City as a Service
Key Concepts
In 2011, Marc Andreessen famously wrote a prescient claim that “software is eating the world.”
Software as a Service was beginning to bloom.
In the year 2022, this has evolved into platforms are eating the world.
Make no mistake about it, Networks, Platforms and Ecosystems (NPE) are the defining forces and economic principles that are shaping the future.
No organisation, be it public, private or citizen based can afford to be ignorant of the degree of influence NPEs are having on business, society and governance.
As a thirty year veteran of covering this territory as both a professional observer and ecosystem designer, I can tell you flat out that I’ve yet to meet anyone at the civic level or enterprise level who fully comprehends the consequences of their lack of understanding.
Venture Capitalists are notoriously weak on the very fundamentals upon which they portend to invest their clients money.
This void of knowledge is having untold costs and lost opportunities for business and society.
Overcoming the NPE Knowledge and Skills Gap
As Ed Morrison writes in his landmark book, Strategic Doing: Ten Skills for Agile Leadership, “Complex challenges are all around us — they impact our companies, our communities, and our planet. This complexity and the emergence of networks is changing the practice of strategic management. Today’s leaders need to understand how to design and guide complex collaborations to accelerate innovation and change — collaborations that cross boundaries both inside and outside organisations.”
There are two ways to deal with Complexity.
→ Simplify operations to cope.
→ Design the organisation to make complexity a strategic advantage.
While coping strategies can be a necessary survival skill, this is also extremely self limiting.
Mastering complexity is where extraordinary opportunities and results lay hidden.
There is only one way to learn these skills and the range of requisite knowledge domains: Strategic Doing.
As Cities, we learn to design and develop our own networks, platforms and ecosystems.
SmartSwarms Proformance Ecosystems is the result of thirty years research and development for bringing the natural business networks and ecology of every city together with the vast, rich webs of knowledge required for a City as a Service Network/Platform/Ecosystem.
Only through the explorative process of “strategic doing” can business leaders the world over experience the phenomenal potential of Ecosystem Orchestration.
With these five essential stages of “digital property development”:
- The Garage
- Eighteen Tables Ecosystem
- The International VillagE
- The City as a Service Franchise Model
- The World League of Cities
Leaders from all walks of governance, business and citizenship can become Masters of their Ecosystem for value creation in a digitally turbocharged economic environment and apply it where it matters most: Cities.
The following are some of the key concepts of “knowledge domains” for value creation and organisational agility for a NPE economic landscape.
Key Digital Economy Concepts
Economies Are Complex Adaptive Systems
Complexity economics differs significantly from Neoclassical Economics and the Efficient Market Hypothesis. (reference Andrew W. Lo’s Adaptive Markets: Financial Evolution at the Speed of Thought )
Complexity Economics grew out of the multi-disciplinary Santa Fe Institute, a research centre for studying complex systems.
You cannot understand a complex system, you can only recognise it as such.
I reference Shahin A. Shayan’s Understanding Complex Adaptive Systems:
Understanding complex adaptive systems requires Swarm Intelligence. “This is a holistic, synergistic, distributive, and coordinated intelligence that is capable of solving complex problems that would be very difficult for an isolated agent or individual to solve”.
We need to be clear, by seeing our cities for what they are — Complex Adaptive Systems — a City as a Service Ecosystem can solve the staggering array of complex problems facing cities and unlock fortunes in the untapped hidden potential within complexity.
Also reference John H. Miller and Scott E. Page’s Complex Adaptive Systems: An Introduction to Computational Models of Social Life and John H. Holland’s Signals and Boundaries: Building Blocks for Complex Adaptive Systems
Networks
The world runs on networks, it always has and it always will. What has changed in how the internet can reroute networks and magnify “network effects”.
Despite an incredibly wide range of research, Social Network Analysis and network visualisation tools, at the organisational level the power of networks is very poorly understood.
This is extremely costly in terms of organisational performance, intelligence and problem solving capabilities.
Platforms
Digital platforms are a type of “online destination” or “property” that enables dispersed groups to coordinate activities without central authority or control. With an ecosystem of APIs and data sharing, platforms can capture, aggregate and monetise data and coordinated activities in ways that “off-line” structures cannot.
