From Smart City to Intelligent Urban Ecosystem — Unlocking Data Value Is the Key

The complexity of a data-rich strategic smart city development increasingly offers opportunities for private-sector stakeholders to engage in urban ecosystems. City CIOs should provide digitalization paths with data exchanges and user-centric business models to support ecosystem partnerships.

Overview

Key Challenges

• The      success, and especially the sustainable success of smart city      development, depend on the ability of a complex network of      ecosystem partners to understand, manage and contribute a high velocity      of value-generating data. But this requires levels of data trust      and qualification as critical components for success.

• CIOs      engaged in smart city development face challenges in finding the delicate      — and difficult — balance needed to build enterprise platforms that      deliver societal, environmental and financial benefits.

• City      CIOs need a holistic understanding of the priorities, risk profiles and      objectives of their different ecosystem stakeholders, but their current      knowledge is often very immature. The collaboration and communication      needed to reach workable agreements is hampered by misaligned      expectations, project durations, risks and contribution requirements.

• A governance      framework is needed to align data-driven business services with the      engagement rules of government, industry partners and society in a way      that creates trust and credibility.

Recommendations

City CIOs leading in times of innovation, disruptive trends and emerging practices:

• Create a permanent      advisory body with a broad range of stakeholders, so that data and      governance can be leveraged to continuously generate value in urban      ecosystem development.

• Develop data exchange      mechanisms that connect stakeholders with the high-value information they      need.

• Develop agile, resilient      ecosystem models based on a holistic understanding of goals and outcomes      by establishing strong governance procedures, knowledge exchange and      processes.

Introduction

The days when a city’s government — or even its IT organization — could undertake a smart city project on its own are long past. That siloed approach has been rendered obsolete by sweeping social, economic and technological changes. And while it might be adequate in itself, it clearly won’t scale. True smart city development can be achieved only via urban ecosystems involving a broad range of stakeholders.

City residents worldwide, and especially in mature economies, are demanding a voice in urban development decisions. Their voices have, of course, been louder than ever during the COVID-19 pandemic. Residents want to be informed and consulted about the pandemic’s impact on their communities, and their cities’ responses to it. But they also want to be heard on public safety, parks and playgrounds and other amenities, public transit and parking, and a myriad of other issues. And their expectations are heightened by the ongoing trend toward consumerization and democratization, with online shopping and other activities shifting the economic balance of power to the individual.

Businesses and industry organizations clearly have a stake in these same issues, because they impact their ability to do business efficiently and, crucially, to attract high-value employees. Educational institutions, too, can both benefit from ecosystem development and contribute to it, not least as incubators for next-generation workforce skills and technology innovation. Technology providers are playing an expanding role, as well. And emerging projects like Alphabet’s Sidewalk Labs community development project show that the digital giants are ready to play an active — and important — role in the life of cities.

All of these stakeholders connect with each other through a consistent exchange of best practices, goals and information to advance and scale services. The currency for that exchange is data. This data will be available in business models that address issues like parking availability, in operations systems dealing with concerns like energy management, or in citizen data like information on movement patterns through green spaces. Data exchange on a large scale, taking open data and providing standardized data governance around it, will enable a structured and trustworthy approach to a joint execution of ecosystem value.

Ecosystem advancement is already evident in specific industries and ecosystem efforts like tourism, sustainability and industrial digitalization. And it’s already having an impact on skills development, supply chain efficiency and resilience, and overall community prosperity. That’s why city CIOs need to move beyond thinking in terms of smart city projects to engage an all-encompassing range of stakeholders in the development of true urban ecosystems.

Analysis

Smart city development takes so many different forms, and impacts so many different individuals, groups, governmental bodies, organizations, businesses and institutions, that a smart city project can no longer be considered in isolation. The simplest initiative — say, the decision to install electric vehicle (EV) charging stations — raises a complex set of questions: Where should they go? If they’re installed in a fashionable downtown shopping area, are they unfairly privileging certain high-end retailers? If they’re placed in high-traffic zones, will they end up increasing traffic congestion and, because of EVs’ extended charging times, taking away already-scarce parking spaces? Should the electricity be free or supplied at a discount? And whether it’s free or not, is it really fair to use public funds to offer a service to EV owners, who are almost always among a city’s most affluent residents? The “smart” answers to all these questions result from collaboration between different stakeholders and the orchestrated exchange of mobility and utility data. And that collaboration can deliver win-win value for many different stakeholders, including the city’s residents, who will benefit from more options, greater sustainability and customized services.

