Planning Public-Private Partnerships for Sustainability, Resiliency & Success! - with Herb Sih of Pioneer Partners

Join Herb Sih of Pioneer Partners  & Jim Frazer of ARC Advisory Group for an in-depth examination of;

1.       The history of public private partnerships

2.       How have P3’s changed over the past 10 years

3.       Why this change became necessary

4.       The driving forces behind this evolution

5.       How public private partnerships will change in the future

6.       The pitfalls & key challenges of public private partnerships

7.       How P3's have changed the technology landscape

8.       The most important key elements for successful public private partnerships

9.       How to create a successful public private partnership

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Transcript

Jim Frazer  

Welcome again to another episode of the smart city Podcast. Today, I'm very happy to be joined by Herb Sih senior partner at Pioneer Partners. Welcome, Herb How you doing today?

Herb Sih  

I'm doing great, Jim, thanks so much for having me on.

Jim Frazer  

Hey, it's well, it's great to have you. Herb, can you? Can we get started with you giving us a little bit of background of how you came to the smart city ecosystem?

Herb Sih  

Sure, Jim, I'm happy to do that. Well, really, there are a couple of things that I think are valuable for the listener understandable what what makes me tick and how I think about things in the smart city space, one of the first things that's somewhat salient would be I was in the military for 11 years. And as a military helicopter pilot, you're given missions to accomplish but you also understand that you don't have a parachute. So you take off expecting to crash and your words are coming up with Plan B, to be able to make sure in the event that you've got a problem that you know how to accomplish a mission and not you know, have bad consequences. So that's the first thing smart cities, there's a lot of issues that you come up with, you always know how to how to get there, but you always have a plan B, C, or D in your pocket. Another piece that kind of led me to where I'm at Jim, is I spent a number of years 14 years in the investment and finance space. And so whether it was managing money or getting into investment banking, as even on a venture fund really gave me an understanding of the economics and the orientation, especially for stakeholders the return on investment, both from cities, and from the business market, they're really important. And that really gave me a foundation. And then lastly, how I got here, we took the combination of those experiences in my background a lot with my partners. And in 2009, we started a company called Think Big Partners. And that really started off as a technology incubator. We started running accelerator programs for emerging technology. And that program caught the eye of some of the larger fortune 50 technology companies, we started doing innovation partnering of which that led to our first project that we were asked to do, really is more of an example of how to use advanced technology to help cities back in 2014. When Cisco approached us, we really didn't know what a smart city was. But we knew that technology can be used as a tool to solve problems. That's how we got into the space in 2014. And since that time, we've worked in probably 40 cities spend some time your partners was spun out from Think Big Partners and rough years ago to specialize and focus exclusively on digital transformation and helping cities make that journey.

Jim Frazer  

Wow. So you've been you've got a varied career there. You know, now that you're involved in the world of smart cities, and more particularly smart city public private partnerships. Let's get started with you giving us your perspective of the history of Smart City PPCPs.

Herb Sih  

Sure. Well, what's interesting to note is sometimes you don't realize that you're in a partnership until you're kind of along the way. And so if you think about the role that cities play, and you know, they represent the citizens and the businesses, and they're trying to create a high quality life, if you really start going back, when they first started contemplating this back in 1974, la created what they'll call a urban big data project, and it's called a cluster analysis of Los Angeles. Really, back then it was an intelligent viewpoint, using data to try and better understand how they can improve the quality of life. Well, if you follow them the course of that line of thinking, Amsterdam created something 20 years later, and then you started getting the commercial markets, IBM actually along with Cisco, in the early 2000s. They started really investing a lot of time and money into the research and that partnership started to happen because when the private sector market got involved with these cities, that's where the partnership really began because you can't really do research in a vacuum and then over the years is he saw this as a sort of really first blossoming yet Barcelona that came out. There was a city called Yokohama, you know that that was a demonstration project in 2010. There was a project in South Korea that took place and evolution partnerships went from theoretical and academic, to more research and practical. And then it started getting into specific challenges that people were facing, whether it's urbanization or traffic, or climate change and all of that it called that back then. But really, that's where the evolution of partnerships came. And, and really, there's been probably 20 projects I can point to over the course of the last 30 years, but especially since mid-late 2000s. That's really where they started to pop up.

