The Smart City challenge, at root, is a complex ‘system of systems’ problem. Implementing a point solution such as an electricity Smart Grid, can cause knock-on instabilities if not coordinated and architected in conjunction with overlapping urban designs, such as emerging electronic vehicle transportation initiatives or Smart Cloud installations.
PRESENTATION LINK: http://www.sark7.com/docs/Smart_City-Financial_Engineering.pdf
Macro-systemic instabilities can emerge in Smart Cities to the degree that point implementations lack the flexibility and awareness to accommodate and contextualize patterned interactions with overlapping urban systems (across technical, social, and economic contexts).
While software vendors and engineering firms are touting point solutions, the underlying success or failure of Smart City initiatives will depend upon orchestration, not control, approaches. The best orchestration mechanism for complex ‘system of system’ problems is close at hand: market-based approaches.
The attached presentation advocates placing a complex Net Present Value (NPV) economic analysis mechanism as the root orchestrator for Smart Cities system coordination, managed via advanced analytics systems.
A more advanced approach might consider implementing “artificial currency markets” as mechanism for mass social optimization between urban communities and powerful computer analytics solutions, fed data by prolific sensor technology…
SUMMARY KEY APPROACHES
1. Coaxing Cooperation: How to bring multiple stakeholders into a network of cooperative trust in order to build and operate a megacity implementation?
– Structured finance / project finance is a proven approach to orchestrating / coordinating megaprojects…
– However, PPP, as per a range of examples, are typically focused on a particular solution, system, or infrastructure implementation (i.e. highway, power plant, wind farm)
– How can we efficiently coordinate ‘a project of projects’ or a ‘fund of funds’?
2. How to orchestrate and manage ‘system of systems’ complexity resulting from a
‘hyperproject’ of megaprojects (i.e. Smart City)?
– Advanced analytics:
• Monitoring
• Forecasting,
• Optimization
– Simulation (Monte Carlo & discrete event)
– Uncertainty valuation / management via decision trees
PRESENTATION LINK: http://www.sark7.com/docs/Smart_City-Financial_Engineering.pdf
PAPER LINK: An Integrated Platform for Smart City Design: http://www.academia.edu/2941243/An_Integrated_Platform_for_Smart_City_Design
SCTR7: Data Science and Analytics 
March 14, 2013
Methods, Research, Tech Insight, Theory