(Notes from an Executive Short Program called Digitalization for Growth and Innovation, hosted by Ragnvald Sannes and yours truly, in Sophia Antipolis right now. Disclaimer: These are my notes, I am writing fast and might get something wrong, so nothing official by Accenture or anyone else.)
Smart Cities – a discussion with Simon Giles.
Simon Giles is the global lead for global cities initiative in Accenture. He is located in the Health and Public Services group, and
– work with large, established cities on the process of digitalization
– work on digital masterplanning on new cities (Asia, Middle East) or fundamental redevelopment
– work with large organizations on understanding the consequences of increasing urbanism
The Global Cities team has worked in more than 80 cities around the world, they are all unique (and that is very important when working with them – not just the government, but also physical and demographic legacy. Huge differences even within Norway, for instance.) However, some common themes emerge:
- digital transformation everywhere: The increasing IoT and addressable devices gives enormous rise in data amounts and sources. Can the cities deal with it? The rise of citizens digital service delivery expectations paired with a data explosion is pushing the IoT agenda forward. Example: Landing in Sophia Antipolis, firing up the Uber app, immediate booking and invoice submission, 30% cheaper than regular taxi. Some consequences: Digital privacy and security is going to be a huge hurdle and has to be taken seriously. As for democratisation, people both have to understand their rights, but also the benefits
- mobility of talent. Digital talent can work anywhere, so how do you attract them? There is a war for talent, especially cities transitioning from a post-industrial to a knowledge economy. How do you make the city as attractive as possible for the people you want to attract? Healthcare, education, job prospects…
- resource stress. Availability of resources (water, power, waste management, pollution etc.) increasingly a problem, need to understand flows and dynamics at a much more sophistication, digital technology can help shed light on what literally used to be a dark system. Moving from mitigation to adaptation – energy efficiency, transition from hydrocarbon mobility to electromobility. Differs between cities – water stress in California, for instance.
- constraints on public spending. Need to reduce cap ex and op ex spending, as well as increase productivity. But not all investments are equal – a $400m bridge is seen as normal, a $400m investment in digital infrastructure as profligate.
- emerging prosumers Citizens increasingly have a voice through digital tools and participate more actively. Need to think creatively about how to use the data created by citizens to make better decisions and services.
Cities’ role has changed over time – from a meeting place for exchange of agricultural products to a centre for industrial production, introducing sanitation etc. Glasgow and Liverpool became rich because they were on the leading edge of the industrial economy, as market makers. What does that mean in the digital economy? There seems to be an abdication of responsibility from city politicians and managers, thinking digital is completely global – but there are definite winners and losers in that contexts: London and Berlin dominating in Europe, for instance, by making very small changes, such as Tech City in London, relatively small but enough to win the war for talent. Cities need to be more active, governance changing from verticals (water, power, etc.) to a more integrated model. How do we organize for digitization. In Europe, we really are laggards in that respect – companies have CIOs, moving into new technologies etc.. In the US we see city CIOs. In London they did, but did not give that person any power, so he left. The operating model for cities will change.
In the corporate world, we are very articulate about value – shareholder value etc. In the public world, we don’t have that tradition, vocabulary and methodology for doing that. We need to create the equivalent of a business case, focusing on economic prosperity, efficient and effective operations, and high quality public services.
The Global Cities initiative posits the following value proposition for cities:
- how do you create economic prosperity?
- how do you create effective and efficient public services?
- how do you create social and environmental sustainability?
- how do you create strong financial management and governance?
- how do you create a good experience for the citizens? (so much is driven by expectations, you have to understand perceptions, no matter what else you measure)
Break this down further into sub-questions where projects can be evaluated to determine the equivalent of a business case – not to measure profits, but outcome to manage the taxpayers’ money as effectively and efficiently as possible.
Also have developed an operating model consisting of processes such as
- strategy and planning
- performance management (better use of data to drive decisions)
- digital citizen (single face to the customer, need single face to the government)
- asset management and operations
- back office (shared across functions)
- digital enterprise (common digital infrastructure, i.e. a common GIS system across all agencies)
- agency services
Analysis of data becomes more important. For example: There was a bridge in a city in Brazil, lots of congestion, discussion on whether to build a new bridge, increase ferries, or build a tunnel. Analysis showed that two government agencies that had moved to the other side of the bridge created most of the traffic, moving them back would obviate the need for a new bridge…
Cities are organized as a legacy of the industrial economy, geared to make cities work like machines. Now we are in a digital economy, thinking about becoming a place where things are designed and services are sold. The CIO role that came in the 90s in the US is happening now in cities, moving from provisioning to thinking about where the data is and how we can use it.