Jim Frazer  

That's that that is fascinating. So you alluded to an evolution of P threes over those decades. How have they changed in the last five or 10 years?

Herb Sih  

Well, what's been interesting, Jim is if you if you go back to let's go back about 10 years ago, you had a combination of technologies and goals. And I'll even say hopes of the cities that started really coming together and butting up against each other. And so about 10 years ago, you had the hope and promise of what we'll call smart cities impact areas, but the technology didn't quite make it. And there's a whole array of technologies that has to come together. And so you have to have connectivity that connectivity provides that base layer, they have to actually the application itself. So what was the starting point of a good discussion where people thought they were quite ready for primetime became not quite ready for primetime. And so the partnerships went from, how do we get something done, or realizing that we aren't quite there to a cure, we're starting to get some success, you're getting incremental progress. And they started developing a much more robust set based on learning, understanding, working how to collaborate, and it became more of a working relationship that was an ongoing process versus kind of a project with a very finite beginning and end, because again, to get from point A to point B is not always well defined. And I think now you've got an evolution of mutual benefit stakeholders, working in a ongoing conversation that really understand that they have to be able to represent both sides to be successful. And you have to look at all the array of technologies together all at the same time, to be able to really understand that partnership is going to work. So I think it's become much more of an ongoing relationship that has a lot of stakeholders versus one or two parties that kind of dream something up in the backroom, and then just give it a shot.

Jim Frazer  

Well done. You allude to two numbers of stakeholders, public private partnership, intuitively, has two partners, public and the private. Who are these other stakeholders? Well, it's,

Herb Sih  

it's interesting. So do you think about public let's first kind of look at that, historically, if you really look at especially the role of innovation, the federal government has been acting as what we'll call a cannabis or even a convener for decades. But as you go on, and especially when you go under the word smart cities, the cities really are probably still the last biggest group of, of people that can work together, we can still have enough impact, but it can be manageable to get success. So when you look at the cities, cities, sometimes they're just a city by itself, but if there's a region around them, and so depending on where you live I'll pick an easy one Manhattan in New York City, but then you look around the dynamic that New Jersey may have, and if you're living in New Jersey, but working in downtown Manhattan, these regions, so the first public stakeholders are often regions with the cities and epicenter, but because of the nature of things state, whether it's funding, or it's the ability to be able to pull in other favorable regulation, because some of the regulations are at a state level. And then certainly the federal government, particularly in the age of agile funds, and ARPA that we just came out of, you've got multiple stakeholders just on the public side. If you certainly unpacking the next interim step here, it's kind of a hybrid, it's the NGOs, it's the academic organizations, those aren't always well understood on the public side. You've got folks that you know, what, if you're, let's say, working off a grant from NIST, where you've got something coming out of COVID the National Institutes of Health played a really big role in the National Science Foundation even though you've got federal agency, but you've gotten out specific agencies that are working on a microcosm, that is very specific. So you've got not just cities, states or federal government, but you know, agencies, and then you bolt on the private sector and that really is expanded to besides the large companies Which again, historically like the Cisco's and the IBM, and you know, they've been very leaders in their space for a long time. You've got now on the private side, these emerging technology companies. And having come out of the incubator space and work on the investment side to, some of the best ideas are coming from these early-stage companies. And really the partnership that those can have with the larger companies. And collectively, they then form with these cities, is really interesting. And then the last stakeholder, which is one that is really, not necessarily has gotten overlooked. But people haven't really thought about in these terms. There are some projects out there that really brought this to light, it's the public. And so we think about public, private, and then the next party being people, the people really have got to be on board, whether you're trying to design a system with kind of human centered design, and understand the needs, where you're trying to get them involved, or frankly, trying to get them involved in the conversation, to make sure that they're not apprehensive or scared, or they don't win support. There are all these issues that if you don't get the public involved, you can really have some very tough consequences. So I think it's multiple public, multiple private, and now even more than ever, the people have got to be involved. So how many pieces that Jim, I know, it's more than a lot of

