Healthcare systems need to use digital technology for innovative solutions to improve healthcare delivery and to achieve improvement in medical problems. The digital transformation of healthcare includes changes related to the internet, digital technologies, and their relation to new therapies and best practices for better health management procedures. The quality control of massive data collected can help improve patients’ well-being and reduce the cost of services. Digital technologies will also impact medical education, and experts will deceive new ways to train people. Now in this way, practitioners will face new opportunities.

Digital transformation is an ongoing process that can create opportunities in the health sector, provided the necessary infrastructure and training are available. Under Regulation (EU) 2021/694 of the European Parliament and of the Council of 29 April 2021, establishing the Digital Europe Program and repealing Decision (EU) 2015/2240, digital transformation is defined as the use of digital technologies for the transformation of businesses and services. Some technologies that contribute to digital transformation are the digital platform of the Internet of Things, cloud computing and artificial intelligence. At the same time, the sectors of society that are almost affected are telecommunications, financial services and healthcare.

Digital health can play a role in innovation in health, as it facilitates the participation of patients in the process of providing health care [ 1 ]. The patient can overcome his poor state of health when they are no longer in a state of well-being. In this case, the patient is given the to participate in the decision-making regarding their health care. Searching for information through the patient’s internet or using digital health applications (e.g., via mobile phone) is essential for the patient to make the right decision about their health.

In the coming years, health change is expected to focus primarily on the patient, who will take on the “health service consumer” role as the patient seeks control over their health management. The healthcare industry will be shaped based on the needs and expectations of this new “consumer of health services”, which will require upgraded experiences with the main characteristics of personalisation, comfort, speed and immediacy in the provision of services. Gjellebaek C. et al. argue that new digital technologies will shift healthcare towards digitalisation, bringing significant benefits to patients and healthcare infrastructure [ 2 ]. Some of the benefits listed by Gjellebaek C. are the increase in employee productivity, the improvement of the efficiency and effectiveness of the operation of the health units, and the reduction of their operating costs.

On the other hand, in terms of health infrastructure, a typical example is the United States, where 75% of hospitals use electronic health record systems, according to Rebekah E. et al. [ 3 ]. However, clinicians often report side effects using digital technologies, which can be attributed to their misuse [ 3 ]. In addition, some health professionals oppose using these systems and develop solutions that jeopardise patient care. In some countries, such as the United States, the government provides incentives for the “effective use” of e-health technologies, but their results remain uncertain [ 3 ].

Rebekah E. et al. focus more specifically on U.S. hospitals, observing that the remaining countries are relatively in the early stages of transformation [ 4 ]. The United Kingdom, for example, has recently pursued troubled e-health initiatives, and Australian hospitals have only recently participated in investments in the digitalisation of their hospital services [ 4 ]. At the European Union level, digital health is a critical key strategic priority, in line with the European Strategic Plan 2019–2024 (European Commission).

Today, digital transformation in health is spreading and consolidating rapidly [ 5 ]. The purpose of this paper is to provide an assessment of the current literature on digital health transformation, as well as to identify potential vulnerabilities that make its implementation impossible. The ultimate goal is to see how digital technologies facilitate patients’ participation in health and their health.

Due to the rapid development of e-health and digitalisation, data from previous studies are becoming potentially irrelevant. Most studies evaluating digitalisation have relied heavily on quantitative research-based methods. Although quantitative evaluations are required, some of their effects could be omitted.

According to Gopal G. et al., healthcare has the lowest level of digital innovation compared to other industries, such as media, finance, insurance and retail, contributing to limited labour productivity growth [ 6 ]. With this article, we seek to reverse this picture and contribute to the emergence of digitalisation as a factor of health innovation while optimising patient outcomes and the cost of services provided. However, to achieve this innovation, systemic changes are needed in healthcare finances, the education of healthcare staff and healthcare infrastructure.

The following section analyses the methodology and its steps, which then contributed to the emergence of our results.

2. Material and Methods

2.1. search strategy and bibliography reviews.

Our research approach is based on the methodology of Webster and Watson, who developed a concept-centric method and an ad hoc classification system in which categories are used to describe areas of literature [ 7 ]. Initially, the existing bibliographic reviews were searched to select the databases based on keywords. A retrospective search was then performed to examine the reports of the selected works. Finally, the references of selected works were investigated to increase the search sample through the future search. After selecting the articles, they were grouped according to their content.

Systematic reviews were conducted to place this paper on existing knowledge of digital health, as well as to review prior knowledge in this area and to discuss recognised research questions based on the results of previous studies. A comprehensive review of the published literature was reported by Marques, I. C., & Ferreira, J. J. [ 8 ]. The authors explored the potential of existing digital solutions to improve healthcare quality and analysed the emerging trend in digital medicine to evaluate the research question of how stakeholders apply and manage digital technologies for business purposes [ 9 ]. The main question is: How and what could be done sustainably and inclusively through innovation to achieve sustainable development goals by taking advantage of Information and Communication Technologies? Recently, researchers have expressed concern about secure communication and user authentication within providing information to patients. In contrast with data storage, information exchange, and system integration, new approaches and uses of patient care processes are envisaged with the prospect of monitoring not only diagnostic statistics but also in-depth analysis of signs and symptoms before and after treatment, essential sources for new research. Table 1 presents the previous bibliographic reviews on which our study was based.

Previous Bibliographic Reviews.

2.2. Network Analysis

Network analysis is considered a branch of graph theory. Our network analysis is based on the similarity of keywords found in identifying the eligible papers. We used visualisation of similarities (VOS) software, version 1.6.18, to construct graphical networks to understand the clustering of the keywords and their degree of dissimilarity. Our network analysis is based on the similarity of keywords found in identifying the eligible papers.

Initial Search

The search was performed on the following databases: Scopus, Science Direct, and PubMed, using the keywords “digital transformation”, “digitalisation”, “Ehealth or e-health”, “mhealth or m-health”, “healthcare” and “health economics”. We selected publications from the search of international journals and conference proceedings. We collected papers from 2008 until 2021. The documents sought belonged to strategy, management, computer science, medicine, and health professions. Finally, the published works were in English only. The total number of articles collected using the keywords as shown in Table 2 was 5847.

Search Strategy.

We systematically checked the total number of papers 5847 by reading their titles, abstracts, and, whenever necessary, the article’s first page to conclude if each document was relevant as a first step as shown in the Figure 1 .

The diagram for the first phase of the selection process.

Then, we looked at the titles of the 378 articles, and after reading their summary, we accepted 321 articles. Further studies were rejected because their full text was not accessible. As a result, there were 255 articles in our last search. Of the selected 255 articles, 32 more were added based on backward and forward research. The investigation was completed by collecting common standards from all databases using different keyword combinations. According to the systematic literature review, we follow the standards of Webster and Watson (2002) to reject an article. Since then, we have collected the critical mass of the relevant publications, as shown in Figure 2 .

The diagram of the article selection process.

3.1. Chronological Development of the Publications

The categorisation of the articles was based on their content and the concepts discussed within them. As a result, we classify articles into the following categories: information technology in health, the educational impact on e-health, the acceptance of e-health, telemedicine, and e-health security.

Although researchers in Information and Communication Technology and digitalisation conducted studies almost two decades ago, most publications have been published in the last eight years. This exciting finding highlights the importance of this field and its continuous development. Figure 3 shows a clear upward trend in recent years. More specifically, the research field of Information and Communication Technology, in combination with digital transformation, appeared in 2008. However, the most significant number of articles was found in 2019, 2020 and 2021. The number of articles decreased to the lowest in 2009–2011 and 2013–2014. Due to the expansion of the field to new technologies, the researchers studied whether the existing technological solutions are sufficient for implementing digital transformation and what problems they may face.

Number of articles and citations per publication by year.

Figure 3 shows a combination of the articles per year and the number of citations per publication per year.

3.2. Document Type

Of the document types, 59.51 per cent of the articles were categorised as “survey”, while a smaller percentage were in: “case study” (32.53%), “literature review” (5.88%) and “report” (2.08%). However, these documents focused on specific concepts: “information technology in health” (45%), “education impact of e-health” (11%), “acceptance of e-health” (19%), “telemedicine” (7%), “security of e-health” (18%).

As we can see from the following Figure 4 , we used network analysis, where the keywords related to digitalisation and digital transformation were identified in the research study. Network analysis, using keywords, came with VOSviewer software to find more breadth and information on healthcare digitalisation and transformation exploration. It was created by analysing the coexistence of keywords author and index. This analysis’s importance lies in the structure of the specific research field is highlighted. In addition, it helped map the intellectual structure of scientific literature. Keywords were obtained from the title and summary of a document. However, there was a limit to the number of individual words. The figure represents a grid focused on reproducing keywords in the literature on the general dimensions of digitalisation. The digitalisation network analysis showed that e-health, telemedicine, telehealth, mobile health, electronic health/medical record, and information systems were the main relevant backgrounds in the literature we perceived. In the healthcare literature, keywords such as “empowerment” and “multicenter study” usually do not lead to a bibliographic search on digitalisation. Figure 4 shows how e-health and telemedicine have gone beyond the essential and most crucial research framework on how they can affect hospitals and the health sector. The potentially small gaps in network analysis can be filled by utilising data in our research study, contributing to future research.

