Smart Economy

In an era of budgetary constraints and limited resources, regulators may find it difficult to collect all the data they need. However, regulators have a valuable new data source to tap into: Data from citizens. But this goes beyond just data collection. Niche groups of citizens with increasingly powerful tools, social, and otherwise, become formidable civic crusaders.

These “activists by night” undertake distributed monitoring and protection of the environment, organizing through websites such as witness.org. They also participate indirectly, opening up the sensors in their mobile devices and homes for use in large-scale monitoring programs.

The exponential change of technology presents a unique timing challenge for regulatory agencies: Regulate too early and you risk stymieing innovators; wait too long and you risk losing the opportunity to regulate a technology or service before it becomes widespread, potentially harming consumers or markets in the interim.

This becomes increasingly true in the smart city context as cities start experimenting with new and often unregulated technologies. For instance, a handful of years ago, the microchips needed to enable data collection and wireless communication were cost-prohibitive. Now, these microchips are more cost-effective and are commonly used in connected devices—which often presents a privacy and security challenge for regulators.

Technology will likely continue to play a bigger role in the workplace. Some commentators worry that this presents us with a binary choice: Human or robots. But the reality is more nuanced. While technology can indeed wholly automate certain routine manual tasks, other occupations could benefit most from the partial integration of technology.

The resulting human-machine combination augments total intelligence and can significantly raise both productivity and quality. The smart cities of the future will be the hotbed for such integration and experimentation with applications in almost all aspects of the city life.

Innovation labs devise products and solutions to societal and public problems while providing a “safe” space for innovation, collaboration, learning, and incremental experiments to take place. These “city-labs” rely on open data to create service and applications relevant for citizens—bringing the ecosystem element to the siloed government.

“Making”—the next generation of inventing and do-it-yourself—is creeping into everyday discourse, with the emerging maker movement referenced in connection with topics ranging from the rebirth of manufacturing to skills development to smart cities. In a smart city, the maker economy makes small production more economical and viable, which leads to sustainable jobs and economy.

The existing education and training system is going through a transformation. Many smart cities are observing the rise of alternative training providers. These providers offer an accelerated path for acquiring in-demand skills sought by employers and jobs in demand. This can lead to much shorter training periods, reduce the existing skill gap, and potentially create jobs.

A city government collects, stores, and makes available enormous amounts of data. But too often, it’s siloed, difficult to access, and hard to understand. The open data platforms with easy visualizations can be of immense value to businesses.

Such platforms help businesses select the right location based on economic, demographic, and societal factors of their customers. The platforms can also provide data on availability of talent in the vicinity, as well as their skills and education levels.

Digitization and big data analytics improve city regulators’ ability to track performance and outcomes, enabling them to shift from a concentration on processes to the achievement of specific targets. This allows those regulated to modify and adapt their approaches without possibly falling on the wrong side of the law, while giving regulators a clearer view of the ultimate outcomes.

Governments require businesses to obtain permits for thousands of different activities, from renovating an office to transporting nuclear waste. City agencies use digital technologies to create tools or apps to streamline licensing.

These digital permitting systems explain which permits a project would need, let users apply for those permits, help them track those applications, and create an e-license that is valid across the jurisdiction. Streamlining licenses can not only reduce the burden on businesses but also increase regulatory compliance.

Rapid globalization, technology advances, geographical mobility, and innovation in education are transforming the concept of work. This often compels city administrators to focus on programs that help build the next-generation workforce.

Companies can expand their talent networks to include partnership talent (employees who are parts of joint ventures), borrowed talent (employees of contractors), freelance talent (independent, individual contractors), and open-source talent (people who don’t work for you at all, but are part of your value chain and services).

Business ecosystems have been described as dynamic and co-evolving communities of diverse actors who create and capture new value through both collaboration and competition. These tightly integrated networks of organizations are a shift from the siloed and self-contained corporations of the past.

Smart cities see the rise of such thriving business ecosystems around key areas such as health care, transportation, and education. A central aspect of this transition to dynamic and collaborative networks is that firms can begin to “deploy and activate assets they neither own nor control” and engage larger numbers of ecosystem participants.

Businesses subject to city regulations aren’t customers in the traditional sense. They don’t have a choice. However, treating businesses as customers could create a lot of economic and public value. By adopting a customer experience (CX) mind-set, city governments can make business compliance much easier, boosting accurate, voluntary compliance rates. By adopting a human-centered design approach, cities design systems with businesses existing behavior in mind, rather than requiring businesses to adapt their behaviors to use a new system.