Smart Cities and Digital Transformation

Two indivisible concepts, synonyms of innovation, and that are stepping on our heels. Two solid realities placed at the service of people, which are trending topic and an unfinished business in Spain. We are talking of Smart Cities and Digital Transformation, which are expected, according to recent estimates, to generate approximately 1.5 trillion dollars by 2020.

The projections are positive, however, if we already know that a Smart City depends, largely, on a process of digital transformation that is coherent and consensual among all social players. How is it that in Spain, according to DatacenterDynamics (a platform of the data center industry), only 30% of the large companies have invested in digitazing projects?

Added to this, we have the data from the “Bankia Índicex 2016 Report: The digitization of companies in Spain”, which reveals that 8 out of 10 Spanish companies have started their way towards digital transformation; 10.9% have managed to be competitive in this area, and 77.8% have capacity for improvement.

So, is Spain prepared to successfully incorporate the concept of Smart Cities? To this date, Santander, Bilbao, Barcelona and Madrid can be considered to be advancing in the process of incorporating Smart City structures. In fact, Barcelona leads the Spanish ranking and holds the positions number 34 and 21 in the global and European framework respectively, being in 2014 appointed as the first European capital of innovation.

Preparation Vs. Implementation

Although in Spain the migration to a digital environment is not advancing at the expected speed, we must say that the investment in technology and innovation is remarkable, as Asier Arranz, Director of the Technology Lab of IE Business School, is convinced of this. “A few years ago Spain was trending in projects funded by Europe, so we are prepared, the technology exists and it’s ready,” says Arranz.

There are research centers developing artificial intelligence projects, virtual reality and researching about efficient forms of access, management, and use of data. For Arranz, this should be the main objective: that companies, both public and private, aim to be part of the so-called Smart Cities. BBVA and Telefónica are pretty clear and have reoriented the line of work of its Innovation Centers.

On the other hand, the IE Technology Lab, led by Arranz, is considered a pioneer in the development of new technologies that bring us closer to that concept of a Smart City. “We are currently working on projects such as a new model of virtual reality glasses, the simulator for negotiation, and telepresence robots that attend classes and interact with students.”

Against this backdrop, where Spain is in the wave of a competitive and innovative technologic era, the problem is not preparation but implementation. It is vital that the public sector promotes what is being done in R & D laboratories and encourages new proposals. For Arranz “it is necessary for the public sector to support the development of new projects, offering solid alternatives like contests to stimulate working on new technologies and innovation, because in Spain there is talent and good projects, but it is difficult for private companies or startups to achieve implementation agreements of their proposals along with the public sector.”

Asier Arranz
Asier Arranz, Head of Technology Lab de IE Business School

Challenges to Overcome

Even though there are projects in different cities that display a “Smart City” -such as traffic lights with artificial intelligence and traffic intensity sensors, intelligent control of public lighting, water supply, and implementation of communication structures-, there is a long way to go.

The process of digital transformation by large companies has to step up the pace, understanding that they are vital agents in the process of the consolidation of a Smart City. Then, it is necessary to update the legal framework to the new times in which access and use of data changes when generating information. “Privacy and Data Protection Laws, for example, must respond to current needs, they must be updated.” said Arranz.

Furthermore, it is necessary to reach meeting points between two important players: the private companies and research centers along with the public sector, so that talent and implementation are translated into visible and tangible realities. In Spain it is possible if it is considered that, according to a study by Fundación Telefónica, by 2020 there will be more than 50 billion devices connected to the internet, and 60% of the Spanish population will be urbanised.

The main objective is having an interconnected city that efficiently manages information and data (optimizing the use of available resources), that achieves a higher level of sustainability and efficiency, that is ecofriendly, and improves the life standards of citizens by radically changing the management of services and how to access them.

For more information…

Asier Arranz leads the Technology Lab of IE Business School and Onirux Labs, an advanced technology services company. He has advised startups and investment funds such as Kibo Ventures, and speakers at events such as TEDx Cibeles.

Twitter: @asierarranz

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