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- Herausgeber: John Wiley & Sons
- Kategorie: Wissenschaft und neue Technologien
- Sprache: Englisch
This book covers three principal subject areas: smart cities, general contractors and business models. The smart city concept is currently on the rise and cities around the world appear to be in a race to become smart, fast. Converting big cities into smart cities is a move that almost all cities around the globe have made, or will undoubtedly make in the near future, to be able to cope with the various repercussions of urbanization. Smartness is a vague term that could relate to anything and everything, such as infrastructure, people or governance. In this book, we focus our attention on smart buildings - large ones, in particular - and attempt to identify the key problems that France-based construction companies face today, in order to suggest plausible solutions. Our research findings show that no single business model can fit all smart cities worldwide. Using the general contractor business model for smart cities, this book proposes an original solution to managing smart city projects, bringing together architecture, construction and strategy.
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Veröffentlichungsjahr: 2022
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Table of Contents
Cover
Title Page
Copyright
List of Acronyms
Preface
Introduction
I.1. Relevance
I.2. Importance
I.3. The managerial question
I.4. Outline of the book
1 On Smart Cities: A Literature Review
1.1. Historical synopsis
1.2. Definitions, features and models
1.3. Examples of smart cities and initiatives
1.4. Smart city market outlook
1.5. Are all cities destined to be smart?
1.6. Conclusion
2 A General Contractor: A Maven, A Connector
2.1. New value chains in construction
2.2. The construction project lifecycle
2.3. Innovation in construction
2.4. The general contractor
2.5. How do general contractors resemble music conductors?
2.6. Conclusion
3 On Business Models
3.1. Definitions
3.2. Constituents and illustrations
3.3. Business model arrangements and value
3.4. An amalgam of strategies and tactics
3.5. On business model innovation: a long primer
3.6. From the managerial question to the research questions
4 The Design Process of the General Contractor Business Model
4.1. Phase 1: rise
4.2. Phase 2: showcase
4.3. Phase 3: maturity
4.4. Phase 4: evaluation
5 Research Findings
5.1. Problems
5.2. Solutions
5.3. The general contractor business model
5.4. Conclusion
5.5. Appendix
6 Discussions
6.1. Theoretical and methodological contributions
Conclusion
C.1. Research limitations
C.2. Research avenues and next steps
References
Index
End User License Agreement
List of Illustrations
Chapter 1
Figure 1.1.
The four dimensions of a sustainable city
Figure 1.2.
The quadruple-helix model
Figure 1.3.
Global ICT developments, Y2009-19
Figure 1.4.
Smart cities’ features and tools
Figure 1.5.
The main components of smart cities
Figure 1.6.
Smart City Wheel
Figure 1.7.
Giffinger et al.’s (2007) work revisited
Figure 1.8.
Smart city: factors versus components
Figure 1.9.
Copenhagen: carbon emission versus population size
Figure 1.10.
Songdo U-city’s core strategies
Figure 1.11.
Songdo U-city integrated operations center
Figure 1.12.
Smart city market: growth rate by region, 2019-2024
Figure 1.13.
Global smart city market, by segments: 2016
Chapter 2
Figure 2.1.
The actual construction supply chain
Figure 2.2.
The actual construction value chain
Figure 2.3.
The future of construction process
Figure 2.4.
The future construction value chain
Figure 2.5.
The building blocks of a construction project process
Figure 2.6.
Major CPLC phases (a)
Figure 2.7.
The construction project management process
Figure 2.8.
Construction sector organigram
Figure 2.9.
Sections of the orchestra
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Chapter 3
Figure 3.1.
Osterwalder’s business model canvas
Figure 3.2.
Osterwalder’s business model ontology
Figure 3.3.
Elements of a business model
Figure 3.4.
Ryanair’s (low-cost strategy) business model
Figure 3.5.
RCOV framework
Figure 3.6.
The triple layered business model canvas
Figure 3.7.
The decision-making model
Figure 3.8.
The generic two-stage competitive process framework
Figure 3.9.
Strategy, business model and tactics
Figure 3.10.
Typology of business model innovation opportunities
Figure 3.11.
The four approaches to business model innovation
Figure 3.12.
Conceptual framework
Chapter 4
Figure 4.1.
The development process of a GC BM for the building of smart cities
Figure 4.2.
Version 1 of GC BM
Figure 4.3.
Version 2 of GC BM
Figure 4.4.
Version 3 of GC BM
Figure 4.5.
Association between construction stage and BIM process
Figure 4.6. BIM process10. For a color version of this figure, see www.iste.co.u...
Figure 4.7.
An early version of the envisioned GC BM
Chapter 5
Figure 5.1.
Simple graphical illustration of the GC BM
Figure 5.2. Dependency graph (Failing Business Model). For a color version of th...
Figure 5.3. Dependency graph (faulty estimâtes). For a color version of this fig...
Figure 5.4. Dependency graph (absence of an entity that could orchestrate time h...
Figure 5.5. Dependency graph (mismatch between promised and delivered product). ...
Figure 5.6. Dependency graph (additional costs incurred to integrate new technol...
Figure 5.7. Dependency graph (large amount of logistics, pieces and other resour...
Figure 5.8. Dependency graph (outdated CVP). For a color version of this figure,...
Figure 5.9. Dependency graph (misconception of smart city notion). For a color v...
Figure 5.10. Dependency graph (end-users not being co-creators of value). For a ...
Figure 5.11. Dependency graph (risk of technological obsolescence upon delivery ...
Figure 5.12. Construction process map (adjust offerings to exact needs and requi...
Figure 5.13. Construction process map (administer smart developments follow a bo...
Figure 5.14. Construction process map (ensure involvement of end-users in all st...
Figure 5.15. Construction process map (allow for customizability). For a color v...
List of Tables
Chapter 1
Table 1.1.
The cities of tomorrow, conception of success
Table 1.2.
Geographic trends in future city term usage
Table 1.3.
Defining smart cities
Table 1.4.
Direction of developments in smart cities
Table 1.5.
A deep dive into the main components of smart cities
Table 1.6.
Core factors of smart cities
Table 1.7.