Bibliometric map of the digital transformation and healthcare.

Figure 5 shows the network analysis with the keywords concerning time publication. The yellow colour indicates keywords for most recent years.

Network visualisation of keywords per year.

Figure 6 presents the density visualisation of keywords.

Heat map of keywords.

Figure 7 shows the number of articles per each method (survey, literature review etc.) for each year.

The map of number of articles per method for each year.

It is evident from Figure 7 that the most used method paper is the survey type and that in the year 2021, we have a high number of surveys compared to previous years.

3.3. Summary of the Included Articles

In Figure 2 , we have explained how we collected the critical mass of the 255 relevant publications. We added another 32 articles based on further research with the backward and research methods, which resulted in a total number of 287 articles.

Then, the articles were categorised according to their content. The concepts discussed in the papers are related to information technology in health, the educational impact of e-health, the acceptance of e-health, telemedicine, and e-health security. For this purpose, the following table was created, called the concept matrix table.

4. Concept Matrix

In this section, we provide the Concept matrix table. Academic resources are classified according to if each article belongs or not to any of the five concepts shown in Table 3 .

Concept Matrix Table.

5. Analysis of Concepts

From the articles included in the present study between 2008 and 2021, they were grouped into five categories identified: (i) information technology in health, (ii) acceptance of e-health, (iii) telemedicine, (iv) security of e-health, and (v) education impact of e-health.

5.1. Information Technology in Health

Researchers have studied several factors to maximise the effectiveness and success of adopting new technology to benefit patients. Hospitals can benefit from information technology when designing or modifying new service procedures. Health units can use information and communication technology applications to analyse and identify patients’ needs and preferences, enhancing their service innovation processes. Previous findings conclude that technological capability positively influences patient service and innovation in the service process [ 301 ]. These results have significant management implications as managers seek to increase technology resources’ efficiency to achieve patient-centred care as the cornerstone of medical practice [ 207 ].

Informatics facilitates the exchange of knowledge necessary for creating ideas and the development process. The internet supports health organisations in developing and distributing their services more efficiently [ 206 ]. Also, Information Technology improves the quality of services, reduces costs, and helps increase patient satisfaction. As new technologies have created opportunities for companies developing high-tech services, healthcare units can increase customer value, personalise services and adapt to their patient’s needs [ 209 ]. To this end, the “smart hospitals” should represent the latest investment frontiers impacting healthcare. Their technological characteristics are so advanced that the public authorities need know-how for their conception, construction, and operation [ 228 ].

A new example is reshaping global healthcare services in their infancy, emphasising the transition from sporadic acute healthcare to continuous and comprehensive healthcare. This approach is further refined by “anytime and everywhere access to safe eHealth services.” Recent developments in eHealth, digital transformation and remote data interchange, mobile communication, and medical technology are driving this new paradigm. Follow-up and timely intervention, comprehensive care, self-care, and social support are four added features in providing health care anywhere and anytime [ 289 ]. However, the healthcare sector’s already precarious security and privacy conditions are expected to be exacerbated in this new example due to the much greater monitoring, collection, storage, exchange, and retrieval of patient information and the cooperation required between different users, institutions, and systems.

The use of mobile telephony technologies to support health goals contributes to the transformation of healthcare benefits worldwide. The same goes for small and medium-sized healthcare companies, such as pharmacies. A potent combination of factors between companies and customers is the reason for creating new relationships. In particular, mobile technology applications represent new opportunities for integrating mobile health into existing services, facilitating the continued growth of quality service management. Service-based, service-focused strategies have changed distribution patterns and the relationship between resellers and consumers in the healthcare industry, resulting in mobile health and significant pharmacy opportunities. It has been an important research topic in the last decade because it has influenced and changed traditional communication between professionals and patients [ 211 ]. An example of a mobile healthcare platform is “Thymun”, designed and developed by Salamah et al. aiming to create intelligent health communities to improve the health and well-being of autoimmune people in Indonesia [ 225 ].

5.2. Acceptance of E-Health

In a long-term project and a population study (1999–2002), Hsu et al. evaluated e-health usage patterns [ 302 ]. The authors conclude that access to and use of e-health services are rapidly increasing. These services are more significant in people with more medical needs. Fang (2015) shows that scientific techniques can be an essential tool for revealing patterns in medical research that could not be apparent with traditional methods of reviewing the medical literature [ 303 ]. Teleradiology and telediagnosis, electronic health records, and Computer-Aided Diagnosis (CAD) are examples of digital medical technology. France is an example of a country that invests and leads in electronic health records, based on what is written by Manard S. et al. [ 243 ]. However, the impact of technological innovation is reflected in the availability of equipment and new technical services in different or specialised healthcare sectors.

On the other hand, Mariusz Duplaga (2013) argues that the expansion of e-health solutions is related to the growing demand for flexible, integrated and cost-effective models of chronic care [ 304 ]. The scope of applications that can support patients with chronic diseases is broad. In addition to accessing educational resources, patients with chronic diseases can use various electronic diaries and systems for long-term disease monitoring. Depending on the disease and the symptoms, the devices used to assess the patient’s condition vary. However, the need to report symptoms and measurements remains the same. According to Duplaga, the success of treatments depends on the patient’s involvement in monitoring and managing the disease. The emphasis on the role of the patient is parallel to the general tendency of people and patients to participate in decisions made about their health. Involving patients in monitoring their symptoms leads to improved awareness and ability to manage diseases. Duplaga argues that the widespread use of e-health systems depends on several factors, including the acceptance and ability to use information technology tools, combined with an understanding of disease and treatment.

Sumedha Chauhan & Mahadeo Jaiswal (2017) are on the same wavelength. They claim that e-health applications provide tools, processes and communication systems to support e-health practices [ 305 ]. These applications enable the transmission and management of information related to health care and thus contribute to improving patient’s health and physicians’ performance. The human element plays a critical role in the use of e-health, according to the authors. In addition, researchers have studied the acceptance of e-health applications among patients and the general public, as they use services such as home care and search for information online. The meta-analysis they use combines and analyzes quantitative findings of multiple empirical studies providing essential knowledge. However, the reason for their research was the study of Holden and Karsh (2010) [ 306 ].

To provide a comprehensive view of the literature acceptance of e-health applications, Holden and Karsh reviewed 16 studies based on healthcare technology acceptance models [ 306 ]. Findings show them that the use and acceptance of technological medical solutions bring improvements but can be adopted by those involved in the medical field.

5.3. Telemedicine

On the other hand, telemedicine is considered one of the most important innovations in health services, not only from a technological but also from a cultural and social point of view. It benefits the accessibility of healthcare services and organisational efficiency [ 215 ]. Its role is to meet the challenges posed by the socio-economic change in the 21st century (higher demands for health care, ageing population, increased mobility of citizens, need to manage large volumes of information, global competitiveness, and improved health care provision) in an environment with limited budgets and costs. Nevertheless, there are significant obstacles to its standardisation and complete consolidation and expansion [ 300 ].

At present, there are Telemedicine centres that mediate between the patient and the hospital or doctor. However, many factors make this communication impossible [ 300 ]. Such factors include equipment costs, connectivity problems, the patient’s trust or belief in the system or centre that applies telemedicine, and resistance to new and modern diagnostics, especially in rural and island areas. Therefore, telemedicine would make it easier to provide healthcare systems in remote areas than having a specialist in all the country’s remote regions [ 300 ]. Analysing the concept further, one can easily argue that the pros outweigh the disadvantages. Therefore, telemedicine must be adopted in a concerted effort to resolve all the obstacles we are currently facing. Telemedicine centres and services such as teleradiology, teledermatology, teleneurology, and telemonitoring will soon be included. This means that a few years from now, the patient will not have to go to a central hospital and can benefit remotely from the increased quality of health services. This will save valuable time, make good use of available resources, save patient costs, and adequately develop existing and new infrastructure.

In 2007, the World Health Organisation adopted the following broad description of telemedicine: “The delivery of health care services, where distance is a critical factor, by all health care professionals using information and communication technologies for the exchange of valid information for the diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for the continuing education of health care providers, all in the interests of advancing the health of individuals and their communities ” [ 307 ]

According to the Wayback Machine, Canadian Telehealth Forum, other terms similar to telemedicine are telehealth and e-health, which are used as broader concepts of remote medical therapy. It is appropriate to clarify that telemedicine refers to providing clinical services. In contrast, telehealth refers to clinical and non-clinical services, including education, management and research in medical science. On the other hand, the term eHealth, most commonly used in the Americas and Europe, consists of telehealth and other elements of medicine that use information technology, according to the American Telemedicine Association [ 308 ].

The American Telemedicine Association divides telemedicine into three categories: storage-promotion, remote monitoring, and interactive services. The first category includes medical data, such as medical photographs, cardiograms, etc., which are transferred through new technologies to the specialist doctor to assess the patient’s condition and suggest the appropriate medication. Remote monitoring allows remote observation of the patient. This method is used mainly for chronic diseases like heart disease, asthma, diabetes, etc. Its interactive services enable direct communication between the patient and the treating doctor [ 309 ].

