Smart City Governance and Financing Towards disruptive business models

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1 Smart City Governance and Financing Towards disruptive business models Nicos Komninos URENIO Research, Aristotle University of Thessaloniki Smart City Exhibition 2013, Bologna, October

2 URENIO: Aristotle University Lab Work on digital, intelligent, smart cities since 2000: (1) Drivers of Intelligence, (2) Strategies, Planning, Governance, (3) Apps and Solutions

3 Projects on intelligent cities / smart environments Community-based Intelligence Collaborative Innovation Platforms Helsinki Oulu Manchester Barcelona Bilbao Hong-Kong Smart City Solutions Aegean, 40 islands Corfu Thessaloniki Bremen Ivry-sur-Seine Agueda Valladolid Improve-my-City: 25 countries

4 Publications

5 Contents 1. Landscape: Evolution and drivers of intelligence 2. Smart Cities: The standard model 3. Governance and business models 4. Towards disruptive business models

6 1. Landscape: Evolution and drivers of intelligence

7 From a technology point of view Three Waves in Smart Cities - Three waves of web technology

8 WAVE 1 (1997+): Mirror Cities - The institution One way interaction, Top down innovation >Representation Intelligence Digital Corfu - Panoramics Taipei Street View 3D scanning Digital City Kyoto 3D representation

9 WAVE 2 (2003+): Web 2.0 Cities - The user Two ways interaction, User driven innovation >Collective Intelligence Mobility Singapore, Intelligent Nation 2015 Housing Helsinki Health Stockholm, Stokab Manchester East Serve district

10 Living Labs as intelligent clusters / Crowdsourcing Crowdsourcing Platforms

11 WAVE 3 (2009+): Embedded Smart Cities - The sensor Smart environments, Tech innovation >Data driven intelligence???

12 IBM: Instrumentation Interconnection - Intelligence

13 PlanIT Valley : Four layers, Urban Operating System

14 Smart Santander: Testbed for energy, mobility, environment sensors The Santander testbed is composed of around 3000 IEEE devices, 200 GPRS modules and 2000 joint RFID tag/qr code labels deployed both at static locations (streetlights, facades, bus stops) as well as on-board of mobile vehicles (buses, taxis). Open Call from the FP7 SmartSantander project for innovative applications and services, experimenting with the IoT in the context of the city

15 2. Smart Cities is more than technology: The standard model

16 Standard Model of Intelligent / Smart Cities Innovation as driver and outcome of intelligence Definitions of intelligent / smart cities The concept of intelligence CITY INNOVATION ICT DOUBLE INTEGRATION Innovation nets for smart city apps Smart city apps for innovation activ. Social space: citizens and economic activities Funding-RTD- Production- Market Networks Communication: xdsl, FTTH, WiFi, GSM, SENSOR networks Digital Cyber Intelligent Smart Physical space: Building and infrastructure Clusters and innovation poles Access devices: PC, smartphones, tablets, glasses Governance and management City and regional systems of innovation Applications and platforms: dedicated and generic software Challenges / problems to address User-driven innovation Smart specialization e-services

17 Implementation of the Standard Model By city district or city sector - Fragmented government Layer 3: APPS + EMBEDDED SYSTEMS + SOCIAL MEDIA FOUR FIELDS OF KNOWLEDGE DEVELOPMENT INTELLIGENCE E-LEARNING CO-CREATION MARKETPLACE Layer 2: INNOVATION ECOSYSTEMS / INTEGRATED DISTRICTS Industry Port Transport Hubs Central Business District University Campus Technology District Layer 1: CITY DISTRICTS People, Activities, Infrastructure

18 How the Standard Model works Knowledge functions / knowledge-based development ΧCity District City Sector AMPLIFY KNOWLEDGE FUNCTIONS of innovation ecosystems 1. Strategic intelligence Foresight 2. Technology transfer Learning networks 3. Innovation through collaboration 4. Dissemination Global markets R OUTPUTS GDP growth Competitiveness Sales and Exports New products / services Innovation Employment Skills Quality of life Environment Resource savings Utilities performance Governance Measurement Scoreboard

19 Impact to All Urban Subsystems Production, Consumption, Infrastructure, Governance 30 city domains 200 e-services Innovation Economy City sectors: Manufacturing, commerce, business services, financial services, education, research, health, tourism, primary sector activities Clusters: Various groups of interconnected organisations and activities located in the city City Infrastructure Utilities Mobility, transport and parking Energy networks, saving, smart grid Water networks management and saving Broadband, wired and wireless Quality of Life - Living in the city Quality of life services Social and digital divides Environmental alert and services Social care services Safety and security services City Governance Decision making / citizens participation / democracy Government services to citizens City planning / city management Monitoring and benchmarking

