Smart City Scenarios – Industry stepping into municipal authority (Part 2)

Would you want to live in Google-City? Or any other city created by a big corporation? Technically there are various corporations that could offer such a scenario. And already do! Think of PANASONIC with Fujisawa – “a smart town through the concerted efforts of local government, businesses, and residents”. Covering all the aspects of smart energy, -mobility, -security, -health a.s.o. people would put on their that’s-where-I-wanna-live-list.

Is Fujisawa thinkable for Europe? What is so much different form the stereotype new housing estates that keep growing in the outskirts of cities? And how big is the step from providing “external” infrastructure to “internal” structures and say?
Think of a city administration that is managed like a global corporation.
Of citizens that are data recorded like employees. Of city management organized in processes like corporations do. The “City” provides superior living and working conditions, attracts business and people and grows successfully. This scenario offers great scalability for technical solutions, as the successfull “Corporate”-City can easily be replicated in any other part of the nation. With growing globalization maybe even globally. If citizens travel they can rely on familiar infrastructure, the share of and access to systems is most convenient – like switching on your computer at home and being connected automatically. Police is a mixture of facility management and HR department – make sure they don’t sack you :-). The various restaurants in town are like a lushes canteene – you just pay with your name, the amount gets deducted with your local tax and if you have fish & chips 3 times a week your city’s physician sends an invite for a nutrition seminar. You really get cared!

But still – why does the thought give me goosebumps?

The remaining silos can be crossed and we finally manage to apply and transfer internet thinking for holistic solutions spanning various segments. It would be easy to set standards for infrastructure like mobility-, energy-, security-, health-, governance-models. If one corporation alone cannot cover all requirements strategic partners fill the portfolio gaps. These consortia ensure the cross-semgent interoperability for a frictionless, probably web-based management system.
Supply and disposal of the city is mainly centralized. Due to the lack of public control prices are rising. The rising costs for energy lead to a growing demand for energy management solutions. The risen costs of mobility lead to a decline in recreational-mobility, however mobility itself decreases, due to the new home-focus, encouraged by telepresence-solutions. IT security is quite important and centrally provided with the free Wifi. Also in real life urban space is covered with surveillance systems but still people feel uncomfortable due to the competitive atmosphere in town and lacking solidarity.

Ok, I admit, it might be a bit extreme. But therefore it is a scenario!
How far are we from such a scenario? Is it thinkable for Europe 2030?

Smart City Scenarios – spanning the frame of urban future (Part 1)

In order to be prepared for future challenges it is important to get an idea of how future can look like. Based on this idea appropriate strategies can be developed. In order to set up these strategies it is essential to identify future options that are comprised of past experience and future expectations. These future options, the various pictures of the future, are called scenarios.

Limiting the development of urban future into one direction only is not only dangerous but also mistaking the global socio-economic dependencies. The system city consists of various subsystems. The interaction of only a few determinants within a subsystem in the context of urban creation shows the impossibility of a linear, one-dimensional future projection in a complex urban and global setting.

Looking at energy for example: Will energy be generated in a central or decentralized manner? Will it be regenerative, fossil or nuclear? What forms of climate-political regulations will dominate? Will energy consumption be reduced or will it continue to grow? What arrangements in the urban context will e.g. European cities agree on? What is the role of digitalization and connectivity in the context of energy generation, -storage and –consumption? What is the impact on business models – we have seen first hypes die with the subvention of solar energy. In times of low investment rates on savings energy cooperatives seem to develop quite popular. How will the role of traditional stakeholders change? What is the future of traditional energy suppliers? Many cities hold shares in local energy supply. Will they take back over or completely leave the energy supply to third party? What is the role of the citizen? Will so called prosumers – people who not only consume energy, but also produce for their own use and sale – establish extensively? What is the role of IT driven companies like Google. Nest produces thermostats that learn the temperature preferences of its users. The company was bought out by Google in January 2013 for US$3.2 billion as a strategic move to gain access to the growing connected home market. [Forbes 2014/01/13]. Accessing the energy segment as a domain outside the core competency can also be seen with the growing market of e-mobility. On IAA 2013, the world’s leading automotive trade show, BMW launched their new ‘iSeries’. The electric-vehicle can be used as energy-buffer when integrated into the building’s smart grid. This way BMW has an interface to the energy network of an individual household and could diversify into the energy management of private homes or – thinking of fleet management – businesses.

Various stakeholders, e.g. governments, municipalities, technology providers and citizens will take various perspectives when responding to these questions. A similar variety applies for other subsystems or city segments, e.g. mobility or security and even excellerates with the interdependency of these subsystems.

Boyd Cohen “…emerging trends … brand new cities…”

Boyd Cohen, climate strategist, author and researcher:
“One of the fascinating emerging trends will be the introduction and evolution of brand new cities which are being built from the ground up with smart cities in mind.”

Based on his definition of Smart City “Smart cities use information and communication technologies (ICT) to be more intelligent and efficient in the use of resources, resulting in cost and energy savings, improved service delivery and quality of life, and reduced environmental footprint-all supporting innovation and the low-carbon economy.” Cohen published a list of the Top 10 smartest cities on the globe as a result of his research. I was quite surprised to see Vienna in first place and Amsterdam not listed:

1) Vienna
2) Toronto
3) Paris
4) New York
5) London
6) Tokyo
7) Berlin
8) Copenhagen
9) Hong Kong
10) Barcelona

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.’