Telemedicine is a valuable and efficient tool for people living or working in remote areas. Its usefulness lies in the health access it provides to patients. In addition, it can be used as an educational tool for learning students and medical staff [ 310 ].

Telemedicine is an open and constantly evolving science, as it incorporates new technological developments and responds to and adapts to the necessary health changes within societies.

According to J.J. Moffatt, the most common obstacles to the spread of telemedicine are found in the high cost of equipment, the required technical training of staff and the estimated time of a meeting with the doctor, which can often be longer than the use of a standard doctor [ 311 ]. On the other hand, the World Health Organisation states that telemedicine offers excellent potential for reducing the variability of diagnoses and improving clinical management and the provision of health care services worldwide. The World Health Organisation claims, according to Craig et al. and Heinzelmann PJ, that telemedicine improves access, quality, efficiency and cost-effectiveness [ 312 , 313 ]. In particular, telemedicine can help traditionally under-served communities by overcoming barriers to the distance between healthcare providers and patients [ 314 ]. In addition, Jennett PA et al. highlight significant socio-economic benefits for patients, families, health professionals and the health system, including improved patient-provider communication and educational opportunities [ 315 ].

On the other hand, Wootton R. argues that telemedicine applications have achieved different levels of success. In both industrial and developing countries, telemedicine has yet to be used consistently in the healthcare system, and few pilot projects have been able to be maintained after the end of their initial funding [ 316 ].

However, many challenges are regularly mentioned and responsible for the need for more longevity in many efforts to adopt telemedicine. One such challenge is the complexity of human and cultural factors. Some patients and healthcare workers resist adopting healthcare models that differ from traditional approaches or home practices. In contrast, others need to have the appropriate educational background in Information and Communication Technologies to make effective use of telemedicine approaches [ 314 ]. The need for studies documenting telemedicine applications’ economic benefits and cost-effectiveness is also a challenge. Strong business acumen to persuade policymakers to embrace and invest in telemedicine has contributed to a need for more infrastructure and program funding [ 312 ]. Legal issues are also significant obstacles to the adoption of telemedicine. These include the need for an international legal framework that allows health professionals to provide services in different jurisdictions and countries. Furthermore, the lack of policies governing data confidentiality, authentication and the risk of medical liability for health professionals providing telemedicine services [ 314 ]. In any case, the technological challenges are related to legal issues. In addition, the systems used are complex, and there is a possibility of malfunction, which could cause software or hardware failure. The result is an increase in patient morbidity or mortality as well as the liability of healthcare providers [ 317 ].

According to Stanberry B., to overcome these challenges, telemedicine must be regulated by definitive and comprehensive guidelines, which are ideally and widely applied worldwide [ 318 ]. At the same time, legislation must be enacted governing health confidentiality, data access, and providers’ responsibility [ 314 ].

5.4. Security of eHealth

The possibility of the patients looking at the electronic patient folder in a cloud environment, through mobile devices anytime and anywhere, is significant. On the one hand, the advantages of cloud computing are essential, and on the other hand, a security mechanism is critical to ensure the confidentiality of this environment. Five methods are used to protect data in such environments: (1) users must encrypt the information before storing it; (2) users must transmit information through secure channels; (3) the user ID must be verified before accessing data; (4) the information is divided into small portions for handling and storage, retrieved when necessary; (5) digital signatures are added to verify that a suitable person has created the file to which a user has access. On the other hand, users of these environments will implement self-encryption to protect data and reduce over-reliance on providers [ 210 ].

At the same time, Maliha S. et al. [ 227 ] proposed the blockchain to preserve sensitive medical information. This technology ensures data integrity by maintaining a trace of control over each transaction. At the same time, zero trusts provide that medical data is encrypted and that only certified users and devices interact with the network. In this way, this model solves many vulnerabilities related to data security [ 227 ]. Another alternative approach is the KONFIDO project, which aims at the safe cross-border exchange of health data. A European H2020 project aims to address security issues through a holistic example at the system level. The project combines various cutting-edge technologies in its toolbox (such as blockchain, photonic Physical Unclonable Functions, homomorphic encryption, and trusted execution) [ 234 ]. Finally, Coppolino L. et al. [ 271 ] proposed using a SIEM framework for an e-healthcare portal developed under the Italian National eHealth Net Program. This framework allows real-time monitoring of access to the portal to identify potential threats and anomalies that could cause significant security issues [ 271 ].

5.5. Education Impact of E-Health

But all this would only be feasible with the necessary education of both users and patients [ 11 ]. As the volume and quality of evidence in medical education continue to expand, the need for evidence synthesis will increase [ 295 ]. On the other hand, Brockers C. et al. argued that digitalisation changes jobs and significantly impacts medical work. The quality of medical data provided for support depends on telemedicine’s medical specialisation and knowledge. Adjustments to primary and further education are inevitable because physicians are well trained to support their patients satisfactorily and confidently in the increasingly complex digitalisation of healthcare. The ultimate goal of the educational community is the closest approach of students to the issues of telemedicine and e-health, the creation of a spirit of trust, and the acceptance and transmission of essential knowledge [ 268 ].

Noor also moved in this direction, seeking to discover the gaps in Saudi education for digital transformation in health [ 248 ]. The growing complexity of healthcare systems worldwide and the growing reliance of the medical profession on information technology for precise practices and treatments require specific standardised training in Information Technology (IT) health planning. Accreditation of core Information Technology (IT) is advancing internationally. Noor A. examined the state of Information Technology health programmes in the Kingdom of Saudi Arabia (KSA) to determine (1) how well international standards are met and (2) what further development is required in the light of recent initiatives of the Kingdom of Saudi Arabia on e-health [ 248 ]. Of the 109 institutions that participated in his research, only a few offered programmes specifically in Health Information Technology. As part of Saudi Vision 2030, Saudi digital transformation was deemed an urgent need. This initiative calls for applying internationally accepted Information Technology skills in education programmes and healthcare practices, which can only happen through greater collaboration between medical and technology educators and strategic partnerships with companies, medical centres and government agencies.

Another study by Diviani N. et al. adds to the knowledge of e-health education, demonstrating how online health information affects a person’s overall behaviour and enhances patients’ ability to understand, live and prepare for various health challenges. The increasing digitalisation of communication and healthcare requires further research into the digital divide and patients’ relationships with health professionals. Healthcare professionals must recognise the online information they seek and engage with patients to evaluate online health information and support joint healthcare-making [ 235 ].

6. Discussion

The selected studies comprise a conceptual model based on bibliographic research. Using an open-ended technique, we analyse the selected 287 articles, which are grouped into categories based on their context. This methodology provides readers with a good indication of issues concerning the timeliness of health digitalisation. A limitation of the methodology is that selected criteria of the method might be subjective in terms of the search terms and how the papers are selected. The articles indicate that this field is initial, and further research is needed. Although several articles have created a theoretical basis for corporate sustainability and strategic digital management, only limited studies provided guidelines on the strategic digital transformation process and its health implementation stages. However, studies have also developed sustainable models, software or applications in this area. This is also the reason for creating opportunities for future researchers, who will be closed to investigate this gap and improve the viability of digital health strategies. In addition, any work carried out in case studies provides fruitful results by facilitating researchers through deep penetration into sustainable digitalisation. No generalised frameworks are available to guide the wording and implementation of digital action plans. Thus, the need for quantitative or qualitative research is created, providing conclusions on the impact of internal or external factors in the sustainability process, implementation, adoption, planning, and challenges of digital health solutions in general, as well as the impact of digital transformation. Most existing studies explore the issue of digitalisation in a particular part of a nursing institution or a disease rather than the management strategy perspective. In this way, researchers ignore a debate on obstacles and problems that often face in practice during integration. Such an analysis could lead to more profound knowledge.

7. Conclusions

In conclusion, our research observed a timeless analysis of systematised studies focusing on digital health developments. These studies broaden the researchers’ vision and provide vital information for further investigation. This article focuses on understanding digitalisation in healthcare, including, for the most part, the digitalisation of information and adopting appropriate parameters for further development. To build a more holistic view of digital health transformation, there is a great need for research on the management implications of digitalisation by different stakeholders. Finally, the development of telemedicine, the further enhancement of digital security and the strengthening of technological information systems will contribute to the universal acceptance of the digital health transformation by all involved.

Funding Statement

This research received no external funding.

Author Contributions

Conceptualisation, A.I.S., F.K. and M.A.T.; methodology, F.K. and M.A.T.; software, A.I.S.; validation, A.I.S.; data curation, A.I.S.; writing—original draft preparation, A.I.S. and M.A.T.; writing—review and editing, A.I.S. and M.A.T.; visualisation, A.I.S.; supervision, M.A.T.; project administration, M.A.T. All authors have read and agreed to the published version of the manuscript.

Institutional Review Board Statement

Informed consent statement, data availability statement, conflicts of interest.

The authors declare no conflict of interest.

