A recent GBI Research report claimed
that the smart-cities industry will "more than double between 2012 and 2017." But what's really going on, and who's driving it?
The smart cities debate has become muddled: It's often accompanied by fears about top-down approaches and tech companies controlling the direction. Overall it's not entirely clear who the stakeholders are. As someone who has worked on different sides of public and private sector fences, I thought I would try to make sense of who the smart cities players are, their roles, the hurdles, and where all of this is headed:
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- Technology companies: Motivated by profit, given capital markets, tech companies always try to pursue the latest new thing with the hope of gaining an advantage on their opposition. So, of course they are in the smart cities space. They often fund the conferences that the public sector and academia cannot afford (or choose not to), and they are developing services and products that they hope will play well.
But, also note that most technology "supports" existing city functions, playing an enabling (not standalone) role. Take smart buildings, for example: Most building technology is there to ensure the existing operations work efficiently.
- Academics, NGOs, and think tanks: These groups (to me) like to be seen as thought leaders in most spaces, and smart cities are no exception. They play a central role in attracting funding for smart cities research. They also give due consideration to the impact the technology will have on cities and are driven by a desire to improve people's lives and further the discussion.
- Public sector/governments/specialist agencies: The public sector is a central figure for obvious reasons. But, in particular, the public sector is involved because of shrinking budgets and the perception (correct, if done wisely) that smart city initiatives can provide "more with less" by incorporating ICT into existing legacy city functions.
Of course, the public sector doesn't control all of cities' functions or assets -- the opposite is often true. But it's clear, from a political imperative, that cities need to be seen as active and hence take leading roles in this movement. Indeed, some parts of government are tasked specifically to work across the urban space.
- Private sector: Ironically, the private sector actually owns most of the real assets in cities, not government. For example, real estate owners own the bulk of city assets, and the utilities that service them are becoming more and more privately owned. However, the private sector and asset owners and operators tend to be far less involved in this debate than they should be.
So, final conclusions:
Some groups worry too much about tech companies forcing technology into cities. This won't happen at scale because the profit-motivated private sector and the cash-strapped public sector will predominantly only adopt those goods and services that make sense or are likely to be embraced by citizens.
One of the missing discussion points in this whole debate is the distinction between technology innovation and business innovation. So much tech innovation already exists, but the gap lies in the business innovation as both the private and public sectors grapple to understand how to deploy new ideas that cross over existing silos. Cities are still confused over new products and services being offered to them. New business innovations will provide the answers.
At present, too much time is being spent justifying smart cities and rehashing what's already been discussed. We need to keep the debate not about "why" smart cities are a good idea or "what" technologies we should use but rather discuss "how" to make things happen.
We need to work out how to do more with less and how to promote business innovation in smart cities that match the pace of the technology innovations available and allow the use of smart technologies where they make economic sense, are logical, provide benefit to the users, and ultimately improve quality of life.
If we don't do this, I suspect the industry will not double in size by 2017 -- and all the advantages that smart cities genuinely bring will not occur.
— Gordon Falconer, Director, Urban Innovation, IBSG at Cisco