Jim Frazer  

peace? Thanks, Herb, it's interesting that over the last probably decade or two, there has been an evolution in that thought, just as you described. And you know, some folks out there have actually given it some labels. And smart city 1.0 was when vendors, suppliers would come to a city and promote their solution as a as a Swiss army knife that did everything. But those early installations, as you undoubtedly know, did not work out as well as everyone had had intended. So the smart city 2.0 perspective was that it really was a two-entity partnership, a true and very simple public private partnership between the city of the public agency and then the vendor, for perhaps so I don't know, a remote-control street lighting system. But those two, while they were better than earlier attempts at Smart City efforts, they fell short of the goals as well. So the smart city 3.0 terminology has been written about quite a bit in the last, I would say, five years. And it is exactly that it includes those that all of those other smaller stakeholders that are out there. So it might be the downtown business district. It might be the parent teacher association that's lobbying for a safe route to school for the kids to walk to school. It might be the bicycling community. It might be some environmentalists; it could be even taxpayers. There's a lot of those that really need to be defined before you start because if Well, in my anecdote, and I'm a bike rider, you don't want to build a bridge without a bike lane and then have the bicycle community come to you later and say, Where's my bike lane? So you really do need to have a very conscious effort of defining those stakeholder communities upfront, or else you risk disappointing someone.

Herb Sih  

Absolutely. Now, that's interesting. When people think about scaling, Jim the smart city three model has to scale, and scaling doesn't always mean up. It means adoption. And it means to be able to create sustainable funding models, and you got to be able to make sure that the people are getting the impact that they need. So the scaling is actually more penetration and sustainability. And exactly right if you if you build a bike lane, and it's not wide enough for people aren't using it or other challenges with it. How good of a bike point is that? Right?

Jim Frazer  

No, exactly.

So I heard let's, let's go back to

Jim Frazer  

we we've talked all about the evolution of public private partnerships over the last 10 or 20 years. But can you summarize, why was that change necessary?

Herb Sih  

Well, I think there's a lot of reasons and I'll just kind of go through some thoughts here. You know, the first thing is that you've got to be able to create if we start with the people comment that I made, you've got to really be able to help the companies and frankly, the cities to understand how do people live with the technology that they're using, and that's a dimension that's got a lot of different facets you got a group of folks that are digital natives and they view technology and privacy and things like that very different than you know, folks like maybe you know, myself or you based on where they're coming from, and so that that partnership has got to be through multiple lenses. Because frankly, younger generation is going to look at the technology a lot longer than you and me. And you've got to be able to understand that insight. If you look at trying to understand the public also involved in understanding the technology, how's that also going to potentially impact them or compromise their way of life, if that's a concern, there have been some projects. And I'm not trying to pick on any projects, but we're all of us are learning all the time. But there was a project up in Toronto that was started in 2017, of which was well intended was 800 acres, and was really started by is with Sidewalk Labs and Google and there was a lot of good ideas there, we actually did a project in Toronto, just prior to that, that was not directly support. But it was to help the infrastructure Canada challenge process to get Toronto up to speed. But the public didn't understand what was going on. And when their requests for information were really not met to their satisfaction, they became very nervous and concerned. And so we've seen this evolution of these partnerships has got to take into account all the different stakeholders. And ultimately, if you really think about technology, as really the means, and at the end, the most important stakeholder roles are the people. And so the process had to change to include the people representing not only their needs every person has got multiple different identities myself, I'm a father I'm an individual, I'm a business owner I'm a community member, I'm a volunteer, we all have different needs at different times. And you've got to be able to understand the different ways that people use the technology to be able to affect what they're trying to do with the time that they're using it or even experience it. So that's the first part, we had to change the process to make sure that people weren't fearful, they understood it, they're going to support it, whether it's tax dollars, or just allowing you to scale and get the support, and really continue to actually, frankly, act as a co-creator, and take part in the ongoing innovation process. Because once the technology is deployed, it's iterative, you have to keep building additional insights and new use cases so people can adapt to it and technology companies and cities can respond to it. So that's one dimension. Jim, I'm going to go through a few more. Sure. Go ahead. So the other thing that we saw in these public private partnerships call it circa mid-2010, to, you started getting from an academic, interesting one or two stakeholder partnership models into now trying to deploy things. But these deployments were really initially what we'll call well intended, but demonstration projects, with somewhat of an ill-defined, what does success look like? And so let's say it was street lights, as an example, and streetlights are great technology they're trusted or commonly used, it's the standard today, they're well understood, the impact is very real and as measured, but the first handful streetlight projects that were out there, they were really, I think, deployments to kind of showcase the technology. But there wasn't really a plan to scale and adopt the technology on the city side. And maybe it was because a lack of infrastructure, or they didn't know if they had the funding available, or they didn't really understand the labor that it would take to be able to implement them. But on the other side of the partnership, you had these very large companies that are building the technology, they may or may not have paid attention to the end user customer. In this case, it's both the city and the citizens. And lastly, these pilots to really lead to procurement. And if you're going to have a good partnership, these privately held companies are publicly traded, but private companies, they've got to have a path to procurement. And so if they don't understand what success is going to be for the city or the citizens, how in the world can they go to procurement because ultimately, these companies have a mandate to make money. But the parties really need to get together say, Okay, do we understand the rules of engagement and public private partnerships, initially, we're kind of pilots to know where they kind of felt good, a lot of activity, not a lot of progress and ultimately didn't really have the impact for other company and ultimately, the citizens and really get the benefit because didn't go anywhere.

