Platform models can help cities move from being ‘fractionally smart’ to overall intelligent. Learn from the progress of cities such as Amsterdam, Duisburg and Cagliari.
This article is in partnership with Huawei.
More than 1,000 cities around the world have embarked on smart city initiatives, but few are reaping the full benefits of their investment. Most cities were not designed to be ‘smart’ but have evolved organically over time. Many have discovered that integration of multiple systems, data-sets and parties is just too difficult, slow and expensive, and that successful pilot schemes do not necessarily scale for real-life deployments. Others have found that their investments fail to deliver the expected benefits.
In other words, the first wave of smart cities became ‘fractionally smart’ cities, rather than laying the foundations for being ‘overall intelligent’.
Being fractionally smart comes of taking vertical approaches, addressing certain aspects in isolation, such as mobility. This is due to being technology-driven; that is, cities looking at what they want to accomplish and how, then verifying the feasibility of the digital solutions.
In contrast, smarter cities aim to be ‘overall intelligent’: they are purpose-driven and their first step is establishing why they want to implement something, with the focus on citizens’ needs and the cities’ challenges. They are concerned with effective outcomes through systematic, holistic approaches and planning.
It’s not surprising that smart cities in progress are dazzled by the potential of technologies. As new research from Huawei and Ernst & Young (EY) outlines, artificial intelligence (AI) could lead to a 40 per cent increase in productivity by 2035, and blockchain (distributed ledger technology) could add an extra $3.1 trillion to the world economy by 2030.
Threats to cybersecurity are a modern plague, but also an economic opportunity, with the cybersecurity sectors expected to be worth $290 billion globally by 2026. Data analytics will also play a crucial part in global economic progress: the number of IoT devices is forecast to reach $125 billion by 2030.
Nevertheless, from smart cities’ track record, it is clear that success does not depend on technology alone. To gain a better understanding of the other factors that play an important role in these complex situations, Huawei commissioned research from EY. The study, titled The key to Tomorrow’s Smart Cities: Economic Vitality and Systematic Planning, revealed a number of insights into the multiple structural and practical issues that cities are grappling with, and which are creating a disconnect between the true potential of digital transformation and a poor track record of successful implementations.
The first wave of smart cities became ‘fractionally smart’ cities, rather than laying the foundations for being ‘overall intelligent’.
Commenting on the research, Sun Fuyou, Vice President of Huawei Enterprise Business Group, noted that in this age of “digital abundance”, technology also creates more and new things for cities to grapple with.
Indeed, it is clear that one of the biggest challenges for smart cities transitioning from being ‘fractional smart’ to ‘overall intelligent’ is that many things need to happen in parallel across the three main pillars of any intelligent city – the needs of the citizens, business and industry, and governance by the city authorities.
In any circumstances, this is very difficult to do successfully, but as Sun Fuyou points out, many cities are also experiencing cuts to funding, especially in Europe. This is reshaping their policies at the same time as they are striving to implement ‘smart’ government initiatives.
The research found that cities are caught in the middle of many apparently conflicting pressures: they want to improve insights to enable better management of their assets and greater efficiencies, and most importantly, better match their citizens’ requirements. The means of doing this include using data analytics, automation and self-service, but using these tools must be balanced against protecting personal privacy to win and retain public confidence.
As budget cuts bite, it is imperative for cities to boost staff’s productivity and build their skills and capacity – while creating a fair business environment to attract talent and global companies.
No city can achieve becoming overall intelligent on its own – by definition cities are ecosystems – they need the expertise and technology of specialist partners and a variety of funding and business models. Digitalised infrastructure introduces unique opportunities for creating and deploying new funding mechanisms in parallel with emerging business models.
Conventional infrastructure assets are getting a refresh, meaning that existing assets and classes of assets are being revamped by the introduction of sensors and internet connectivity. Data-driven utilities are developing alongside smart cities, which can massively improve the management of energy, waste and water, allowing them to sell their surplus, for example.
Data generated by digitalised infrastructure can be used to expand and upgrade assets. This can be directly or indirectly. Directly could mean raising revenues from selling data to third parties because much of the value that can be derived from smart cities comes from combining data sets, which was not possible before. Indirect ‘monetisation’ comes from the cities extracting greater value from the use of their assets, such as by reducing pollution and commute delays or improving safety on the road by being able to reroute traffic or change speed limits.
No city can achieve becoming overall intelligent on its own – by definition cities are ecosystems.
Public-private partnerships have immense potential for smart cities in terms of funding, innovation and expertise, but for this arrangement to be successful, governments and the private sector need to change their practices, and ensure the appropriate revenue-sharing models reward effective risk-sharing.
The opportunities will be pursued differently in individual cities, depending on the range of services provided and needed, demographics, socio-economic characteristics, partnerships and appetite for risk.
Along with budget constraints, perhaps the ultimate pressure regarding making a city smart is that citizens are increasingly expecting the same level of service from the public sector as they get while shopping online. For example, they expect to access public services via their mobile phones, accessing the city’s digital services, paying for whatever it is they want on the app and getting delivery the next day.
