How the Government Can Work with Companies to Advance the Internet of Things
According to McKinsey, smart cities represent up to $1.7T of the IoT market. But companies find government procurement cycles too slowly — so how can we make public-private partnerships more palatable for both sides?
As the Chief Innovation Officer for San Jose, the largest city in Silicon Valley, I think about how our city can better utilize emerging IoT technologies. Last month, I sat down for a closed door session with 65 CEOs, venture capitals, and institutional investors to discuss the IoT opportunity at the Influencer Series in Menlo Park.
Several questions kept coming up: why are public-private partnerships so hard? And, what can we do to scale adoption of IoT in cities?
IoT interoperability and lack of clarity on winners and losers inhibits willingness to adopt.
The plethora of protocols and standards, lack of interoperability among devices, and rapidly changing landscape make it difficult to understand where and how to invest — making many cities feel they should “wait and see” how the sector shakes out.
Bias toward big players and integrated platforms limit agility.
Many IoT startups are limited in their range of offerings, and are acquired by a larger player that has deeper pockets and builds a full suite of services for government clients. These larger plays require a higher investment, both financially and in terms of IT expertise — not to mention the more stringent procurement requirements. Two questions emerge: (1) What is a “digestible” increment to start a cascade of investments. (2) How can industry standards enable local governments to invest in IoT projects with small but viable firms, growing the larger ecosystem?
Misunderstanding of the risk profile and the need for articulating coherent value to the public.
Companies often pitch IoT value relative to other technology applications. However, city governments are resource constrained; an investment in technology is viewed by the public as a trade-off that takes away from more immediate concerns such as road repair and police on the streets. Articulating the benefits of any new technology needs to be framed for the public in very tangible terms — as cost savings, productivity gains, or as an investment that will yield significant returns to the public good. For government, the public are our equity holders — and our investments are dependent on their buy-in.
Despite these challenges, there are areas of collaboration that can pave the way for larger partnerships for IoT and city government
Building a talent pipeline to understand IoT in cities.
Because of the complexity of IoT solutions, many of our corporate partners struggle with cultivating the right talent. Similarly, city government struggles with attracting high-caliber talent that understands emerging technology trends and how to build technology “into” municipal services. Working together, corporations and city governments can develop talent models that allow tech talent to spend time in city government.
Building better business and use cases.
Only a few IoT use cases pop up as generating real value to cities–smart trash cans, parking applications, water and electricity management, street lights, etc. But the list is shorter than expected and higher impact use cases must be developed to demonstrate the benefits of IoT applications. Working together to produce reference designs allays fears about risks on both sides. Including a university partnership can be beneficial by pushing the envelope on technology, while building new applications for cities that can be monetized by companies.
Limiting risk through refining procurement to move quickly.
Rather than asking cities to deploy untested and costly full IoT solutions, look for ways to break down projects into more manageable investments. Local governments can reduce the burden of long procurement cycles. For example, include cooperative clauses where other many municipal governments can piggyback on a contract from a single city to replicate successful efforts and scale quickly.
In San Jose, we are experimenting with these approaches to build a more agile government
We are building our talent pipeline through high caliber fellowship programs that will place over a dozen experienced IT executives in city government. We are working with our IoT platform provider, Silver Spring Networks, to build use cases for pressing problems in our city departments under our “Demonstration Policy,” that allows us to use alternative procurement processes for pre-commercial applications to speed up implementation. We are engaging academic partners like San Jose State University to build use cases on image recognition, edge computing technology that supports public safety, and waste management applications that could save the city hundreds of thousands of dollars and allow us to redeploy our workforce to higher value activities. Through these approaches, we will advance the IoT space.
But to capture this opportunity, we need to work together.