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Information and Communication Technologies in Tourism 1997 pp 85–99 Cite as

The value of information technology: A case study and a framework

• G. J. van der Pijl 2 ,
• H. T. M. van der Zee 2 &
• P. M. A. Ribbers 2  
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Over the past years, many attempts have been made to measure the value of IT according to a variety of criteria. In 1993 Brynjolfsson summarized the principal studies of IT and productivity 1 . He concluded that: “The relationship between information technology and productivity - the fundamental economic measure of a technology’s contribution - is widely discussed but little understood. The general unease and the blurred discussion about the determination of benefits of IT confirm the need for better measurement, frameworks, and tools, to assess and monitor its value. In this paper we describe how the value of information technology was measured at ANWB, The Royal Dutch Touring Club. The case described demonstrates that the value of IT for an enterprise can not be expressed in a single measure. Measurements at different levels have to take place in order to get a clear picture. In the second part of the paper we demonstrate how measurement on different levels can be applied systematically by using the BtripleE framework. The paper is based on the doctoral dissertation of van der Zee 2 that was written under the guidance of Ribbers and van der Pijl.

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Brynjolfsson, E. (1993), “The Productivity Paradox of Information Technology,” Communications of the ACM , December, vol 36, nbr 12, 67–77

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Van der Pijl, G.J. (1993), Kwaliteit van Informatie in Theorie en Praktijk , Doctoral dissertation Catholic University of Brabant, Tilburg.

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van der Pijl, G.J., van der Zee, H.T.M., Ribbers, P.M.A. (1997). The value of information technology: A case study and a framework. In: Tjoa, A.M. (eds) Information and Communication Technologies in Tourism 1997. Springer, Vienna. https://doi.org/10.1007/978-3-7091-6848-6_10

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LEAP model-based analysis to low-carbon transformation path in the power sector: a case study of Guangdong–Hong Kong–Macao Greater Bay Area

• Mengke Xu 1 , 2 , 3 ,
• Cuiping Liao 1 , 2 , 3 , 4 ,
• Ying Huang 2 , 3 , 5 ,
• Xiaoquan Gao 2 , 3 ,
• Genglin Dong 1 , 2 , 3 &
• Zhen Liu 2 , 3  

Scientific Reports volume  14 , Article number:  7405 ( 2024 ) Cite this article

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As a major carbon emitter, the power sector plays a crucial role in realizing the goal of carbon peaking and carbon neutrality. This study constructed a low-carbon power system based on the LEAP model (LEAP-GBA) with 2020 as a statistic base aiming of exploring the low-carbon transformation pathway of the power sector in the Guangdong–Hong Kong, and Macao Greater Bay Area (GBA). Five scenarios are set up to simulate the demand, power generation structure, carbon emissions, and power generation costs in the power sector under different scenarios. The results indicate that total electricity demand will peak after 2050, with 80% of it coming from industry, buildings and residential use. To achieve net-zero emissions from the power sector in the GBA, a future power generation mix dominated by nuclear and renewable energy generation and supplemented by fossil energy generation equipped with CCUS technologies. BECCS technology and nuclear power are the key to realize zero carbon emissions from the power sector in the GBA, so it should be the first to promote BECCS technology testing and commercial application, improve the deployment of nuclear power sites, and push forward the construction of nuclear power and technology improvement in the next 40 years.

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Introduction

With President Xi’s goal of “carbon neutrality”, achieving the dual-carbon target has become a major opportunity and challenge for China 1 . As one of the most open and dynamic regions in China, the GBA is an important spatial carrier for China to build world-class city clusters and participate in global competition 2 . Its green and low-carbon transformation and development has attracted much attention. Electricity, as an indispensable material basis for the production and life of modern society, is transformed from fossil energy, nuclear energy, renewable energy and other energy resources, and is the main way of non-fossil energy utilization. With socio-economic development and increasing electrification level, electricity consumption has been increasing year by year. Electricity consumption in the GBA in 2020 will reach 550.8 billion kWh, an increase of 56% compared with 2010, and the installed capacity of power generation will still be dominated by thermal power, which accounts for more than 75% of the total. The development of renewable energy within the GBA has been hindered, with the development of photovoltaics severely hampered by imperfect distributed photovoltaic mechanisms and unequal approval processes. Onshore wind power development is restricted by mountain protection policies 3 , and offshore wind power resources are limited. Hydropower is difficult to continue in-depth development due to resource endowment. The urbanization rate of the GBA in 2020 will have reached more than 85%, with fewer agricultural and forestry resources and limited land available, making it unsuitable for the development of biomass power plants based on agricultural and forestry wastes, and only waste incineration can be developed. 2020 average power generation standard coal consumption of thermal power units in the Greater Bay Area will be around 295 g of standard coal/kWh, which is a large gap compared with the national average of 287 g of standard coal/kWh 4 . Carbon emissions from the power sector in the GBA will account for 49.8% of the total carbon emissions from energy consumption in 2020, and carbon emission reduction in the power sector needs to be addressed urgently.

There have been many studies on low-carbon power transformation. The key to low-carbon power transition lies in the construction of a new type of power system with new energy as the main body, constituting a comprehensive energy service system centered on electricity. It is required to build new power systems that technological innovations, including efficient and low-cost solar and wind power generation technologies 5 , ultra-high voltage transmission and distribution technologies 6 , small reactor nuclear power plant technologies 7 , carbon capture technologies, energy storage technologies 8 and smart grids 9 . However, the relationship between the scale of expansion of the new energy industry and technology should be balanced, taking into account the two dimensions of scale and technology in the process of energy transition 10 .

Considering the long construction period of power generation facilities, they need to be planned in advance. In recent years, research on power system planning simulation has been deepening. The studies mostly use integrated assessment models to analysis the decarbonization pathway of the power sector. They mainly include top–down macro prediction models and bottom-up micro prediction models. Typical macro forecasting model is CGE model. Xu Hongwei 11 , Wang Peng et al. 12 simulated electricity demand and investment return under different paths in the process of low-carbon transition of electricity in GBA by CGE model. The approach is based on general equilibrium theory and is weak on analyses related to abatement technologies. Micro-prediction models include AIM Enduse, LEAP model, etc. Luo Yuejun et al. 13 analyzed the impact of carbon emissions trading mechanism on electricity transition path based on AIM Enduse model. The model focuses on the analysis of the impact of a single technology or policy on overall carbon emissions. Compared with other models, the LEAP model can comprehensively evaluate the impacts of various technologies and policy measures on energy conservation and emission reduction in terms of the supply of energy structure, the level of energy technology, and the demand for energy, which is more suitable for analyzing the medium- and long-term scenarios of the power sector in this study. Nayyar 14 , Cai Liya 15 , and Nojedehi et al. 16 forecasted the medium- and long-term demand for electricity using the LEAP model. Overall, most of the current domestic studies on low-carbon transition paths in the power sector are based on national, provincial and municipal studies, and there are fewer studies on the low-carbon transition of power in urban agglomerations. China’s regions have large differences in energy resource potential, and there is obvious regional heterogeneity in the structure of power generation and energy consumption, and the path of low-carbon transformation of electric power should be adapted to local conditions.

The innovation of this study is to consider the technology learning rate in the model calculation, the carbon capture rate of CCUS technology and the negative carbon emission factor of BECCS technology in the simulation process, and the power self-sufficiency rate and the energy self-sufficiency rate of power generation in the result analysis process. The significance of this paper is that the importance of nuclear power is demonstrated by the substitutability of nuclear power and renewable energy, the contribution of CCUS technology to the low-carbon transition is quantified by the carbon capture rate, and the security of local power generation is considered by the power self-sufficiency rate and the energy self-sufficiency rate of power generation. The results of the study can provide a reference for the government to formulate a carbon–neutral action plan.

This research study chooses the GBA as the research object, and uses the LEAP model as the research tool to simulate the power generation structure and energy consumption structure of the power sector in GBA, and predicts the carbon emissions of the power sector. This study combines energy planning and local electricity supply and demand with conversion in each municipality, considers the constraints of the local economy, population, and urbanization rate, sets the business-as-usual (BAU) scenario (scenario for maintaining the current development trajectory) as the baseline, four low-carbon transition scenarios, analyzes the electricity demand, generation structure, CO 2 emissions, and generation costs under different scenarios, and explores the path to carbon neutrality in the power sector. This paper is structured as follows: “ Introduction ” introduces the research background and research methodology of the power sector low carbon transition study. “ Scenario design ” presents the research methodology and key assumptions used in this study. “ Results and analysis ” presents the methodology for setting up the various scenarios. “ Discussion ” provides a detailed analysis and discussion of the simulation results.

Scenario design

According to Guangdong Province’s 14th Five-Year Plan for Energy Development 17 and Outline Development Plan for the Guangdong–Hong Kong–Macao Greater Bay Area 18 , the future development of the GBA should optimize the energy structure, promote green and low-carbon energy transformation, and build a new type of power system, while improving the level of terminal electrification. This study sets up four low-carbon transition scenarios, clean energy generation (CEG) scenario, carbon capture, utilization and storage (CCUS) scenario, natural gas generation (NGE) scenario, and natural gas generation + carbon capture, utilization, and storage (NGE+CCUS) scenario, using the business-as-usual (BAU) scenario as a reference to analyze the carbon emissions, power generation costs, and power supply reliability of the power sector, and explore the best carbon neutral path in power sector for the GBA.

