History shows us that all successful companies are in the same business –the business of innovation. No matter what product or service they are offering, whether they are the smallest of start-ups or the world’s biggest multinational, the companies that grow are those that know how to create new solutions to fulfil unmet customer needs.
Yet innovating can be a risky venture. A few years ago a global survey of top risk managers identified the number one method for identifying and assessing risk. It was “senior management intuition and experience.”
Successful innovation, however, does not have to rely solely on intuition. We live in a world marked by an explosion of data. Almost half of the earth’s population –3.2 billion –and more than 90 per cent of Australians 14 now use mobile communications. Social networks keep citizens and organisations of every type connected at unprecedented continuity and scale.
The world's systems and industries are becoming more instrumented, interconnected and intelligent. Every two days, we now generate the equivalent of all the data that existed in the world up to 2003. This is “Big Data” and it makes up a vast new natural resource that can, when applied to the world’s challenges and the innovations which may solve them, revolutionise industries and societies.
It is this data, not intuition, which has the power to create winners and drive successful innovation in today’s “smarter” era.
Enhancing natural resourcefulness
This approach is not limited just to commercial businesses. In Australia, it is our regional cities that are proving leaders among their government and business counterparts.
Townsville City Council recently knocked off competition from around the nation to take home the Smart Infrastructure Award with IBM from Infrastructure Partnership’s Australia 2013 National Infrastructure Awards. For the Townsville City Council, this award is recognition of an ongoing project that’s only been possible through its partnership with IBM and the application of smart thinking and technology.
The city is embarking on a smart water pilot that is breaking new ground in the way data is collected and analysed in near real-time. At its core, it will help identify and enable ways for the people of Townsville to drive water conservation by empowering residents with smart technology to assist with positive behavioural change.
Why does a city located in the tropics need to worry about water consumption, given the incredible deluges we experience during our wet season? Like many towns or cities located in the tropics, Townsville has two very extreme seasons – wet and dry. So when it’s wet, it is really wet; and when it’s dry, there is not a drop of moisture for months on end. And it is always hot!
The people of Townsville love their gardens and carefully tend these to help make Townsville a better looking place. But Townsville has a growing population and with its seasonally dry climate, almost 70 per cent of the average household water consumption is currently used on lawns and gardens – which means they have a per household volume that is around three times higher than other major Australian cities. Not only that, but the infrastructure that supports the flow of water around the city and down from the Ross River dam is aging.
By using IBM’s Big Data expertise for the pilot project, Townsville City Council is able to deliver near real-time information about daily water usage from digital water meters to the Council and residents via a web portal. But delivering information on how much water a household is using is not enough to positively change behaviour. Where the really ‘smart’ aspects come from are via the analytics that IBM has developed.
The web portal provides personalised and actionable insights so households can better understand their water consumption patterns and even be alerted to potential anomalies to help identify leaks. It also encourages some friendly competition amongst the pilot community by comparing and contrasting usage with other participating households. A future application even includes the option of participants receiving a mobile phone text message stating predicted rain conditions, allowing residents to change their water usage behaviours accordingly.
Such data-driven innovation can demonstrate the potential for significant water consumption reductions across the city, delivering environmental benefits. This in turn can lead to flow-on savings for the Council through reduced water treatment costs and deferral of capital investment
A smarter West-side story
Another regional government not prepared to rely on intuition is the City of Greater Geraldton.
Geraldton on the country’s West Coast is projected to grow rapidly over the next decade, with more than $27 billion of planned investments for the region. Alongside this enormous potential, Geraldton faces significant challenges including internet access, rising energy costs and energy capacity concerns. If these challenges are met, it is anticipated that Geraldton has the potential to become an entrepreneurial hot spot with a global presence. At the same time there is a desire amongst the Geraldton community to preserve the quality of life associated with this regional community.
Like Townsville, the city worked with IBM initially as a grant recipient of our Smarter Cities Challenge. The city is now working towards realising its carbon-neutral strategy by adopting a range of smart energy and smart data solutions.
Urban life is becoming the dominant way in which most humans live and work. This is great news in many respects, since city residents tend to use energy, water, transportation, healthcare and other resources more efficiently than those in the suburbs or rural areas. By this measure, one might say that urbanisation is an important step to guaranteeing a more sustainable future for humanity.
More than ever, though, this vision depends on cities that work more efficiently, and respond more adaptively to the needs of their growing populations. For the first time in millennia of urban evolution, digital technology is proving to offer a virtual fix for many of the real world problems cities are facing. By making cities better equipped and interconnected, they can operate more intelligently. For businesses, residents, and officials alike, a smarter city promises a better quality of urban life.
Catherine Caruana-McManus is Smarter Planet and Smarter Cities Executive at IBM.