On March 5, Saundarya Mehra found herself standing before a panel of brilliant innovators: VPs from Tyco and HCL Technologies; directors from IBM; chief innovation officers of cities near and far; even a consul general of India. Mehra and her team were pitching them their very best ideas to use open innovation and business models to create smarter cities. They were also receiving a sizable portion of their course grades from the industry and community leaders.
It was all part of U.C. Berkeley Haas School of Business professor Solomon Darwin’s Building Smart Cities course. The smart city, a concept taking hold in India, is broadly defined as a city that uses technology to enhance infrastructure, health, and well-being. A smart city’s various infrastructure systems run more efficiently and allow citizens to interact more with leaders. In short, smart cities represent a marriage of big data, technology, and infrastructure, to run a community like an efficient and cost-effective business. “The mayor is more like a CEO,” Darwin says.
The project goes back to last May (2014) when India elected its new Prime Minister, Narendra Modi. Months later, Modi announced India would establish 100 smart cities. In September of last year, President Barack Obama announced the United States would be lead partners with the Indian prime minister to develop three specific cities—Ajmer, Visakhapatnam and Allahabad.
VIEWING URBAN POPULATION GROWTH AS A BUSINESS PROBLEM
Politics aside, Darwin and others see rapid urban growth as a business problem. “Cities have traditionally been run by politicians that have vested interests,” Darwin says from his Berkeley office. “Many are about power, prestige, and greed. But technology and the internet has allowed citizens to be engaged. The citizens now can say, ‘This is the type of city we want to live in and these are the ones we don’t want to live in.’”
So Darwin, who grew up in Vizag, India – a city that has seen 650% population growth in the past decade as rural residents fled to cities – created a new course. The first part of the course was to go to India during winter break to visit existing and developing smart cities. “India could be a real laboratory for building cities and technologies,” Darwin says. “In America, we over-engineer things and build too many features we don’t use. The iPhone is an example of that. We probably use about 10 percent of its capability. My eight-year-old can use 10 per cent. When the Indians build, they build the basic model and use 90 per cent of a product.”
And it’s that type of efficiency that forms the crux of smart cities. With booming populations and unstable resources, efficiency is key. “The students spoke with politicians in India about how smart cities of the future need to be run like companies,” Darwin continues. “They need a business model. They need to answer questions like, ‘How do you cut back expenses and advance revenues? What can you share with other nearby cities?’ This is all what Prime Minister Modi is subscribing to.”