Thursday, October 6, 2016

"Smart Cities" Benefits Likely Will be Smaller than Projected

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Asset-light business models such as Uber and Lyft are about monetizing dark vehicle assets. Airbnb perhaps is about monetizing dark room and lodging assets, also using an asset-light approach.

Wi-Fi often is an asset-light approach to mobile device access. Netlfix might be considered an http://littlebitjohnny.blogspot.com /search?q=asset+light&view=classic" style="text-decoration: none;">asset light approach to video entertainment, at least in terms of access assets.

In other cases, big data and Internet of Things networks aim to enable more efficient use of in-use assets.

Arguably, the most-powerful trends happen when multiple values can be realized, such as combining dark assets with asset-light business models with peer-to-peer transactions and “leasing rather than owning” consumption patterns.

All those potential changes in business models should eventually affect prospects for many proposed Internet of Things services, such as “smart parking.” If vehicle ownership declines as much as some expect, there will be less demand for urban area parking, and therefore less value and demand for smart parking services.

In other words, all currently-projected markets essentially extrapolate from existing conditions. But those conditions will change as IoT and IoT-assisted ecosystems change.

Similarly, smarter transportation systems that allow users to evaluate transportation options in real time will reduce the amount of vehicle congestion the smart systems aim to solve.

Where it comes to the impact of IoT systems, feedback loops will operate, changing the context even as the systems come online. In other words, non-linearity will be a key aspect of future IoT systems. In the process of solving specific problems, the magnitude of the actual problems will diminish.

That likely will mean the expected benefits will be smaller than forecast.


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