Electricity demand in the GBA is forecast to be 735 billion kWh in 2025, with an average annual growth rate of about 6% during the 14th Five-Year Plan period, which is basically in line with the 14th Five-Year Plan energy plans of various municipalities. With reference to the planning of key projects in Guangdong, Hong Kong and Macao Greater Bay Area municipalities in 2021, 2022 and 2023, and taking into account the longer construction cycle of generating units and the smaller scale of actual commissioning, the installed local power generation capacity in 2025 is lower than that of the 14th Five-Year Plan in this paper at the time of the scenario parameter setting.

Business-as-usual scenario (BAU)

In the BAU scenario, the power sector’s installed capacity structure and generation structure are based primarily on the energy planning policies of the GBA administrative regions 19 , 20 and no further carbon reduction measures are considered. In principle, there will be no new coal power generation and the old coal power generation units will be retired according to their service life, while gas power generation, renewable energy generation and nuclear power generation will be steadily developed. The key power projects under the 14th Five-Year Plan of each city will be completed, and some of the gas power generation units will be retired gradually after 2045 according to their service life. According to the relevant national standards, thermal power units within the GBA should complete energy-saving retrofits within the retrofit cycle 21 , 22 , 23 . Biomass power generation will be developed according to the existing planning and speed, with a waste incineration treatment capacity of about 159 kilo-tons per day, accounting for about 50% of the amount of waste to be treated. Photovoltaic power generation will be developed according to the current planning and growth rate, with an installed capacity of about 12 million kW to be completed by 2060, and wind and hydropower will be developed according to the existing planning and not further developed due to limited resources. Electricity demand is a continuation of existing policies and trends. The local installed generation capacity and generation structure under the BAU scenario are shown in Fig.  1 a. By 2060, coal-fired, gas-fired, nuclear and renewable energy sources will account for 11.4%, 46.7%, 23.3% and 17.5% of the GBA’s local electricity generation capacity respectively.

Installed capacity and generation structure in GBA under each scenario.

Low carbon transition scenario

This study establishes a low-carbon transition scenario based on the BAU scenario. In this scenario, other carbon reduction measures in addition to existing plans are considered. This study sets up four low-carbon transition scenarios according to different carbon reduction measures. It also compares the power generation costs and reliability of four low-carbon transition paths to identify the optimal low-carbon transition path.

CEG scenario

The scenario is set up to consider more clean energy generation and reduce carbon emissions from the power generation sector. Considering that CO 2 emissions from the power sector are mainly from fossil fuel generation, the CEG scenario further promotes renewable energy generation and nuclear power and retires coal-, gas- and oil-fired power plants year by year according to their lifetimes. In this scenario, to achieve 100% clean energy generation and further promote nuclear power construction, the Daya Bay Nuclear Power Station in Shenzhen adopts new nuclear units to replace older units. The total installed capacity of nuclear power in the GBA will reach 34.5 million kW in 2060. Considering the economic development, the future direction of solar power generation in GBA is mainly in rooftop PV. According to each city planning and research, the installed PV power generation in the current plan is only 50% of the buildable installed capacity in GBA, so solar power generation is further promoted based on existing policies. The scenario sets up an annual growth of 56 MW in installed PV capacity, reaching 26.24 GW by 2060. Due to the resource endowment, both wind power and hydropower in GBA are developed according to the existing plan, and the installed wind power and hydropower in 2060 are 2.85 GW and 1.78 GW, respectively. According to the forecast of urban domestic waste generation per capita and population, the domestic waste volume in GBA in 2060 can reach 364 kilo-tons per day, setting the incineration treatment ratio at 80% 24 , and the installed power generation capacity can reach 7.75 GW. This scenario retains only a small amount of coal and gas power as backup units by 2060. By 2060, coal-fired power, gas-fired power, nuclear power, and renewable energy power will account for 0.2%, 1.5%, 73.5%, and 24.8% respectively in local power generation in GBA. The structure of installed capacity and generation under the CEG scenario are shown in Fig.  1 b.

CCUS scenario

The commercial deployment of CCUS technology is critical to achieving carbon neutrality in the power sector. This scenario is based on the BAU scenario deploying CCUS technology on a unit-size basis after 2035, with all retained coal-fired and gas-fired power plants covered by 2060. BECCS technology has a carbon-negative role, and is deployed in this scenario after 2035, assuming that 150,000 kW of new BECCS installed capacity is added each year, covering all biomass generating units by 2060. The carbon emission factor for BECCS technology is set at − 3.214 25 . The carbon capture rate for CCUS-coal and CCUS-gas generation is 85% 26 . By 2060, CCUS-coal-fired, CCUS-gas-fired, nuclear and renewables will account for 10.8%, 33.5%, 44.9% and 10.3% of GBA’s local electricity generation, respectively. The installed local generation mix and the local generation mix in the CCUS scenario are shown in Fig.  1 c.

NGE scenario

Natural gas is generally regarded as a clean fossil energy source that emits less carbon than other fossil fuels and reduces the production of other air pollutants significantly. In this scenario based on the BAU scenario, natural gas-fired power generation is the main form of power generation in GBA, the merit order is adjusted from 2 to 1, the coal and oil power units are gradually retired, and the incentive for gas-fired power generation is stimulated through policies such as improving the natural gas price mechanism. By 2060, local power generation in this scenario mainly consists of natural gas-fired power generation, renewable power generation, and nuclear power generation, with the proportion of 43.7%, 45.2%, and 11.1% respectively. The structure of installed local generation and local generation capacity in the NGE scenario are shown in Fig.  1 d.

NGE + CCUS scenario

The natural gas power generation process still generates some carbon emissions. Therefore, the NGE+CCUS scenario is set based on the NGE scenario. The CCUS technology is deployed gradually after 2035 according to the size of natural gas power plants, with an average of 2.5 million kW of new CCUS-natural gas-fired generation capacity per year, covering all natural gas-fired power plants by 2060. The structure of installed local generation and local generation capacity under the NGE+CCUS scenario is shown in Fig.  1 e.

Results and analysis

This study predicts the future electricity demand and carbon emissions in GBA through the LEAP model and designs four low-carbon transition scenarios. The four power supply scenarios are compared in terms of carbon emission, power supply reliability, and cost to find out the optimal low-carbon transition path for the power sector in GBA.

Electricity demand forecast

The forecast results of total electricity demand and that by sector in GBA from 2020 to 2060 are shown in Figs.  2 and 3 . It is in a period of rapid development for GBA from 2020 to 2060. With the rapid growth in population, GDP, and electrification levels and the level of energy efficiency of equipment across all sectors, electricity demand in the GBA peaks at 1055.8 billion kWh in 2050 under the BAU scenario, and it peaks at 1029.8 billion kWh in 2040 under the Low-carbon transition scenario. Comparing the electricity demand in different scenarios, the BAU scenario peaks in 2055. The low-carbon transition scenario has its peak shifted forward to 2050, and its electricity demand maximum is lower than that in the BAU scenario. This is largely attributed to increased energy efficiency levels in consumer-side devices. As can be seen from Fig.  3 , the electricity demand mainly comes from the industrial sector and the construction sector. Electricity demand in the transportation sector increases year by year in both the BAU scenario and the low carbon transition scenario. Unlike the BAU scenario, its growth rate slows down after 2035 in the low-carbon transition scenario. This is due to the reduction in unit electricity consumption resulting from further improvements in electric vehicle technology and energy efficiency in the low-carbon transition scenario. In the BAU scenario, industrial sector electricity demand peaks at 433.2 billion kWh in 2045, and it peaks at 432.6 billion kWh 5 years ahead of schedule due to the accelerated pace of implementation of energy efficiency policies and the accelerated upgrading of energy efficiency levels in the low-carbon transition scenario. Electricity demand in the building sector increases annually in both scenarios, but it slows down significantly after 2035 in the low-carbon transition scenario. In the BAU scenario, agricultural electricity demand has been on an upward trend. The low-carbon transition scenario, on the other hand, accelerates energy efficiency and promotes high-tech and green agriculture, whose electricity demand peaks in 2035 and then begins to decline annually.

Total electricity demand forecasts.

Electricity demand forecasts by scenario sub-sector.

Sensitivity analysis

Sensitivity analysis of electricity supply and demand.