Virtually all organisations, corporations, governments, ad-hoc groups and open society interfaces through digital platforms today.
Having a strategic comprehension of the pros and cons of the current landscape of platforms is essential.
Key point: Those who own the Data own the future.
Ecosystems
Ecosystems are the collective quality of businesses, people, software, technologies and culture that formulate on a platform.
The quality of your ecosystem and the quality of the networks and platforms that make them viable will determine the quality of your future, be that as a business, a government or a citizen.
Proprietary systems and technologies can wreak havoc interoperability for the agents and partners within an ecosystem, rendering it into average or even deleterious performance for digital strategy.
Distributed Risk and cyber security are two components that can make or break an ecosystem as well.
The vital take-away here is that for the full potential of Digital Transformation to be realised, the only way to realise this potential is through well designed ecosystems with distributed ownership, highly collaborative webs of partnerships and high trust value creation networks.
Capital
We cannot understand capitalism if we do not understand what capital is in the age of data, open source information and distributed, autonomous knowledge.
Capital is often poorly misunderstood as simply “money”.
This is only a part of what makes “Capitalism” work.
Social, Intellectual, Reputation and Engagement are the other essential “ingredients” to Capitalism, and when these are not properly nourished and maintained, the system begins to degenerate.
We are watching this now as the geo-political order is slipping into chaos and the rise of mistrust and hostility to capitalism and free trade grows.
Capitalism is a social contract.
NPEs must restore the balance, distribution and trust in “Capital” if we are to flourish in the coming decades.
Francis Fukuyama’s Trust: The Social Virtues and Creation of Prosperity is an essential guide.
Celine Schillenger’s Dare to Un-Lead: The Art of Relational Leadership in a Fragmented World which finds “Liberty, Equality and Fraternity” as the bedrock of the modern socio-economic world today is likewise essential reading.
Software and “Flow” Architecture
Nowhere is the fluid nature of the digital world more self-evident than that of software development.
Software now is in a constant state of evolution. Enterprise software practices are the kiss of death.
No enterprise will survive this.
See:
Building Evolutionary Architectures: Support Constant Change
Flow Architectures: The Future of Streaming and Event-Driven Integration
The Software Architect Elevator: Redefining the Architect’s Role in the Digital Enterprise
Clean Architecture: A Craftsman’s Guide to Software Structure and Design
Data Economics
Nothing distinguishes the differences between the old Industrial Economy and that of the modern Digital Economy than Data.
Hundred years ago as the industrial revolution was about to go into hyperdrive, natural resources seemed “unlimited”.
Today, we know ‘natural’ resources are not unlimited.
Data, however, nearly is.
What natural resources and factory workers were to the Industrial Revolution, Data and Knowledge workers are to the Digital Revolution.
Capitalising on data is the gateway to new value creation in the age of Networks, Platforms and Ecosystems.
Bill Schmarzo and his body of work, particularly The Economics of Data, Analytics, and Digital Transformation: The theorems, laws, and empowerments to guide your organization’s digital transformation is who and where I begin.
For Data “Capitalism”, Reinventing Capitalism in the Age of Big Data by Viktor Mayer-Schönberger and Thomas Ramge opens our minds to the massive potential for enlightenment in Data Economics.
Data Mesh
As an ecosystem designer who cut his teeth in the era of “Web1” (approximately 1995–2004), I consider my ideas and requirements for a digital ecosystem and Peer-2-Peer networks to be “Mesh Capitalism”, an idea I explored heavily with the thriving “Glia Community” I led on Google Plus circa 2011–2013.
These designs would not truly take hold without a data mesh.
Fast forward to the spring of 2022 when Zhamak Dehghani published Data Mesh: Delivering Data-Driven Value at Scale was what I had been waiting for.
Data Mesh is “a decentralised sociotechnical approach to share, access and manage analytical data in complex and large-scale environments — within or across organisations.”
Domain Driven Design
In order to bring sensemaking across the staggering array of domains within platforms of open and closed networks, Ecosystems require DDD to map, navigate and create value across the entire topography of the ecosystem.
We begin with Vaughn Vern’s classic Implementing Domain Driven Design and Eric Evan’s groundbreaking Domain-Driven Design: Tackling Complexity in the Heart of Software.
