‘Smart City’ is putting on new cloths as the concept expands to address multiple challenges in sustainable development for a growing number of constituencies. Conceived originally by urban theorists as an assessment of urban performance based on measure of a city’s arsenal of physical infrastructure and human and social capital, the term now speaks to academics, policy-makers, citizens and industry across a range of disciplines. Many of these were on hand at the 7th annual Meeting of the Minds event held in Toronto this month, to add their perspective, share best practices and identify new potential for the creation of equitable, living urban organisms.
A key theme at this year’s Meeting of the Minds event — and a hallmark of the evolution of the smart city concept — is the progress towards this goal through the application of information and communications technologies. In this enablement process, the private sector plays a critical role, primarily through the supply of digital and communications technologies needed to power intelligent municipal collaboration and better management of energy, water, transport, buildings and other urban infrastructures. Representatives from private industry were out in force at the conference, with sponsors Toyota, Cisco, Schneider Electric, Bombardier, IBM, Itron and Jones Lang LaSalle onsite at the Evergreen Brickworks to showcase the latest tech innovation. For these and other ICT companies, smart city offers significant new opportunity: a market review released in Q1 2013 by Navigant Research, “forecasts that the smart city technology market will grow from $6.1 billion annually in 2012 to $20.2 billion in 2020.”
But how can a company market to a concept that continues to undergo seismic shift as it grows to accommodate new challenges and changing stakeholders? One answer for vendors that want to do business with smart cities is reinvention — a corresponding shift in principles of demand creation and marketing approach. These were also on display at Meeting of Minds.
Cisco is especially adept in this regard, and sent its chief globalisation officer, Wim Elfrink, to envision the use case(s) for advanced ICT in urban environments. According to Elfrink, demographic change is requiring real productivity improvements if we are to maintain our current standard of living. At the same time, population explosion and huge in-migration to cities, in developing regions in particular, are creating huge demand for more infrastructure. To meet this demand, he explained, “you have to think differently” about the “virtualization of education,” the ”virtualization of healthcare,” and the ”virtualization of work,” taking advantage of the Internet of Everything, or the digital connection of people, processes, data and things, to generate alternatives to physical infrastructure.
Excerpts from Elfrink’s visualization exercise are available in the accompanying video here; and concrete “iconic” examples of the application of Cisco’s Smart + Connected Communities concept were offered up in Elfrink’s presentation, notably, Rio de Janeiro’s use of networking technologies to coordinate management of city systems in an Integrated Operations Centre, and new for Canada, implementation of a Cisco WiFi mesh at the Toronto Waterfront development to enable new levels of collaboration and service delivery in this intelligent community project. Another example he provided is Nice, which has implemented smart parking, lighting, waste management and environmental monitoring, using Cisco infrastructure and other technologies to achieve savings of 30 percent in energy consumption, 50 percent in water, a 20 percent reduction in crime rates and a 30 percent reduction in traffic congestion.
If these results are compelling to city administrators, the approach is gaining traction with other vendors as well. For Charbel Aoun, SVP, smart cities — strategy & innovation, Schneider Electric, the key to progress on smart city is “moving from spending to investing. In traditional government rhetoric,” he explained, “it’s all about spending budgets, but investment in infrastructure is something that is for the future. It’s a bet on the future.” To encourage this longer term vision, Schneider made its own investment in 2011 — creation of the smart cities – strategy & innovation group, whose mission is to generate collaborative conversations around six different “solution buckets,” including smart grid, transportation, buildings, energy, public services and the integration of systems by use case. With the exception of the integration portfolio, Schneider had been building capabilities in each of these areas for quite some time; however, as Charbel noted, in recognition of changes in the market began in 2011 to “move into using the language that was more commonly known [smart city].”
This new market approach has been built in turn on a much larger transformation within Schneider, which Daniel Peloquin, president, Schnieder Electric Canada explained was based on the acquisition of the Madrid-based software development firm Telvent in 2011. Designed to position Schneider in the efficient infrastructure, transportation and smart cities markets, the Telvent purchase brought with it the ICM (Integrated City/Corridor Management)platform, which has since become the Integrated Management platform. Another acquisition brought to Schneider Resource Advisor, a visualization tool that allows enterprises to monitor activity and model data from systems across the organization to improve sustainability performance. This capability is now being combined with other company IP (from the smart grid portfolio, for example) and applied to cities as these require the integration of data and applications from disparate systems that Schneider’s standard data platform can support. Common code for all Schneider capabilities, combined with open source APIs that can reach into multiple systems, is in Peloquin’s view a key differentiator for Schneider in this market.
Schneider’s repositioning operates at a very high level, and incorporates sustainability and efficiency messaging that the company has developed since the 1970s. But Schneider is also working to integrate this into day-to-day operations with the help of city account managers who can focus on specific city strategies: Charbel advised city managers to “dream big, but start practical, from the bottom up with low hanging fruit that can deliver tangible results to achieve buy in,” creating value that will lead to the next layer of service delivery. According to Charbel, Schneider’s shift away from exclusive focus on energy management to solutions built on data management platforms is beginning to bear fruit: approximately 41 percent of the company’s revenue is now derived from “the new economy.”
