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15 Mar 2021

What Does It Take to Be Smart?

Jacobs
The future of smart is potentially transformational – the big challenge though is how to get there and who pays.

The term “smart” has been used for some time now to broadly describe the adoption of technology by a city or infrastructure owner. The expression has begun suffering from overuse, particularly where the public experience of the result has been anything but smart, in the literal sense.

Many cities and infrastructure owners have made technology investments over the years to automatically monitor or control things such as streetlights, water levels, utility distribution and traffic flow. However, these are relatively modest interventions when put in the context of Industry 4.0, the much heralded fourth industrial revolution, and the impact that real time data and advanced analytics could have on how our cities and infrastructure assets operate in the future. If the hype is to be believed, and there’s good reason for it to be, then the future of smart is potentially transformational. The big challenge though is how to get there - and who pays.

The use cases for smart cities are multiple, varied and growing, as anyone who has visited any of the international smart city exhibitions will be able to testify. It’s clear that relatively benign sensors that periodically transmit data today will be replaced tomorrow by real-time interactions which will allow for advanced applications, such as connected and remote healthcare, and connected ecosystems for things like autonomous vehicles. 

Whilst many of today’s use-cases will operate on current networks such as LoRaWaN and 4G, 5G is widely seen as the tipping point technology that will enable a lot of the next generation, disruptive use-cases to be realized. However, a challenge for cities and infrastructure owners is that predicting these use-cases is a little like trying to predict in the early 2000s the vast array of applications we now use on our smart phones. Creating a business case for a “smart” entity is therefore not easy.

Connecting people and place

For anything to be smart it needs to be digitally connected and whilst satellite technology is developing, this invariably means hardwiring everything back to fiber. This then introduces the value of connecting people as well as things. Both local and central governments are actively encouraging reliable fiber-to-the-home connectivity for all citizens, recognizing the value of closing the digital divide and giving people better access to 21st century jobs, opportunities and services.

There’s now a very good body of evidence that points to the positive social and economic benefits of fast and reliable digital connectivity. Cities in particular have an opportunity to promote digital connectivity as a platform for creativity and innovation that in turn is attractive to inward investment and growth.

Unlocking the value of infrastructure

Similarly, owners of linear infrastructure assets see the opportunity to use their networks to promote the laying of fiber, unlocking not only operational use-cases and additional revenue streams for themselves but also providing a social value benefit through connecting people in harder to reach areas.   

The starting point is therefore to be clear on the outcomes to be achieved. The challenge for any city or infrastructure owner is to get digital connectivity where they need it and to build use-cases around the technology they intend to adopt.

Both urban and rural communities are generally reliant on the established telecom network providers expanding their fiber and mobile networks, although the timing and geographic reach of these plans is principally driven by their own commercial considerations rather than the specific priorities of a city or infrastructure owner.

More recently, given it can be highly revenue generative, there are increasing numbers of private investors seeking to realize value from fiber ownership and governments are actively encouraging this in certain jurisdictions. The good news is that there’s a lot of cash available for investment in digital connectivity if only the right business cases can be established.

Putting forward the case for change

To be both smart and to realize the benefits of connected citizens, public authorities are highly reliant on this private investment from either established or new telecom network providers. In turn, that private investment depends upon being able to secure anchor revenues to justify an investment case.

For public authorities who can navigate state aid and public procurement regulations, they can attract this investment by either providing a future anchor tenancy commitment or encouraging others to do so. This all comes down to being able to develop their own credible business cases that clearly capture future connectivity benefits.

Defining and banking these future benefits is therefore key to being able to attract investment.  Whilst technology companies are spending billions on research and development, and there’s a highly impressive array of technologies on the market, cities and infrastructure owners need to understand those that will truly add value. Technology remains nothing more than an interesting idea until such a time that it becomes accessible and deployable in a way that creates tangible value for the end user.

For a city or infrastructure owner it’s the consequences of this technology on business processes, people and training that needs to be clearly understood as part of the overall business case. These important points are often lost in the excitement of the technology but matter hugely to the ultimate buyer.

To realize the benefits of becoming truly smart – where city and infrastructure operations are a fusion of the physical and cyber worlds – is highly complex and requires the alignment of interests across the technology, telecommunications and investment sectors in collaboration with the city leadership and asset owners. 

At Jacobs, we’ve developed a series of models that allows us to develop business cases for investment, from determining the social and economic benefits of connecting people through to defining "smart" use-case benefits and their impact on organizations and operations. Through our engagement with cities, infrastructure owners, telecommunication providers, technology companies and investors we are able to integrate all elements of this complex ecosystem to create business cases that will help to realize smart ambitions.

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