20 3. Governance and business models: A key component

21 PEOPLE Smart City project : Definition of planning and governance model

22 PEOPLE: FOUR PILOTS Vitry-sur-Seine, Paris, FR Abando District, Bilbao, ES Thermi City Center Technology Park University of Bremen, GE City of Thermi, Thessaloniki, GR

23 PEOPLE Smart City project Planning roadmap: 3 stages / 7 steps Challenges and Assets Strategy Development Implementation 1. The city: Defining challenges & communities 2. Innovation ecosystem: Institutions and userdriven processes addressing challenges 3. Digital spaces: Technologies and solutions for smart environments 4. Setting-up intelligent ecosystems Activation of actors and communities Knowledge processes: acquire, absorb, create, disseminate Innovation activities Innovation cycles 5. Development of applications and solutions for districts, utilities, gov. 6. Business models for sustainability of e-services 7. Measurement: Documentation of impact, innovation, intelligence A planning and governance roadmap based on the Standard Model of intelligent cities, and the double circuit of innovation Implementation based on solutions mixing web1, web2, and web3 technologies Solutions selected with respect to business models of operation and sustainability

24 Business Models Assets, products, markets, and finance Business models serve two important objectives: Create value by defining a series of activities from raw materials to the final product, and Capture a portion of this value by establishing a competitive advantage 24

25 Towards Open Business Models Evolution, stages of maturity OPEN CLOSED Sources: Chesbrough 2006 and

26 Business Models for Smart Cities Every application is based on a different Business Model

27 Business Models for Smart Cities Solutions are defined with respect to Business Models Public Development Funding, regional national international, supporting development and inclusion Advertising, for commercially oriented services or services related to promotion. Sponsorship, overlaps with advertising, but differs in the fact that sponsors endorse / support a cause/organization and its operation. Reselling, a service that may be appealing enough to be resold from one organization to another. Free Core Service & Paying for Additional Features, a core service is open to the public and upon paying a fee, additional features are made available to users. Leasing, for some platforms that may be attractive enough to be given to a private company for operation Data Monetization, based on selling data collected and analysed through the various apps and e-services. Crowd Funding, by raising capital through collective cooperation and trust by people that pool money to support efforts and initiatives by other people and 27 organizations.

28 Business Models for Smart Cities SWOT per application - Assessment and combination of BMs

29 Business Models for Smart Cities Applications and Business Models PPPs for revenue-sharing Revenue-generating or cost-cutting Capacity reselling Leasing and financing Public funding Advertising Crowdfunding Data monetization

30 4. Towards disruptive business models Disruptive business models: improved quality of service at low cost

31 Towards Disruptive Business Models Pillar 1: Open Source solutions for smart cities Access to tested solutions, free of charge Support by large community of developers (Github, Joomla, Drupal, etc.)

32 Towards Disruptive Business Models Pillar 2: Open data Open data is data that can be freely used, reused and redistributed by anyone subject only, at most, to the requirement to attribute and share alike. OpenDefinition.org Availability and Access: the data must be available as a whole preferably by downloading over the internet. Reuse and Redistribution: under terms that permit reuse and redistribution. Universal Participation: there should be no discrimination against fields of endeavour or against persons or groups.

33 Towards Disruptive Business Models Pillar 3: Cloud based solutions Source:

34 Towards Disruptive Business Models How it works: (1) Set up a Cloud IaaS with OpenStack Nova, compute services (Virtual Machines) Quantum, networking services (Virtual Networks). Cinder, storage services (Virtual Disks) Horizon, web front-end Glance, catalogue for storing virtual machine images Keystone, authentication and authorization

35 Towards Disruptive Business Models How it works: (2) Create a platform, FOSS core and Perimeter Perimeter: Firewall, authentication, analytics, benchmarking CORE: Open Source Smart City Apps ICOS repository

36 Towards Disruptive Business Models How it works: (3) Actualize smart city mirrors and applications X Smart Mirror Valladolid All Agueda Gov Perimeter X Smart Mirror Infra Core Smart City Apps Cluster Manchester X Smart Mirror Living All X Smart Mirror District Thessaloniki

37 Towards Disruptive Business Models Costs and benefits of ICOS-CLOUD based SC models Disruptive business models because minimize development costs and maximize the quality of service Cost reduction Open source economies User-driven content and data economies Cloud-based economies Zero entry cost Scalability of costs Pay per use Costs corresponding to revenues Quality of service increase One click installation Central update of new versions User empowerment Expanding OS library Instant scalability Security against cyber threats and cyber crime Trust, accountability, transparency. Reliability of complex infrastructure Analytics and benchmarking

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