Considering that the IoT is in its infancy and due to the last years wasted in predictions that have not been fulfilled, in disappointing statistics of successful projects and with most companies without clear strategies, it is normal to think that R & D is today so necessary for boost and accelerate this increasingly sceptical market.

R&D should be an essential part of bringing innovation to any company via IoT projects. And though we can all agree how important R&D is, it requires a great deal of experience, senior experts, and specific toolsets—resources that not every company can say they have handy.

However, there is a risk when deriving the strategic decisions that the executive directors consider to be technological towards the R & D departments. Many times, oblivious to the reality of the markets, those responsible for R & D with the invaluable aid of the subsidies of the different Administrations, they launch to develop products and technologies for problems that do not exist, just for the fact of obtaining recognition or to continue living without pressures of the Top Management. I am enemy of granted subsidies granted most of the time by unqualified Administration organisms that does not understand that need to prevail the utility, the business model, the business case and the commercialization over the innovation that R & D said to be developed.

Now, if we ask the sellers of IoT technology, products and services, they may not be so happy with the idea of having to talk with the R & D areas instead of with other areas of the company more likely to buy. Most time, R &D departments decide to do it themselves. Vendors know, that with great probability, they will not to close deals due to lack of budget of the R &D or the low visibility of this area by the rest of the departments of the company.

The Importance of R&D for the Internet of Things

Innovation in IoT is a major competitive differentiator. See below some advices to have a decisive advantage over competitors:

• IoT-focused companies need to invest in R&D to keep up with the rapidly changing and expanding market. It is important that an organization’s R&D iteration turn times are quick, otherwise the company is not going to be able to keep pace with the expected IoT market growth. However, it’s not enough to simply speed up R&D—innovative IoT firms, both start-ups and established companies, must also make sure their R&D processes are extremely reliable.
• You can’t solve R&D speed issues just by increasing budget.
• Executives must maintain strong, steady communication with R&D regarding the department’s priorities over a particular time frame and how progress will be measured.
• Guidelines are invaluable: The more structured and streamlined R&D procedures are, the better IoT companies will be able to move from conception to delivery.
• Design innovative IoT products but accelerate time to market.
• Internal collaboration: R&D team should share real-time data across internal departments to spur intelligent product design
• External collaboration: Connect with customers and partners to ensure success
• Differentiation: Drive overall business value with IoT.

Outsource or not Outsource R & D for your IoT project

Just like any other technology, IoT products and solutions require thorough research and development, and it better be done by professionals. Despite the noise generated by analysts and companies around the IoT, the reality is that there have not been many IoT projects and therefore it is not easy to find good professionals with proven experience in IoT to hire.

When I think of Outsourcing IoT projects, Eastern European and Indian companies immediately come to my mind. No doubt because the R & D talent seems to be cheaper there. Spain could also be a country to outsource IoT, but at the moment I do not see it.

The benefits of Outsourcing R&D for IoT Projects:

• Expertise and an Eye for Innovation
• Bring an IoT Project to Market Faster
• Optimize Your Costs
• Control and Manage Risks

I am not sure about the quality of most of these companies or the experience of their teams in the development of IoT products or in the implementation of IoT projects, but there is no doubt that there are benefits to Outsource R & D for some IoT Projects. You should select any of these companies after a careful evaluation.

Recommendation: Do not stop your IoT projects if you do not have the skills and professionals in house. Luckily, there are companies who offer outsourcing R&D for IoT projects.

Note: Remember I can help you to identify and qualify the most suitable Outsource R&D for your IoT project.

Spain is not different in R & D for IoT

I have not believed in R & D in Spain for years. There are exceptions without a doubt, but it seems evident that the prosperity and welfare of Spain is not due to our R & D. Fortunately we have sun and beach and a lot of brick to put in houses that are not sold because of high prices and low wages.

With the entry into the EU, I thought that we had great markets open to us. I was also optimistic that we would have great opportunities in the Latin American market, thanks to the fact that our research and development capacity would have been consolidated effectively in our companies and universities because it would be profitable and worldwide recognized.

But it has not been that way. The technology developed in Spain and more specifically that relating to the IoT has little chance of being commercialized in France, Germany and not to mention in the UK. If we add the development gap of the countries of South America and that our local market is averse to technological risk, it is difficult to flourish R & D in IoT or Industry 4.0 here in our lovely Spain.