Streaming Microservices
We’ve experienced the first wave of streaming services in rideshares, food delivery and of course Amazon.
The City as a Service ecosystem promises to take this to an entirely new dimension, giving every single business within the City’s business ecology the opportunity to outcompete the predatory platforms of Web1 and Web2 with the “Home Field Advantage”.
It cannot be overstated how “streaming microservices” will transform how we connect knowledge work of every kind to exactly where it needs to be applied and when.
Sam Newman’s Building Microservices: Designing Fine-Grained Systems and Vaughn Vernon & Tomasz Jaskula’s Strategic Monoliths and Microservices: Driving Innovation Using Purposeful Architecture and the Jan 2023 release of Serverless Beyond the Buzzword: A Strategic Approach to Modern Cloud Management by Thomas Smart establish the baseline for a City as a Service platform.
Digital Property Development
DPD is what ties everything together. The fundamental key to all future prosperity. Where Real Estate and Digital combine.
Digital Twinning
The fundamental key to Digital Property Development, Digital Privacy, Digital Identity and Digital Security.
Data Mesh and “Intelligent” Buildings, Traffic and Cities grow from here.
The evolution of “The Internet of Things” and Distributed Data Capitalism.
Fintech
Nowhere is the digital revolution and the shifting nature of “capital” more apparent than that of Fintech. Nowhere do we see more dead branches of ill-conceived ideas than we see in the evolution of Fintech.
Personally, I find it a travesty.
Which means most of the vast opportunities lie ahead.
And nowhere is the need for “ecosystematic” thinking, culture and design more desperately needed.
I’ll drop two names who understand the concepts better than most.
Yanis Varoufakis, whose work most blends the digital world and the economic world, most famously as the Greek Finance Minister and pontificator of “Techno-Feudalism” .
And Paolo Sironi whose 2022 publication of Banks and Fintech on Platform Economies: Contextual and Conscious Banking is the first book worthy of the title I’ve come across.
Two quotes from Paolo:
“To generate sustainable business value on outcome economies, banks and fintech need a new strategic anchor that centres on a novel understanding of the “biological” relationship between clients, financial markets, and technology.”
“The platform orchestration of the ecosystem of users, producers, or developers is essential to remain relevant in any industry, and keep up with competitors’ speed of innovation by embracing exponential technologies.”
Quantum Reality
We live in a Quantum Reality. As the renowned theoretical physicist Carlo Rovelli writes, “Reality is Not What It Seems”.
This is a deep intellectual dive we must take if we are to overcome our limitations for an adaptive future.
Fundamentals: Ten Keys to Reality by Frank Wilczek is a nice start along with The Big Picture: On the Origins of Life, Meaning, and the Universe Itself & Something Deeply Hidden: Quantum Worlds and the Emergence of Spacetime by Sean Carroll.
Information Technologies
Our conceptual understanding of the defining features of the modern organisation are incredibly shallow.
We must rectify this dangerous shortcoming.
We start with “What is Information?” with the help of Why Information Grows: The Evolution of Order, from Atoms to Economies by Cesar Hidalgo; The Information: A History, a Theory, a Flood; .by the acclaimed science writer, James Gleick; Information: The New Language of Science by Hans Christian von Baeyer; The Soft Edge: A Natural History and Future of the Information Revolution by Paul Levinson; The Social Life of Information by John Seely Brown & Paul Duguid.
What is “Technology”?
Technology has driven hominid development for approximately 2 million years. There is an excellent case for music and language as the first “information technologies” that separated homo sapien from all other living species that preceded us.
Does technology shape humans? Or do humans shape technologies?
For a human centric future, we need to understand who shapes whom.
Artificial Intelligence
No technology is more defined by unrealistic hype and misguided venture capital than “AI”.
Nowhere is our ignorance of what exactly is “AI” and its purpose in human centric societies more perilous.
Two quick statements:
— General Artificial Intelligence that rivals that of human intelligence is far, far off on the horizon. If ever.
— Artificial Intelligence must be custom designed for every application and requires significant human guidance and intervention to be both effective and non-biased. Which leads us to…
Collective Intelligence
Beginning with music and language, human’s ability to communicate over time and distance is what allowed an otherwise nondescript hominid to go from rudimentary hunters and gatherers to a modern civilization in the span of a mere 60,000 years, barely a third of our species’ existence.
