Can a city be delivered as a service?

By

EY Global

Multidisciplinary professional services organization

4 minute read 29 Mar 2018

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Superfluid city governments are using new technologies to deliver more efficient, tailored and exciting services to residents.

The world has just entered the age of superfluid — or frictionless — markets.

In the private sector, digital connectivity, ever-expanding storage and computing power, and the leveraging of technologies such as artificial intelligence (AI) are greatly reducing transactional “frictions” between buyers and sellers. As commerce has become easier and less expensive, companies have slimmed down — having activities once done in-house delivered as a service. Companies that deliver products to customers as a service have arisen — think music and movies. And existing companies across all industries are investigating how to deliver value using the “as-a-service” model.

The vision for superfluid government — cost savings plus enriched citizen experience

Governments have typically lagged behind their private sector counterparts in adopting and realizing the benefits of technological innovation. There is undoubtedly tremendous opportunity for the public sector to leverage newer technologies and models to improve the delivery of services to citizens. The scale of government-citizen interaction is enormous, with government spending on public services at close to 50% of GDP.1 Cities represent a high proportion of this activity, as local government spending comprises more than 20% of total government expenses.2 In short, cities can and should be the premiere hotbed for superfluid government innovation. Cost savings represent one benefit, but the opportunity to vastly improve the urban citizen experience should be another key driver.

Welcome to the City-as-a-Service

The City-as-a-Service model is emerging as a key enabler of more superfluid city governments. City-as-a-Service can be defined as the delivery or enablement of core municipal services through digital platforms that are data-driven and accessible via personal devices. Similar to accessing apps-based ridesharing services or entertainment streaming services, residents in many cities can now use smartphones or personal computers to access services as diverse as public transportation, housing, employment, licensing and regulatory support. Today, citizens in some cities can communicate quickly with relevant city agencies through online chat, in some cases powered by chatbots, which are constantly learning from such interactions. Identification verification capabilities and payment options are also enabled, adding levels of security and convenience to transactions.

Smart technologies that leverage sensors, geo-locationand other capabilities undergird some of the first iterations of City-as-a-Service, with improved mobility as a key goal. For example, Barcelona and many other cities have instituted smart parking solutions that utilize city-wide sensors and in-app digital payments. The city of Toulouse has rolled out a Mobility-as-a-Service-platform orchestrated through a single app that gives residents seamless access to car-sharing services, public transport and the city’s bike share system. The Johannesburg Road Agency’s “Find ‘n Fix” app allows South African drivers to flag road problems such as potholes; the app then geo-locates the problem and creates a maintenance ticket for the city’s road repair crews. The city of Auburn, Washington in the US offers a multiservice mobile app where residents can not only report problems from downed trees to malfunctioning traffic signals, but also pay utility bills, sign up for city programs and get email messages on selected issues, among other services.

While in its relative infancy, the concept of City-as-a-Service offers a flexible and extensible model for public sector engagement with citizens. The personalization of services is fundamental to this paradigm shift. In Tel Aviv, residents can sign up for a Smart City Card and become members of the Digi-Tel Club, which not only offers them information and special deals based on their unique profiles, but delivers customized digital services that enable them to carry out transactions with the municipality. This is clear departure from “one-size-fits-all” conventional service delivery, where phone call mazes, layers of bureaucracy and impersonal touch points tended to characterize interactions with city services. At its core, the City-as-a-Service is about delivering a customized, flexible, frictionless and high-quality experience for each and every city resident.

The best is yet to come

As technologies mature, they will bring new capabilities and meanings to the concept ofCity-as-a-Service . For example, cities are beginning to leverage augmented reality as a way of imbuing an interactive and experiential flavor to city-resident touchpoints. Mantua in Italy bills itself as the first “Phygital City” and is experimenting with adding digital overlays to enhance the physical interactions its residents have with the city while traversing its various neighborhoods. These services are delivered through a smartphone-based digital assistant powered by machine learning where the ultimate objective is to gain more and more understanding of individual user preferences in order to anticipate and deliver highly tailored and relevant offerings. The promise of AI platform adoption by cities is anticipating and proactively shaping a wide array of services across integrated domains (e.g., health care, mobility and education) for individual residents.

Use cases for the adoption of blockchain technology by city governments are also beginning to emerge. For residents, complexity will be reduced even as trust and transparency are enhanced when cities begin to manage public records such as land titles, vehicle registries, business licenses, passports, voter identifications, death certificates and proof of insurance on distributed ledger technology.

These examples provide just a taste of what’s to come with the City-as-a-Service model. Functionality, as well as the creative applications of technology, stands to get better and better. Just as mass customization and the “market of one” has become the private sector’s “holy grail,” the notion of the “government of one” could soon be realized in a municipal context. The good news is that traditional frictions between residents and their public sector providers will significantly lessen and perhaps dissolve. As a result, cities will become more livable even as they grow. With the City-as-a-Service model, the era of superfluid government is dawning.

How city leaders should approach the City-as-a-Service:

  1. Engage the private sector as a key partner and collaborator in developing solutions. As a start, cities can issue "requests for innovation" ahead of standard requests for proposal to elicit new ideas.
  2. Learn from the experiences of cities that are first adopters of the City-as-a-Service approach. Prototype and “road test” new ideas rapidly to see what makes a digitally delivered service experience a quality one for your residents.
  3. Involve citizens in co-developing and designing the user experience around specific services.
  • Show article references#Hide article references

    1. On average, for OECD economies. Including spending on general public services; defense; social protection; education; health; recreation; housing and community amenities; environment; economic affairs and public order. Source: OECD Stat, August 2017.
    2. On average, for OECD economies. Source: OECD Stat, August 2017.

    This article was generated by EYQ, an EY think tank that explores leading and emerging trends, focusing on “what’s after what’s next?”

Summary

The City-as-a-Service model is dissolving traditional frictions between residents and their public sector and improving urban quality of life.

About this article

By

EY Global

Multidisciplinary professional services organization