The EV example — just one of many — shows that what seems like a simple idea actually has complex, far-reaching consequences. That’s why it’s urgent that city CIOs move away from their traditional approach to smart city development. The first steps toward building a truly strategic plan is for CIOs and their teams to build projects with a scalable focus on outcomes in both operational efficiency and citizen impact.

There are many reasons the traditional government-driven approach we described above is no longer viable, but two stand out in especially sharp relief, and they’re closely interrelated. The first is that there are an increasing number of private-sector and government stakeholders that have the ability and the desire to build a viable service experience as part of a city’s development. The second is that technological advances are moving at such breathtaking speed, and presenting so many opportunities to improve city environments, that CIOs face difficult decisions about priorities. (This is especially true of the advances enabled by the ever-growing networks of autonomous devices that make up the Internet of Things [IoT]). The massive amounts of data generated from these environments, sensors and systems becomes a valuable source for on-site and location-based information. City CIOs have the necessary know-how about the maturity of system and data generation, and the downstream impacts on so many different people, entities and functions, to support and moderate prioritization decisions. CIOs need to lead the discussion and evaluation of these decisions in the technology context, because they’re uniquely positioned to determine their viability in terms of standardization and interoperability, and the innovation benefits and risks associated with them.

Smart city government CIOs urgently need to collaborate with all the stakeholders in the urban ecosystem, and — even more importantly — enable those stakeholders to collaborate with one another in an open, transparent, trusted manner. Data literacy is a critical enabler for this collaboration, because it helps to create trust. That trust is often built by good leadership and an objective setting of the ecosystem, whether in a district, for a business service or for a technology rollout. A set of best practices for CIOs undertaking this mission-critical task:

• Create a permanent      governance body with a broad range of stakeholders to drive continuous      added value in urban ecosystem development.

• Develop data exchange mechanisms      that connect stakeholders with the high-value information they need.

• Develop standardized operating      processes that enable sustainability through data-driven decision making.

Create a Permanent Governance Body With a Broad Range of Stakeholders to Drive Continuous Added Value in Urban Ecosystem Development

One of the most important components of a smart city strategy is balancing the complex, often conflicting interests of the stakeholders in the urban ecosystem — or rather, enabling them to balance their own interests. The first step in creating a viable collaboration model for stakeholders is to identify the engagement models. With an engagement plan in place, a decision framework for successful business data exchange can be established and the benefits that those models would bring to local government and various industry organizations and businesses can be identified.

All the stakeholders in an urban ecosystem obviously have very different interests and very different risk postures. Local governments want to respond to the needs of citizens, and they need resilient methods for doing so. Residents want their neighborhoods to be attractive and safe, but they also want them to remain affordable. Businesses want, among many other things, to have efficient traffic flow for their transportation and logistics operations. First responders want — and need — to be able to respond rapidly to emergency conditions. Environmental and social activists want clean air and green spaces and much more. And technology providers obviously want their products and services to be the ones that will support these projects, because that will bring them market share and mind share.

When business interests aren’t aligned with outcomes, investments and benefits, entire projects may have to be reassessed or canceled. CIOs obviously have a central role to play here, as technology architects, governance developers and advisors, because they understand how to drive innovation while protecting citizens’ data. And, of course, these initiatives are built on a technology foundation, so city CIOs will, as always, need to make critical technology evaluation, selection and implementation decisions. (The most important, as we’ll see, is to enable open, intelligent data exchange between stakeholders.) Intelligent urban ecosystems will require governance in service and business engagement, with a continuous feedback loop for all ecosystem partners, as well as with nongovernmental organizations and citizens’ groups. The development of key performance indicators (KPIs) will help to ensure credibility and tangible results. KPIs will make it possible for stakeholders to determine whether programs and projects are developing in ways that will deliver joint success, and ensure that all investors are getting their expected outcomes.

The CIO must form — and moderate or manage — a permanent governance committee, comprising technical, business and social participants. This committee should be empowered to offer needed guidance on smart city development decisions and, at least in some cases, to make those decisions. Execution governance, especially on technology, is the central pillar of sustainable engagement. The CIO’s technology know-how will enable the committee to make informed decisions. The committee can advise on spatial issues related to zoning and licensing, data exchange, sensor and IoT infrastructure, business sharing models and communications through applications, user devices and dashboards.