Electricity demand fluctuations will challenge the security of GBA’s electricity supply, due to the impact of uncertainty factors, there are fluctuations in electricity demand, and sensitivity analysis should be carried out on the balance of electricity supply and demand. In 2020, the GBA purchased power outside the province of 320 billion kWh, 140 billion kWh of which came from hydropower, assuming that the total amount of electricity purchased outside the province will remain unchanged in the future. Purchase of electricity from outside the province mainly from the neigh-boring cities in the east, north and west of Guangdong, Yangjiang six sets of 1.25 million kW of nuclear power in the end of 2019, all completed and put into operation, Shanwei Lufeng nuclear power plant six sets of 1.25 million kW of nuclear power units, Haifeng nuclear power plant eight sets of 1 million kW of nuclear power units, Shaoguan nuclear power plant four sets of 1.25 million kW of nuclear power units are in the planning of the construction. It is expected that by 2060, 26.98 million kW of nuclear power units will be put into operation to ensure the supply of electricity, generating 200 billion kWh of electricity annually. According to the Offshore Wind Power Development Plan of Guangdong Province ( 2017–2030 ), in the eastern and western regions of Guangdong, the installed capacity in the offshore shallow water area is 8.35 million kW, and the installed capacity in the offshore deep water area is 57 million kW, with a total installed capacity of up to 65 million kW, and a total power generation of up to 200 billion kWh. In the coastal areas of eastern and western Guangdong, a series of large-scale coal-fired units with a total installed capacity of about 18 million kW have been built because of their geographical advantages. There are also some large coal-fired units under construction in key planning projects in Guangdong Province. It is expected that by 2025, the installed capacity of large coal-fired units in eastern and western Guangdong will reach 20 million kW, providing 80 billion kWh of electricity. Assuming that end-use electricity consumption is raised by 5%, 10%, and 15% respectively under the low-carbon scenario, an analysis of the balance of electricity supply and demand in the GBA is shown in Fig.  4 .

Balance analysis of electricity supply and demand in GBA.

Within the 5% confidence interval, only the CEG and CCUS scenarios basically meet electricity demand, and within the 10% and 15% confidence intervals, an additional 50 billion kWh and 90 billion kWh of out-of-province power purchases are required in 2025 to meet electricity demand under the low-carbon scenario.

Sensitivity analysis of installed nuclear power capacity to electricity generation

Nuclear power, as clean electricity, is able to maintain a stable high output and is an important way to replace fossil energy sources. This paper analyses the installed amount of renewable energy that can be replaced by nuclear power installation according to the principle of power equivalence as shown in Fig.  5 . It is expected that 34.5 million kW of nuclear power will be commissioned in the GBA by 2060, which can replace 190.2 million kW of photovoltaic power generation or 111.0 million kW of wind power, discounted on the basis of the 2020 average annual power generation hours of wind power and solar power. Considering the complementary nature of wind–photovoltaic power generation, 140.2 million kW can be replaced by a 1:1 wind-photovoltaic mix. The amount of electricity reflects the effective generation time, the capacity reflects the generation capacity, and the reliability of renewable energy generation is low. The upper and lower confidence limits of wind power capacity are 26.37% and 7.68% respectively 27 , and the confidence limits of photovoltaic capacity are 13.7% and 23.2% considering the daytime and all-day period respectively 28 , and the upper and lower confidence limits of wind and photovoltaic integrated capacity are 25% and 5% respectively 29 . The new energy installed capacity that can be replaced by nuclear power with capacity equivalence is shown in Fig.  6 . According to the principle of capacity substitution, in 2060, the installed nuclear power capacity in the GBA can replace the upper limit of 2.8 billion kW and the lower limit of 560 million kW of wind-photovoltaic mix power generation, which is a considerable benefit.

Electricity equivalent nuclear and renewable energy installed substitution.

Capacity-equivalent nuclear and renewable energy installations.

Carbon emission prediction

In this study, the energy consumption of power generation is calculated based on the power generation structure of the power sector, and the carbon emissions of the power sector in GBA are calculated based on that. The carbon emission factor of purchased electricity adopts the average carbon emission factor of the power grid in Guangdong Province. The carbon emission projections under each scenario are shown in Fig.  7 . Carbon emissions in the BAU scenario decline slowly each year after peaking at 295.13 million tons in 2030, to 227.32 million tons in 2060. The CO 2 emissions per unit of electricity generation will decline annually to 218.75 g/kWh by 2060. Therefore, it is difficult to achieve net-zero emissions in the power sector under the current policy trend. Carbon emissions in the CEG scenario peak at 299.76 million tons in 2025 and then decline each year to 4.05 million tons in 2060. And the CO 2 emissions per unit of electricity generation declining annually to 4.26 g/kWh by 2060. Therefore, enhanced implementation of clean energy policies could lead to an earlier peak in carbon emissions and a 98% reduction in power sector carbon emissions by 2060. Carbon emissions in the CCUS scenario peak at 315.99 million tons in 2030 and then decline each year to 11.80 million tons in 2060. And the CO 2 emissions per unit of electricity generation declining annually to 12.42 g/kWh by 2060. So consideration of CCUS deployment could reduce carbon emissions in 2060 but also increase peak carbon emissions. Carbon emissions in the NGE scenario peak at 311.68 million tons in 2030 and then decline each year to 56.25 million tons in 2060. The CO 2 emissions per unit of electricity generation declining annually to 59.22 g/kWh by 2060. Carbon emissions in the NGE+CCUS scenario peak at 311.68 million tons in 2030 and then decline each year to 7.11 million tons in 2060. And the CO 2 emissions per unit of electricity generation declining annually to 7.49 g/kWh by 2060. So considering the coal-to-gas policy reduces carbon emissions less, while considering that CCUS deployment can reduce carbon emissions by 96.9% in 2060, which is lower than the carbon reductions in the CEG scenario. The percentage of CO 2 emission reduction under each scenario is shown in Table 1 . The simulation results show that accelerating the decommissioning of coal-fired power plants while accelerating the application of CCUS technology and promoting renewable power generation and nuclear power generation can help achieve carbon neutrality goals for the power sector in GBA.

CO 2 emission prediction for each scenario.

Reliability analysis

This study also considers the reliability of electricity supply under different scenarios. The power sector supply reliability δ can be calculated from the electricity self-sufficiency rate λ and the energy self-sufficiency rate μ of power generation. It can be expressed as follows:

which are shown in Table 2 .

In the BAU scenario, the λ in GBA decreases to 41.59% in 2060 while the μ increases to 67.96%. The δ increases from 27.76% in 2020 to 28.26% in 2060. In the CEG scenario, the λ in GBA decreases to 36.15% in 2060, which is due to the limited availability of renewable energy resources and the difficulty of nuclear power siting, while the μ increases to 100%. So the δ increases from 27.76% in 2020 to 36.15% in 2060. In the CCUS scenario, the λ in GBA decreases to 45.50% in 2060, which is due to the impact of energy prices, and the μ increases to 56.63%. So the δ decreases from 27.76% in 2020 to 25.77% in 2060. In the NGE scenario, the λ in GBA decreases to 44.21% in 2060, which is due to the natural gas price and geographical resource constraints, and the μ increases to 56.68%. So the δ decreases from 27.76% in 2020 to 25.06% in 2060. In the NGE+CCUS scenario, the λ in GBA decreases to 44.21% in 2060 and the μ decreases to 47.23%. The δ decreases from 27.76% in 2020 to 20.88% in 2060. This indicates that both the deployment of CCUS technology and the conversion of coal power to gas power will reduce the reliability of the electricity supply and that policies to promote clean energy generation should be accelerated.

Cost of electricity generation analysis

In this study, the total power generation cost and the unit power generation cost under different scenarios are shown in Fig.  8 and Table 3 . In the BAU scenario, the total cost of generating electricity peaks at 254.40 billion yuan in 2050 and then declines each year to 243.02 billion yuan in 2060. And the cost per unit of electricity generation increased yearly to 0.56 yuan/kWh. In the CEG scenario, the total cost of generating electricity peaks at 271.70 billion yuan in 2035 and then declines each year to 165.87 billion yuan in 2060. The cost per unit of electricity generation peaks at 0.49 yuan/kWh in 2050 and then declines yearly to 0.48 yuan/kWh, which is 14.10% lower than that in the BAU scenario for 2060. In the CCUS scenario, the total cost of generating electricity peaks at 296.51 billion yuan in 2050 and then declines yearly to 290.10 billion yuan in 2060. The cost per unit of electricity generation increased yearly to 0.67 yuan/kWh, which is 19.37% higher than that in the BAU scenario for 2060. In the NGE scenario, the total cost of generating electricity peaks at 275.44 billion yuan in 2045 and then declines yearly to 245.31 billion yuan in 2060. The cost per unit of electricity generation increased yearly to 0.58 yuan/kWh, which is 3.89% higher than that in the BAU scenario for 2060. In the NGE+CCUS scenario, the total cost of generating electricity peaks at 301.04 billion yuan in 2050 and then declines yearly to 291.56 billion yuan in 2060. The cost per unit of electricity generation increased yearly to 0.69 yuan/kWh, which is 23.48% higher than that in the BAU scenario for 2060. The simulation results show that an increase in clean energy generation can be achieved by controlling fuel costs in a way that reduces generation costs, while the deployment of CCUS increases both fuel costs and the O&M costs of power equipment.

Power generation cost under different scenarios.

Electricity demand mainly comes from industry, buildings, and residential life, accounting for more than 80% of the total electricity demand. So increased electrification of the industry sector and the building sector is the key to reducing electricity demand in the GBA. Due to the instability of natural gas prices, gas-fired power is less economical and should not be the dominant power generation technology. Considering the local natural resource endowment of the GBA, wind- and hydroelectric power generation are also highly restricted. Therefore, accelerating the decommissioning of coal power plants and promoting the development of solar power, biomass power, and nuclear power are key to achieving carbon neutrality in the power sector of the GBA.

