Is The City A Platform Worth Billions?

Platforms, in terms of economics and technology, are powerful and disruptive when they work. EBay is a platform that changed how everything from collectibles to big-ticket electronics are bought and sold. Amazon began as a book retailer, but became a platform where vendors and buyers conduct millions of transactions in countless categories. Microsoft and Intel turned a fragmented PC market into a platform that created billions of dollars in hardware and software revenue.

There’s a new platform revolution, now in its early stages: the city.

Today’s cities are beset with a host of challenges – traffic woes, budget crises, crumbling infrastructure, security concerns, and many more. At the same time, mobile-enabled, digitally-savvy citizens are demanding service levels comparable to what they get from commercial entities. Standing in long lines as bored clerks process paper forms won’t cut it. If you can view ten-plus years of order history on Amazon.com, why can’t you do the same for your water usage or tax bills?

One way cities are responding to 21st century challenges is with the Smart City movement. In this context, “smart” has two meanings. In the technology sense, it can mean adopting advanced digital infrastructure, installing sensors that provide instant information on anything from traffic to environmental variables, and much more.

The “Internet of Things” (IoT) revolution means that even simple devices will now be sources of data to improve city operations.

From a less technical perspective, “smart” also refers to a citizen-focused approach intended to make city residents happier and more productive. While reducing time lost due to traffic jams will certainly do that, simper steps like eliminating long forms required by city departments can also help.

A key element in the Smart City effort is to make better decisions by effectively collecting and using digital information.

One of the challenges to the Smart City movement is that there is no central authority to standardize the technologies cities use. Currently, even within a single city, each department may use unique software and infrastructure that makes data exchange and centralized control difficult. Proprietary solutions from individual companies may not extend across departmental boundaries or may limit the ability to incorporate technology from other providers.

According to a report from Navigant Research, even with today’s emphasis on Smart Cities,

…the majority of procurement is still being structured around the siloed requirements of individual departments.

This is where the “platform” concept enters the picture. What if cities and solutions providers agreed on a set of standards that made communication and interoperability easy? What if a tiny startup with a clever idea could design a product knowing that it would be compatible with solutions from giant companies, and work in cities both small and large?

That’s the concept behind the City as a Platform Manifesto announced at the Smart City InFocus conference in Yinchuan, China. Both the Manifesto and conference are organized by TM Forum, a non-profit global association that promotes collaboration in the communications and technology areas.

The Manifesto itself is an aspirational document that commits signers to goals like adoption of vendor-neutral standards, open APIs, protection of citizen privacy, and much more. The Manifesto’s first stated goal, significantly, is to improve the quality of life in cities.

At the Yinchuan conference, attended by delegates from more than 60 countries, dozens of cities, vendors, and other interested parties signed the manifesto. These included cities like Dublin, Las Vegas, and Wellington. Big companies like Orange, NEC, and Hewlett Packard also signed.

Jamie Cudden, Head of Smart Dublin, said, “We see the City as a Platform as a key enabler to develop evidence-based solutions that will enhance city living”.

The Manifesto itself doesn’t deal with technology specifics or require adoption of explicit hardware standards. “A smart city top level design philosophy is difficult to agree on in many Western cities, but there are other ways of achieving the same results”, according to Carl Piva, Vice President of TM Forum.

To meet the goal of smooth communication and interoperability in smart cities, a set of open APIs was announced in conjunction with the Manifesto. (APIs are standardized communication protocols that simplify data exchange between applications.) If adopted by cities and vendors, these APIs would make it easy to combine data from every department and to mix and match vendor hardware and software. Common APIs would also let different cities easily share and compare data, and allow easier adoption of approaches found to be successful elsewhere.

That brings us to the economic opportunity. According to Navigant Research, global Smart City revenue will reach $88.7 billion by 2025.

Certainly, much of that revenue will go to big companies with a long history of serving the needs of cities. The report cites identifies key vendors like General Electric, Huawei, IBM, Hitachi, and others. But if vendor-neutral standards are adopted, entrepreneurs and smaller firms will have a wide-open field to develop innovative solutions and, once proven, scale them rapidly to many cities.

With no real governing authority, of course, adoption of these principles and standards is by no means assured. But, it seems inevitable that standards of some kind will emerge as the Smart City market matures. And, the principles in the City as Platform Manifesto as well as the APIs seem to be solid starting points that have garnered initial support from a diverse group of stakeholders.

 

Roger Dooley
Original source: Forbes

 

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