Data changes paradigm

New technology enables collective thinking and acting in a transdisciplinary manner. Flexibility, networking, real-time information and utility, rather than possession, are impulses consumers learn in the virtual world of ICT and expect action in the physical one. The use of new technology can change the way people consume, produce and relate to each other. This development accelerates with the growing group of Generation Z who are used to curating information online at a rapid pace, sharing thoughts and observations on a variety of machines, topics and products.

New paradigm is “possession vs usage”.
I am of the generation where one thrived to possess things. A one to one relationship. My car. My book. My … whatever. The object is in my possession until the end of its live cycle and then it is my problem to dump it. This one-way-, or silo-mentality perfectly fits the sort of old-fashioned structures in city authorities. There is an administrative office for every segment. Collecting data within each silo. Providing segmented data in a one on one relation for passive use. City is the sender. Like in the Web 1-0. Uni-directional, in a one on one or one to many relationship. Fostering silo-mentality.

The principle of “usage” however expands the number of participants.  Transferred to cities this means information changes from single to multi purpose. And using an object or data only in a fragment of its live cycle. By making data accessible (e.g. open data) citizens even have the possibility to actively create value. Like in the Web 2.0 content is generated by users and city becomes the moderator. Multi-directional, in a many to many relationship. The prerequisite for collaboration.

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Manzini on “Strategic Design Approach”

 

Literature Review:
E. Manzini, C. Vezzoli
A strategic design approach to develop sustainable product service systems: examples taken from the “environmentally friendly innovation” Italian prize
(Source: Paper, Journal of Cleaner Production 11 (2003); pg. 851-857; Milan / Italy)

Product service system (PSS) describes the idea of designing and selling “satisfaction” rather than products. Assuming, that the customer (business as well as end user) doesn’t necessarily demand the product itself, but what the products and services enables him to achieve. This is basis for new stakeholder relationships, production processes and business models. Manzini describes this business model innovation as ‘… shifting the business focus from designing (and selling) physical products only, to designing (and selling) a system of products and services which are jointly capable of fulfilling specific client demands, while re-orienting current unsustainable trends in production and consumption practices. … usually referred to as a Sustainable Eco-efficient PSS.’.

Besides the collaborative idea key is that innovation doesn’t happen on product or process side but in the way existing technologies are systemized. In the paper 4 examples are described that target a latent social demand. Given the fact that they all use a – so far unseen – combination of existing technologies and services implementation seems quite easily possible. Prerequisit is that stakeholders are flexible enough to depart from consolidated patterns and get away from business-as-usual. Instead of optimizing their own segment PSS follows an overall systemic resource optimization which is based on the convergence of stakeholders’ interests. This approach results in new forms of organization within stakeholders as well as redefines their role towards other companies and clients. PSS is based on new systems of values and consequently creates new market opportunities that enable new offerings which either add value to the product life cycle or are a final result for the customer.

The 4 examples given are:

A)    “The Diddi & Gori textile flooring service”
Diddi & Gori is in the segment of synthetic fibers production and sold textile flooring, mainly to retailers for exhibitions and trade fairs. Such products rely on oil refining which obviously have an environmental impact (e.g. resource consumption).
Their new idea is to offer services in addition to the product as a final result to the customer by offering the utility of the product rather than the product possession. The new offer includes the whole service from supply and installation to removal. This way the customer no longer buys the product but its utility – they don’t have to struggle with the disposal as Diddi & Gori remove the flooring and make fibre again. This has an impact on the design of the flooring in the first row. As Diddi & Gori  remain the owner of the product over its life cycle, they are interested to enhance material’s lifetime. So easy recycling that allows to create new flooring is their inherent economic interest which reduces resource consumption and waste.
The motivation for the customer is that the overall cost is cheaper than buying and disposing the product.

B)    “The Kübler services added to lubricant supply”
Kübler is a lubricant supplier for machines and components in various industries.
Their new idea is to offer services that provide value added to the product life cycle by analyzing the effectiveness of the aerosol treatment plants and of sewage treatment. In order to do so they set up a van as a movable chemical laboratory with which they analyse the performance of lubricants, the noises, vibrations and other undesired effects directly at the clients machines. Kübler suggests potential for efficiency as well as environmental protection and guarantees functionality and durability.
The motivation for the customer is to improve the lifetime of the clients’ machines and reduces their cost for monitoring and maintenance. The reduction of lubricants sold is compensated by the services offered and improved customer loyalty.