Large-scale renewable energy generation into the grid will bring greater volatility to the grid, the later O&M costs greatly increase, so the abandoned wind, abandoned light phenomenon is serious currently. Smart grid technology and energy storage technology can increase the flexible scheduling of electricity, maintain grid stability, and reduce the operation and maintenance costs of the grid. At present, both the State Grid and the Southern Power Grid have built a strong smart grid. Energy storage technology still has certain technical barriers and has a greater impact on the cost of power generation after large-scale application. Electricity-hydrogen integration is still in the technology demonstration stage. Research on the impact of smart grid technology and energy storage technology on power generation costs will be carried out in the follow-up research.

CCUS technology plays an important role in carbon emission reduction in the power sector. However, due to high cost and energy consumption, CCUS technology is still in the demonstration and promotion stage due to a lack of experience in large-scale demonstration projects. Moreover, the complete industrial chain of carbon dioxide capture, storage, and utilization has not yet been formed, which prevents the combination of carbon-emitting enterprises and carbon-demanding enterprises from forming an integrated CCUS model. The carbon cycle of the power sector of GBA should be realized in combination with the good storage conditions of the submarine saltwater layer in Guangdong Province and the good foundation of gas hydrate extraction technology of carbon dioxide replacement.

As a policy tool to push enterprises to make energy-saving and emission-reduction transitions, carbon market trading is playing an increasingly important role. The carbon market is efficient and flexible but requires a complex set of institutional designs to support it. The core of the carbon trading market is carbon pricing, and the impact of carbon pricing on carbon emission reduction and power generation costs in the power sector will also be continued in the follow-up research.

Conclusions and recommendations

This study examines the ways to achieve carbon neutrality in the power sector in the GBA, a city cluster in the Pearl River Delta of China. This study adopts the LEAP model to construct a low-carbon power system in the GBA. The electricity demand in the GBA from 2020 to 2060 is analyzed from the demand side, and the power supply, power generation cost and CO 2 emission of the power sector under different scenarios from 2020 to 2060 are analyzed from the supply side. The results of the scenario analyses are available for policy makers.

The total electricity demand in the GBA will increase annually over the next 20–30 years and then decrease annually as energy efficiency levels improve. Electricity demand in the industrial sector will peak in 2040–2045 and then gradually begin to decline, and building and residential electricity use will grow slowly through 2060 with no inflection point. As electricity demand grows, an additional 40 billionkWh of out-of-province electricity should be purchased in 2025 to meet electricity demand under the 10% confidence interval and to ensure security of supply.

Carbon emissions from the power sector vary under different scenarios. Under the BAU Scenario, CEG Scenario, CCUS Scenario, NGE Scenario, and NGE+CCUS Scenario, the CO 2 emissions per unit of electricity generation are 219 g/kWh, 4 g/kWh, 12 g/kWh, 59 g/kWh, and 7 g/kWh by 2060, respectively. Accelerated decommissioning of coal plants, coal-to-gas conversion, and CCUS technology can all significantly reduce carbon emissions from the power generation sector. However, due to the limitation of carbon capture rate, CCUS technology cannot achieve zero carbon emission. Only through the development of nuclear power and renewable energy power generation can we truly realize zero carbon emissions from the power sector. Considering the volatility of power demand, a small amount of fossil power generation should be retained as a standby unit to ensure the reliability of power supply in the power sector. To ensure net-zero emissions from the power sector, all fossil energy generation and biomass generation should adopt CCUS and BECCS technologies by 2060.

Generation costs vary across scenarios. Deployment of CCUS technologies increases energy consumption costs and O&M costs in the power sector, and an increased share of natural gas generation raises fuel costs. Unit generation costs are highest in the NGE+CCUS scenario, reaching 0.69 yuan/kWh by 2060. The modeling results suggest that accelerating the retirement of thermal power plants and promoting clean energy generation can help reduce the cost of power generation. Meanwhile, the study considers the reliability of the power sector. Due to the limited use of renewable energy and the development of nuclear power in the GBA, a small amount of fossil power generation should be retained to improve the reliability of power supply, and CCUS technology should be adopted to reduce carbon emissions.

Recommendations

Strengthening demand-side management of electricity.

Between 2010 and 2020, terminal electricity consumption, per capita electricity demand and electricity consumption per unit of GDP in the GBA have increased year by year and electricity consumption per unit of GDP is higher than the level of international power-saving countries, so in the future, we should promote the decoupling of economic growth and electricity consumption by improving the ladder tariffs, valley-peak tariffs and smart grids etc., which can vigorously promote the demand-side management of electricity.

Strict control of coal power installation

The Central Government’s working opinion on the implementation of carbon neutrality suggests that fossil energy consumption should be strictly controlled, the pace of coal reduction should be accelerated, and the growth of coal consumption should be strictly controlled during the Fourteenth Five-Year Plan period and gradually reduced during the Fifteenth Five-Year Plan period. As the main source of carbon emissions in the power sector, coal power should be integrated into the future development process to maintain supply and peak adjustment, strictly control the addition of coal power units, and gradually retire old coal power units, accelerate the energy-saving upgrading and flexibility transformation of existing coal power units, and gradually transform coal power from the main force of power generation to a standby unit, and progressively reduce or even prohibit the bulk burning of coal.

Properly addressing the relationship between carbon neutrality in the long term and the development of natural gas in the near term

In recent years, the GBA has been actively encouraging the application of natural gas, actively developing natural gas-fired power generation, identifying natural gas sources and gradually constructing and improving the natural gas pipeline network, and upgrading the reception, transmission and distribution capacity of the trunk pipeline network. Natural gas-fired power generation, with its flexible operation, short start-up and stopping time and fast climbing rate, is a necessary support for the large-scale development of renewable energy. Therefore, the relationship between the long-term carbon neutral target and the near-term transition of natural gas power generation should be properly handled, the natural gas price mechanism should be improved, and appropriate laws, regulations and policy documents should be introduced when necessary to stimulate the power generation enthusiasm of natural gas units.

Promoting cleaner purchased electricity

In the next 40 years, it should continue to broaden the green channel for clean power from outside the region to enter the Bay, sign long-term strategic agreements, build a cross-provincial and cross-regional power transmission system for foreign clean power, and enhance the ability of clean energy bases to transmit power. Accelerate the promotion of inter-regional investment in renewable energy power plants by municipalities in the GBA, and tap the clean energy resources of the province's eastern, northern and western Guangdong.

Promoting energy efficiency of thermal power generating units in the GBA

The thermal power units in the GBA started early and are old, and the standard coal consumption per unit of power generation is higher than the domestic average. It is possible to optimize the energy system and improve the energy efficiency level of the units by designating measures for a special action program for energy efficiency improvement, increasing green financial expenditures 30 , upgrading the management level of energy efficiency indicators, and improving the unit's online performance calculation, indicator and consumption analysis system.

Methodology

The Low Emissions Analysis Platform (LEAP) model, developed by the Stockholm Environment Institute, is widely used for energy policy analysis and climate change mitigation assessment. It is based on scenario analysis with built-in energy, emissions, and cost–benefit accounting, allowing a comparison of energy demand, social costs and benefits, and environmental impacts under different scenarios.

LEAP framework and basic data

This study analyzes the pathway to carbon neutrality in the power sector of the GBA by 2060. The study consists of five modules: key assumptions, power demand, power supply, CO 2 emission, and power generation cost. The key assumptions module mainly includes GDP, population, urbanization rate, and industrial structure. The power demand module is used to simulate the electricity consumption structure on the demand side of GBA, which includes four sectors: industry, transportation, construction, and agriculture. The power supply module simulates the power installation structure and power generation structure on the supply side while considering the transmission and distribution losses. LEAP software is used to construct the Low Carbon Power Model of the GBA model, and the model framework is shown in Fig.  9 .

Power planning model structure of GBA.

Total electricity demand calculation method

Electricity demand is mainly influenced by factors such as activity level, energy intensity, and electrification level. Activity levels can be measured by economic indicators (such as industrial value added) or physical indicators (such as miles traveled, passenger turnover, floor space, etc.), and energy intensity can be measured by energy consumption per unit of activity. Total local electricity generation mainly depends on the structure of installed local generation and the generating hours. Purchased electricity is determined by electricity demand and local generation. CO 2 emissions from the power sector are determined by the power supply structure and the carbon emission factors of each power technology 31 .

Industrial sector electricity demand can be calculated based on the activity level, energy intensity, and electrification level of each branch. It can be expressed as follows:

where E p, i is the industrial sector electricity demand, AL i, j is the product output (million ton) of branch i product j in the industrial sector, EI i,j is energy intensity of branch i product j in the industrial sector, expressed in energy consumption per unit of product (million tons of standard coal per ton), EL i is the electrification level of branch i , and i is the traditional industries in the industry sector. AL k,j is the industrial value added (billion yuan) branch k product j in the industrial sector, EI k,j is the energy intensity of branch k product j in the industrial sector, expressed in energy consumption per unit of industrial value added (million tons of standard coal per billion yuan), EL k is the electrification level of branch k , and k is the emerging industries in the industry sector.