The five strengths of Amsterdam’s smart city
Table 1.8.
Towards a smarter London
Table 1.9.
Copenhagen: smart projects and initiatives
Table 1.10.
Establishing Songdo city, targets and steps
Table 1.11.
Components of international smart city models: comparison
Chapter 2
Table 2.1.
Alternative value configurations
Table 2.2.
Change agents in the construction industry
Table 2.3.
Major CPLC phases (b)
Table 2.4.
General contractors’ roles
Table 2.5.
Project delivery system spectrum
Table 2.6.
General contractors vs. construction managers vs. project managers
17
Table 2.7.
General contractors vs. music conductors
Chapter 3
Table 3.1.
Table 3.1. An activity system design framework
Table 3.2.
BM definitions
Table 3.3.
The constituents of business models
Table 3.4.
Ryanair: choices and consequences
Table 3.5.
Fundamental business model arrangements
Table 3.6.
Generic growth opportunities
Table 3.7.
Definitions of BMI
Table 3.8.
Table 3.8. Streams of BMI research
Table 3.9.
Research on BMs and BMI
Table 3.10.
Gaps in BMI research
Chapter 4
Table 4.1.
Data sources used in the business model design process
Table 4.2.
Problems versus solutions (phase 1)
Table 4.3.
Problems versus solutions (phase 2)
Table 4.4.
Problems versus solutions (phase 3)
Table 4.5.
General Contractor’s main duties
Table 4.6.
Definition of the TLBMC building blocks
Chapter 5
Table 5.1.
Key problems in construction (France)
Table 5.2.
Key solutions in construction (France)
Table 5.3.
Breakdown of problems: a sneak peek
Guide
Cover
Table of Contents
Title Page
Copyright
List of Acronyms
Preface
Introduction
Begin Reading
Conclusion
References
Index
End User License Agreement
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I dedicate this work to my family who have supported me in both the good times and the bad. Above all, I bestow it to my wife who cheerfully sacrificed time, energy and bread so that I could fulfill my dream. Her infallible love and absolute backing allowed me to get to the shore when I was drowning in doubt. Not forgetting my four, beautiful little angels – my raison d’etre
I would also like to mention my parents, as well as my brothers and sisters, and their respective families; I am truly grateful for all the encouragement you have given me and the love you have shown me. Though it has been a long road, together, we have made it through. No words could truly express how appreciative I am. This success is for you – you were part of it – you always will be – now and in the future
General Contractor Business Model for Smart Cities
Elie Karam
First published 2022 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:
ISTE Ltd27-37 St George’s RoadLondon SW19 4EUUK
www.iste.co.uk
John Wiley & Sons, Inc.111 River StreetHoboken, NJ 07030USA
www.wiley.com
© ISTE Ltd 2022
The rights of Elie Karam to be identified as the author of this work have been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.
Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s), contributor(s) or editor(s) and do not necessarily reflect the views of ISTE Group.
Library of Congress Control Number: 2021950884
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library
ISBN 978-1-78630-790-3
List of Acronyms
AIIB
Asian Infrastructure Investment Bank
AMT
Additive Manufacturing Technology
ART
Augmented Reality Technology
BIM
Building Information Modeling
BM
Business Model
BMI
Business Model Innovation
BT
Business Technology
CCTV
Closed-Circuit TeleVision
CLD
Causal Loop Diagram
CM
Construction Manager
CPLC
Construction Project LifeCycle
CVP
Customer Value Proposition
DSR
Design Science Research
EU
European Union
GC
General Contractor
GDP
Gross Domestic Product
GHG
GreenHouse Gas
ICT
Information and Communication Technology
IDI
In-Depth Interview
IoT
Internet of Things
IPCC
Intergovernmental Panel on Climate Change
IS
Information System
IT
Information Technology
LCA
LifeCycle Assessment
MIS
Management Information System
MSP
MultiSided Platform
PM
Project Manager
R&D
Research and Development
ROI
Return On Investment
TLC
Technology LifeCycle
U-
Ubiquitous-
UK
United Kingdom
UN
United Nations
UNESCO
United Nations Educational, Scientific and Cultural Organization
USA
United States of America
USD
United States Dollar
VRT
Virtual Reality Technology
WW
World War
WWW
World Wide Web
Preface
The WWW (World Wide Web) – the Internet – and the ICT (Information and Communication Technology) – are all key, fairly recent and successive inventions that have substantially altered and shaped the world we live in (as we know it!). They have turned our existence upside down and affected every aspect of our lives, even the tiniest ones. Having said that, let us now reconsider how life is organized on Earth. To do this, let us simply think of the planet as an inhabited human body (an interlocked system). It is the transit system of roads and railways, bridges and tunnels, as well as air and seaports that enable our mobility across the continents – much like the vascular system that powers the human body. It is also the oil and gas pipelines and electricity grids that distribute energy and ensure the unblemished work of the nervous system of communications; additionally, it is the Internet cables, satellites, mobile networks and data centers, which allow for the smooth exchange and storage of information. Like the human body, the main components of the Earth system are interconnected by flows of energy and materials. And so we believe that a disruption of any of those flows would unquestionably sway the system in its entirety.
Today, this ever-growing infrastructural system – connectography as labeled by Parag Khanna1 – consists of several million kilometers of roads, railways, pipelines and Internet cables. It represents a quantum leap in the mobility of people, goods, resources, knowledge and ideas. It is an evolution of the world from political geography (how we legitimately divide the world) to functional geography (how we actually use the world). It is hence quite evident that connectivity – rather than sovereignty – has developed into the organizing principle of the human species.
“Our yearly spending on global infrastructure is anticipated to rise to USD 9 trillion within the coming decade,” Mr. Khanna indicated. “We will build more infrastructure in the next forty years than we have in the past four thousand years.”