Jim Frazer  

So that's, that's fascinating herb as, as you spoke about Toronto and some of the challenges that have occurred, the words customer centricity come to mind for me that ultimately it's that other looser group of stakeholders that really are the customer to pedestrian the person to having dinner outside you know, on the on the on the sidewalk, the bicycle rider, the taxpayer. And what's often unsaid is that concern about privacy, and about transparency. No, you and particularly about data collection and tracking people. You know that that has been understated in some of the smart city efforts today.

Herb Sih  

It really has the. So there are a couple, I guess, ways that I look at this, for those digital natives as an example that, that I just talked about their viewpoint of privacy and transparency is really different. Now, what's interesting I am a very private person, I respect privacy, and sometimes you look at the role technology has, you feel like you're compromising it, the reality is, I think that there's a constant bargain, because I willingly and very happily carry my phone. And that phone is just a phone like all of us, we carry smartphones these days, or most of us, and that phone knows everything about us. Now, just because it knows, it doesn't mean that people can use that data. And so I really think there's kind of a a dynamic here to where the folks that are, first of all giving up information, I think there's a level of transparency that people have to have and be willing and aware. And you can't have it both ways. Unfortunately, the digital natives, they assume that they have no privacy, they think it's gone. They, they, they don't necessarily like it, but they just have no expectation. versus somebody like myself, I hoped for it. And I do read the terms and conditions of apps that you download, I think most people don't. But as you give this up, the privacy has got to be transparent. It has to be accurate, if the policy changes, it needs to be updated. And I think it has to be very real, but I think people need to understand that the privacy is a lot of different dimensions. There's been regulation in Europe GDPR. And then in California, they adopted a version of that era a couple years ago, but privacy is important, but the reality is that what does privacy mean? You know, I certainly know what those are,

Jim Frazer  

mean, that that's one half of the of the tradeoff. Because once you have IoT, and all this, all this communications technology, you do get a raft of benefits shortly your there's going to be an autonomous vehicle that will pick you up at your house, or your pizza, or will get delivered by an autonomous vehicle. You know it helps with sustainability, and you know, the siloing of of all types of, of city and public agency applications. So, I'm going to ask you herb on a slightly different subject. How do you see these public private partnerships evolving in the future? Well, I