From an ecosystem perspective, the government also works with real estate developers and businesses in developing new business parks, identifying potential return on investment (ROI) from tech innovation or designing housing or learning environments. One example of such a collaborative project is the buildout of the new Amazon headquarters in Arlington County, Virginia. Another is the Zorrotzaurre initiative in Bilbao, where local government is working with business to develop a sustainable, technologically innovative business park — on a man-made island — with community focus and cooperation in mind.

Recommendations for CIOs leading in times of innovation, disruptive trends and emerging practices:

• Lead a governance committee      tasked with developing a holistic and forward-looking data governance framework      that will identify data usage, protect intellectual property generated by      data innovation, and ensure both data accessibility and data privacy.

• Manage the expectations of      stakeholders in the governance committee regarding their contributions,      investments and engagement models by implementing an urban technology      platform that publishes KPIs on ROI and use-case benefits.

• Create scale in interactions      and enhance learning of the committee by providing a knowledge and      innovation hub for stakeholders, and include design thinking in strategy      development and operations execution.

• Define and communicate agile      goals and guardrails, taking into account the different social, economic      and environmental perspectives of various stakeholders, to build      resilience, trust and agreement.

Develop Data Exchange Mechanisms That Connect Stakeholders With the High-Value Information They Need

Data is, of course, at the heart of any smart city project, and enabling the appropriate flow of information is at the heart of the smart city CIO’s role. All the stakeholders we’ve been talking about — stakeholders who are competing, conflicting or collaborating, and sometimes doing all at once — need access to relevant, actionable, contextualized data, and they need it fast, accurate and in real time. But it’s absolutely essential that CIOs recognize that data shouldn’t just be collected and exposed to an open data portal. Building ecosystem value means data has to be available for various stakeholders to exchange.

Let’s take a look at some examples of smart city projects that show the potential benefits — and complications — of open data exchange:

• Smart mobility management,      including last-mile logistics. It’s no secret that the world’s cities are      choked with vehicular traffic. And with people reluctant to use public      transit during the pandemic, some cities are seeing a dramatic increase in      car traffic. Some cities, like Paris, are responding by encouraging      bicycle use, with measures like pop-up bike lanes and subsidies for bike      maintenance. The Citi Bike bike-sharing program allows New York City      residents to take short rides for exercise or to run errands, and collect      health points while they do it. Dedicated      bike lanes have also been created to make the city more accessible. Lyft,      which provides a mobile app, is the operating partner for the Citi Bike      program. The Lyft app allows people to become “bike angels” who ride      bikes to docking stations that are in need of bikes. Bike angels receive      credit and points that can be translated into credits or reductions in      subscription fees.

• Another initiative, in the      Swedish port city of Gothenburg, is working to solve the problem of      delivering packages in heavy traffic, while making logistics providers’      footprints more sustainable. The project — a partnership by DHL, Velove      Bikes, Best and Bling — has created a logistics center for electric cargo      bikes. They can manage the “last mile” more rapidly, more easily and with      less environmental impact than conventional vehicles.

All these bike-enabled initiatives have data requirements, in terms of payment options, geospatial and context-based location information and various additional context at the core of their business and service models. Contextualized data — possibly delivered in part by those smart streetlights we mentioned earlier — can present real-time information about traffic conditions, parking availability, logistics providers’ delivery schedules and much more. Exchange of these datasets, together with prioritization on quality of assessments for modeling or real-time decision making, becomes a critical enabler of service quality.

These data exchanges are being developed using different platforms and data pull mechanisms, and they can be streamlined through appropriate data governance. This can offer real benefits for some stakeholders, because it can link to automation in data orchestration and subscriptions. For some, it could lead to better scheduling of order management or asset maintenance. And logistics providers like UPS or Fedex could obviously make deliveries more efficiently and less expensively if drivers had up-to-the-minute information about whether parking spaces were available. For one thing, the company would pay significantly less in fines for illegal parking — which can represent a significant operating expense.

With the right data from urban, commercial and secondary sources, smart city ecosystems can develop data ecosystem models. Getting the right modeling data for those services is one thing. Creating solid value chains with committed stakeholders again requires governance, and modeling these value chains may require a range of data sources and data.

