“Smart cities in Europe: Financing the commercialisation of smart city technology” – Interview with Peter Madden

This summer, OC released the first in a series of white papers on smart cities, “Smart cities in Europe: Financing the commercialisation of smart city technology“. We, in collaboration with VB Research, interviewed smart cities champions and experts, including Peter Madden, CEO at Future Cities Catapult.

On smart city
technology:

Waves of technology change are coming whether cities like it
or not. Platforms like Uber and AirB&B will change the way resources are
allocated and cities function. Our question is, how can we help cities and
those that run them understand the potential of these new technologies and apply
them in the best possible way?

On role of Future
Cities Catapult in helping cities understand new technology and its benefits:

We exist to help innovation for cities in the UK economy.
There are two parts to this. First is helping companies big and small to
innovate the right things that are going to work in cities and help them
function more effectively. Second we help cities and those that run them adopt
and apply that technology and understand the benefits. Because there is no
point having the innovation if nobody is buying it.

How do we make that happen? One of the main things we do is
to help develop urban demonstrators, which are large scale trials and platforms
in cities that can prove the technologies at scale. Small businesses can plug
into them to see if their solution works. At the same time cities can kick the
tyres and see how it is functioning.

We also have our own Cities Lab, which is a capability to
help people collect and collate urban data and then model, visualise and apply it.
A lot of people hear about big data and the IoT and sense that there are lots
of opportunities in it, but having a team of independent experts that can help
individual companies or cities understand the potential and how data can be
applied to provide insights is very useful.

Finally we run some specific projects to see if we can
unpick some of the barriers to stop these technologies from being adopted. For
issues like financing, we have been working with the financial community and the
people providing the technologies to identify where the issues are and see what
we can do to build the evidence and models that enable people to deploy at
scale.

On how urban
demonstrations are funded:

Urban demonstrations help to test and prove new smart
city technologies, and part of our role is to see if there is money that can be
assembled to make them happen. In some cases, like the Glasgow Future Cities
Demonstrator, the £24 million was provided by InnovateUK as a single pot of
money. In other instances, money might come from the EU or we might bring
together a funding consortium. For example, the Milton Keynes demonstrator has
funding from HEFCE, a higher education funding institute, with contributions
from ourselves, ARM, BT, and the City Council. We do need to test smart
technology in urban environments at sufficient scale. To do this, a bunch of
organisations are going to have to come together to collaborate.”

On role for smaller
companies in demonstrators:

We work hard to involve small companies in our work. In the
Milton Keynes example, one of the trial projects is smart bins, where sensors
tell you how full the bin is. This allows for the more efficient collection of
waste. There we have procured sensors from an SME. They are using this project
to sell to other people and demonstrate the business opportunity.

If it’s an innovative piece of software or a platform, it’s
much easier to develop and scale it without too much support. But if it
involves mixing hardware and various things together and deploying them in the
public realm, things are more complicated and often these companies will need early
stage support.

On importance of
demonstrations being ‘open-access’:

If companies, big and small, have their own ideas and IP,
they want to protect them and get a return on them. If it is public funding
coming from the EU and citizen taxpayers’ money, these funders are going to
want the maximum openness. Most of our projects depend on a blend of different
funding and different levels of participation.

Some companies are willing to be very open and share things
in order to open the market. Others have spent a lot of time developing their ideas
and need to test in ways that are more secret. So it very much depends on what
the opportunity and technology is.

On funding demonstrators:

There is not a lack of investors, but a lack of viable
investment propositions coming from cities themselves. Often, people that run
cities are not packaging these opportunities up in the right way that makes
sense to private investors. Because it involves a new approach it may require a
blend of different asset classes, investors and approaches that investors
previously haven’t put together.

As in any new market there may have to be some oiling of the
wheels to get things going but we are starting to see, in things like smart
street lighting, larger scale financing coming through.

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