Herb Sih  

think it's going to be interesting, because first of all, if you look at the cities, I think these partnerships, you start creating a network. The first one is that I think companies can be both competitive and cooperatives. So that coopetition model, to be able to advance technologies to be able to help the cities and the cities working with each other to in the peer to peer learnings, I think you're going to get a very well called network effect of these public private partnerships, because we all need to learn faster together, there's a lot of technologies some of the bigger ones that are on my mind these days artificial intelligence, for sure autonomous this vehicles, there's a long way to go still there. You know, you've got you know, robotics, there's a lot of work that needs to be done. And if we can all learn from each other and work better together, even if you're in competition on the private side, I think you've got to be able to change how we talk about and communicate, whether it's setting standards, adhering to the standards, collectively, as groups or figuring out what's working, what's not working. Gosh, I shouldn't want to be in a in a technology or a vehicle that if another city had an experience that the company that is producing the vehicle that I'm in can learn from, I'd sure like to avoid getting into a fender bender, or worse just because they didn't give out that information. So I think that the network effect is one of them. I think another is you've got to find different ways to increase the funding. And so, again the infrastructure investment JOBS Act created five or $50 billion in new spending. That's great. ARPA created spending part of that what was interesting about ARPA, which was the first time that you really had at a mass scale, a higher level of accountability. Where do the funds go? How did you use them? What's the impact? I think the change that needs to happen is that we have to look at the return-on-investment dimension is not just financial I think there are really three, actually four, but the fourth one is a little bit opaque. But they're really dimensions that we have to evaluate these Public private partnerships in a return-on-investment dimension. And I think we have to rethink of how we look at this and measure success. So I think those are two biggest areas, I think we have to look at it. And then lastly, we've got such big problems, or challenges the world today, I think we have to look at it through a wider group of stakeholders some of the innovation that's coming out of different segments the business community and the academic community, I think there's a way to continue to advance ways to bring them in. So these public private partnerships can address the problems faster and more effectively by bringing in more stakeholders to the equation. So that network effect isn't just between the bigger stakeholders, but it's also looking at more corners to be able to turn over to find the best ideas.

Jim Frazer  

Sure. All right, let me let me ask you a little bit of an off-topic question. In cost accounting, in the in the private business world is fairly well defined. You know, in the public agency world, not so much your truck roll may be, we're going to be costed out of the $1,000, or zero, because the person is on staff and the trucks can pay for how do you go about trying to build financial business cases around of some of these other softer, Smart City applications?

Herb Sih  

Sure, that's a great question. Well, let me give you one example that I think most people can relate to. But it's got, again, a lot of different dimensions, but I'm going to get into some specific economics as an example. And so at least where I live, nobody says, gosh, I really enjoy being stuck in traffic. I don't think anyone really ever says that, right. Even if you have a good podcast, you want to listen to it your car, if you'd like to get home for dinner. And so if you think about it as a starting point, so something as simple as being stuck in traffic, okay, nobody wants to be stuck in traffic. So for every extra mile that I drive, the vehicle that I'm in I I drive a truck, that puts 404 grams of co2 emissions into the atmosphere. So the average vehicle is puts about six and a half tons a year into the atmosphere. So you've got a very simple dynamic, if somebody's spending time stuck in traffic, I'm driving. So now I've got co2 Going into the atmosphere, by the way, for every hour that I spend in my car, and that really incredibly productive whether I want to have you know, family time or maybe I could work another hour for my employer or you know, make money, when there's a cost of time. But if I start looking at the entire gauging chain of that extra mile driven or my car, let me give you the economics of that. So for every ton of co2, it's about $50 a ton. That it costs to be able to deal with that. The health concerns that go with that those particulates that go into the air pollution, go into water systems and that water system, then you know, whether it's an aquifer or surface water from let's say, a river goes into the human body, the cost of health care, because of contaminated water, I mean, depending on the community that you're in, but you can quantify that very easily. If you think about every car that is on a road, especially in urban environments, that example, I'm stuck in a downtown traffic jam, that cost of the vehicle on the road, about 40% of all the vehicles at any given time in an urban environment, look for a parking space. So we're not only burning gas, which is a natural resource and precious. But I'm also now potentially creating a hazard to public safety. Because I can run over a pedestrian there's a cost to the economics of an accident measure, if I can reduce the cost of that truck roll being an ambulance at a fire truck instead of a utility truck, stringing the streetlight, the ability to be able to look at okay, I now have an extra $100 a year that can do something that I'm not stuck in traffic. You know, the average median cost for most communities is about 5050 dot $5 per hour, great, I just could use it a little more productively, maybe I can earn an extra income or, by the way, that extra income goes into a tax base, that tax base can fund a community. And so you start getting the economics of environmental impact, workforce development, economic development, public health, personal health, public safety, all that it's just for me sitting in a traffic jam for an extra hour driving an EXTRA MILE because I'm extending off, they're trying to get around traffic. So the economics are actually very straightforward and multiple dimensions. There's the financial, there's the social, by the way, the social programs and most governments, there's a budget attached to that so becomes financial again. There's the environmental and sustainable and then there's a human element to the quality of life. And so all of these can be translated into highly quantifiable numbers. You know, we can go GED Be on the high end to you know, longevity and quality life in the moment. And in between there's all these different economic development factors that cities like, and the companies can assign impact to their technologies being deployed?