Clearly, the most fundamental element of intelligent cities is ubiquitous, reliable connectivity with enough capacity, underpinned by secure, multi-cloud storage and processing resources – and this will evolve to cloud-native as 5G moves beyond the radio access network (RAN), where it is being deployed now, into the transport and core networks.
The other essential ingredient for intelligent cities, which can address the complex issues outlined above and is sufficiently flexible to accommodate future ones, is platform-based business and operational models.
Examples of platform-based businesses include Alibaba, Amazon, Apple, Facebook, Google and Netflix. Over the last 15 years or so, these businesses have become the largest and fastest-growing, displacing the likes of oil companies and banks which dominated the top of global rankings for decades. This is because platform-based models are the most efficient and effective way of bringing multiple parties together to interact and transact.
By their very nature, platforms create and support ecosystems, with the platform handling the complexities of integration. This massively reduces the obstacles to both offering and accessing all kinds of services – such as matching prospective tenants and property-owners, public or private, for example.
Platform-based business and operational models are an essential ingredient for intelligent cities.
Similarly, platforms are designed to scale rapidly. They grow by what is known as the net effect, which means that the more providers and consumers join, the more successful they become and so attract more parties. For instance, the more drivers ride-hail companies like Didi Chuxing, Uber and Lyft have in a city, the more convenient the service becomes and the more passengers they attract, which encourages more drivers to join. It is easy to see how this model could be applied to improving and better integrating public transport.
Platforms are also sufficiently flexible to support multiple business and operational models simultaneously. A citizen might be a supplier of energy to a city from solar panels at some times in the day, and at others be a customer, buying energy from a city supplier.
Also, new technology and capabilities can be added to the platform without causing disruption to the parties who use it.
In short, successful smart cities are built on platforms that bring all the right technologies together seamlessly for the benefit of all the partner organisations – citizens, commercial and non-commercial organisations – including integrated cloud-based ICT, artificial intelligence, analytics, security, automation and more.
However, simply deploying a platform does not guarantee success because if they are deployed badly, then the net effect outlined above works in reverse, and organisations and companies abandon them. It is essential to choose an experienced, trusted partner – for example, Huawei’s Intelligent City Solutions have been used in more than 200 cities across 40 countries, serving more than 500 million people.
In Europe, they include Amsterdam in the Netherlands, Duisburg in Germany and Cagliari, the capital of Sardinia.
Huawei created a smart stadium in Amsterdam, before it was named Johan Cruijff Arena, as the foundational step for new sources of information for the City of Amsterdam. It was one of the first stadia to deploy high-density Wi-Fi and provide a new kind of experience for the fans. They can replay the football matches and order food and drinks so they don’t miss the action.
Now it is part of the dashboard that shows the city’s operations and conditions, provided by Huawei’s Integrated Operations Centre, which means the city authorities can optimise traffic flow, for instance, taking into account factors like the parking situation, average speeds on main routes and congestion, using data from cameras and other sensors.
Simply deploying a platform does not guarantee success. A trusted partner is essential.
Beyond traffic, Amsterdam is also measuring energy usage within buildings, and environmental pollution and weather conditions.
Huawei provided the Rhinecloud, a secure and scalable cloud-based solution to Duisburg, a middle-sized city in Germany with a population of about half a million, and the local University of Essen. Previously, it was known for its heavy industry, including its famous steelworks. Duisburg also has Germany’s biggest inland port. However, those heavy industries are fading and the city needs revitalise its economy and become digitalised. Huawei has been working with the city for two years, deploying more applications for mobility, living, broadband, utilities, administration and economic activities, especially for harvesting crops. Huawei is also helping Duisburg to attract more partners.
Cagliari is the capital of the Italian island of Sardinia. It is an ancient city and a tourist’s paradise. Huawei began working with the city three years ago and has a joint venture Innovation Centre, where it carries out pilot tests of different technologies before moving to commercial launch. The company worked with various local partners too, including some start-ups because the digital economy plays a very important role in creating more jobs as part of improving the economy.
Huawei is now providing many digital services such as IoT and emergency communications, which were particularly important two years ago when there were serious floods and the fire department had to rescue people. Another application is about ensuring the safety of children at the seaside.
Huawei’s overarching intelligent city solution, HiCity Intelligent City Solution (see the graphic below), has three layers:
Using the HiCity platform, city managers can identify existing or emerging problems through the collection, collation and analysis of data from all over a city, whether it is monitoring and measuring (with the ultimate aim of controlling) pollution, traffic congestion, water usage, road safety, public health, energy usage, refuse collection or many other aspects of the urban environment.
The platform-based approach is the most efficient way of enabling technologies to drive urban development and improve citizens’ lives at home, at work and at play.
“Huawei is uniquely positioned to turn intelligent city ambitions into reality,” commented Sun Fuyou. ”Based on its cloud-pipe-device strategy, Huawei can provide the secure, cloud-based platforms as described above, plus IoT and broadband networks to make ubiquitous connectivity possible, as well as connected devices.”
In conclusion, the depth and breadth of smart cities mean that no single party can address all the issues. Rather, the city needs to work in an ecosystem of all kinds of partners from different fields to formulate plans and develop and deploy solutions via a centralised platform.
Simply put, the platform-based approach is the most efficient way of enabling technologies to drive urban development and improve citizens’ lives at home, at work and at play.