Peer reviewed article published

Prof. Roos and I published an article in the business informatics journal AKWI! Please feel free to take a look 🙂

http://ojs.hslu.ch/index.php/AKWI/article/view/33/49

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Smart City Expo World Congress – Day 2

Again some quotes (as I understood them)…
Plenary session “Governance Challenges for Smart Cities”
Antoni Vives I Tomas, Barcelona, Deputy Mayor for Urban Habitat:
Segmented structures: ‘We have a lot of smart industry, but we lack smart politicians – and I am a politician. We have authorities and experts but industry doesn’t have a real client – and that’s the problem. Therefore industry can continue selling us products, but that doesn’t solve our problems. {…} We need to restructure our organisations.’
Pilot projects: ‘I hate pilots – I am fed up with small solutions for parts of the city – it doesn’t help, it is a waste of money, it is just for the press. {…} You as industry should ask for visions.’
‘Pilots encourage the eagerness for quick solutions. And when you have a stupid mayor and a company selling products you have stupid solutions, short sighted, but no smart city. {…} We need a city protocol that demands a vision and long term solution.’

Business models: ‘If you (industry) expect payback over 6 years, don’t come to us – if you are willing to build up an industry structure over 30 years we are partners.’

Charbel Aoun, Schneider Electric, Senior Vice President, Smart Cities:
The following barriers make it difficult to deal with cities:
a) Structures: ‘We don’t understand cities – municipalities are a blackhole for industry.‘ {…}
‘Don’t break the silos – I cannot talk about breaking silos, we as industry are structured as silos ourselves. But we need a change of paradigm and find a way to work across silos. We need to implement hybrid structures.’
‘If you want to create a collaboration mode we have to erase the term competition.’
b) Requirements: ‘Cities tell industry we need xyz. Then you have a lot of power point presentations and use cases and then you don’t know which one to take. If I decide for one, would I be stuck with this supplier? What exactly do I get? Industry is a blackbox for cities.’ {…}
c) Regulations and procurement: ‘If we have identified a solution, we can not implement it because of restrictions, regulations, procurement processes.’ {…}
d) Financial models: Smart city requirements are something new for the financial sector. Currently cities thrive for the wellbeing of their citizens but … ‘Would you find a bank to finance “better live”?’ {…}
e) Business model: ‘If you bring in 10-15-20 players to a project, how do you handle this? Who should handle this? What is the business model behind it?’

Pilots: ‘If a solution has already been showcased another pilot is waste of time. Therefore no more pilots, pleeeaaase.’ {…}

Laura K. Ipsen, Microsoft, Corporate Vice President, Worldwide Public Sector:
Pilots: ‘We start projects with a workshop to identify what a city needs. Instead of going for a pilot we ask to build a sustainable ecosystem, that can be transferred to other cities with similar challenges, e.g. Olympic games.’
Collaboration: ‘What private sector can do better is collaborate with each other.’
{…}

GE2 Parallel Session “EU Smart Cities and Communities”
Colette Maloney, DG CONNECT European Commission – Smart Cities and Sustainability, Head of Unit (Belgium):
Smart Cities and Communities EIP (European Innovation Partnership)
• aim to have transformed a number of cities into smart cities by 2020 (how many was not said)
• aim to fund large scale projects, light house projects, this is the focus of Horizon2020 (successor of FP7) and difference to previous funding policy. These large scale projects shall demonstrate the use of technology, not necessarily technology innovation.
• has no focus on pilots but on scale up projects – which so far is not seen in Europe, and the reasons seem unclear. This is the reason why EIP looks into the questions:
o What are the barriers?
o What standards are needed?
o What can be learnt from city projects so far? Knowledge sharing amongst cities what has worked, but also what didn’t work?
• seek to break down “silos” between energy, transport, ICT and consolidate European Commission’s initiatives under “one roof” – this affects cities amongst themselves and with industry.
• want to encourage interaction and technological integration rather than technological innovation in order to overcome the lack of sustainable business models.