C)    “The Allegrini service added to detergent supply”
Allegrini produces detergents and cosmetics.
Their new idea is to offer services that provide value added to the product life cycle by offering home delivery as a new way of supply. They have a mobile van that periodically tours from household to household and refills the provided plastic flacons – even if not completely empty. This reduces cost for packaging which – bottom line – reduces the cost of the product over all and increases customer loyalty.
The motivation for the customer is time saving (no need to go to a shop) and reduction of waste (reuse of packaging) and landfill.

D)    “The AMG solar heat selling service”
AMG is a municipal enterprise providing gas and lighting to the city of Palermo / Italy.
Their new idea is to offer services in addition to the product as a final result to the customer. So instead of selling the gas they sell heat and hot water as a finished product as well as the maintenance of the equipment.
The motivation for the customer is to be environmentally friendly which – for a municipality – reacts to public opinion.

‘… they would have said “faster horses”…’

What is the reason behind a city’s sound claim to be “smart”? Henry Ford once said “If I had asked people what they want they would have said, faster horses.”. The proverb can be transferred to cities. Smart cities are not about the improvement of already existing offerings and maybe adapt them to more people, faster service, improved cost efficiency. It is about the satisfaction of needs that are often beyond peoples imagination. To take up Ford’s proverb again: Smart City is about “cars” not “faster horses”. Most people think in products and services they are familiar with – solutions offered in subsystems. Therefore “smart” solutions – like cars – are a system of subsystems. The underlining assumption is that the requirement is not a product or service, per se, but the resulting benefit the agglomeration of products and services enable the citizen to do. Assuming we have such a cute “smart” idea for the city, how is it put into action? Well, most of the times by tendering silo offerings and try to put the puzzle together. However business focus should be on innovating, creating and implementing “satisfaction”, selling a system of products and services that are jointly able to – referring to Ford’s proverb – “drive”. This requires a new way of innovation based on new interpretation of concept of offering. However the approach- and tender process is about “car parts”. But who puts them together? Who is the visionary? And who takes the risk, if the assembly doesn’t work?

Let’s take a look at the potential stakeholders: Governmental bodies – often face the conflictive share of responsibilities among supra-national, national and regional structures. In addition city authorities often struggle with their strictly separated old-fashioned internal structure and also fear that e.g. open data could be misused. Industry – companies are not used to collaborative work, yet. They are often afraid to give up competitive advantage when collaborating. Last but not least academia. Universities have a huge knowledge but no access to bring it in operation.

However complex problems need to be addressed in a collaborative way.

You can only be CO2 neutral, when you don’t exist

Prof. Dr. Michael Braungart
Keynote speaker Smart City World Congress, Barcelona / Spain, 13.-15.11.2012

“Even trees are not CO2 neutral. You can only be CO2 neutral, when you don’t exist. Trying to reduce emissions therefore is the wrong thing. And doing the wrong things perfect means doing things perfectly wrong.”

With two examples he underlines his statement: Firstly, the sealing of buildings is tax supported in Europe – however behavior of inhabitants is not adequately changed. He quoted a study that detected climate in a building often being worse than outside. Consequently there is a negative impact on health that is shown, for example, in Asthma being the most common chronic disease among children worldwide and rapidly growing. In Europe 10-15% of children are affected. Secondly, things are not used to “be smart”. So it doesn’t help to make them more sustainable or extend lifetime. Inventing tires for double milage only extends the problem.

Therefore he invented the “Cradle to Cradle Concept”. It is a biomimetic approach to the design of products and systems. It models human industry on nature’s processes viewing materials as nutrients circulating in healthy, safe metabolism. It is a holistic economic, industrial and social framework that seeks to create systems that are not only efficient but also essentially waste free. Companies designing products that go in the biological cycle are for example Puma, KLM and Maersk. According to Braungart future cities could affect the climate like forests, being carbon positive, not neutral only. Currently 25% of the world emissions come from buildings. An urban area set up in the cradle to cradle concept is the “Park 2020” near Amsterdam. Also the city hall of Venlo in the Netherlands is based on the concept, so are companies in the building industry like Thoma Holz buildings, Schüco windows, Moas tiles. Philips, famous for light products just recently decided to align the company according to Braungart’s concept. Their first lighthouse project is selling light to the city of Rotterdam instead of lightbulbs. Cost for electricity decreased by 60% – Philips and the city of Rotterdam share the saving.