Jim Frazer  

You're absolutely right herb I come from the transportation domain. And I and we often look at looking towards the future, about intersections many, many accidents happen at intersections, what intersection do you improve for safety? It's not just the frequency of that collision. But it's all of those other factors, response time to a fire and EMS who doesn't get served because someone is getting served at a fender bender at an intersection. What about the response time at the emergency room at the hospital, and you know, all those dependent scenarios that you know, in for one traffic accident, there's, there's an awful lot there. We also need to look at some of the technology induced unexpected consequences. Like I'm sure herb, you and I have both read studies about when the cost of autonomous vehicles dropped so low, you may have a scenario where your autonomous taxicab is circling the block and fleets of them are circling the block, creating their own traffic jam just waiting for a potential customer.

Herb Sih  

It's, it's until a technology can be affordable. I mean, again, I've got to hand it to Tesla, they not only have made Tesla, to me is really as much of an energy storage company, as it is a beautiful company. Because until the battery technology was both affordable, and also useful. You know, it's great to be able to drive a Tesla. But if you can only go twice around the block, and then you get a charger for 20 hours. I mean, it's never going to get adopted. But you're absolutely right, Jim, I think you've got to make a number of interconnected technologies useful, affordable, and obviously can have such significant consequences to where you know, back in the day when you can put your laptop in the overhead bin because the lithium ion battery was catching fire kind of a bad problem to have fear and fly. The technology has evolved to make them safer till So you're absolutely right,

Jim Frazer  

exactly. So let me ask you herb, so all is probably not rosy in the world of public private partnerships. What are some challenges or pitfalls or things to think about as you consider embarking down that PPP? Road?

Herb Sih  

Oh, no, that's a great, that's a really good question, Jim there, I want to go to one that's a little bit more macro global, and then I'm going to go that kind of more US based on local macro global. One of the challenges is a combination of speaking in a language where we can understand each other because we don't always have the same common language, there's a level of trust, the Trust has got a number of dimensions there's, there's frankly, there's waste, fraud and abuse, that happen all over the world. It's not just any one country, but the more differences of currencies or languages, or even systems creates inefficiencies that sometimes can be taken advantage of. But also, the challenge of working globally is that there's a lot of different challenges that we don't fully understand and all the dimensions, so it can lead to a lot of mistrust by the by the people too. So that's kind of on a global macro, some of the things that have got to really change here, I think are continuing to evolve, is you have to have a continued recognition or understanding that it's going to be useful for all parties there's mutual benefits real. And I'll give you an example. You know, I see, like many other companies, again, Pioneer partners, we're not we don't make software, we don't make hardware, we don't make anything. We sit in the middle. We help translate technology, products and services and technologies into applications and impact for cities. Conversely, we help the city is trying to understand that they have to be able to communicate their needs of the citizens and you know, their leadership, mission and vision and goals. So the companies to that sitting in the middle, you realize that you've really got to have a level of trust. And the level of trust is if the technology works, that's great. But marketing has a really good way of putting a spin on technology that's just not quite ready yet. And so the legacy of vaporware is one of those things that we really have to make sure that we're very intelligent, to be able to speak clearly, the technology and the capabilities, it's okay to have a roadmap to future releases, but if it's not quite there yet, you have to be very clear on that. And the roadmap has got to be reasonably accurate. You can't say it's coming in and it never comes. Another problem that we really see is that you've got organizations like cities that are issuing sometimes RFPs, or these other requests that that are really hard to respond to. And it's not that it's the heart is the problem. But that's the information that they need. That's great. But if they're going to issue these RFPs, they really need to respond in a way that it was a legitimate modified request for an opportunity for somebody to be able to win a bid. And so I'm not suggesting that all RFPs are not that way. But I will tell you that sometimes the city's issued them prematurely, they don't have a good understanding of what they're really asking for. And the amount of time it takes for these companies, whether you're big, and especially if you're small. It is an enormous amount of time. And I know that some of the best companies no longer respond to RFPs at scale, because the process in itself is arduous, or it's not always well designed to give the outcome that they're looking for, or maybe there's other challenges to begin with. So we've got to find a better way to be able to respond to the needs of the cities without having to go through these very long, arduous technologies. But really, everyone needs to be able to trust each other a little bit more. And we got to continue building this trust along with the public trust. On the way too, I think those are some of the biggest challenges, Jim Well,