Magdalena Andreea Strachinescu, DG ENER European Commission – New energy technologies, innovation and clean coal, Head of Unit (Belgium):
• Horizon 2020 Budget 2014-2015: 1.254 mio EUR → 2/3 of budget will go to Smart City
• In the calls to come, the EU would like to see more cooperation across Europe: North-South-East-West, different climate zones, structures…. ‘Identify common challenges and address them with scalable solutions.’

Smart City Expo World Congress, Barcelona

First day of the congress started – here are some quotes that perfectly fit my theory that Smart City is not about innovation of technology but about a revolutionary approach in organizational structures….

Keynote
Kent Larson, Principal Research Scientist and Director of the Changing Places Group, MIT Media Lab, Department of Architecture and Media Lab, Cambridge, USA:

* ‘We developed cities in segmented areas over time and realize the limitation of this concept. Segments are not made to scale.’
* Buildings originally were constructed like skeletal systems and progressed to structures that add blood circulation to the bones. ‘I think next stage is comparable to the nervous system of a body.’ The implementation of sensors make data available and actionable information possible. Challenge is to get acceptance of people – young people love it, baby boomers not so much. Therefore the transformation process to smart solutions will be a bottom up approach over time.
* ‘People, especially young people increasingly prefer to share and use than possess.’ referring to the cover story of The Economist.
* From the audience the question how to commercialize the impressive technology shown was raised. Larson’s idea is to encourage students from MIT and other academia to set up startup companies. These startups than need to be fed into large corporations for them to roll out large scale solutions. ‘Governance should encourage this.’.

Plenary session “IT city integrated vision”
* Chris Vein, Chief Innovation Officer for Global Information and Communication Technology Development, World Bank, Washington DC, USA quoted Mike Bracken / UK: ‘”In an analog world policy dictates delivery. In a digital world delivery informs policy.” This entails a whole new way of organising our business processes.’ – Exactly! – Couldn’t have said that any better 😉

Plenary session “The Future of urban Sustainability”
Amitabh Kant, CEO & managing director, Delhi and Mumbai Industrial Corridor Development Corporation, New Delhi, India:
* ‘Horizontal integration is key to urban development – this is difficult for retrofitting, much easier in greenfield. {…} Segmented urbanisation is dead.’
* ‘Technology is not the ultimate solution. Technology has to harnest the people. People make it a vibrant city, not technology. Emerging countries have an advantage and are the ones to make a sustainable planet.’
* ‘Smart City, Connected City, Intelligent City Concepts – are all dead, if corporations like IBM, Siemens, Schneider – all the big ones that exhibit here today – continue to supply in silos! You need a revolutionary approach.’

Sylvie Spalmacin-Roma, IBM, Vice President, Smarter Cities, Europe:
* ‘Data becomes a natural resource in itself. {…} Cities across the world are mainly structured in silos. This is not a bad thing, as you need experts in the segments. But for sustainable development data needs to be used across segments.’
* ‘Many cities move to horizontal organization to make use and integrate data available. This was the bases for the Rio project.’
* ‘Coming back to your (Amitabh Kant) point of corporations working in silos: There is a need of combination of public and political players. Municipalities can help private companies to understand the needs and work together.’
Factual-, observational- and social media data can now be integrated and put into actionable data. Motivation for cities to do so is to reduce operational cost. This can easily be done by analysing data available. Innovative projects can then be paid out of the savings.

Moderator Cristiana Fragola, C40, regional director Europe, Milan, Italy:
* ‘I think it is common understanding of this panel that a smart city first of all is about integration, integration, integration. Even before upgrading aged infrastructure.’

Sam Adams, Managing Director, City Club of Portland, Portland, USA:
* Political top ranking issue should be: ‘Set goals! Set goals what kind of city you want to be. Only afterwards use technology to achieve these goals.’ Currently the focus is on technology and implementing solutions without necessarily paying to a big picture.

