Smart Cities And Regulatory Implications

July 31, 2018
smart city regulations

I once had a customer tell me that a yearly release cycle (for complex middleware) was too quick. It amounted to them being in constant evaluation/upgrade mode because it would take them a year to test, plan, and then implement each new release (and any requisite changes in applications that an upgrade would demand).

That’s not so unusual, though is changing as more and more software is consumed as service. Interestingly, remember when Apple was at a disadvantage to Microsoft in the enterprise because Apple wouldn’t share a five-year roadmap with buyers?

Regulatory decision making is even slower than enterprise decision making, and requires even more due diligence. In fact, it’s likely that the pace of change has “lapped” the pace of due-diligence, meaning, by the time the “strategy is in place” it’s already irreparably out of date.

As a result of an announcement with CA partner Chordant, I got asked about how the regulatory environment will impact Smart City progress.

Will regulations make Smart Cities rigid and inflexible, or will the desire for success force regulatory decision-making to become more agile?

It should be obvious to anyone paying attention that tech is bumping up against regulatory challenges. Simply watching the big players shows the risk – Über and AirBnB are the most prominent examples.

I don’t think anything about smart cities themselves are “exceptionable,” meaning, we don’t need one off exceptions to the regulation process. We simply need an agile process. It’s more like that it’s no longer possible to ignore the fact that while current regulatory limitations are noble and important in their own context, that the speed at which technology moves and the channels through which it diffuses make the current approach to regulations a real challenge.

It reminds me of past work, where a development team might be agile, but operations not… development could release every sprint or two, but to get that release into production was still a cumbersome and time consuming (and very much non-agile) process. Eventually there had to be a meeting of minds to re-evaluate the assumptions that slowed down operations. Those assumptions were still relevant but a new approach was needed.

Same with smart cities. The benefits are too compelling to not cause us to examine how we approach the need to capture the benefits of regulations, while bypassing current regulatory limitations.

Making regulatory environments agile

I’ve seen a couple of ways to make regulatory considerations more agile.

One is to try to adopt an agile posture, including minimum viable regulations with rapid updates as new things are learned.

Another is to create an unregulated, experimental, environment so that solution providers together with government can understand how to regulate new technologies.

Finally, just today, I heard of a place where they are innovating the purchase process for new solutions so that smaller innovative providers can compete against established companies when selling to government.

In this latter case, they use software competitions (hackathons) that give winners the opportunity to spend three months inside the government area that they are providing a solution to – learning even more about the “customer”. At the end there is a new purchasing process in place… effectively making the “competitive aspect of the bid” the work done during the hackathon where the competition is about innovation, rather than much later in the cycle where it becomes about being the low-cost / low-risk provider. Cost and risk are instead managed throughout the lifecycle of the project rather than as a “gateway step” just before a deal is signed. I find it compelling.

Privacy

One area that I think will continue to be much more closely regulated throughout the process though is data privacy. I believe that the regulations will get tighter, more aggressive throughout the process. I like to say that an application is “better” when security is built into the design instead of layered on top (it’s of course harder to do it this way). Similarly, data privacy is going to have to be something considered from the very beginning, rather than developing a solution and seeing how privacy regulations apply. I think we’re seeing that with GDPR in Europe.

I like the idea of data informing policy and then applying policy on the fly. I don’t think this concept will be uniformly applied though. Some governments will get this, others probably not so much. And, even those that “get it” will have a non-uniform way of implementing an updated regulatory posture – and some will be successful, others less so.

Smart cities are inevitable; Consider citizen experience

One final thought. The opportunity with Smart Cities is huge. If I had to sum it up, and this is important because it has to be the guiding principle, cities need to pivot from thinking about how to provide access to government services (and thinking about digital as a channel) and instead think about how to improve the citizen’s experience. When thinking about experience, cities will find they need to be able to gather data from across silos and bring it together to create new outcomes that improve people’s lives. This is why I think it’s such an interesting space to watch.

Two examples of regulatory bodies willing to experiment in acknowledgment of the need to be more agile are the FDA and FCC:

  1. FDA speeds up tech approvals in a pilot program designed to get health improvements to customers more quickly
  2. SEC allows Google (Alphabet) to bring emergency mobile phone service to Puerto Rico

In both cases, one can clearly see that putting the focus on the customer makes it obvious that action needs to be taken. Customer experience is a really good lens through which to view the changes that are happening all around us.

David Bressler is VP Vertical Solutions (Focused on IoT these days), API Management at CA Technologies where he helps tie together business drivers to technology solutions. His newest book is "The Elephant in the Room has a Paycheck."

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