Collective Intelligence is Homo Sapiens’ Superpower.
Examples?
— The Scientific Method. This is what took Western Civilisation from the “Dark Ages” to where we stand today.
— The City. Every city that has flourished over time was and is a living testament to the collective intelligence of its inhabitants, merchants and global trade routes.
— The Markets. The Crown Jewel of Collective Intelligence.
Yet we continue to design systems that squash this Superpower.
Well designed Networks, Platforms and Ecosystems amplify this exponentially.
We need to be crystal clear here: Harnessing the Full Power of our Collective Intelligence will make or break civilization before we hit the 2050 mark.
SmartSwarms as I’ve developed the concept is the power behind my ecosystem development since day one.
Any complex system that does not consciously develop and nourish Swarm Intelligence is fatally flawed. Every organisation is a “complex system”.
All decision making models without Swarm Intelligence are inadequate for digital complexity. That’s approximately 99.9% of all organisations.
Strategy in a Networked World
However you conceived and executed on Strategy previously is dangerously inadequate for the world we now occupy.
From the macro world of geo-politics, emerging technologies, shifting alliances, climate change, energy creation and management, fragmenting society and social norms to getting the most out of their workforce in the micro world of families, neighbourhoods and communities the world over, Leadership today requires an entirely new approach to the needs of people and their organisation.
One thing is clear:
What got you to here, will not get you to “there”, wherever “there” may be.
Human Nature
Nature vs Nurture, Nurture vs Nature. This false dichotomy has plagued humanity for aeons.
For our purposes here, every organisational design has to maximise the very best of our Nature while mitigating the very worst of our Nature.
Virtually every organisation today has sown the seeds of its own demise due to the ignorance of this design requirement.
How the Brain Creates Your Mind
We cannot begin to understand “economics” without understanding “Homo Economicus”.
The neural architecture of the human brain is beyond phenomenal, the “result” of two billion years of evolution.
Recent research has discovered that The human brain builds structures in 11 dimensions and advanced mapping techniques show the mind-boggling networks of neurons and synapses in driving human behaviour.
There are a few things we must consider here.
Number One is This:
Your brain has almost unlimited capacity to fool your mind. Understandably, this is a very hard pill for 99.99% of people to swallow.
But swallow we must if we are to unlock our full potential.
We must understand this about our minds.
— Our brains create our maps that approximate our mind’s “reality”.
— Those “maps” are not “the territory”.
Number Two?
Your brain is a quantum computing device and 100% the key to agency and value creation in Networks, Platforms and Ecosystems.
A bit of a Bad News/Good News paradox to end our introduction to Key Concepts for a City as a Service.
Closing Comments
Leadership in the Digital Age is so vastly different than anything that has preceded this era.
We are, as many observers are saying, in “uncharted territory”.
With the “climate crisis” now knocking at our front door, and the quantum leap from the diminishing returns of the Industrial Economy to that of the Digital Economy, we must radically innovate at a depth and speed unprecedented in human history.
This is not optional. We may have reached the “tipping point” already.
Every moment lost from here on out, is a “moment” we cannot afford to lose.
The ability to Orchestrate Ecosystems through Swarm Intelligence is the only scientifically proven and culturally palpable way out of the frying pan and into the Oasis.
The five essential stages of ecosystem development I have designed gives every city, corporation (public or private), government, and citizen a “strategic doing” guide for creating the digital infrastructure, the cultural buy-in and the means to capture value and distribution that is lacking today.
The Garage
The Eighteen Tables Civic Ecosystem
The International VillagE
The Cities as a Service Franchise Model
The World League of Cities
are “digital properties” we can begin to work together to develop starting today.
This is a bridge we all have to cross. Staying “here”, where we are “now”, is not an option.
If we work together, this will be the easiest transformation in human history.
If we work against each other, the history of two World Wars and a Global Depression loom as the spectre of the worst of human nature.
The choice is yours, the outcome is ours to wear.
Gregory D Esau.
Founder of SmartSwarms Business Design & Development Consultancy
The SmartSwarms Proformance Ecosystem Engine.