Larry Ng Lye Hock, Urban Design Director, Urban Redevelopment Authority, Singapore:
New developments now put sociologists in first place rather than architects and city planners.

More to come 😉

The shifting global business landscape

http://www.mckinsey.com/Insights/Urbanization/Urban_world_The_shifting_global_business_landscape?cid=other-eml-alt-mgi-mck-oth-1310

Asia and Africa are not only the regions of highest population growth but also changing global market places. With their high pace of urbanisation, development of consumption power and increasingly skilled labor it is most likely that the global business landscape will change.
Emerging countries set the scene for either new business areas for established corporations or a threat of existing business when these markets are ignored. Especially when having the economic slow down of developed markets in North America and Europe in mind. According to McK large corporations will rise in the emerging world and impact the dynamics of global competition.

New kids on the block

Software developers seem to discover “City” as a customer. Having developed software for business processes like accounting, controlling, sales, purchase, production, logistics, personnel it is only a small step from handling this business data to also manage the respective assets. As soon as a city gains transparency on their asset conditions and cost (e.g. infrastructure, lighting, busses, energy….) the software developer could climb up the value chain and start to actively manage the assets as a new business field.
So far the asset management is an own domain or part of the asset-/product-suppliers territory.

As a reaction to protect the assets proprietary systems are an option. However in times of increasing connectivity the customer city can insist that interfaces are open and data is shared.

Business WITH cities is crucial for sustainable business IN cities

At the end of the day all city pain points conclude in the keyword “budget”. On the one hand city authorities need to reduce cost: Smart solutions based on ICT can help municipal efficiency (e.g. eGovernment). Besides the savings cities need to secure income. Most leverage lies in tax income – however this source seems to be a fragile one.

Tax losses drive Revitalization of Industrial Parks
This week I had an interview with the Agency of Economic Development of a city in southern Germany (approx. 600.000 inhabitants). A huge problem seems to be the aging structure of industrial parks and the emigration of companies – of tax payers.
The history of industrial parks in Germany dates back to the 1970s – an “import” from the UK. The first generation consisted of approx. 80% storage / production – simple buildings, greenfield development, often located close to the motorway. Only in the mid 80s the share of office space increased and the “integrated location” – often as conversion of traditional industrial land – connected to town through improved infrastructure gained relevance.
These structures come to age now and need revitalization with state of the art technology and logistics in order to maintain attractive for industry.

Cities leave their enclosure for Industry to expand the value chain
Cities seem to be interested to analyze these areas for “smart city solutions” – technologically as well as with new business models. There are various examples where industry and city jointly develop concepts how to revitalize these areas. New forms of partnering, be initiatives or public-private partnerships (PPP) show that “City” leaves the traditional enclosure and opens towards industry. “Ingenieursmeile Mannheim”, “InnovationCity Ruhr”, “Neckarpark”, “Synergiepark Vaihingen” are only a few examples where industry takes an active role in a traditional municipal domain.
Industry, respectively product suppliers, expand their position in the value chain and try to get hands on analyses, consulting, planning on the one side of the chain as well as operation on the other side of the value chain.

With the early involvement of industry in core municipal domains the roles of city and industry change. The impact of technology providers on regulations and tender grows. It therefore seems crucial for industry to work WITH cities in order to secure its business IN cities in future.

PPP

Public-Private Partnerships (PPP) are a way to escape the short-term election-cycle trap. By leveraging public goods to foster private investment, save money, and create new long-term benefits city has an attractive financial model and industry gets a reliable timeframe for investments.
There are examples for e.g. infrastructure trust where private companies can invest and get concessions for 10 or 20 years to operate facilities. In a McKinsey report i read about an example in Washington/US where the mayor Vincent C. Gray initiated an “App for Democracy” to an open community platform developed for submitting non-emergency service requests to the city. The first edition of “App for Democracy” yielded 47 Web, iPhone and Facebook apps in 30 days—a US$ 2,300,000 value to the city at a cost of $50,000.