Investing in IoT19/04/17Science & Technology
Attending the Smart Cities UK event in London, PEN heard from the CEO of through…, Paul Fletcher, who discussed the property industry’s reluctance to embrace connectivity
Providing a private sector, technology-based perspective at the Smart Cities UK event was Paul Fletcher, a former architect turned consultant with through…, an organisation which specialises in methods of embedding new technological capabilities into building designs from the outset. He spoke about the relationship between technology developers and the solutions they can offer for greater connectivity in future cities, the challenges posed by the investors building these cities, and the concerns that the disruptive innovations might entail.
Fletcher opened by establishing his working definition for smart cities, highlighting the fact that in a lot of sectors the terminology remains ambiguous. As the internet of things (IoT) becomes a framework through which local authorities are viewing the development of their cities, it is necessary to clarify this vision with accurate nomenclature, he explained: “I want to offer a quick definition of smart cities. The smart city is buildings plus the internet of things. It’s all connected, which means the internet of things plus people. It’s a simple definition, but I think it hard to argue against.” While many may label their projects ‘smart’ in the pursuit of trends, it is only relevant to consumers that will ultimately determine the value of a project, he continued: “In that world, you can be irrelevant – business as usual. Or you can be momentary and compete for the moment, following trends and reacting to behaviours. You’ll badge everything you do as smart cities, you’ll say your buildings are connected and say lots of wonderful things, but are you ever being relevant? Because that is all that matters.”
Working, living, learning
The importance of the consumer in this transaction is the most notable paradigm shift that IoT capabilities will offer to the property industry, Fletcher argued. “Cities, as far as the buildings that make them, exist as an answer to a very traditional investment question. No such thing exists, certainly here in the UK, as people who invest in property not being wealthy. However, the city as looked at from an IoT perspective is producing new answers. Those answers don’t really fit or gel with these traditional investment questions.”
Those people investing in property do not care about connectivity and the IoT, he added, because from a traditional investment perspective these capabilities do not add value to their buildings. “Property at the moment is a very hierarchical organisation. We have something that we might refer to as the client, which is a combination of the big investment companies and developers. They then respond to a customer, usually an employer or someone like that, who will buy or lease large amounts of space from them. Then we have the consumer, which is everybody who has to work, live, learn, socialise or anything else in those spaces. I use the word ‘consumer’ because they do not have any direct connection to the client. They might be obliged to consume that space because of their employer, or because they want to go in there and drink the coffee that that place sells.”
Consumers and connectivity
The challenge here is that consumers and clients are not necessarily on the same page when it comes to how these new technologies will shape future development. “I think there’s a degree of disparity in meaning,” he said. “It’s what the property industry wants, which is the reason we even have physically built cities today, versus what the IoT might promise in regard to people and their connectivity.”
Because of this shift in focus towards consumer needs in the IoT sphere, the hierarchy of the property market is increasingly being upended. Fletcher explained: “Your connected IoT devices make you relevant as an individual in ways that have never happened before. The question is, if that is what’s happening in the world of IoT, and that’s how it’s gaining traction, how are we going to bring about that to the property market? … No investor in property is going to want their guaranteed long-term investment to be upset, but if we don’t, nothing will change.”
Fletcher then offered an explanation of why, in his view, these IoT capabilities matter enough to consumers to have a notable impact on property investors: “Connectivity is the key thing. The only real reason for IoT, I would argue, is the necessity of greater and greater connectivity. … These answers are growing all the time in relevance to us, because they mean something to us. My Apple Watch tells me information that is relevant to me and I’m able to customise it. The other IoT-type devices that I’ve got become part of my life because they give me meaning. It’s probably the single most important thing that connects us with the physical objects we have interaction with, because we apportion meaning to them.”
Seeking to create meaning and meaningful experiences, Fletcher insisted, is the ultimate goal that could ensure that the buildings which comprise future smart cities are maximally efficient and offer value to their consumers. He elaborated: “Smart cities should be all about meaningful experiences. To develop the technology, we’ve got great engineers who will bring lots of solutions, but if those solutions don’t bring meaningful experiences, they’re kind of irrelevant.”
Driven by disruption
Given the current state of affairs in this area, the property industry seems in some cases to be directly at odds with what consumers want from connected experiences, but thanks to the hierarchical structure of the market, the consumer does not have the power to directly affect the spaces they are consuming. “Property investment is actually getting in the way,” Fletcher argued. “I’ve had people tell me – and I’m still hearing from people – that there have been large, global, mobile IoT providers saying that the built environment is killing what they can do. It gets in the way. I’m not just talking about simple stuff like WiFi reception or 4G capability [in certain areas]. I’m talking way beyond that, to all sorts of levels of our connectivity with the physical space we’re in.
… Increasingly, the questions being asked by property investors don’t match the answers that IoT is bringing.”
Despite this mismatch, change is inevitable, and Fletcher warned that the property industry should prepare for the positive disruptive potential of new technologies or face negative consequences. While disruption may be inevitable given the speed and volume of innovation in IoT capabilities, there are ways in which organisations can collaborate to ensure that this disruption occurs in a positive and mutually beneficial way – but what actions can the property industry take to prepare itself?
Fletcher has two basic recommendations that address the core elements of design: “They need to think different, to root out unnecessary questions; and do different, to find relevant answers.” This, he suggested, should be built into the design process as early as the brief, and become a fundamental part of the construction of new buildings. Clearly, the disruption caused by IoT technologies will cause not only local authorities but also property developers to rethink their activities from the ground up, to accommodate the technologies of the future.
This article will appear in Pan European Networks: Smart Cities 1, which will be published in May 2017.