Thus far, Asia is topping the list of continents whose countries are investing the most time and money into promoting their connectivity, both regionally and internationally. In collaboration with some adjacent countries, China, for instance, announced in 2015 the creation of the AIIB (Asian Infrastructure Investment Bank), a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region. Beyond connectivity, the 21st century seems to be characterized by a second megatrend: planetary urbanization. According to Parag Khanna, “over 67% of the world’s population will live in cities by 2030 – megacities in specific” – a justly rational argument, as megacities are nowadays on the rise and could easily be dotted anywhere in the world:
– the technology powerhouse of Silicon Valley (USA) is a very good example of a megacity extending from San Francisco, going south through Palo Alto, all the way down to St Jose;
– the sprawl of Los Angeles is another good example of a megacity, spreading south all the way to San Diego, crossing the Mexican border, to finally reach Tijuana. San Diego to Tijuana is a binational conurbation, comprising over 5 million residents as well as a joint airport terminal;
– one additional example of a megacity is the USA’s northeastern megalopolis – stretching from Boston to New York, to Philadelphia and Washington – the so-called
Bos-Wash corridor
. The latter is the second most populous megacity in the USA, with over 50 million residents.
However, the megacity trend looks like a viral phenomenon; Asia remains by far the area with the biggest megacities in the world:
– from Tokyo, to Nagoya, to Osaka stretches the world’s largest megacity. It comprises over 80 million people and accounts for most of Japan’s economy;
– China’s megacities seem to be on the rise as well, as clusters are coming together with populations reaching 100 billion people. The Yangtze River Delta, for instance, which is a triangle-shaped megacity cluster, covers an area of about 100,000 square kilometers and is home to over 115 million people (as of 2013). In 2018, the Yangtze River Delta had a GDP (Gross Domestic Product) of about USD 2.2 trillion – roughly the same size as Italy today.
These facts are weighty – also to some extent amusing – especially when we picture global diplomatic institutions (e.g. the Group of Twenty) basing their memberships on economic size rather than national representation. Under a similar scenario, some Chinese megacities would be granted access and have seats at the table, while whole countries like Argentina or Indonesia would see their partaking being revoked. The exact same leaning (towards increased connectivity) could be found in other countries, say India (Delhi), Iran (Tehran) and Egypt (Cairo-Alexandria corridor). And there is Lagos too – Africa’s largest city in Nigeria’s commercial hub – with its plans to create a rail network that would make it the anchor of a vast Atlantic coastal corridor – stretching across Benin, Togo and Ghana, to Abidjan (in Côte d’Ivoire). In other words, in some parts of the world, whole and entire countries could in time become suburbs of megacities – a plausible setup in a megacity world.
Going forward, it is worth noting that people normally move to cities to be connected, and connectivity is why these cities ultimately prosper. Whether it is São Paulo, Istanbul or Moscow (really!), any one of them has a GDP approaching or exceeding 33–50% of their entire national GDP. Bringing up the case of Gauteng province in South Africa – comprising Johannesburg and Pretoria (the capital) – it too accounts for more than 33% of the country’s GDP. Equally importantly, the latter is also home to the offices of almost every single multinational that directly invests in South Africa and (circuitously) the entire African continent.
As-is, planetary urbanization seems to be a good thing, a promising megatrend. Yet, we ask, is it risk-free? For some, urbanization is a source of negative externalities that would lead to frustration in the long run. In their opinion, urbanized cities are destroying the planet – and will continue to do so in the future. Hitherto, today, there are over 200 intercity learning networks booming, focusing on a single goal: sustainable urbanization – and having a lone objective: upholding the well-being of people. Fair talk indeed, nevertheless, could we put our faith in such upmarket promises? Yes, we can. Looking into the matter from a different perspective, we may ask ourselves the following question:
– Do we really believe that developed nations, through summits held recurrently, would eventually succeed in reducing GHG (Greenhouse Gas) emissions and stop climate change? No, we do not.
We could reverse global warming by injecting sulfur into the stratosphere – an unconventional solution to an exceptional problem. Yet, until now (thank goodness!), there has been no need for such eccentric tenacities, especially since human beings have started to mitigate the carbon intensity of their respective economies via intercity handovers of technology, knowledge and policies. That is, that cities used to be part of the problem, but now, they are part of the solution. What is more, if we travel through megacities from end-to-end, one could easily notice extreme disparities within the same geography – another serious challenge for sustainable urbanization – and still, our global stock of financial assets has never been greater, approaching 300 trillion dollars. That is four times the actual GDP of the world. Indeed, since the latest financial crisis, we have taken on some huge debts, but – sadly! – did not invest them in inclusive growth. Therefore, it is only when sufficient and affordable public housing projects are built and robust investments in transportation networks are made that alienated cities and societies will come to feel complete again.
According to Parag Khanna, “connectivity is an opportunity — one of the most important asset classes of the present century”. Besides connectivity and equitability, megacities could also make the world more peaceful. How? By looking at regions of the world with dense relations across borders, we see only trade and investment trails, as well as stability. Following World War 2, once industrial integration had kicked off, it in due course led to the rise of the EU (European Union). In North America, the most important streaks on the map are not the USA–Canada or USA–Mexico borders, but the dense network of roads and railways, pipelines and electricity grids, as well as water canals.
Now, let us go back to Asia – Southeast Asia in particular. This region of 600 million people is evolving into the so-called Pax Asiana – a period of peace among Southeast Asian nations. A similar phenomenon is taking place in East Africa where six or so countries are investing in inter-nation railways and corridors so that noncoastal countries can get their commodities to the marketplace. At last, we wonder whether connectivity could overcome the patterns of rivalry among the great powers. And to amply answer this question, what would be better than to look at the experience of East Asian countries in this respect? After all, this is the region where WW3 was supposed to break out.
China and Japan, on the one hand, have had a long history of rivalry, often deploying their air forces and navies to show off their strengths in island disputes. Then, just some time ago, Japan started making large investments in China – Japanese cars are selling big in China – and guess where the largest number of foreigners residing in Japan comes from? BOOM, you guessed it: China. China and India, on the other hand, have also fought a major war and have three outstanding border disputes, but today, India is the second largest shareholder in the AIIB. The two countries are currently working together to build a corridor distending from Northeast India, through Myanmar and Bangladesh, to Southern China – and their trade volumes have grown from USD 20 billion a decade ago to USD 80 billion today.
