Are legacy governance structures able to produce the results smart cities promise? Christina Bowen and Anish Mohammed elaborate on the future of smart cities and on how they might connect to the Blockchain and decentralized infrastructures.
Cities provide infrastructure and governance to allow millions of people within a specific geographic area to live and work within a multitude of coordinated, civilized patterns. People and things need to move in, out and within the city. Water needs to arrive; garbage and sewage must go away. Communications must occur at the right time and reach the right people. Energy must be delivered when and where it is needed, and in a form capable of doing the work being demanded of it. All this must happen with the minimum possible waste and harmful effects on the environment. And it must happen safely, at a reasonable price, and equitably.
Cities have striven to meet this challenge for centuries but the complexities that come with population size and diversity, as well as technological and economic change continue to up the ante. As the UN World Urbanization Prospects report notes,
“Over half the world’s population already lives in cities: by 2050, 66% of the world’s population are expected to live in urban areas, with nearly 90% of that increase in Asia and Africa.”
Now, it appears possible that technology could serve as an opportunity as well as a challenge, making the job and outcomes of municipal design easier, not more complicated. How could this happen? What makes a city smart? How might our cities apply these new technologies in a way that increases our ability to solve today’s challenges together? And what does that mean for our everyday decisions?
Before the modern telecommunications and the internet, paying our power bills requires a human from the local public utility district (PUD) office to arrive and read our meter, return and enter information into a central database, and trigger another process to send our bill. This whole procedure, which could easily take a few days, would then be repeated every month or two. Today, increasingly, smart meters can send our meter readings to PUD offices, saving worker trips and making the process faster. We have access to the information in near real-time. We pay our bills online and set up alerts to tell ourselves when our use of electricity passes certain limits. The connectivity of everyday objects capable of sensing the world around us, or gathering some information that may be useful to us – this enlivening of refrigerators, coffee makers, electrical meters – is what we call the ‘internet of things’, the IoT. The city-scale conception of the IoT – the idea of a ‘smart city’ – has many people keenly interested in the myriad ways that idea might play out. The Smart Cities Council describes the activities of a smart city this way:
“A smart city gathers data from smart devices and sensors embedded in its roadways, power grids, buildings and other assets. It shares that data via a smart communications system that is typically a combination of wired and wireless. It then uses smart software to create valuable information and digitally enhanced services.”
One of the Council’s partners, International Data Corporation (IDC) has listed this as their number one prediction for 2016: “by 2017, at least 20 of the world’s largest countries will create national smart city policies to prioritize funding and document technical and business guidelines”. Cities and nations around the world are scrambling to create some version of a smart city. We are busily working out how, exactly, to leverage our flexible new technologies and the emerging IoT in order to enable very fast, transparent decisions. Fundamentally, however, all decisions stem from people. The ‘thing’ that make cities ‘smart’ is us – collectively, as pointed out by Sergio Fernádez de Córdova:
“The smart city ecosystem relies on everyone for success. While roles and contributions may differ, their importance does not. As people flock to cities in greater numbers and populations grow, it will ultimately be people who make their cities smart. Social inclusion programs, community engagement platforms, public challenges, shared economies and social governance will all help the smart city ecosystem flow, but people — and their needs — are at the heart of all these platforms.”
How, and how well, people are able to recognize and communicate their needs within a smart city depends not only on our technological tools, our capabilities and literacies, but also on our municipal structures and policies. People may make a city smart, but smart governance allows that intelligence to be collectively expressed. So. If you want to build a smart city (and who doesn’t?), a pressing question is how to reliably transform the flood of information available to city administrators into intelligent action. Gerard Grech puts it this way (see his ‘Cities as Platforms’ article from Tech Crunch):
We must start with the recognition that, like its physical architecture, we can augment our city’s digital foundations; building sustainable solutions from the data we collectively produce. Here’s a simple analogy for how to think about this more disruptive urban paradigm. If you take a set of encyclopedias and ask, “How do I make this digital?” you will get Microsoft Encarta, an encyclopedia on a disc. Remember those? But if you ask, “How can digital change our engagement with encyclopedias?” you get Wikipedia, one of the largest publicly accessible knowledge stores on the planet with which we all can engage.