Focus in the development of new capabilities to address smart grid markets is being placed by many vendors on 21st century gold — data and the technology platforms needed to extract meaning from it. Cisco, for example, has been working to transition its expertise in data analytics for the monitoring/management of networking infrastructure to new applications. According to Nicola Villa, new managing director, big data & analytics, Cisco Consulting Services, the advent of distributed intelligence — where energy independent, context aware, devices with the CPU needed for computing and filtering of data in real time reside at the edge of the network — will give Cisco a leg up in the data analytics marketplace. Cisco has unique value, he explained, due to its expertise in analyzing this type of ‘data in motion’, and Villa sees “no reason why the company cannot transition to business analytics,” especially since there is a “direct one-to-one correlation between the network within an organization, and its business processes.” Villa’s current task is to build out Cisco’s data program through creation of an ecosystem of “capacity” (consulting service delivery), “capability” (domain expertise for implementation in vertical stacks), and “scaling” (extend Cisco’s high touch approach across markets) partners, and to articulate a market approach that shapes the business case through smart city demos, labs and scale projects. In work with clients, Villa intends to rely on “disruptive consulting from the bottom up” that can accommodate the complex, multi-stakeholder environments that cities represent, and which is based on the real data monitor of existing infrastructure to establish benchmark for improvements. “Consulting in the city space will no longer be top down: it will be about identifying concepts in a network, cross-fertilizing them, and producing insights that will come to the client in the shape of a consulting offer,” he explained.
With its strong heritage in data analytics and more seasoned view of urban initiatives, IBM also presented at Meeting of the Minds on the company’s transformation of smart city into philanthropic work, touched by elements of competition and play. As Stan Litov, president of the IBM Foundation, explained, the idea of philanthropy has changed at IBM to include not just donation of cash, but also about technical skills, which IBM invests in to the tune of $6 billion year in its network of research labs. One component of the company’s CSR function is to provide access to this intellectual capital for work on urban issues — to help cities resolve problems through the application of IBM technologies.
According to Litov, the issues that cities now face are too large to leave to public officials to solve on their own, so the company has embarked on the three-year Smarter Cities Challenge, a program that will identify 100 cities around the world with a significant problem and send in an IBM team to work on the issue. By the end of the challenge, Litov noted that IBM will have allocated 100,000 hours, which equates to a donation of $50 million in billing charges. But beyond the intrinsic value of technical support provided to individual cities (Litov discussed specifics with Mayor Brenda Halloran of Waterloo, and Bruce Hayne, councillor for Surrey, two winners of the Smarter Cities Challenge in a panel at the event), the program is also delivering systematic insight into how cities can use technology to effect urban transformation. Litov shared some of the learnings that have developed out of this work: rules around governance must be established to encourage regional approaches and engage the private sector; data silos in government departments and systems need to be broken down; citizens can collaborate with government through the creation of social and mobile solutions and should be encouraged to do so to establish broad support for innovation; finance of smart cities initiatives needs to become more creative; and best practices should be linked to concrete action to advance the smart cities agenda. On this last point, IBM’s Challenge has made a significant contribution: based on its work with different global cities, the company has built multiple case studies on economic development, improvements to water quality, the creation of software development hubs, and energy, smart metering and carbon neutrality initiatives – as well as a roadmap, reference architectures and technology for other cities on the journey.
This work at the ground level with city managers is an important input to the successful implementation of smart city initiatives. In his dealings with potential adopters of smart technologies, Rick Huijbregts, GM for Smart +Connected Communities at Cisco Canada has found that investment in upfront dialogue is time well spent as it provides the flexibility needed in complex, multi-stakeholder urban initiatives. Huijbregts now leads the Cisco Canada’s Industry Transformation Team, a group tasked with bringing the discussion “from the server room to the board room” across vertical portfolios including connected real estate, healthcare, financial services, government, education, and resources. The team also applies a municipal lens, looking at the “interceptions” between different industries to connect silos of information from disparate city systems in creation of smart solutions.
According to Huijbregts, there are eight or so Canadian municipal entities (ex. Newmarket, Waterloo Region, Winnipeg) that have established a form of smart city council, and these are now inviting vendor input. To support this work, Cisco has developed a six-step “True Growth” advisory program (as opposed to consulting service) that the company is now rolling out to four cities. “In these communities, we see all these brilliant ideas popping up and this network of initiatives,” Huijbregts explained, “but often what is lacking is the structure and governance that will allow the municipality and stakeholders to focus on those areas that have the most natural energy and the most people rallying around them.” In a True Growth “conversation,” priorities are set for projects representing “true pockets of metro energy” — initiatives that have broad community interest and that can demonstrate quick wins in order to maintain momentum for longer term initiatives. Once priorities are established, Cisco would re-enter the discussion as a commercial entity with solution offerings around specific themes. This long term, committed pre-sale engagement benefits all parties, including Cisco. Huijbregts noted: “We have learned the hard way that coming in as an eight hundred pound gorilla enterprise and asking for paid consulting services up front is a tough sell. Or, if we try to jump to a conclusion too fast, the ideas are not owned by the community, or carried far enough and they are not sustainable. And then we get into trouble because there is no procurement and nothing happens.” True Growth, he added, is designed to provide “line of sight” on low hanging fruit and to identify where the real opportunities lie.
For the ICT vendor community, significant new opportunity clearly resides in the smart city marketplace, but only for those organizations that are willing and able to demonstrate the adaptability that is now also demanded of city organisms. This work is clearly underway — in visioning exercises designed to inspire new demand for advanced technologies, in the acquisition of new capabilities and the development of new digital platforms to address complex city needs, in repositioning and the creation of new go-to-market strategies and programs, and in real work with city administrators at ground level. We look forward to the outcomes.
Next up: the energy factor in smart city