Jim Frazer  

that's, that's a really concise and insightful perspective. You do need to meet in the middle and everyone needs to trust each other. But you know, there was someone who said, verify trust but verify. The, the suppliers themselves, well, you're right, the marketing folks are paid to over promise. And you know and create their marketing hype. And on the other end, those agencies and in those cities often can create RFPs, or have not even RFP and an RFI with perhaps no even funding behind it, just to perhaps look politically good, from a in a marketing outreach to their own stakeholder communities. So it really is quite a bit of a challenge there. You know, as let me ask this, as we've moved into more sophisticated and mature public private partnerships, have P threes, change the technologies themselves,

Herb Sih  

they really have, I can give you a couple of examples of how some of the things that we are, frankly, that we live with every day, really came through a couple of different p3 models, and was interesting as it you don't always realize how it's going to work until you just kind of get to the other end. So I'll give you an example. So you ever seen those, or maybe you have one gym those Roombas that are running around they're really helpful. So, the Roomba came out from a DARPA funded project, I mean, they had a robot called Shakey the robot back in the day and, and really, it was developed by a group called the Stanford Research Institute, or SRI International now, and really, that Roomba that is you know, sweeping up after your pet hair, or whatever it may be, really came from this public private partnership, that they were trying to figure out what to do with the technology, what it can be useful for. And that technology evolved into a number of things that we have today. You know, whether it's the Mars Rover, which we've seen some of the stunning pictures that came back, were the drones, or again, the room of Roomba, which is our domestic robot, it came out of a DARPA funded project way back in the day. And that was really an example of, okay, let's take what is an interesting technology, but not quite useful the original six foot tall computer on wheels, wasn't that useful, but we knew that we were onto something, if you get a little bit more practical into like the self-driving cars that we just talked about that also came out. Interesting story, DARPA issued a challenge back in the day. And the goal, I think, was to be able to create 142 mile course, to go drive across, and obviously the Mojave Desert, which is where the track was, it's a safe place, and I can run over anyone and it's also while flat, not always the most friendly. You know, the heat environment can be very, fairly hostile. Now, what was interesting was, this million-dollar prize that they offered, had a lot of entrance, and the first year that they did this, not a single car finished. It was pretty interesting. So I think the longest was seven miles that the car traveled, and everyone else diamond divide. Now what was interesting, this was an example of an iterative process, that it was a successful failure because the next year that can you know, and I think 2004 Or five, they up the prize money to 2 million, and then they had five cars complete the course. Now that technology process led directly to things like AI in hand in this video, we're on LiDAR, or ultrasonic sensors, ultrasonic sensors are on the phone that you and I carry. That's how we get the range detection to figure out a good crisp picture on an iPhone or an Android phone LIDAR really useful in a lot of areas Tesla, and Mobileye, which was a technology that was on the front ends side of he's one of the versions of the Tesla are we products, I mean, there's all types of stuff. And then the last thing, which is my favorite, Jim, I'm, I'm a little bit of a technology junkie at times, but I can't get away, I don't adopt technology, the first minute that it's out there, and I know it can be kind of buggy. But I'm a big fan of the voice assistant devices by Amazon or by Google. And again, DARPA came in, they issued an award actually went to Siri in the early 2000s. And it developed a thing called the cognitive assistant that learns and organizes which Siri then formed a startup with an answer called Siri in 2007, Apple acquired it in 2010. And that's now powering devices to include other competitor devices that we use today. So the role of technology, where it comes from is really interesting. That was an example of something that is now ubiquitous, and so many consumer applications. And again, it's interesting, the federal government, private sector companies, in some cases, agencies like NASA, some of the states I mean, gunshot detection came out of this. I mean, there's so many things that just come out from these partnerships. And if you really begin with the end in mind, saying, what are we trying to impact? What are we trying to achieve? Well, you don't always know until you get there. And so you've got to be open minded. And really, it's a consistent tuning into the needs of both the public and the art of the possible because as things become more possible, the demands that go there with it. So it's like constant exchange, triangulating our way to what should we be doing? What should be doing now?

