Having studied history we have come to the conclusion that there is a very clear analogy between electrification and the technologies related to IOT/Smart Cities. From the history of electrification it’s clear that the first wave of innovation was fundamentally incremental in nature, and consisted of people augmenting existing processes with electricity in cases where it had become possible (but not mandatory) to do so. The payback from doing so was sometimes more status and prestige related than in the form of direct economic benefits. This is something that may influence some of the ‘Smart City’ projects today.

The real revolution started when new business models and processes involved which were only possible because of electricity. A good example would be optional electric lighting in a music hall versus a cinema, which can’t function without power and provides the same function but with radically different economics and boundaries.

If we apply this principle to where we are now we can see that the majority of current ‘Smart City’/IOT ideas fall firmly in the first group. Ideas – such as Uber – which require a Smart City/IOT are only starting to appear now.

Because we are still in the early stages of the ‘Smart City/IOT’ it’s very hard to place winning bets on IOT technologies and applications at this time. However, we can foresee certain infrastructural solutions that will be needed in order for all of this to work, and whose shape and characteristics we can determine now. Like electrification there will be an entire secondary industry that will spring up to meet the infrastructure and logistics needs of the new technology. While we can’t predict the successful ‘Smart City’/IOT ideas in advance we can see a clear need to provide an entire suite of services to manage the very large amounts of time sensitive data that this will involve. 

For more information see Openet’s Smart Cities white paper.