That does not mean that we do not have public R & D budgets for these areas. What happens is that the same thing that happened during the last 30 years has happened. The incentives and aids are few and for the most part used to finance large companies with little return to society. There is no rigorous control of the aid granted and, above all, there is no plan to encourage the local and global marketing of the products developed with the talent of our scientists and researchers.

I have stopped believing and trusting in our successive Governments for the change in R & D but there are exceptions that are worthwhile to follow and work with them. For this reason, I continue help them demonstrate that “SPAIN CAN BE DIFFERENT”.

Key Takeaway

After years of unfulfilled expectations, companies are sceptical of the potential growth of the IoT market or the benefits in their business. R&D department can be a cure to boost IoT initiatives but also a poison to kill IoT initiatives.

IoT may have started in R&D, but their benefits don’t have to end there. To drive overall business value, it’s important to share IoT data – both internally and externally. Facilitating open collaboration, discovering new ways to innovate products, and accelerating time to market, you can differentiate R&D and your business.

As fast turn times and reliability becomes a focal part of companies’ R&D processes, these companies will be well-positioned to thrive within the IoT market.

Thanks for your Likes and Comments

A new wave of technologies, such as the Internet of Things (IoT), blockchain and artificial intelligence (AI), is transforming cities into smart cities. Many of these cities are building innovation labs and zones as part of their new civic landscape. Smart city innovation labs are vital components of the smart city ecosystem (Figure One). They provide an organized structure for cities, communities, experts, and vendors to come together to create solutions. Successful solutions piloted in smart city innovation labs are then scaled and deployed into a city’s operations and infrastructure.

Figure One. Strategy of Things Smart City Ecosystem Framework.

What is a smart city? The answer depends on who you ask. Solutions providers will tell you it’s smart parking, smart lighting or anything to do with technology. City officials may tell you it’s about conducting city business online, such as searching records or applying for permits. City residents may tell you it’s the ease of getting around, or about crime reduction. Everyone is right. A smart city, built properly, will have different value for different stakeholders. They may not think of their city as a “smart”city. They know it only as a place they want to live in, work in, and be a part of. To build this type of city, you have to first build the smart city ecosystem.

A smart city is built on technology, but focused on outcomes

A scan of the various smart city definitions found that technology is a common element. For example, TechTarget defines a smart city as “a municipality that uses information and communication technologies to increase operational efficiency, share information with the public and improve both the quality of government services and citizen welfare”. The Institute of Electrical and Electronics Engineers (IEEE) envisions a smart city as one that brings together technology, government and society to enable the following characteristics: a smart economy, smart mobility, a smart environment, smart people, smart living, smart governance.

But what does a smart city really do? Our scan of smart city projects worldwide showed that initiatives fell into one or more smart city “outcomes” (Figure One).

Figure One. Smart city projects are aligned to one of seven outcomes.

As a starting point, we define a smart city is one that uses technology extensively to achieve key outcomes for its various stakeholders, including residents, businesses, municipal organizations and visitors.

The smart city ecosystem framework

Figure Two shows our framework for a smart city ecosystem. A vibrant and sustainable city is an ecosystem comprised of people, organizations and businesses, policies, laws and processes integrated together to create the desired outcomes shown in Figure One. This city is adaptive, responsive and always relevant to all those who live, work in and visit the city. A smart city integrates technology to accelerate, facilitate, and transform this ecosystem.

Figure Two. The smart city ecosystem framework.

Four types of value creators

There are four types of value creators in the smart city ecosystem. They create and consume value around one of the outcomes listed in Figure One.

When people think of a smart city, they automatically think of services provided by municipal and quasi-government agencies, such as smart parking, smart water management, smart lighting, and so on. In fact, there are three other value providers and users that co-exist in the smart city – businesses and organizations, communities, and residents.

Businesses and organizations may create services that use and create information to create outcomes for its stakeholders. Some examples of “smart” businesses include Uber and Lyft for personal mobility, NextDoor for information sharing, and Waze/Google for traffic and commute planning.

Communities are miniature smart cities, but with very localized needs. Some examples of potential smart communities include university campuses, office parks, airports, cargo ports, multi-dwelling unit (MDU) or apartment complexes, housing developments/neighborhoods, business districts and even individual “smart” buildings. They have needs for smart services that may be tailored specifically for their stakeholders.

