Smart Cities Industry: Challenges and What to Expect

Working in or with the public sector isn't the easiest when it comes to deploying and scaling a project. And with smart city solutions, it's no different. Cities face challenges regarding funding, understanding what type of solution they need and navigating the vast sea of vendors. Whereas vendors have to go through the very lengthy and bureaucratic process of consultations and tenders, as well as budget constraints. Some of the challenges is that some cities go too much in just for the tech. And they're looking for a technology and they're maybe not thinking too much about the actual challenges they're trying to solve. So I think it's really important that you can have a clear idea of what the challenges you're trying to solve and maybe what the outcome intended outcome might be, because that helps with the communication and engagement with the vendors. I think the pricing is a big, big challenge and it's always the cheaper it can be, the more scalable. And the value on data. I always have big issues with people putting a price in terms of this is how much their data is and not having great examples of how that data has been used to deliver impact. It could mean changing procurement rules. We have rules that are decades old and we're trying to use those things to govern a modern, fast moving, ubiquitous environment like a smart cities environment. Technology’s changed by the time we've procured a solution, and that makes us weary and makes us, jaded. Vendors are overselling it. I think that most of the time cities are saying, Can you do that? Can you do that? And there is not a lot of ‘no’ in the answer. And it leads to a situation when cities are expecting something and there is some disappointment about that. A lot of times what we hear vendors pitch, it's the same pitch for everyone. They start with the technology first. They don't really try to understand what the city is wrestling with. A lot of the cities, they don't... If you have one person trying to do smart cities... Right? they're not going to know every single technology area, they might be familiar with one or two areas. So there really is an education process. Another issue the industry faces is pilots or small projects will not enable cost optimization or generate sufficient benefits to compensate the fixed cost of the project design and management, giving the impression that there is no business case. There are two options here. The first is that smaller vendors could partner with big companies involved in various projects so that the big company does some of the initial heavy lifting, like the tenders. The second comes from the city side. Cities can look for solutions and put out tenders together to make them more attractive. Is that instead of maybe Dublin City Council just putting out a tender, how can we pull together multiple local authorities. So we get economies of scale, better pricing and it's a better solution for the vendor because they need to write one tender and they may never have had an interest in writing to 20 or 30 something local authorities in Ireland. And we've seen that example in London where the London Boroughs do this. But even at scale, successful smart city projects must focus on priority verticals with significant outcomes, instead of trying to design global smart city projects addressing a range of verticals and use cases at once, as it will be complex to implement across the city departments. That being said, cooperation with different departments is still key for those projects to address challenges more comprehensively. I think the main issue is that cities want to make big projects and so they try to have everybody around the table and it takes a lot of time. They lose a lot of energy trying to do so. And it leads to a big project with a lot of people. And actually most of the time it fails because of that. So I think that they should more focus on really take one issue. There’s also the issue, which means that if you are working on one topic, you have to be sure that the next project they will do will be OK with the first one. So we are talking interoperability and we are talking format of the file like Fiware and so on sovereignty and so on. So this is expert topic that they have to deal with and sometimes they don't have the knowledge to do so. When we talk about smart cities, it affects different departments or areas in a city. and it takes a bit of time and sometimes it's not possible, sometimes it’s impossible, to make them understand that they have to share infrastructure and data. And so to have or to set up a transversal view on what the city would like to implement on smart city solutions that profit, I would say, different departments or areas of the cities, but also to different type of users or citizens in the cities. Politics can be a hindering factor for the smart city industry as well. Many projects are implemented by a group and then the next one in office decides stop it. So after understanding the issues, how can the industry and solutions be more resilient? I think it's trust. I think it's reference ability, it's them being able to talk the talk of cities or planners or urban policy. And it's quite clear when you meet someone who's a tech salesperson and has never worked with a city, they just completely say all the wrong things and use too many acronyms. So it's making sure that your teams are trained in terms of how to communicate and engage the right way for public bodies. If the services are really involved infrastructure in the technical services, I mean, it will be more resilient. I mean, it has to be a common decision between political and services and not just a political choice that will obviously be challenged the next time the city mayor, the political team will change. I really believe that there should be a closer collaboration between cities and municipalities, sorry, cities and vendors or private sector. And sometimes with academia. We have to change mindsets from a vendor point of view, from a political institution point of view where we have a much more collaborative approach and maybe more of a long term approach. I think, however, that there is a solution to that, which is really to set up from the very beginning an architecture that is future proof. And again, I'm going back to open interoperability. You have to set up from the very beginning a construct that allows you to go with the different waves. Interoperability, cooperation, trust, pricing and return on investment. Those are the pillars for a successful smart city project. But this leads to a Catch-22 situation. For big projects, vendors need to show references to gain the trust of cities, but it's hard to get those first references if there's no initial trust that allows the vendor to deploy their solution in the first place. To prove a return on investment, vendors need to have been able to deploy the solution at scale, which doesn't happen without the trust, which won't happen without references. Cities want cheap solutions, but making the smart city industry profitable is what allows vendors to develop them in the first place. Also, the smaller the project, the lower the return on investment is because of the fixed price to design and set up a project. So the lower the probability becomes to demonstrate the business case and for cities to invest more in the project. Cooperation would also allow for a better flowing project, but the amount of paperwork required would delay the schedule so much it wouldn't come to fruition. So Catch-22. I'm pretty open on this. Cities are really hard to work with. Government is very hard to work with. So it's interesting, like we meet companies that have absolutely amazing solutions, and sometimes my advice to them is, don't sell to cities because it'll destroy you. Smart city vendors and investors will have to understand that the process of working with cities will always take time and effort. It's not a traditional tech industry. It's a tech industry that involves a public buyer with a long process. So they will need to be patient in finding cities that will take the risk necessary to deploy solutions.