With shifts in population demographics and number, GDP, and workforce development, emerging markets have become increasingly important to the global economic landscape. The world is currently in the throes of unprecedented change. Populations in the developed world are shrinking and aging and in the developing world, many countries are experiencing hypergrowth. Major shifts in economies across the globe are driving people into cities in legion numbers – some estimate 730M will move into cities by 2050 — to find a way to make a living. Urbanization of this magnitude tests the ability of both existing and new cities to prepare for the onslaught. It will put increasing pressure on city governments to provide urban services – generally on tighter budgets — to the growing numbers of citizens, many of whom fall in low-income brackets.
In these challenges, though, lie opportunities…opportunities for the Public Sector to see and do things in new ways. Fortunately, as the need do more with less arises, the costs of technologies needed to address these challenges is falling. The costs of computing, storage and bandwidth have dropped significantly and the use of mobile, sensor and cloud technologies is on the rise.
The Internet of Everything (IoE) – Cisco’s moniker for describing the ecosystem of network-connected people, objects, processes, and data – has been described thus far as representing upwards of $14.4 trillion in “value at stake” or the dollar value associated with a combination of cost savings, new business opportunities, new jobs, more efficient operations for the private sector. We have now received the results of recent research on a similar analysis of the public sector, which estimates the IoE Value at Stake for Public Sector at a whopping $4.6 trillion. This value will arise in similar, but slightly different, forms: in increased city revenues, decreased costs, improved government efficiency, and improved citizen experience—and ultimately in better city livability.
The $4.6 trillion value can be broken down as follows: An estimated 70% of the total will come from “agency-specific use cases,” meaning benefits associated with connected education, connected healthcare, smarter safety and security– the big-ticket items in most cities. The remaining 30% would come from “cross-agency use cases,” that would include future work models, short & long-distance travel avoidance, smarter buildings, reduced traffic, more efficient parking, better waste management, and so on.
The public sector has certainly been hard at work applying technology to improve government efficiency. The pace, however, has been slow, fragmented and uneven. The era of Big Data will up the ante on adopting more approaches to harnessing city-generated data. The biggest trend in new products at the Consumer Electronics Show this week in Las Vegas is in sensors--sensors of all types, ubiquitous enough to have bubbled up to the consumer-product level – in everything, measuring everything, and sending data about it — unimaginable quantities of data about people, process, machines to inform decision making by people or by machines. Some of our projects already involve embedding sensors that trigger traffic lights to change to accommodate ambulances, alter garbage truck pick-up routes in response to sensored cans signaling fullness or a really bad smell, indicators on how soon a bus will arrive at a stop and how full it is, which parking places are open nearby, and on and on.
Tapping into big data can also quickly offer public sector leaders many new ways to learn about and communicate with citizens and improve urban service offerings to accommodate visible trends. It can also generate new big business opportunities say to create new Apps (and open up jobs to do that) to the delivery of useful information to the business sector to improve their product and service to citizens.
There are four key pieces to successful IoE-led transformation for cities:
1. Internet of Everything Use-Case Prioritization
The challenges on both sides of the world – developed and emerging -- are the same: provide access to affordable healthcare, education, emergency services, safety, security, more efficient / cleaner transportation, access to virtual town hall services – however prioritizing which challenges to address immediately can differ dramatically. While developed world will see use cases like parking management and streetlight management on the top of government priority lists, emerging markets, e.g. Indonesia would see Flood Management and Traffic control at the top. Physical Safety and Security will remain close to the top of the list for both markets.
2. Architecture for a Converged Infrastructure
The architectures Cisco has developed are applicable to the challenges faced in any part of the world. The Smart+Connected Communities Cisco City Infrastructure Management architecture can be implemented as an underlying foundation for solutions to challenges in geography / region and might be different. While Cisco’s Global ecosystem partners continue to play a key role in the new IoE market, Local Partnerships will begin to play significant role as well.
3. Environment for Innovation
In all this, innovation will become a key catalyst and outcome. Cities that foster innovation and build an environment hotbed of entrepreneurship will be the ones that will thrive in the coming era. Emerging markets will be the drivers of Reverse innovation. Many new use cases and technologies geared towards low-income individuals and households will come from emerging markets and see themselves moving up the priority charts on both sides of the world. We have already seen how Mobile wallets and micro lending (Bangladesh), came out of emerging economies and are proliferating in the developed world.
4. Education for the Workforce of the Future
Cities and countries are under increasing pressure to provide greater support and exhibit better results in their commitment to science, technology, engineering and mathematics, or STEM, education. Cisco recently announcement a partnership with New York Academy of Sciences and governments of Australia, Malaysia, and Argentina around a global STEM alliance that helps move these regions ahead in this quest. Cisco’s Networking Academies and its iPrize initiative, along with other technology-focused curricula, will help cities make strides in building their workforce of the future.
Because of Cisco’s clear advantages in the network infrastructure it and its customers have built to support the evolving Internet, it is uniquely qualified in its ability to sense, measure, quantify, and respond to myriad changes that occur at the network edge. Cisco can then respond with technology-crafted solutions and relevant business models to these sometimes subtle contextual shifts – like the evolution of crowdsourcing – or abrupt occurrences – like a natural disaster that necessitates an immediate response to save lives, livelihoods or property. Cisco strength lies in its ability to gather intelligence at the edge of the network.
One clear element for success in envisioning and implementing new solutions and new opportunities in a public sector context – especially in emerging countries where infrastructure investment capital may be limited or simply non-existent is a collaboration between the public and private sectors. Public-private partnerships, or PPPs, are a crucial part of the mix in bringing these enormous, evolutionary projects to life. There are many different models for PPP involving shared funding of new projects, projects in which the assets are owned by the private sector and leased under a more feasible opex vs. capex scenario, projects in which assets are owned by the government and leased for use in a joint venture.
The private sector might drive new scientific development in their R&D departments and creates products and services in such a way to be embraced by the marketplace; however it’s the public sector that shapes the foundation for breakthroughs via policies and support for various types of research in universities and agencies. Often the private sector can absorb some of the initial costs to being projects that will allow the public sector to mitigate some of the potential risk. The public sector will provide the advocacy for acceptance of innovation within communities It is a win-win for both sides of the equation, allowing each to leverage unique and complementary sets of expertise to understand and address risk profiles associated with adopting new solutions to existing and new urban challenges.
The momentum is building now on connecting the unconnected. The rapidly growing tsunami of resulting data will be instrumental in changing processes and the quality of life for citizen of cities around the world in ways we can’t even yet imagine.
In summary, there is a huge value at stake globally for connecting the unconnected – especially across the developing world. The public sector stands to benefit tremendously as does its citizenry. It’s incumbent upon leaders in the developing and the developed world to address these opportunities for change in a thoughtful, methodical way. But the value is there. And Cisco stands ready to assist emerging markets in leveraging that value to create sustainable cities and improve life for citizens everywhere.