We end with these words by Parag Khanna: “connectivity has remarkably developed into a new reality – a reality that has allowed cities and nations to aggregate over time into more diplomatic and well-off wholes”. “Though no one could swear for sure today that World War 3 will not break out, anyone could realize why it has not happened yet.”
Elie KARAM
October 2021
1
This Preface was inspired by Mr. Khanna’s Ted Talk: Khanna, M. (2016). How megacities are changing the map of the world? [Online]. Available at:
https://www.ted.com/talks/parag_khanna_how_megacities_are_changing_the_map_of_the_world/discussion?;anguage=en
[Accessed March 31,2021].
Introduction
When we try to pick out anything by itself, we find it hitched to everything else in the Universe.
John MUIR
Connectivity has become a reality today – and the upsurge of megacities at the international level is not expected to cease anytime soon. Neither is the flow of the world population leaving for urban centers. In fact, UN data1 shows that over half of the world’s population lived in cities in 2015, and this figure is likely to rise by an extra 10% in 2030. As previously evoked, people tend to migrate to large urban centers in search of opportunities and connectivity. And these same reasons – we suppose – will continue to drive this kind of migration towards big cities. Consequently, those big cities would eventually capture a significant share of the world’s wealth and their giant potential would attract further newcomers. With that said, it is valid to enquire whether today’s big cities are all equally and sufficiently equipped, urbanized and structured enough to receive superfluous inhabitants (the answer is obviously: No, not at all!). Also, we may ask: what would happen if an increase in population ends up being unaccompanied by a comparable increase in economic performance? (normally, the quality of life of inhabitants would plunge!).
Tokyo (Japan), Delhi (India), Shanghai (China), São Paolo (Brazil) and Mexico City (Mexico) are the world’s most densely populated megacities today – with respective populations exceeding 22 million. Lagos (Nigeria), Kinshasa (Democratic Republic of the Congo), Dar Es-Salaam (Tanzania) and Bombay (India) are megacities of the future; currently in the making. However, strange as this may sound, urbanization has proved to be a contagious phenomenon that is spreading fairly swiftly across the world (Schaffers et al. 2011). Overall, this phenomenon (of urbanization) will eventually defy any nation, from the perspective of basic goods and services, and with minimum infrastructure required – a challenge that could not be resolved except through satisfactory innovation: the creation of smart cities2.
Though the notion of smart cities is not new, it is the managerial approach that policy makers, city governors, mayors and project owners frequently opt for when building smart cities that could make the whole difference, mainly by rendering smart cities – smart again. Often, smart city projects are conceived and built following a top-down approach with the aim of improving the places we, the people, live in, yet they repeatedly fail to hit the target and don’t reach envisioned goals (Turok 2014). Why? Conventionally – and mistakenly – construction companies used to (and sometimes still do!) overweigh the significance of technology, data and cutting-edge computing, while disregarding the foremost component of any successful smart city: people. To be sure, for a smart city to succeed and reach its full potential, it should not solely focus on the technology or the infrastructure. Instead, it must be about, must reflect the needs and wants of, and must be built for – the people. Otherwise, the people will reject it. When building smart cities, by choosing a people-centered approach, we inspire collective thinking, the exchange of ideas as well as the democratization of the development of cities, and instigate the city-as-a-platform concept. Consequently, projects would then be conceived with a thorough understanding of real city problems – following a bottom-up approach, exactly as opined by city stakeholders: citizens, businesses and visitors.
We add that human-centric smart cities can only be planned and developed when citizens have the opportunity to make their voice heard by governments regarding plausible methods that could be implemented to better city operations. This concept goes farther than thinking of the citizen as a source of data – but as a source of new ideas too (Neirotti et al. 2014). Definitely, engaging members of the public early in the conception–construction process could help eradicate disapproval when smart projects or initiatives are implemented. Smart cities formerly focused on connecting infrastructure for better insights, but the attention is nowadays shifting bit-by-bit towards engaging governments, citizens and businesses with the objective of providing upgraded city services and a higher quality of life (i.e. enhancing the citizen experience). That is, smart city projects are now deemed successful if and only if they are accepted and validated by the people – this is a prerequisite.
While the motivation of cities remained intact over time, that is, the founding of livable environments, where people and businesses could thrive together – the setups used to this end evolved favorably. Data is now put in the hands of both end-users and policy makers to drive better decision-making, and collective thinking and intelligence are laying the groundwork for the creation of hands-on solutions to some of the toughest urban snags encountered today.
Within this framework, it is worth mentioning that a number of cities (Barcelona, London, etc.) have already started – only a few years ago – to upgrade their infrastructure systems via the implementation of sensor technology and data analytics. They are doing so in an effort to lift the performance of their physical infrastructures and the use-value of their urban assets: public transit, waste management services, wastewater systems and roads (among others). The SmartSantander project in Santander, Spain (Hernandez-Munoz and Munoz 2013) – an extensive real-world experimental facility, spreading across four European countries (Spain, Germany, the UK and Serbia) – is a great example of a human-centric smart initiative. Truthfully, as big cities around the globe will, in the future, be expected to shelter superfluous people, smart initiatives and enablers like the SmartSantander framework have been growing in strength and gaining momentum in recent years, hence underlining the need for better and more efficient methods for the management and development of big cities overall.
I.1. Relevance
Hurried urbanization puts an incredible amount of pressure on urban centers, presenting challenges for cities to provide economic opportunities and environmental sustainability, and ensure the safety, protection and well-being of their inhabitants (Moir et al. 2014). Prosperous cities tend to overcome these challenges by seeking sustainable and resilient growth. The IoT (Internet of Things) in smart cities – and smart city technology – account for only part of the solution. The other part, however, has to do with adaptability: the adoption of a new business model that allows for the optimization of the construction industry’s value chain. This is valid as the conception and construction of smart real estate, often grasped as megaprojects, take years to be completed, up to 20 years. Whereas the TLC (Technology Lifecycle) is relatively shorter, up to 15 years, which signifies that there is a high risk that the implemented technology would reach its tipping point – and so become obsolete – even before the construction project has been finalized or delivered to clients (Kordas et al. 2015).