Along the same lines, we could take a city and ask, “How can we make it more digitally responsive?” and we would most likely end up with is a list of inane and oft-cited “smart city” solutions. Think smart toilets, bins and elevators, and you’re close. But if we ask, “How does digital change our engagement with our city?” we get closer to exploit its full potential in a dynamic and civically minded way.
Right now, even the most advanced smart cities still operate mainly through centralized governance bodies that mediate all the sources and uses of IoT data. These days, we may be able to take care of many processes via city website, through custom phone apps or even just our autopay notifications. However, it is critical to understand that this geographic decentralization does not yield greater collective capabilities or significantly more intelligent action. It just takes our old centralized processes and makes them a bit faster, and perhaps less of a bother. Our data, and any information we see flow from it, still gets ‘processed’ by our central authorities. This leaves plenty of room for delays and significant transaction costs, as each phase of a transaction, each box to be checked, is mediated in central bottlenecks.
For example, in London’s lauded ‘congestion zone’, drivers are identified by license plate photos and charged a fee to go through the area during peak times, discouraging traffic through pricing. However, the data informing those fees still gets sent to a central authority for dispatch to your mailbox, inbox, or autopay account. Similar centralization remains the norm within the emerging smart city infrastructures for energy, water, citizen planning efforts, and standards around smart buildings.
But let’s return to what we are actually aiming for by making our cities smart. Are these legacy governance structures able to produce results we want within their centralized bureaucratic processes? Can these existing structures cope with the challenge of turning our ever-increasing floods of data into valuable information, available at the right moment to inform intelligent decisions and actions? Grappling with the real work of making a city smart means confronting the limitations of hierarchy and centralized structures. The Smart Cities Council favors “decentralized solutions that adhere to strict standards so they can easily share infrastructure and share data”. Andrea di Maio of Gartner Research shares this view, saying “smart city endeavors need to be focused on specific city problems, must leverage existing infrastructure, skills and financial resources, and must be developed in an evolutionary fashion rather than being dealt with as top-down programs”. He goes on to say that the correct meaning of the word ‘smart’ in smart cities is not ‘intelligent’ but astute:
“Being astute means to be able to make the best possible use of scarce (and declining) resources. It means to effectively leverage available funding. It means to reuse as much as possible of what exists. It means to realize that sustainability requires collaboration within and across traditional boundaries.”
How easy is it to collaborate and break through traditional boundaries in a highly top-down organization? This method of organizing is becoming ineffective. Rapidly changing, widely distributed networks will shape our future. Look at the web. Now look. See the future?
Understanding networks can help us navigate today’s world. They can be centralized, decentralized, distributed, and have many facets and flavors. For now, let’s focus on how decentralized and distributed networks can give our collective intelligence another leap forward, and so help our smart cities flourish.
As we developed our digital senses and sensibilities over the last 30 years, exploration of the architecture of computing and the experience of the first world wide web increased our network literacy. Decentralized, distributed networks suddenly allowed people to learn together exponentially faster, and more effectively, than any curriculum, course, or training manual could ever enable. We began to see this capability supported at scale by technology for the first time in human history, and some of us (no one actually knows who) built the means to decentralize value creation and transaction recording.
This new tool, a global, distributed, incorruptible ledger for record keeping, became known as the blockchain, one of today’s most intriguing emerging technologies. Blockchain technologies allow exchanges to occur immediately, transparently and reliably without centralized authorization, and are immune to alteration by fraud. Today, strategies based on blockchain technology bubble up from strange and wonderful intersections of finance, cryptocurrencies, and complex adaptive systems investigations across many fields. We are beginning to see possible uses of this new tool that reach far more than transaction recording. Specifically, for smart cities, making our exponentially growing IoT ‘blockchain aware’ through smart contracts could transform not only the smartness and speed of municipal governance, but make our collective lives more equitable and our use of resources more astute as well.
