Smart City Governance and Financing Towards disruptive business models

Nicos Komninos URENIO Research, Aristotle University of Thessaloniki

Smart City Exhibition 2013, Bologna, 16-18 October

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

URENIO: Aristotle University Lab

Helsinki Oulu Manchester Barcelona Bilbao Hong-Kong

Aegean , 40 islands Corfu Thessaloniki Bremen Ivry-sur-Seine Agueda Valladolid Improve-my-City: 25 countries Smart City Solutions

Projects on intelligent cities / smart environments

Community-based Intelligence

Collaborative Innovation Platforms

Publications

Contents

2. Smart Cities: The standard model

1. Landscape: Evolution and drivers of intelligence

3. Governance and business models

4. Towards disruptive business models

1. Landscape: Evolution and drivers of intelligence

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

Digital City Kyoto – 3D representation

Digital Corfu - Panoramics Taipei Street View – 3D scanning

WAVE 1 (1997+): Mirror Cities - The institution One way interaction, Top down innovation–>Representation Intelligence

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Singapore, Intelligent Nation 2015

Housing

Mobility

Health

Helsinki

WAVE 2 (2003+): Web 2.0 Cities - The user Two ways interaction, User driven innovation–>Collective Intelligence

Living Labs as intelligent clusters / Crowdsourcing

Crowdsourcing Platforms

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http://goo.gl/KxT2b0

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

IBM: Instrumentation – Interconnection - Intelligence

PlanIT Valley : Four layers, Urban Operating System

12.000 sensors

The Santander testbed is composed of around 3000 IEEE 802.15.4 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

Smart Santander: Testbed for energy, mobility, environment

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

Standard Model of Intelligent / Smart Cities Innovation as driver and outcome of intelligence

CITY INNOVATION ICT

Social space: citizens and economic activities

Funding-RTD-Production-Market Networks

Communication: xDSL, FTTH, WiFi, GSM, SENSOR networks

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

DigitalCyber

IntelligentSmart

DOUBLE INTEGRATION Definitions of intelligent / smart cities The concept of intelligence

Innovation nets for smart city apps Smart city apps for innovation activ.

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Layer 2: INNOVATION ECOSYSTEMS / INTEGRATED DISTRICTS

Layer 1: CITY DISTRICTS People, Activities, Infrastructure

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Layer 3: APPS + EMBEDDED SYSTEMS + SOCIAL MEDIA FOUR FIELDS OF KNOWLEDGE DEVELOPMENT

INTELLIGENCE E-LEARNING CO-CREATION MARKETPLACE

Implementation of the Standard Model By city district or city sector - Fragmented government

How the Standard Model works Knowledge functions / knowledge-based development

ΧCityDistrict

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

Impact to All Urban Subsystems Production, Consumption, Infrastructure, Governance

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

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3. Governance and business models: A key component

PEOPLE Smart City project 2011-2013: Definition of planning and governance model

Technology Park University of Bremen, GE City of Thermi, Thessaloniki, GR

Vitry-sur-Seine, Paris, FR Abando District, Bilbao, ES

PEOPLE: FOUR PILOTS

Thermi City Center

1. The city: Defining challenges & communities

2. Innovation ecosystem: Institutions and user-driven processes addressing challenges

3. Digital spaces: Technologies and solutions for smart environments

Challenges and Assets Strategy Development Implementation

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

PEOPLE Smart City project 2011-2013 Planning roadmap: 3 stages / 7 steps

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

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Towards Open Business Models Evolution, stages of maturity

Sources: Chesbrough 2006 and 2008 http://www.slideshare.net/SiliconValleyST/business-model-innovation-by-h-chesbrough

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

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 organizations.

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Business Models for Smart Cities Solutions are defined with respect to Business Models

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

Data monetization

Advertising

Public funding

PPPs for revenue-sharing

Leasing and financing

Revenue-generating or cost-cutting

Crowdfunding

Capacity reselling

Business Models for Smart Cities Applications and Business Models

4. Towards disruptive business models

Disruptive business models: improved quality of service at low cost

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.)

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.

Towards Disruptive Business Models Pillar 3: Cloud based solutions

Source: https://www.readwriteweb.com/cloud/2011/04/the-cloud-stratosphere-infogra.php

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

Towards Disruptive Business Models How it works: (2) Create a platform, FOSS core and Perimeter

CORE: Open Source Smart City Apps – ICOS repository

Perimeter: Firewall, authentication , analytics, benchmarking

Core Smart City Apps

Towards Disruptive Business Models How it works: (3) Actualize smart city mirrors and applications

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Thessaloniki

X Smart Mirror

X Smart Mirror

X Smart Mirror

X Smart Mirror

Cluster

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Towards Disruptive Business Models Costs and benefits of ICOS-CLOUD based SC models

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

Disruptive business models because minimize development costs and maximize the quality of service

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