On another note, it is worth indicating that businesses as much as governments are facing the challenges of urban growth – and their capacity to drive continued growth is being put to the question. Actually, for businesses to be able to attract the educated talent desired, they need (at least at first) their head offices to be based in livable (and blooming) cities (Nam and Pardo 2011), meaning that the attractiveness of cities is a function (among other factors) of their respective economic power and influence – which means that talented people would not choose to migrate to big cities unless they have a good reason to do so. In this sense, cities are responding by finding ways (adequate platforms, business models, frameworks, structures or ecosystems) to speed up construction works and improve decision-making processes, not only by consulting with governmental entities – but with businesses and residents too, thus tapping into the collective intelligence of the city in its entirety (Termeer and Bruinsma 2016).
I.2. Importance
Big cities (or megacities) have long been engines of economic growth and opportunity. A World Bank analysis3 of 750 cities around the globe found that, from 2005 through to 2012, economic growth in almost three-fourths of cities outpaced their respective national economies. By 2025, the world’s top 600 cities are estimated to account for more than half of global GDP. London today accounts for almost 20% of the UK’s GDP. In the USA, the Bos-Wash corridor – and the Los Angeles metropolitan area – account for nearly 35% of the country’s GDP4. The world is now seeing a nonstop concentration of population in cities. And cities that are not suitably equipped to handle growth (or fail to adapt to this new reality) are likely to see their environments and residents suffering from negative consequences. Now, this challenge is becoming increasingly relevant as quite a few big cities around the world (e.g. Lagos, Bombay, etc.) are undergoing such an explosive growth.
To recap, a smart city is not only about implementing smarter things (conversely to what is believed today!); it is also about endowing stakeholders (policy makers, residents, project owners, project managers, etc.) with the right tools and frameworks so they can make smarter decisions. For example, in Amman, Jordan, the city authorities have lately adopted a data-driven approach to streamlining the waste management process, which allowed for the successful optimization of existing fleet management systems5. Not only in Amman, but also all over the globe, cities are adopting shrewd managerial approaches to building their own smart cities. All of this sounds great, yet we note that there is currently no unique, matchless and unrivaled smart-city model that countries around the world could use – at any time, in any way – to refurbish or build their own. And that the conception and development of smart cities is almost certain to vary from one country to another, based on each country’s specificities and available resources. Furthermore, any smart development, we presume, involves numerous key players and it is the interplay between these players throughout the lifespan of the construction project that determines whether the latter will eventually succeed or fail (Ke et al. 2015; Komninos et al. 2015). This in fact sheds light on the key role of the general contractor who brings all stakeholders involved in construction projects together, hence tying up the construction value chain, downstream to upstream.
I.3. The managerial question
This book revolves around five major themes. From the most wide-ranging to the more specific they are as follows: connectivity, smart cities, smart constructions, general contractors and business models. Indeed, the main puzzle that we aim to solve can be written as follows:
– How can we design a
general contractor
business model in order to build smart cities?
Thus, as a means to an end, we assume that the most successful smart city projects (in France in particular and around the world in general) are run, managed and built by general contractors, in partnership with other construction actors. As a result, the value chain of the entire construction industry – we expect – can be optimized through improved connectivity between various stakeholders and, ultimately, so can the livability of big cities and the quality of life of residents in general.
(These assumptions are still to be validated in due course of this book!)
I.4. Outline of the book
This book follows a funnel structure and is split into six chapters, as follows:
–
Chapter 1
focuses on smart cities. An extensive overview of smart city concepts and theories is proposed. That is, a full review of the existing literature on smart cities is presented, coupled with a full description of relevant theoretical models, notions and concepts. A historical synopsis of the emergence of the concept of smart cities is also given. Moving forward, some detailed, real-life examples of successful smart cities around the globe are examined. Global smart-development best practices are depicted too – in an attempt to inform an expert managerial business model on building spot-on smart cities.
–
Chapter 2
explains the key roles that general contractors could play in building smart cities.
–
Chapter 3
embarks upon business model theories. The features, constituents and importance of business models are methodically examined. Additionally, light is shed on recent literature relating to business model innovations.
–
Chapter 4
describes the business model design process, primarily how our idea of a new business model developed over time, and how it cultivated year-after-year to finally turn into something tangible, a dual-use business model, at the end of this book.
–
Chapter 5
classifies the main problems faced in French construction today and suggests plausible solutions for their resolve. Specifically, using the triple layered business model canvas, problems and solutions are dispersed across the different dimensions of a construction project:
economic, social
and
environmental
. To these, you may notice, we add an extra one: the
technical
dimension. In addition, the links between problems and solutions are highlighted, narratively and visually through dependency graphs and construction process maps. Additionally, an in-depth explanation of the research findings is proposed throughout this chapter. The main discussions revolve around topics such as the need for a central operator to lead smart developments, the potential benefits of a new business model in construction and the opinions of key stakeholders apropos the envisioned business model and the role of general contractors in improving the configuration and enactment of the construction industry’s value chain. Lastly,
Chapter 5
elucidates how innovation is part of construction processes on various levels – and how innovative procedures in general are likely to soar over time from augmented managerial and technical connectivity.
–
Chapter 6
discusses our theoretical and methodological contributions to the literature on smart cities, general contractors and business models.
– Finally, we summarize all this research by putting forward some recommendations for both industry players and policy makers as to what could be done to better crack smart developments’ inherent problems, irrespective of whether those problems are of a technical and/or legal nature. Hence, we call for all stakeholders to join forces to embolden the development of smart cities – and render them – literally – smart again. Research limitations and avenues are also marked in the conclusion.
1
United Nations, Department of Economic and Social Affairs, Population Division (2018). World Urbanization Prospects: The 2018 Revision [Online]. Available at:
https://esa.un.org/unpd/wup/Publications
[Accessed March 31, 2021].
2
Ibid.
3
The World Bank Group (2015). Competitive Cities for Jobs & Growth: What, Who, & How? [Online] Available at:
http://documents.worldbank.org/curated/en/902411467990995484/pdf/101546-REVISED-Competitive-Cities-for-Jobs-and-Growth.pdf
[Accessed April 5, 2021].