In New York anyone can call 311 to get in touch with the city’s public services. They log the requirement, and get back to you. By the way, why should this be phone call, why not an app? In general, public services do not do front desk. Need to professionalize and de-politicize the relationship between the strategy/policy setting and the service delivery.
Case study: Accenture is working with two larges cities in setting an agenda for a more systematic approach, based on sensing and responding to activity, and that might be smart metering or smart transportation, but it is not systematic and not city-wide. A Smart City is not that because the power company has put in 5000 smart meters…you get death by pilots, they never scale. In these cities we are seeing much more systematic approaches, taking a common approach. It does not make sense that individual ministries which inevitably will implement IoT set up their own platforms. In two cities Accenture work with, they go beyond the platform, extracting data from all platforms and an kind of device and make it available for analytics.
Cities to watch are Dubai and Singapore – converging city and state, so they have powers to act, and they have ambition. Smart Dubai is a digital platform to create data across the city. Singapore has a Smart Nation program. Rather than having islands of smartness in verticals, they want to be able to look at data across functions, providing new services, and a platform for entrepreneurs and innovators to build on. Government as platform, and as service.
For example: In one of the cities, it rains almost every day in some area, no taxis available. Match data from meteorological services, taxi fleets, and people location (from cell phone towers), create an algorithm to reroute taxis to desired areas in advance of a rainstorm. The city can create this urban information marketplace to make that possible, to allow entrepreneurs to work based on this platform. To do this, you need citizens that are skilled, connected and have a culture for using and innovating with the platform.
Norway should think about setting up IoT as a platform and make it and its services available to the cities. Brisbane is a good case study on consolidation, from around 20 units to 1, has 2 million people. Could deliver much better public services. Political perspective should be about how to deliver more on top of that platform.
Question: What should I do as fresh politician to promote this?
Politicians need to articulate the value proposition, because industry will respond. For example: Immigrant communities can become a cost to society because of limited inclusion and integration. Politicians need to deconstruct that problem, identify root problems (why aren’t they getting those jobs?), and use digital technology to help them. Start with the small things, where you can make a difference. Find problems to solve, describe what a day in the life of an immigrant community will be two years from now, with digital, and make it a stark and dramatic contrast.
Secondly, establish a capability for analysis, make it small, bring in someone for a few months, demonstrate value propositions. Then signal to the rest of the government about what you could do if you had more data… Demonstrate the value proposition, then expand. And don’t do pilots, technical proof of concepts, make sure whatever you do is scaleable.
Question: The sharing economy, self-driving and electric cars?
At the moment, the relationship with the sharing economy – AirBnB and Uber, mostly – is antagonistic. Uber is doing well because they have a better value proposition than the taxi companies, which are ripe for disruption. It will happen at some point anyway because the fundamentals are solid. But taxi drivers are important voters, so politicians will appease them, but the sharing economy will thrive anyway. How do you manage that transition without losing your seat and disappointing citizens. You lose trust with the public if you stop evolution, the voters will move with their feet (and money).
An interesting view on Tesla’s Model X – there are a few design elements there that point towards a strategy. The gullwing doors are great for mums lifting kids and parking, but also gives good access to the front and back of the car when it is self-driving. The self-docking technology with the “snake” means that it can self-dock and pick up people. Think of this in the context of having a fleet of these things. (Search for article on deconstructing the Tesla launch.). More self-driving functionality will be added eventually, everything is there except the LIDAR. Will become increasingly self-driving, Uber has already done a deal with Tesla and might be the first fleet of self-driving cars. What does that mean for public service providers? Will standard diesel buses be there? Interesting things coming out of MIT, ethics of self-driving for instance.
Question – what about the high levels of unemployment?
That’s a pretty big topic, much writing about the future of work and the implications of the sharing economy. Increasing automation, AI, self-driving cars and so on. If left unchanged, you will see massive unemployment, but this has happened before. The economy of New York city in 1905 had many thousands of people working with horses, and they all lost their jobs over the next 15-20 years. I think we will see the development of the “gig” economy, more freelancing and part-time work. This has massive implications about how we think about support – the traditional job centre will be a much more fragmented activity. The idea of a citizen wage is interesting but a long way off, more about having social services where the onus is on you to create value over that. Cities will need to think about upskilling those workers…
Question – how can we rethink the fragmented nature of the Norwegian public structures?
At the basic level, some services need to operate at scale – no reason a municipality should have its own HR system, for instance. At the same time, don’t throw out the baby with the bath water – from a front office perspective, you need the closeness to the needs of the people. But a community of 10000 does not have the capability to develop their own analytics – so what is the role of the central government in providing a platform? The municipality can become a buyer of services from a common platform. Only a few cities large enough in Norway to do something, so you need to demonstrate value there, then have the central government provide it as a platform for everyone.