Imagine, for example, a city aiming to move to 100% renewable energy use. In a ‘normal’ grid, the majority of people draw energy, rather than produce it. If we come closer to a balance in those flows, we can begin to solve reliability and storage problems, major obstacles to renewable use. This can be accelerated through smart contracts recorded on the blockchain that immediately pay people for storage capacity in connected energy ‘sinks’ like refrigerators, water heaters, or electric car and bus batteries that can be used during peak use times. Another difficulty with bringing distributed renewable energy sources into the grid is the costliness of tracking and accounting for those ‘demand response’ inputs. In a smart grid supported by the blockchain, the cost to monitor distributed renewable inputs drops to near zero. Each IoT-enabled distributed energy source or sink independently ‘talks’ to the grid. This is recorded in real time in the blockchain, and the credit accrues to the of the owner of that asset in their cryptocurrency of choice, with no cost, mediation or delay.
Smart contract built on the blockchain can also provide better results than what we see by attempting to control or influence behavior through pricing. Pricing, the most common feedback used to influence consumer behavior, has been a standard method for utilities. However, it causes unfairness without any necessary intent for unfairness on the part of consumers: for those with more money, the price signal is muted. Price feedback is also delayed and opaque, presented as a line on a monthly statement and removed when people are turning on a switch. Linking the IoT to smart contracts can allow dynamic feedback based on things people care about, and can be shown to customers as they make decisions. Showing a range of metrics at the time of the decision to use energy, such as tons of carbon emitted or saved, ways in which a local economy is fed or drained, and other indicators of personal value, people’s behaviors will be more effectively influenced. This would impact both amount and timing of use, preserving resources and providing demand alleviation during peak times. Strategies like these could greatly increase our ability to explicitly opt to power our lives and businesses in more sustainable, regenerative ways.
What would moving away from central control look like for our traffic flows? Returning to the busy streets of London, if ‘smart’ cars had the ability to directly interrogate data from roadways, cost could be used to disincentivize unneeded traffic in that area dynamically, in real time negotiations between the car’s sensor and available traffic data, with any fees coming instantly out of driver accounts. Even better, rather than assuming that driving is the solution, lets look at the outcome we want. Ask ‘how can I best change my location, getting from where I am to where I want to go?’ Add a destination and pricing param
eters, and our smart device finds the cheapest/ fastest options based on real-time city data, allowing us to make the choice. Extend this idea with smart cars that deliver their pollution rates and other metrics, and we could replace road taxes.
The use of distributed smart contract technology can make us more astute not only in our flows of energy and traffic, but in our most basic physical waste: garbage collection. Most cities, with growing populations and increasingly costly land, struggle with disposal. In a Reuters article about this problem in Singapore, one of today’s ‘smartest’ cities, author Gillian Murdoch ends by saying
“In the meantime, normalizing the idea of recycling through legislation would help, he said. “Right now in Singapore recycling is not legislated. In Europe, everyone separates organics, everyone recycles, it’s legislated.’ ”
What if our thinking about problems did not default to centralized solutions? What if we focused here too on the behaviors and outcomes we’d like to see and found ways to move those forward with distributed smart contracts linked to the IoT?
A ‘smart trash can’ with an attached sensor and individual identifier could interact with a garbage truck’s IoT enabled pressure sensor on the lift, gathering weight data about a client’s trash. Charges based on that weight would be dynamic and immediate, credits could be issued for recycling, and further thinking could illuminate ways to stimulate more regenerative designs of products and packaging, as well as the reduction and reuse of resources, which should come before recycling in our efforts to curb waste production.
Distributed smart contracts enable us to incentivize desired behavior across many relevant municipal sectors, rewarding those who play nice, and disincentivizing behaviors that lead to the problems we are working to solve. How quickly could we deploy the blockchain technologies within the emerging IoT? The most rapid path to adoption may be through making IoT enabled homes/ buildings/ business ‘hubs’ blockchain aware. Faster and easier than building blockchain awareness into each individual thing on the IoT, these hubs could also aggregate data relevant to individuals, households and businesses, taking the quantified self to a new level.
Smart contracts built on blockchain technology are fair, incorruptible, low-cost and instant. This speed, security and clarity means better outcomes across many facets of our civil lives, in both the physical and social realms: astute deployment of common resources, easy and fast accountability for both reward and penalty, and smoother paths to the results we seek, whether that be a parking spot, better traffic flows, more attuned governance bodies, or a way to reduce an entire city’s carbon footprint.
Written by Christina Bowen and Anish Mohammed.