4
CityLab (2014). The Dozen Regional Powerhouses Driving the U.S. Economy [Online]. Available at:
https://www.citylab.com/life/2014/03/dozen-regional-powerhouses-driving-us-economy/8575/
[Accessed April 5, 2021].
5
ASCIMER (2014). Facing the challenges of a new era: Smart city projects [Online]. Available at:
http://eiburs-ascimer.transyt-projects.com/files/14_MaqousiAli_Presentation_%20%5BASCIMER%5D.pdf
[Accessed April 5, 2021].
1On Smart Cities: A Literature Review
Thus far, we have established – with a fair amount of confidence – that functional geography has gradually come to prevail, overshadowing the significance and governance associated with political geography. We have also highlighted that global urbanization is putting serious pressure on big cities in terms of their ability to accommodate additional inhabitants, and that this pressure is being passed onto the construction industry which is currently hastening developments: smart cities. Furthermore, we have shed light on the importance of promoting macro-level connectivity as a means of boosting economic growth and sponsoring environmental sustainability and political stability1.
Besides macro-level connectivity, we endeavor in this work to demonstrate that connectivity is critical at the micro-level too (Hanna 2009). Clearly, there is now a need to institute strong micro-level connectivity (within the construction industry) and rethink existing stakeholder management approaches, for the most part to improve stakeholder engagement throughout the various stages of the CPLC (Construction Project Lifecycle). In fact, establishing strong links between construction actors – maintaining open channels of communication at all times – has become a prerequisite to successful construction projects. This is palpable – in our opinion – because stakeholders often have distinct interests and concerns, and therefore strong connections at the micro-level – if they could exist – would ensure timely, consistent, relevant exchanges of information between them. The result is the successful execution of smart development projects.
However, connections at the micro-level connectivity cannot be established without the intervention of a key industry player who is both a connector and a maven: the general contractor.
In summary, this chapter explains the smart city concept in detail.
The research is then explored further to address the crucial role of the general contractor in managing the construction value chain (Chapter 2).
From our perspective, the general contractor role exists because of the presence of (a major issue) broad organizational gaps and weaknesses within the construction industry’s value chain, which often hold construction actors back from proposing value-adding innovations to their clients. As for the solution to this particular issue, we declare it is nowhere to be found except in a newly-designed – centralized – stage-based business model.
Over the course of my professional career as a general contractor, I have had the opportunity to handle numerous construction projects and amass sufficient knowledge about the current state of the market: its strengths, weaknesses, the threats faced and future prospects to be seized. In my personal view, smart cities are likely to shape the future of urban developments. The smart city market in France, as well as in other countries, has lots to offer and has been growing exponentially, especially with the global urbanization trend which has erupted in recent years and has been on the rise ever since.
Practically, smart city projects refer to long-term construction projects that are generally labor-, capital- and technology-intensive. To say the least, they are a source of value, creating various revenue streams that could potentially benefit all construction actors2.
Currently, the number of construction actors – those intervening at different stages of the construction value chain in order to execute smart city projects – is significant; however, the difficulty encountered in this context has very little to do with the number of those involved. Instead, it stems from the absence of an entrepreneurial entity that could resourcefully orchestrate these interventions, avoid overlapping roles and guarantee the successful delivery of projects (Flyvbjerg and Holm 2002; Flyvbjerg et al. 2003).
1.1. Historical synopsis
The concern surrounding sustainable development of urban centers has been a central preoccupation for many years, and the aspects that typify the cities of tomorrow have been embraced during this time. Furthermore, the vocabulary associated with the features of these cities has been unequivocally enhanced over the past few decades, mainly to explain the substantial number of concepts endorsed by stakeholders (Eremia et al. 2017). Today, this vocabulary has changed once again, with specific terms gaining or losing ground over time (see Tables 1.1 and 1.2).
Table 1.1.The cities of tomorrow, conception of success
(source: adapted from Guerrero-Perez et al. (2013))
Domain
Social
Economic
Governing
Garden cities
Participative cities
Entrepreneurial cities
Managed cities
Sustainable cities
Walkable cities
Competitive cities
Intelligent cities
Eco-cities
Integrated cities
Productive cities
Product cities
Green cities
Inclusive cities
Innovative cities
Efficient cities
Compact cities
Just cities
Business-friendly cities
Well-led cities
Smart cities
Open cities
Global cities
Smart cities
Resilient cities
Livable cities
Resilient cities
Future cities
Post-1950, sustainable city was the most popular English term used to label future urban developments. Digital city followed in the late 1990s; its popularity resulting from its inherent ability to connect with and reflect the increasing importance of ICT at the time. Nevertheless, in 2009, the term gradually fell out of favor and was replaced by a new one: smart city. This new term embraces elements of sustainability and social inclusion, while at the same time being suited to the evolution of the IoT (Deakin 2012). In the following sections, we shed light on the two concepts of sustainable and smart cities. Then, in the chapters that follow, we embark on deep dive into the main features and models of smart cities and present a quasi-complete inventory of all definitions of smart cities.
