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Melbourne, Barcelona, San Francisco: three smart cities changing the world

PwC smart cities

Last month, Chris Vein’s article about why we need smart cities kicked off a conversation about Australia’s future and the role smart cities will play in it.

Here, he cites three cities around the world that exemplify the new perspectives that smart cities must bring.

The power of change has an impact on our lives every day. It always has been, and will be, the driving force of progress. The difference now – and it’s a big difference – is that change is exponential.

I don’t think it too much of an exaggeration to say that Australians experience a new way of being, every minute of every day. We’re told to innovate, to emulate start-ups, to co-create, to take risks. To be ‘smart’.

That’s good advice, of course. However, government is different from business, or academia. Fundamentally so.

How should governments go about improving the lives of citizens?

They should begin with the unique experience of living, working and playing, creating the delivery of experience as the service, and building new operating and business models to support that promise.

This is where ‘smart’ comes in. Here I cover three perspectives that exemplify what it means to be smart, and the cities that encapsulate the vision.

The difference is experience

Cities don’t provide products in the same way that businesses do. Cities are (or should be) in the business of providing the experience for others to solve problems, big and small. It is their product model.

Cities are economic powerhouses that compete globally for human and financial capital. They focus on their unique brand, or their channels to deliver services (such as Australia’s government portal myGov), and their amazing capacity to engage citizens. Their differentiator is the citizen experience.

There’s a quote that goes: “People may forget what you say, but they’ll never forget how you made them feel.”

What makes smart cities smart is that they begin at this point. They then (re)build their operating and business models, understanding what people need, addressing the whole experience and making it simple and intuitive.

Case study: Melbourne

“Our mandate for the City of Melbourne is to start with the perspective of our users or customers of the city – our residents, students, workers, visitors, business owners – by asking, ‘What can smart cities do to improve the liveability, prosperity and sustainability of our city for them?’” says Michelle Fitzgerald, Chief Digital Officer and Smart City Office Manager for the City of Melbourne.

Truly a world leader in smart cities, the focus of Melbourne is on people interacting with other people and their environment. Technology is an enabler.

Melbourne has been using citizen juries for ten years that convene a range of Melburnians to “deliberate and make decisions that government bodies would traditionally have undertaken and led.”¹

Last year, thousands of Melburnians were asked to help guide the update to the Future Melbourne 2026 strategy. I like to think of them as personas representing diverse input on how to make the world’s most liveable city more liveable.

Architectures of participation and collaboration

Cities must build ways for people to participate and collaborate. It has been said we need to “build rules of engagement that allow disagreeing people to let their work products agree.”²

While a smart city is not primarily about technology, technology enables the product and business models to work in ways that weren’t possible before.

A ‘modern’ set of technologies can support layers of capability: infrastructure (this is where blockchain could be applied), intelligence (using data and artificial intelligence to drive decisions), and access (where augmented reality will shine).

New processes could now be used effectively, including crowdsourcing, predictive analytics, and process automation. Flat organisations, experienced teams, and agile processes make the change happen.

Case study: Barcelona

What amazes me about the City of Barcelona is how extensively it has reconsidered its operating model.

Barcelona believes in connections and relationships, with entrepreneurship as the vehicle for building them. The dynamic operating model in Barcelona includes components of policy, finance, culture, human capital, markets and infrastructure.

One of my favourite examples from City of Barcelona officials is about how the city wanted to experiment with AI and robots. They approached disadvantaged neighbourhoods, worked with businesses to take over vacant buildings, and engaged the disabled and the unemployed in labs to find, test and scale solutions that could enable economic and social change³.

Barcelona uses iterative, agile and lean practices, and a modern technology stack that defaults to open, more flat organisations and experienced teams. But it doesn’t focus on public good or private good. It focuses on good.

A new business model

Perhaps the most surprising aspect of a smart city has to do with the business of running it.

There will never be enough resources for a city to perform to its potential. But what a smart city does is to provide services innovatively while enabling others to do the same. As author Sangeet Paul Choudary argues in his book The Platform Manifesto, we need to transition from the siloed, linear model of ‘pipes’, to interactive, decentralised ‘platforms’4.

Prime Minister Malcolm Turnbull has spoken eloquently of government-as-a-platform. It is indeed a foundational part of Australia’s Digital Transformation Agency (formerly the DTO).

The theory goes, that many of the internal operations could be built once, and then used by all departments to support the broad range of policy and delivery needs of government.

Once built, not only is government more efficient and effective, but others may access the modular components, building additional and far-reaching value. The business geeks out there refer to his as a ‘network effect.’

Case study: San Francisco

The most obvious example of this working – and working really well – is with open data. The City and County of San Francisco was one of the first governments to release data not only for bureaucratic use, but to be accessible to anyone. For free.

The idea behind open data is that the cost of harnessing it has already been paid, so, by making it widely available, other enterprises such as startups and large businesses could use it to build new products and services.

This model proved to be both effective and popular. Todd Park, former US Chief Technology Officer, enacted it at scale by making open data the default setting for the Department of Health and Human Services5. It currently offers over 2,000 datasets to date6. Tim Kelsey, inaugural head of the Australian Digital Health Agency, is an advocate of open data and has talked about the opportunities for it to revolutionise health outcomes.

For isn’t that what the business model of government should be? To be outcome based, rather than service based?

Although not a smart city initiative (yet), the NSW Data Analytics Centre, which facilitates data sharing, and its Victorian equivalent7 are some of the best examples in the world of how to enable outcome-based government.

Smart city as an enabler

What smart cities do is create platforms for communities to organise, find new ideas, test them, and instill positive changes in their neighbourhoods. Smart cities go to their citizens for input, apply agile methodologies and create new models of sustainability and scalability.

Mike Bracken, former head of the UK Cabinet’s Digital Government Service, once said that in an analogue world, policy dictates delivery. But in a digital world, delivery informs policy.

I love that quote. To me, it perfectly summarises what a smart city does. It doesn’t dictate. It experiences. Then it governs.

 

1  http://theconversation.com/city-calls-on-jury-of-its-citizens-to-deliberate-on-melbournes-future-59620
2  https://opensource.com/business/12/6/architecture-participation
3  www.fablabconnect.com/ateneus-de-fabricacio-digital-manufacturing-for-everyone/
4  http://platformed.info/the-platform-manifesto/
5  www.healthdata.gov/content/about
6  www.hhs.gov/idealab/health-data-initiative/
7  www.innovationaus.com/2017/01/Victoria-cranks-up-new-data-agency/

 

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