Urenio Watch Watch: Business Models

A report by Atos on Smart City Economics

Smart City Economics: A multi-sided approach to financing the smart city is a position paper published by Atos, the european IT services corporation specialised in cloud, big data services etc. The main issue that this paper attempts to deal with is whether there are better ways of funding innovative projects that do not rely on tax revenue and do not depend on the whims of external partners.

According to Atos, there are four factors that must be combined to create an effective multi-sided market for developing and launching successful, sustainable innovation projects:

  • Public interest
  • Public engagement
  • Business viability
  • Market opportunities
When these four factors are in place we have an environment in which every participant, from ordinary citizens to major corporations, can engage in joint projects, targeting their own specific goals. Then funding options start to open up and momentum builds.
In contrast with the classic outsourcing of basic services to external bodies, the multi-sided market concept enables us to focus on innovation. In other words, it permits exploring how to work with commercial organisations and find better ways of structuring and delivering services.
Key Smart City focus areas. Source: Current report.

Data: a currency for cities

Special focus is given in the report on the importance of open data provided by city governments. On-line services are already available in many cities and citizens are more and more connected to the Internet. City governments gather enormous quantities of data and most of them remain untapped and unexploited. As long as legal and ethical requirements are covered, citizens could agree in sharing their data so that cities trade it for service and commercial benefits.

Data is exactly what potential commercial partners need, as this helps them to refine and target their services, making these more attractive and therefore more profitable.

The city – a platform for creativity

According to Atos, the Smart City platform needs to be based on a number of important functional parts, including:

  • Big Data analytics
  • Data security and access management
  • Secure connectivity of sensors and devices
  • Scalable API management-system
  • Continual risk assessment
  • Secure on-line payments
The report concludes with the conviction that the only way for cities to improve quality of life for their citizens and businesses, lies in collaboration and cooperative working in a multi-sided market environment. Ensuring that all participants are benefited, cities should aim at building a shared environment where creativity and innovation can flourish, based on a business model in which everyone contributes and everyone profits.