Table 1.2.Geographic trends in future city term usage
(source: adapted from Moir et al. (2014))
Term
Popularity
Regional Popularity
Popularity in Countries
Popularity in Cities
Future cities
Stable
Global
India, USA, Canada, Australia, UK, Mexico, Brazil
Minneapolis, Singapore, Mumbai, New Delhi, Phoenix, San Francisco, Pune
Eco-cities
Stable
Asia
The Philippines, Singapore, Malaysia, India
Chandigarh, Tianjin
Smart cities
Fluctuating interest
Europe, North America
Italy, Spain, Belgium, UK
Barcelona, Bologna, Turin, Rome
Intelligent cities
Stable
North America
USA, UK
London
Sustainable cities
Stable
Commonwealth
Australia, UK, Canada, USA, India
Vancouver, Singapore, Washington, Auckland, Portland, Dubai, London, Austin
Compact cities
Stable
Mixed
Australia, UK, USA
Salt Lake City, New York City
Liveable cities
Rarely used
Commonwealth
Australia, UK, Canada, Singapore
New York City, Singapore, Melbourne, Pittsburgh, Vancouver
Digital cities
Stable, following a drop in popularity
Mixed
USA, Ireland, The Philippines, UK
Kansas City, Oklahoma City, Dublin, Minneapolis
Innovative cities
Stable
Mixed
USA, UK, India
Bangalore
Green cities
Stable
Northern America
USA, Australia, Canada
New York City
1.1.1. Sustainability, unfolded
The idea of sustainability grew out of the cognizance that the prevailing model (at the time) of socioeconomic development was oblivious to the ecological disasters created by industrialized economies, as well as to mounting social disparities among people and nations (Najam 2005). As of 1970, growing concern over humanity’s influence on the environment ignited a global environmental movement that culminated in the United Nations Conference on the Human Environment, also known as the Stockholm Conference. Initially, this conference was met with much resistance from the emerging countries represented, who scrutinized the lawfulness of environmental issues as a global priority. The statement from Côte d’Ivoire demonstrates this conviction pretty well: “more pollution problems are better than more poverty problems, as far as they are proof of industrialization” (Rowland 1973). As described by Najam (2005), global environmental debates are still today very much a legacy of industrialized versus emerging economies.
After Stockholm, the debates have shifted from solely focusing on environmental problems to (collectively) concentrating on environmental and socioeconomic development, now recognized as the concept of sustainable development (Prizzia 2007). The Brundtland Report3 describes sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED 1987). Since it first appeared on the world stage, the concept of sustainable development has garnered widespread attention and has become the key message when promoting the environment in the fields of science, technology, economy and urban planning (Bibri and Krogstie 2017).
As is it easy to confuse the concepts of sustainable development and sustainability with each other, it seems vital at this point to elucidate that the latter describes a long-term goal or sought-after end-state that could be preserved over time, while the former describes initiatives and projects undertaken to attain the ultimate goal of sustainability (Höjer and Wangel 2015).
UNESCO4 defines sustainability as “a paradigm for thinking about the future in which environmental, societal and economic concerns are balanced in the pursuit of an improved quality of life”. According to Elkington (1997), sustainability is commonly described as an equilibrium of its three dimensions – economie, social and environmental – and is also referred to as the triple-bottom-line perspective of people, planet and prosperity. Currently, the most prominent school of thinking within the European sustainability logic is ecological modernization (Baker et al. 1997), the basic aim of which is to replace a manufacturing-based economy with one that is cleaner and more service-oriented (Pepper 1998). This includes (but is not limited to) improvement in energy and resource efficiency.
In the 21st century, the work carried out by scientists at the IPCC (Intergovernmental Panel on Climate Change) has helped to uphold the significance and consideration given to the environmental aspects of sustainability on the global stage. Similarly, their strident warnings against business-as-usual impacts on the environment have created a global call for a transition to sustainability. Today, sustainability is certainly the end goal in the face of unconventional challenges (Rittel and Webber 1973), and a plausible solution to particularly pressing issues, for example, climate change.
1.1.2. The sustainable in a city
As the world’s population is becoming increasingly urban (refer to the Preface and Introduction), sustainable development is now perhaps the most fundamental archetype influencing research and dialogue around urban development, affording it a high level of recognition within global policy (De Jong et al. 2015). The sustainable city concept became largely dominant in Europe via the Aalborg Charter (1994)5, an urban sustainability initiative, comprising over 3,000 signatories today, making it the single most successful European effort in sustainable urban development. Its goal is evident: “to render urban settlements inclusive, safe and secure, strong and sustainable”. Outside of Europe, the Melbourne Principles6 (for sustainable cities) were drawn up in Australia during a planning session leading up to the 2002 Earth Summit held in Johannesburg, South Africa (UNEP 2002). They consist of 10 brief statements on how cities could become more sustainable, among which are the following: 1) the need to build on the characteristics of ecosystems in the development and maintenance of sustainable cities, 2) recognize and build on the distinctive characteristics of cities, 3) expand and enable cooperative networks to work towards a common and sustainable future and 4) enable continual improvement based on accountability, transparency and good governance.
Definitions of the term “sustainable city” are numerous and variable. Rogers (1998) conceptualized a sustainable city as a place where a higher quality of life is achieved, in tandem with policies that efficiently cut demand on resources outside of the city. Other scholars (e.g. Meadows 1999) approach the term from a different angle, an eco-friendly one. Their respective sustainable city representations focus on a city’s ecological needs, assessing and reducing pollution and GHG emissions, as well as energy and water consumption (along with other goals). More recently, Rode and Burdett (2011) have opted for a socio-economic explanation, where social equity, together with a greener living environment, should be considered for the development of sustainable cities. They pointed out that cities should offer proximity, density and variety, which would eventually yield productivity benefits for companies, and help stimulate innovation and new job creation via high-tech clusters in big cities, for example, look at Silicon Valley.
Figure 1.1.The four dimensions of a sustainable city
(source: adapted from UN (2013)7). For a color version of this figure, see www.iste.co.uk/karam/general.zip
Other academics (De Jong et al. 2015; Ahvenniemi et al. 2017) have recently recognized that understanding the rapports between people, their activities and the environment is key to sustainability. In this context, Bibri and Krogstie (2017) affirm that a sustainable city aims to achieve a dynamic balance between economic, environmental and socio-cultural development objectives (Figure 1.1) that are outlined by a local governance system that is characterized by increased citizen contribution.
This holistic vision of a sustainable city involves an efficient, local and balanced process that expands into all areas of local decision-making and aims to continually improve various urban systems, both design- and function-wise. The governance dimension is therefore essential as cooperative efforts from various stakeholders are needed to take an all-encompassing approach to solving the complex challenges of cities.
This rationale is hypothesized using the quadruple-helix model (Figure 1.2), in which universities, governmental authorities and the private sector join forces with the people, in order to find solutions to shared problems (Arnkil et al. 2010). Certainly, this archetype of collaborative urban governance – which is increasingly supported by ICT (Termeer and Bruinsma 2016) – has the potential to cut across outdated prerogatives and practices (Lubell 2015) and is seen as fundamental for the creation of a sustainable city (Kordas et al. 2015).
