I had the opportunity to attend Itron Utility Week this year on behalf of Iguá Saneamento, a water provider in Brazil. This large event is focused on the utility sector (water, energy and gas) and hosted by Itron, which is innovating the way utilities and cities manage energy and water and committed to the development of the sector.

The theme of the event already points out the purpose: To Connect, Innovate and Transform. There were three days of learning and great inspiration about the challenges and opportunities we face in creating smart cities.

What are Smart Cities?

There is much talk about smart cities; it is cool, but we are still crawling. There are examples and initiatives of success, however, this is an embryonic business and an agenda to be explored.

In summary, we are talking about making cities intelligent, using information and data that is collected using smart city infrastructure to help improve the management of cities and enable more informed decision-making. The most important and central axis involves the objective: provide better services to the citizen! As it was well stated by Phil Nevels, director of the utility of the future at Exelon during a panel on smart cities at the conference:

“We are not talking about technology, this is about service delivery!”

To a large extent, talking about smart cities involves an exercise of futurism, navigating in the universe of possibilities that the new technologies may provide. If on the one hand, we are not capable of foreseeing a clear point of arrival, it is more than tangible to observe connection and integration solutions that make the relationship of the service providers with the clients more accessible, transparent and deliver a better level of control and efficiency for the city.

No one would have imagined using Google or Uber some years ago. However, today no one conceives the idea of being without this type of service. I do not think it will be different in the vision of a smart city. The form of relationship with the water, energy or gas service providers is still archaic, and the support of these operations in its current format will remind us of the telephone lists in a little while. Connectivity, undoubtedly, will be a field to transform our business models.

Who is responsible for developing smart cities?

The challenge to create the agenda of smart cities is very similar in the U.S. and in Brazil, in spite of the differences of history and institutional context. Listening to David Graham, the deputy COO of the city of San Diego, we have the clarity that this mission needs to involve the public-private partnership, and the protagonist should be increasingly more of the public service providers (the concessionaires). It is not possible to advance without the public sector, but the agenda of undertaking and assuming the risk has much more adherence to the private sector than to the governmental sector.

The sector of utilities needs to face its long-term relationship as a service provider. It is necessary to capture in its planning the premise that the technology cost will decrease consistently (the so-called Moore’s Law), and that the present restrictions will be competitive differentials soon. It is a strategic positioning of thinking big! Understand that there is a potential besides the obvious service and that the basic infrastructure is a necessary investment that needs to encompass other variables beyond the form of the present service.

Create a virtuous cycle in which more investment results in a better service provision and this results in new components of revenue, feed-backing the capacity of investment and the cycle to bring solutions to the city.

A smart city is an innovative process. There are support layers for the evolution and emergence of new ideas and applications. It is necessary to provide some abundance to allow for the disruption. In this sense, the vision of the public authority gains great relevance. The strategic agenda is in the form of creating the regulation environment and the inherent incentives. It is necessary to create a sense of integration and sharing. As it was said by Nevels during a panel on smart cities:

“It is not about thinking out of the box, but to enlarge the box!”

If the entrepreneurial protagonist is the private sector, sustaining the environment for such innovation is inherent to the public sector. Courage to break the standard of “protecting itself through the negative response” and of a low environment of trust is crucial.

How can you make progress on the agenda of smart cities?

The U.S. and some other countries in the world are more advanced, in the sense of having had the courage to create initiatives and pilots. There are, in some cases, more synergies for utilities that allow for scale gains on this agenda.

In Brazil, the theme of public lighting seems to me to be a great catalyzer of the process. There is a large space to create solutions of public-private partnerships in this territory. There is space for this service to be a platform for the smart city by integrating other solutions.

Smart lighting applications that are activated only with the presence of people and adapt according to the density of the event, that are integrated with noise-capture systems for public security alarms (detection of gun shots, for instance), and still support of telemetry systems for reading of water, energy and gas consumption meters are some of the possibilities. Why not think of creating a city lit up in an environment with plenty of Internet Wi-Fi access? What would that represent for the agenda of development of new businesses?

As it was very well explained by Mike Beehler, Vice President Burns & McDonnell during the conference: this is the old and good, Think Big, Start Small and Walk Fast!

It is a matter of not losing sight of the need to put the customer at the center of the solution. Something that the utilities sector still is reluctant to adopt: a legitimate and continuous concern about perception and customer satisfaction. We are talking about providing solutions to the citizen. At the end of the day, it is the citizens who pay the bill. We have a new generation of consumers who are born with a different vision of what is free and who expect more of what is basic.

The vision of society as it relates to the conference’s theme reveals a little of the way. It involves the smart city connection with the necessary sustainability agenda. A study of this perception was presented by Itron and shows how there is a space for such territory (check out the 2018 Itron Resourcefulness Report).

We want to have smart cities (after all, nobody wants to be in “dumb cities”). There is the intention. It is necessary that we advance on the action agenda! Finally, more efficiency directly involves less waste and more sustainability of our natural resources!

In this intense immersion of the world of the utilities, I observed that even in the U.S. there is a lot of space for how we address the customer’s agenda. The agenda of having the active and continuous listening, by means of the Net Promoter Score (NPS) which we have at Iguá, in fact is something unique and innovative in the sector.

Our way of progress requires building partnerships and the continuity and intensification of the innovation agenda. Transforming our reality focused on providing excellent service. To connect, innovate and transform!

P.S.: What about you? How do you get into this agenda? Do you have ideas or initiatives? Do you believe in the importance of the initiatives to create smart cities? Share and let’s create a network of entrepreneurs in this theme!

Eder Sá Alves Campos is the Corporate Management Manager at Iguá Saneamento in Brazil. Connect with him on LinkedIn here.

Eder Sá Alves Campos
Corporate Management Manager - Iguá Saneamento