Public Sectors Worldwide Capture Value from the Internet of Everything

Today, Cisco announced that Public Sector entities worldwide could realize some US $4.6 trillion in value by embracing the Internet of Everything (IoE). The Value at Stake calculation comes from a bottoms-up analysis of 40 case studies of Smart city, state and country solutions proven to enhance everything from healthcare and education to traffic flow, parking, lighting, crime reduction, waste and water management.

With IoE, the possibilities to connect people, processes, data and things via common networks and killer apps seem infinite. The release of our study, “Internet of Everything: A $4.6 Trillion Public-Sector Opportunity,” coinciding with the Consumer Electronics Show (CES), spotlights many Public Sector opportunities over the next decade.

Why Now?

Here, I want to elaborate on two vital questions a lot of people asked me at CES: First, why now? Second, what are the opportunities internationally?

Why now? Since the dawn of the Internet, a complementary ecosystem of sensors, actuators, killer apps, mobility, computing power and Big Data analytics has continued to mature around the network. In just the past few years, as usage has grown, the costs of these networked technologies and solutions have come down rather dramatically.

As a result, it now makes sense not only for private enterprises but also for Public Sector organizations to reap benefits that outweigh the costs of building networked infrastructures. After years of visionary talk, it’s now possible for the Public Sector to improve IoE-based services for citizens and consumers, in effect, with flat budgets.

Reduced costs, increased revenue, better employee productivity (there are 350 million Public Sector workers globally) and enhanced citizen experiences all combine to more than make up for the costs of implementation, which also can be defrayed through public-private participation.

The Global Ramifications

What are the international (non-U.S.) ramifications? — a question very dear to me as Cisco’s Chief Globalisation Officer. Of the $4.6 trillion VaS, Cisco identified $1.5 trillion attributed to connected militaries. When you back that out, about $586 billion of the remaining civilian value is attributed to U.S. Public Sector organizations, but than half goes to Public Sectors outside the United States. That means Public Sectors all over the planet, whether in the rural hinterlands of Indonesia, major metropolises of Europe, or the new-millennial Smart Cites built from the ground up in Asia, the Middle East and South America, will gain the significantly in terms of value volume from connected services.

The documentation of international successes seems to grow on a weekly basis. Here are a few of the most recent notable examples of Smart Cities, which will claim nearly two-thirds of IoE’s total civilian benefits over the next decade:

Early projections from plot tests of smart parking services in the City of Nice, France, have shown the potential for a 30 percent reduction in traffic congestion and significant air pollution benefits.

In Songdo, South Korea, a central building management network monitors and optimizes energy use, reducing energy consumption by 30 percent.

In Barcelona, Spain, a smart bus network tracks new bus routes in the city and provides real-time bus information to citizens; and Virtual Citizen Services using video and collaboration technologies enables local citizens to conduct legal processes without going to local offices.

At Cisco’s Internet of Everything booth (Consumer Electronics Show, Tuesday, Jan. 7, 2014): From left to right: Munish Khetrapal, Engagement Manager, Cisco; Vicente Guallart, Barcelona’s Smart City Architect; Toni Vives, Barcelona’s Deputy Mayor; Wim Elfrink, Cisco’s Chief Globalisation Officer; Manel Sanroma Lucia, Barcelona’s CIO

Value by the Numbers

We think Smart Cities have the potential to claim nearly two-thirds of the non-defense IoE Public Sector value, especially when implementing killer apps. We have been tracking the benefits among global leaders. For example, the value creation opportunity (in parentheses) is being met in following cities from IoE installations: Barcelona ($3.2 billion); Nice, France ($1 billion); Amsterdam, The Netherlands, $275 million; Rio de Janeiro, Brazil ($2.3 billion); Songdo, South Korea ($170 million).

These and other enlightened Smart Cities, which know that they must actively compete for younger citizens amid shrinking populations, can extract the most gains from taking a holistic, or big picture, approach. The network multiplier effect grows exponentially when many applications, such as connecting traffic and garbage pickups or lighting and police services are transparent across functions, departments and agencies.

Indeed, an IoE culture for innovations that enhance citizen experiences is taking off most anywhere and everywhere.