Figure 1.2.The quadruple-helix model
(source: adapted from SIP-SSC (2015)8)
1.1.3. The start of smart
While the sustainable city model was traditionally seen as the best option, it has nevertheless been superseded in recent years by the smart city model (De Jong et al. 2015). In fact, modern understanding of a smart city is integral to the advent and growth of ICT and computing (Harrison and Donnelly 2011; Kitchin 2014). In advanced economies, strong infrastructures, cutting-edge technologies and investment in energy efficiency are all quoted as the main ICT-driven benefits conferred to cities (Bibri and Krogstie 2017).
Figure 1.3.Global ICT developments, Y2009-19
(source: adapted from ITU (2019)9). For a color version of this figure, see www.iste.co.uk/karam/general.zip
Nowadays, although the fallout of the wide-scale deployment of ICT is still not fully understood – and an affordable and reliable Internet connection is still out of reach for the majority of people in the world – the network, both in terms of infrastructure and content, has grown rapidly since its inception and is stimulating vast innovation and improved user engagement (Figure 1.3). According to Turok (2014), increased deployment of ICT in the cities of emerging countries has been cited as a driver of efficacy in urban infrastructures, reducing the cost of city operations while supporting innovation and the eradication of poverty. In some instances, such as in Hong Kong and Singapore, urban economies tend to circumvent the need to retrofit existing infrastructure by incorporating ICT into new ones during their initial construction stages.
From our point of view, the burden is currently also put on the shoulders of governments; they are constantly seeking to gather and monitor data in connection with governance, infrastructure, the economy and the environment (UN-Habitat 2016). Kitchin (2014) affirms that the use of data allows cities to assess their performance in various aspects (from crime prevention to energy efficiency and investment) and thus improve the quality of their public offerings. Indeed, today, performance measurement has become a key element in the eyes of both officials and planners. This is the case because the use of data enables cities to not only measure their own performance and make evidence-based decisions, but also to compare and benchmark themselves against other cities, nationally and internationally. At this point, connectivity has reached a tipping point and the IoT is gradually being replaced by the Internet of Everything – cleverly dubbed as everyware – a network of networks where billions of connections could create unparalleled opportunities in making cities manageable in new, comprehensive and dynamic ways (Greenfield 2006).
Within this context, however, Silk and Appleby (2010) have indicated that the efficient exchange of information requires data accessibility, which is only possible via the publication and standardization of basic datasets: Open Data. Specifically, Open Data aims to strengthen the average citizen’s contribution to urban governance and is – to some extent – a commitment to transparency and accountability.
Before we conclude this present section, we wish to reiterate that the smart city concept is comparatively new and is still a contested topic and, out of interest, we proceed by asking: where did the idea of smart city technology come from? (Surprisingly, former USA president Bill Clinton takes all the credit for this one!) Back in 2005, through his charitable organization – The Clinton Foundation – he challenged network equipment provider Cisco to use its technical know-how to render cities more sustainable. As a result, Cisco devoted USD 25 million over a five-year period to research the topic, which led to the Connected Urban Development (CUD) program. The latter involved working with the cities of San Francisco (USA), Amsterdam (The Netherlands) and Seoul (South Korea) on a number of pilot projects to verify the technology’s potential.
In 2010, the year Cisco’s pledge expired, it launched its Smart and Connected Communities Division in order to commercialize the products and/or services that had been developed over the course of the program. Not long after, IBM had a similar vision to use IT (Information Technology) to make cities, say, smarter. At the time, both corporations were entirely focused on smart cities; however, their respective approaches to building those cities diverged significantly:
– IBM’s strategy – on the one hand – was underpinned by its recent focus on information management and analytics. Through acquisition and internal R&D (Research and Development), the company succeeded in arming itself with analytical procedures and data processing technologies that are indispensable in understanding massive amounts of sensor data.
– Cisco’s projects – on the other hand – ranged from modified or upgraded projects, such as their partnership with the Metropolitan Transit Authority in New York to improve rail and station monitoring, to completely new ones such as Songdo – a sustainable city to be built on reclaimed marshland in South Korea.
In conclusion, we wonder: did Cisco win the bet? Yes, in fact, it did because the investment made came first in the smart city make-a-thon. This instigated a global market whose current value measures up to billions of dollars, with hopeful prospects (Bloomberg’s!) to grow further in the future to reach USD 253 billion by 202510.
1.2. Definitions, features and models
A review of academic literature reveals that the use of the term smart city has increased exponentially – as of early 2009 – to the extent that it became the most prevalent classification for sustainable urban development (De Jong et al. 2015). It was the buzzword, drawing increased attention among research agencies, universities, governments, officials and specialized companies. All over the world, there has been hasty proliferation and promotion of smart city programs and the market potential for smart city solutions is set to be substantial (Etezadzadeh 2016). China, for instance, is urbanizing quickly and the Chinese government is currently pushing for renovation throughout its cities, with over 100 initiatives in the pipeline: eco-cities, low-carbon cities, as well as smart cities (SIP-SSC 2015). Similarly, a few years ago, India announced plans to develop smart cities in response to the country’s growing population and pressure on existing urban infrastructure (Smart Cities India 2015).
Today, although the concept of the smart city is still viewed favorably, implementing initiatives in countries with vastly different needs makes it difficult to establish shared definitions and common trends at the global level. That is, there is no clear-cut definition of the term smart city, or any general agreement on what its inherent features are (Caragliu et al. 2011; Dameri 2013; Kitchin 2014; Neirotti et al. 2014; Albino et al. 2015). In Latin America, for example, smart city projects tend to be weighted towards the improvement of security, local government management and mobility, whereas in Asia, the emphasis is instead on the improvement of infrastructure and mobility; there again, in Europe the aim is to boost efficiency in terms of the public offering, establishing a socially inclusive culture and enhancing citizen well-being (Neirotti et al. 2014).
According to SIP-SSC (2015), a smart city uses ICT to enhance livability, workability and sustainability. Similarly, the USA Office of Scientific and Technical Information11
