The current research analyses the case study of the business models of Santander’s public services in order to identify the most common features of business models in smart cities. The paper is structured around four questions that are answered throughout the research work. A comparison among eight services managed using IoT and other technologies and those implemented before the use of the mentioned technologies shows that their business models have significant differences, even in those cases where the new technologies just complement the conventional management systems.
In order to carry out the analysis mentioned above, we selected the Business Model Canvas for Non- Profits framework, based on the insights collected through in-depth interviews with eleven experts on business model analysis. This management tool has shown to be useful to describe business models in smart cities as it enables to identify important aspects, like social and environmental issues, which other frameworks do not take into account.
Many of the differences among the business models of public services managed conventionally and those managed with innovative technologies are repeated in various cases. The most recurrent differences that the smart public services present are the following: the service maintains the same or superior quality;
there are more actors involved in the management of the service; the total costs are lower in the long term; some initial investment is required; the use of Big Data for decision-making; the users are provided with more information of the service; reductions in energy and/or water consumption are produced; they contribute to foster an ecosystem of IT businesses and professionals in Santander.
The current research allows us to conclude that public services managed with ICT require initial technology investments and know-how; however, they allow the municipality to save costs and to increase management efficiency in the long term. The contract signed with the corresponding company enables the City Council to reduce the cost of the previous contract by 20%. Likewise, the new lighting system is expected to entail a minimum saving of 65% of the previous cost.
The large amount of information is usually managed and analyzed with the same platform, which allows mixing data and obtaining improved results in the entire value chain.
As the current research suggests, smart cities also enable energy and other natural resources consumption savings. Municipal services provided with IoT and other smart city technologies have a reduced ecological footprint when compared with those conventionally managed.
Santander smart city engages different actors in the public services management, more than when the services were conventionally managed. The smart city management benefits from the engagement of citizens that are better informed about the public services and are more committed with their management. Furthermore, the economic crises force local administrations to rely on PPPs projects in order to finance the services. Additionally, the higher complexity of the smart systems requires actors capable of providing expertise. Those factors fully enable the creation of an ecosystem of business specialized in products and services for smart cities and, therefore, new and highly qualified jobs. We have already assessed that the migration towards the smart city paradigm has reshaped the ecosystem built around the city giving much more relevance to the knowledge and technology with the consequent impact in company attraction, start-up creation, etc.
With regard to the limitations of the current research, we should highlight the limited open data available on economic and environmental issues for several of the services analyzed due to their new implementation. Although there is available data for three of the services that support our statements, in the near future we will monitor and analyze new data in order to broaden our research.
Also among the limitations, it has to be said that although the infrastructure has been designed with the aim to cope with some equipment failure, network resilience is one of the key topics to be addressed in the forthcoming phases. Last but not least, data privacy and integrity are also relevant issues which have been taken into consideration when deploying the network [13,91,92].
In our future work we would like to carry out further research on the development of business ecosystems in the smart city and its consequences on net job creation. We will also open a line of research focused on examining citizen perception of the services provided with smart technologies.
We also plan to delve into the development of methods to analyze and benchmark business models in smart cities as we believe that the growth of smart city initiatives will make business model analysis more necessary.
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Highlights
Business model analysis of public services operating in the smart city ecosystem: The case of SmartSantander
Raimundo Díaz-Díaza *, Luis Muñozb, Daniez Pérez-Gonzáleza