Data today can be used to improve as well as hinder society. With large companies dominating data from our devices, it is important we create new networks that add value to society and help to generate more equitable options for people, place and the planet. There are some exciting emerging models of using data to drive social good. I was lucky enough to meet Heini who is a researcher into the use of the Internet of Things (IoT) to drive value creation models for the public and private sectors. Her research has led her to be an impact and sustainability lead in Finland for the EU’s SynchroniCity project, which is designed to create a global network of IoT systems to increase quality of life, mobility and cleantech.

Meet Heini

Heini Ikävalko has an impressive career in academia working on increasing gender equality in technology, innovation management in Corporates, organisational management and is currently exploring value creation of IoT. I read about Heini’s role in SynchroniCity as well as her research paper about the value creation of IoT.

Heini Ikävalko, Project Researcher at Aalto University School of Business

Building the ecosystem for IoT value creation

IoT is the concept of creating a network of physical objects to the internet. This allows greater data capture and better tracking and management of the lifestyle around us. Some obvious examples include mobile phones, laptops, speakers, in home appliances. However, there is an abundance of commercial sensors including thermostats, air quality sensors, farm machinery, traffic light systems. IoT networks often bridge the gap between private and public systems, which creates a strong network of data.

Gartner forecasts that 14.2 billion connected things will be in use in 2019, and that the total will reach 25 billion by 2021, producing immense volume of data.

Heini’s paper published in March 2018, Value Creation in the Internet of Things: Mapping Business Models and Ecosystem Roles highlights the need for finding business models that support the scale of IoT so the power of data can be unlocked providing value for public and private parties.
Here is an extract that highlights the ecosystem and the key players to ensuring value creation.

In the article, an ecosystem refers to “the alignment structure of the multilateral set of partners that need to interact in order for a focal value proposition to materialize” (Adner, 2017). This definition focuses on the configurations of activity around a value proposition (Adner, 2017) and fits with IoT ecosystems, in which building ecosystems around a focal actor is no longer the only solution.

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The three identified role archetypes – ideators, designers, and intermediaries – have distinctly separate operating logic and activities in the ecosystems. First, ideators integrate current market offerings with their unique contexts and needs, and they provide input for service innovation by explicating these needs to the ecosystem with one-way communication. Second, designers mix and match existing knowledge components to develop new services with the ecosystem with reciprocal communication. Third, intermediaries cross-pollinate knowledge across many ecosystems and orchestrate service innovation with multi-way communication, affecting both the flow of knowledge and relationships. The intermediary role is especially important, because the intermediaries act as orchestrators by designing and facilitating the processes that allow ecosystem actors to collaborate with each other (Dhanaraj & Parkhe, 2006). Table 1 further illustrates the three roles.

(Ikävalko, H., Turkama, P., & Smedlund, A. (2018).  
Value creation in the Internet of Things: Mapping business models and ecosystem roles. Technology Innovation Management Review, 8(3).)

The SynchroniCity project

It is important to understand the underlying infrastructure and players required to create an IoT value proposition. One IoT system by itself has limited value, however a connected network with open source data allows more business models to be developed, leading to greater value creation.

Heini’s research and expertise led her to be a project lead for SynchroniCity, a European Union funded project over 2 years. According to their website, SynchroniCity is opening a global market, where cities and businesses develop IoT- and AI-enabled services to improve the lives of citizens and to grow local economies. It is funded by the European Union for EU Countries and has partners in South Korea, Switzerland and Mexico.

With over half a billion people in the European Union (Britain still included in that number..!), the scale potential is huge. The 2-year pilot is happening in big cities, but Helsinki is the only capital city involved. They are mostly large cities like Milan (Italy), Manchester (UK) and Antwerp (Belgium). To source the ideas, SynchroniCity did an open call. They received 133 applications from 55 new cities in 22 countries from all over the world.

There are existing networks including Open & Agile Smart Cities network and EUROCITIES which represented one-third of the 55 new city applications. As this is only a 2-year project by the European Union, it is important that existing networks have the opportunity to tap into this funding to accelerate ideas as well as create stronger foundations for concepts moving forward. You can read more about it here.

Principles for creating a scalable IoT ecosystem

Australia has started working on smart cities however much of the reporting is ‘the battle for smart cities’. Reality is that Australia needs to start thinking of cities as networks, not a competition in order to grow opportunities. If the EU countries all thought of each city as a competitor, they would not achieve anything!

However, there have been some great activities including the Smart Cities Week that happened in Sydney last year, bringing together thought leaders in this space.
As we are getting into election season, the Smart Cities Council also announced a proposed plan for party endorsement which can be read here.

From my meeting with Heini and further research on the topic, the below principles seem to be key in order to create successful IoT ecosystems:

  1. Collaboration not competition: Cities and countries need to work together and create communication channels for easy information sharing. For example, the SynchroniCity network use bootcamps to bring the network together and have regular meetings to ensure projects are aligned and working effectively.
  2. Create open data standards: Interoperability is critical for data to create broad ecosystems that can connect, share and scale insights for greater social change. Achieving this creates strong infrastructure which allows multiple parties to access data and build business models off the open and accessible data.
  3. City Councils should have dedicated resources: Innovation teams are becoming more common in local Councils in the EU. Heini said that having a ‘point person’ who can manage and navigate the bureaucracy can cut downtime and help to make more effective decisions.
  4. Co-creation with citizens: Sometimes projects can feel like they are being imposed on citizens rather than seeing the benefits. Ensuring there are channels (whether a website, facebook page or a face to face forum) that local citizens can interact with the technology, the leaders and to see the outcomes is critical. This builds trust and helps to build ownership in the local communities.

Overall

Smart cities have the opportunity to create benefits for quality of life, stimulate new business growth and protect local the local environment. The role of businesses in developing the IoT smart city ecosystem is critical to provide sustainable growth for the infrastructure. The EU’s 2-year project is fascinating and I will be keeping a keen eye on their future pilots and will hopefully drop in on a few on my travels! You can see their pilots and cities here.

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