Residents or individual citizens are also smart services providers in the smart city. A resident living near a dangerous street intersection can point a camera at the intersection and stream that information live to traffic planners and police. Residents place air quality measurement sensors on their properties to monitor pollution and pollen levels during certain times of the year, and make that information available to other community members. Residents can choose to make these smart services temporary or permanent, and free or fee based.

The Smart City is built on layers

A smart city is an ecosystem comprised of multiple “capability layers”. While technology is a critical enabler, it is just one of many foundational capabilities that every smart city must have. No one capability is more important than the rest. Each capabilities plays a different role in the smart city. These capabilities must integrate and coordinate with each other to carry out its mission.

Value layer. This is the most visible layer for city residents, businesses, visitors, workers, students, tourists and others. This layer is the catalog of smart city services or “use cases”, centered around the outcomes (Figure One), and offered by value creators and consumed by the city stakeholders.

Innovation layer. To stay relevant, value creators in the smart city must continuously innovate and update its services for its stakeholders. Smart cities proactively facilitate this through a variety of innovation programs, including labs, innovation zones, training, ideation workshops, skills development and partnerships with universities and businesses.

Governance, management and operations layer. The smart city creates disruption and results in digital transformation of existing processes and services. Smart city management models must integrate a new ecosystem of value creators and innovators. They must plan, support and monetize new business models, processes and services. They must upgrade their existing infrastructure and management processes to support “smart” services. Finally, they must measure the performance of the city with a new set of metrics.

Policy, processes, and public-private partnerships, and financing layer. The smart city doesn’t just magically appear one day. An entirely new set of engagement models, rules, financing sources, and partners are required to build, operate and maintain the smart city. Cities must develop a new set of “smart” competencies in order to get and stay in the “smart city game”.

Information and data layer. The lifeblood of the smart city is information. The smart city must facilitate this in several ways, including open data initiatives, data marketplaces, analytics services, and monetization policies. Equally important, they must have programs that encourage data sharing and privacy policies to protect what and how data is gathered.

Connectivity, accessibility and security layer. People, things and systems are interconnected in the smart city. The ability to seamlessly connect all three, manage and verify who and what is connected and shared, while protecting the information and users is crucial. The highest priorities for smart cities are to provide a seamless layer of trusted connections.

Smart city technology infrastructure layer. Most people automatically think of technology when talking about smart cities. The smart city technology infrastructure must scale beyond the traditional municipal users and support a new class of value creators, and city/user stakeholders.

Leveraging the smart city ecosystem framework

The smart city is a complex ecosystem of people, processes, policies, technology and other enablers working together to deliver a set of outcomes. The smart city is not “owned” exclusively by the city. Other value creators are also involved, sometimes working in collaboration and sometimes by themselves. Successful and sustainable smart cities take a programmatic approach to engage its stakeholders across the ecosystem.

Our research has found that many cities are not taking an ecosystem approach to smart city projects. This is due in part to smart city projects being managed by the Information Technology (IT) organization where their charter is on systems development and deployment. In contrast, more experienced smart cities manage their smart city programs through internal cross functional “Transformation” or “Innovation” organizations.

Regardless of where cities are in their smart city journey, they must get ahead of the “curve” with smart city projects. They begin by thinking in terms of building the broader ecosystem in order to create a sustainable and scalable smart city. Key next steps include:

1. Understand the smart city ecosystem framework and tailor it to the realities of their specific city. Incorporate this model into the development of their smart city vision, strategy and execution plans.
2. Relative to the smart city ecosystem framework, identify current capabilities and gaps across the various layers. Understand what is needed to support the four types of value creators.
3. Evaluate existing and new smart city projects and initiatives against the ecosystem framework. Use this framework to identify what is missing from the project plans and what is needed to make the projects fully successful.
4. Prioritize and develop competencies across the various ecosystem layers. A smart city requires new skills and competencies. Augment existing capabilities through strategic partnerships and contracting with service providers, as required.

About:

Benson Chan is an innovation catalyst at Strategy of Things, helping companies transform the Internet of Things into the Innovation of Things through its innovation laboratory, research analyst, consulting and acceleration (execution) services. He has over 25 years of scaling innovative businesses and bringing innovations to market for Fortune 500 and start-up companies. Benson shares his deep experiences in strategy, business development, marketing, product management, engineering and operations management to help IoTCentral readers address strategic and practical IoT issues.

This post was co-authored with Renil Paramel, an IoT Innovation Catalyst, Strategist and Senior Partner at Strategy of Things.