Smart City Stakeholders

August 20, 2018

In my last post, I talked about the tremendous benefits and unfortunate drawbacks of relying on just technology for a robust smart city solution. Realizing the vision of a smart city demands an all-hands approach from several stakeholders — policy makers to normal, every day citizens. In this post, I’ll be introducing the various stakeholders and dive into their roles, interest, and the value they bring to and expect from the ecosystem.

Stakeholder Analysis

Stakeholders for a smart city can be split up into four main groups — Users, Drivers, Resource Providers, and Framework Enablers. Each of these stakeholders is dependent on the others and has specific roles they play and wants from the rest of the groups, which I organized into the table below for easy reading.

Given the stakeholders’ contributions and expectations to the smart city vision, here is a short list of examples of what those stakeholders could be. Keep in mind that it’s totally possible for a person or company to exist in multiple groups at the same time.

Identifying the prominent stakeholders is an important step, but understanding how they cooperate with the other groups is what really completes the stakeholder analysis. An important tool used to pinpoint the value an organization adds to the ecosystem is the value chain!

Value Chain

Technically speaking, the value chain is a model used to describe the high-level process of how businesses receive materials, add value through their product/service, and create a finished product to sell to their customers. The ultimate goal, naturally, is to deliver maximum value for the least possible total cost.

Any company has the ability to optimize it’s internal processes to increase their efficiency and make a profit. By optimizing operations in at least one of these components, a company can either create better products or provide products at a lower cost to their customers, carving out a competitive advantage.

The value chain above describes the internal process flow and operations for just one stakeholder. But as we all know, a product or service has to travel through several hands before it reaches you as an end consumer. Taking a step back, let’s analyze how one company fits into the value chain of the entire production of a product.

Every company has to define where in the overall value chain from raw material to finished product it operates in and where their competitive advantage is. It is one of the fundamental steps a company has to take, as this question addresses the root logic of why that company exists at all. Let’s take the automobile industry for example….

At every step of the process from raw materials like steel & leather to Tier 1 & Tier 2 suppliers like Bosch and Delphi to manufacturers like Ford and Toyota to the dealerships, and finally to you, each company had had to define a space in which they operate and be successful within that space by providing a specific value proposition to the next part of the chain. Let’s take a look at the smartphone industry…

Similar to your Ford F-150, your iPhone had to travel through several companies at different stages of it’s development process to end up in your hand.

Smart City Value Chain

A trend in the value chains you may have seen above is that at every step of the process, the product or service passes hands from one step to another. Every step of the value chain adds something to the product and passes it on to someone else.

What’s unique about cities is that providers of the service are also the consumers of the service. Using the four main stakeholder groups, let’s build out a value chain for a city.

As you can see, the value chain for the smart city is significantly more complex than the general value chain for a business. Each stakeholder is intimately tied in with others, and the service they provide is dependent on their mutual relationships. Ultimately, to build an unforgettable user experience, every stakeholder from the User to the Enabler have to fully participate in the development process.

Now that you have a good idea of the various stakeholders, in my next post, I’ll discuss some prominent Smart City projects going on across the world!