As soon as we touch the autonomous word, we need to build curb value, or any location-based model based on instances of those data models. Building a data exchange will allow open access to ecosystem data. This will — and should — be based on specific access modalities, ecosystem agreements on data privacy and governance, and economic and social consensus. This consensus should balance citizen requirements and market needs with business opportunities that are defined in the smart city vision.

Recommendations for CIOs leading in times of innovation, disruptive trends and emerging practices:

• Benchmark the available      datasets in the existing open data portal, and assess their velocity and      quality values toward ecosystem requirements that rely on rapid data      access.

• Build demand for data      marketplace services with algorithms and self-service analytic tools that      make information easy to discover, contextually meaningful and actionable      for all ecosystem participants.

• Set guidelines for      data security, privacy, ethics and usage across infrastructure and      data architecture by building audits and certifications into the      governance structure. The intersection of different stakeholder platforms      and processes means that every participant is as vulnerable as the one with      the weakest data protections.

• Design a data visualization      front end of your ecosystem data exchange by creating a data dome      with 3D models, digital twins and threads, to showcase the      capabilities of ecosystem development.

• Map ecosystem outcomes to social      and sustainability benefits by defining smart city services that require      communal outcome, not just business profit.

• Focus on APIs and API      governance as part of your data exchange, by assessing and building data      access capabilities to allow third parties to access the data (for      example, through open-source platforms like FIWARE).

Develop Standardized Operating Processes That Enable Sustainability Through Data-Driven Decision Making

The development of resilience in the business ecosystems of smart cities requires agility in the definition of KPIs and benefit criteria across the stakeholders. To make the “smartness” of service delivery sustainable, there has to be a clear protocol establishing the priorities of the overall ecosystem development, its purpose and its standard operating processes in the event of uncertainty or disruption.

A number of examples of urban ecosystems that have worked to ensure ongoing resilience and service delivery:

• The tourism industry ecosystem      has experienced massive challenges during pandemic lockdowns, working to      provide safe travel experiences without compromising the well-being of the      environment. The government of Singapore has set up an analytics network      to enable the exchange of data analytics between different ecosystem      partners developing visitor experiences. The Singapore Tourism Analytics      Network ecosystem consists of linear interexchanges between      government and partners, which are interactive between all partners. This      is the only way a tourism ecosystem can tailor government and business      services toward the activity of visitors, as well as citizens.

• Many cities are faced with      dramatic increases in vehicular traffic — caused by residents’ reluctance      to use public transit during the pandemic — even as they try to restrict      the use of fossil-fuel-powered cars and trucks that contribute to      pollution. City leaders require new mobility strategies, not just electric      vehicles, because traffic congestion promises to remain the same, or get      even worse. Ride-sharing services like Lyft and Uber have increased the      number of car trips, rather than reducing them. Automotive and      mobility ecosystem platforms are being developed to address this problem      with new approaches to logistics and transport. One example is a joint      project of Hyperloop and the port of Hamburg — Europe’s      third-busiest. The project is designed to move containers from the      port to an inland logistics facility, using a new transportation module      that bypasses city traffic, increasing speed and reducing pollution.

• Business districts and other      developments involving real estate and construction companies, investors,      infrastructure and technology providers, retailers and other participants      have wide planning horizons. This means they need a transparent      understanding of operating conditions and financial risk, without being      locked into them. The Dubai Multi Commodities Centre (DMCC) free trade      zone is a good example of a business district being built with a strong      government focus on smart and sustainable development. The DMCC      has worked to make the district economically attractive to trading      companies and other businesses while building residential communities      for multinationals. Data exchange, infrastructure development and      service environments that are benchmarked against KPIs in areas like      sustainability and climate change, as well as social and demographic      well-being, are foundational to the effort.

Recommendations for CIOs leading in times of innovation, disruptive trends and emerging practices:

• Develop agile, resilient      ecosystem models by establishing strong governance procedures and      processes. This will support a frictionless approach to showing win-win      results across stakeholders and in conjunction with government social and      political strategies.

• Create organizational agility      for disruptive changes by developing governance criteria that allow      benchmarking and progress reports. This helps to maximize business value      (for example, revenue) while at the same time minimizing risk (for      example, public safety).

• Enable visualization of      data-driven decisions by supporting dashboards that let stakeholders      play with and analyze impacts and outcomes to generate trust between      ecosystem partners and the citizens.

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