The building sector is divided into commercial buildings and residential buildings. The commercial building electricity demand can be calculated based on the building area, energy intensity, and electrification level. It can be expressed as follows:

where E P,b1 is commercial building electricity demand, A i is the building area of branch i (million square meters), EI i is unit area energy consumption of branch i (tons of standard coal per m 2 ·a ), EL i is electrification level of branch i .

The residential building electricity demand is calculated based on per capita living area, population, urbanization rate, energy intensity, and electrification level. It can be expressed as follows:

where EP,b 2 is residential building electricity demand, A j is the per capita living area in administrative area j (square meter), P j is the population in administrative area j , UR j is the urbanization rate in administrative area j , EI UR,j is energy intensity of urban residential life in administrative area j , EL UR,j is electrification level of urban residential life in administrative area j , EI R,j is energy intensity of rural residential life in administrative area j , EL R,j is electrification level of rural residential life in administrative area j .

Electricity demand in the transportation sector can be calculated based on the activity level, energy intensity, and electricity consumption per unit activity level of each transportation type 32 . It can be expressed as follows:

where E' P,t is transportation sector electricity demand, E i is 100 km energy consumption of transport i (tons of standard coal per 100 km), L i is annual mileage of transport i (per vehicle-km), N i is ownership of transport i (vehicles), EL i is the percentage of new energy vehicles in transport i, and i is the type of urban passenger transport other than the metro, E j is energy consumption per unit passenger turnover or freight turnover of transport j (tons of standard coal per passenger-km) or (tons of standard coal per tonne-km), L j is activity level of transport j (passenger-km) or (tonne-km), EL j is electrification level of transport j . And j is the type of transport except i .

Electricity demand in the agricultural sector can be calculated by activity level, energy intensity, and electrification level. Considering the data availability, the value added of the primary industry is used as the activity level of the agricultural sector. It can be expressed as follows:

where E P,a is agricultural sector electricity demand, AL is the activity level of the agricultural sector (billion yuan), EI is energy consumption per activity level (million tons of standard coal per billion yuan), and EL is the electrification level of the agricultural sector.

The total electricity demand is the sum of Eqs. ( 1 ), ( 2 ), ( 3 ), ( 4 ), ( 5 ). It can be expressed as follows:

In the power supply module, the electrical transformation and distribution include transmission line losses, transformer losses, and other equipment losses. Considering the availability of data, only transmission line losses are considered here. The average line loss rate of 3.63% 3 in Guangdong Province in 2020 is used as the average transmission line loss share of electric utilities in the GBA in that year. Activity levels, energy intensity, and electrification levels for each sector are derived from statistical yearbooks and research and analysis by the project team 33 , 34 , 35 , 36 , 37 .

The specification of generation technologies

The power generation module includes coal-fired power, oil-fired power, gas-fired power, hydro-power, nuclear power, wind power, biomass power, and photovoltaic power. For each generation technology, the dispatch rule, process efficiency, historical production, exogenous capacity, maximum availability, merit order, dispatch-able, lifetime, etc. are shown in Table 4 .

Methodology for calculating carbon emissions in the power sector

Carbon emissions from the power sector include carbon emissions from local power generation and purchased power. Carbon emissions from local power generation can be calculated based on the energy consumption structure of local power generation and carbon emission factors. The carbon emission of purchased electricity can be calculated based on the purchased electricity and the average CO 2 emission factor of Guangdong electricity. It can be expressed as follows:

where ECO 2 is carbon emissions from the power sector, EG i,j is electricity generation from category i fuel j power plant, bf i,j is standard coal consumption rate for power generation for category i fuel j power plant, EF i is CO 2 emission factor for category i fuel, PE is purchased electricity, EMF is the average CO 2 emission factor of Guangdong province 38 . The average carbon emission factor of the future power grid in Guangdong Province is determined by the future power generation structure in Guangdong Province.

Transformation costs methodology

Transformation costs include fuel demand costs, transformation capital costs, and fixed and variable O&M costs 14 . It can be expressed as follows:

where C t is the total cost, c i is the capital cost of power technology i , IC i is installed capacity of power technology i , f i is the fixed O&M costs for power technology i , v i is the variable O&M costs for power technology i , EG i is electricity generation by power technology i , c j is usage cost of fuel j , D j is the demand for fuel j . The various cost parameters are shown in Table 5 39 , 40 , 41 .

Previous studies have typically used learning curve models to predict trends in generation costs. The learning curve model based on the “learning by doing” effect can be formulated as follows:

where c i ( n ) is the generation cost of power generation technology i in year n , c i ( 0 ) is the initial cost per unit of power generation technology i , IC i ( n ) is the cumulative power generation capacity of power generation technology i in year n , α i is the elastic coefficient of power generation technology i , L i is technology learning rate of power generation technology i , LR i is the technological progress rate of power generation technology i . Learning rates for wind power, photovoltaic, coal power, CCUS, biomass power, etc. refer to relevant references 42 , 43 , 44 , 45 , 46 .

Socioeconomic parameters assumptions

The GDP growth rate, population, urbanization rate, and industrial structure of the GBA in 2020 are statistically calculated concerning the Statistical Yearbook of the nine prefecture-level cities of Guangdong Province within the GBA, the Statistical Yearbook of Hong Kong and the Statistical Yearbook of Macao in 2019–2020. The GDP growth rate of GBA from 2020 to 2035 is set concerning the existing growth rate trend and the Outline of the Fourteenth Five-Year Plan for the National Economic and Social Development of Guangdong Province and the Visionary Goals for 2035 47 , and the industrial structure from 2020 to 2035 is set by the trend of changes in the existing industrial structure and the Outline of the Fourteenth Five-Year Plan for the National Economic and Social Development of Guangdong Province and the Visionary Goals for 2035 47 , meanwhile, the impact of changes in GDP growth rate and industrial structure under the 2020–2021 epidemic is considered comprehensively. The GDP growth rate and industrial structure in 2035–2060 are set according to the trend of GDP growth rate and industrial structure change in 2020–2035. The population growth rate of GBA in 2020–2030 is set concerning the Population Development Plan of Guangdong Province ( 2017–2030 ) 48 , and the population growth rate in 2031–2060 is set concerning the trend of population growth rate in 2020–2030. The urbanization rate of GBA in 2020–2035 is set concerning the New Urbanization Plan of Guangdong Province ( 2021–2035 ) 49 , and the population growth rate in 2035–2060 is set concerning the trend of change in urbanization rate in 2020–2035. The socioeconomic parameters setting is shown in Table 6 . Discount rate analysis and projections based on historical discount rate trends.

Data availability

In this study, the data on electricity demand, population, and GDP used for prediction are from the website: http://stats.gd.gov.cn/ (accessed on 19 September 2023), and the data on installed power, electricity generation, and energy consumption are derived from a study of individual power plants.

Abbreviations

Low emissions analysis platform

Guangdong, Hong Kong, and Mocal Greater Bay Area

Carbon capture, utilization and storage

Bioenergy with carbon capture and storage

Stochastic impacts by regression on population, affluence, and technology

Operation and maintenance

Clean energy generation

Natural gas generation

Business-as-usual

Photovoltaic

M 2 multiplied by age

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Acknowledgements

We are so grateful to every power plant for their cooperation in data collection. Thanks to Songyan Ren for his precious opinions on the original draft writing.

This study is supported by the Collaborative Research Fund project entitled “Turning 2060 Carbon Neutrality into Reality: a cross-disciplinary Study of Air Pollution and Health Co-benefits of Climate Change Mitigation of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA)” (Project No.: C7041-21GF) of the Hong Kong Research Grant Council; Science and technology projects of Zhejiang Province [Project No.: 2022C03168].

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School of Energy Science and Engineering, University of Science and Technology of China, Hefei, 230026, Anhui, China

Mengke Xu, Cuiping Liao & Genglin Dong

Guangzhou Institute of Energy Conversion, Chinese Academy of Sciences, Guangzhou, 510640, Guangdong, China

Mengke Xu, Cuiping Liao, Ying Huang, Xiaoquan Gao, Genglin Dong & Zhen Liu

Guangdong Provincial Key Laboratory of New and Renewable Energy Research and Development, Guangzhou, 510640, Guangdong, China

CAS Key Laboratory of Renewable Energy, Guangzhou, 510640, Guangdong, China

Cuiping Liao

School of Engineering Science, University of Science and Technology of China, Hefei, 230026, Anhui, China

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Conceptualization, M.X. and C.L.; methodology, M.X. and C.L.; investigation, M.X., Y.H, Z.L. and G.D.; writing—original draft preparation, M.X.; writing—review and editing, M.X., X.G., G.D., and Z.L.; supervision, C.L.; project administration, C.L.; funding acquisition, C.L. All authors have read and agreed to the published version of the manuscript.

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Correspondence to Cuiping Liao or Ying Huang .

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Xu, M., Liao, C., Huang, Y. et al. LEAP model-based analysis to low-carbon transformation path in the power sector: a case study of Guangdong–Hong Kong–Macao Greater Bay Area. Sci Rep 14 , 7405 (2024). https://doi.org/10.1038/s41598-024-57703-w

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Received : 21 December 2023

Accepted : 21 March 2024

Published : 28 March 2024

DOI : https://doi.org/10.1038/s41598-024-57703-w

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