Jim Frazer  

Exactly. Exactly. So, so are assuming, let's put ourselves in the in the shoes of a city manager, a public works director, or maybe even a citizen activist? What would be the most important key elements for a successful public private partnership?

Herb Sih  

Oh, gosh, to me, it's defining the problem and the challenges, which is a similar side of the coin, but not the exact, maybe side of the coin of what are you trying to achieve? Because, again, if you think about technology as a tool set, you've got to ask the folks, what do you try to get it done. And so the same technology, let's say from the city side, is trying to create more efficiency. You know, it's not that they're using technology to replace workers, especially the bit great resignation, or that we live in today. But they're trying to use technology, to create labor to do jobs, maybe that are tedious, or less desirable, or they can't find to be filled, because they've got open work orders. And so that reducing errors, improving efficiency, and lowering cost side, to the other side of the citizen, or other side of the coin to the person is, hey, I'd like to be able to, let's say, apply for a permit. And I don't want to drive across town, to be able to go stand in a line, fill out a form and then get sent a permit 10 days later to be able to have a picnic in a park shelter, or maybe a festival. And so beginning with the end in mind, for all the stakeholders involved. In this exact case you've got departments, you've got systems and technology, it also be very useful to understand what the challenges are to be able to get from point A to point B, because there's a lot of additional letters, and then alphabet. So understanding the problem, understanding what you're trying to achieve and getting the stakeholders involved on this, this design thinking oriented process to look at things is the key, I think that's the key to every good Smart City project for technology problems today. So

Jim Frazer  

So in shorthand that is finding your stakeholders, defining stakeholder communities, getting to extract out of them user needs and turning that into your project specification.

Herb Sih  

It absolutely bottoms up to represent the voice of the customer, the citizens top down to represent the mission, vision and goals of the city and get the folks in the middle to figure out how do we get from point A to B, point B to make sure that they understand how they can interact with that equation, to be able to deliver the results and get the benefit they need to absolutely,

Jim Frazer  

sure. And hopefully D deconstructing each of each of these needs so that there's a financial, compelling financial model behind him.

Herb Sih  

Absolutely. And I think understanding the value of talking about what you're trying to do you know the theory behind open innovation, instead of being the stealth project where you're trying to be clever or protective to try and guard the idea, and have the big aha moment to where you're trying to find that needle in the haystack, you've got to switch it around, you've got to become you broadcast ideas in the haystack finds you, you become the needle into where if you're trying to solve a problem, you really invite the community at large to comment on it, interact with it, you've got to build a local support local, isn't just you know, in the backyard that you live in, but the world community, academia, private sector company, other cities that have experienced similar challenges or things, I mean, being able to broadcast what you're doing to the world, and then listening is really key.

Jim Frazer  

That's a challenge. It's a challenge that that the stakeholders come in such a variety of a come with such a variety of perspectives, that it's, it's often a challenge, and it's difficult for any one person or with one perspective, to really understand where you're from, from which they see from the position of which they see. You know, we recently did a podcast with a company that instead of offering a 2d representation, a flat representation of street lighting, of the light folding on the road, the sidewalk, they recently come up with a with a 3d approach. And they take the lighting, output files for each fixture. And as a result in a 3d model, you can see the light falling on the front on the vertical front door of your home. Or you can see how the how the lighting levels change with changes in elevation, for example, that has proven to be very popular, because the two D, the two D, but just colored circles, really doesn't communicate much to some of those folks out there that might not be lighting engineers, for example. So it's interesting that you really do need to not only broadcast that out there but try to understand how those stakeholders can really consume that information.

Herb Sih  

Absolutely, it reminds me of a project that we did, oh gosh, probably in 2000, and maybe 18 or so. And it was interesting, because it is in a smaller community of about 100,000 Folks, and it was a lightning related project as part of the smart city master planning bigger plan. And really, they were trying to reduce crime, improve public safety relative to feeling safe in a parking structure. But like many of these other developments that are going up, there was mixed use it was retail office down residential up in a 234 story environment. And really, they needed that tunable lighting, that was not only dimmable, but you could also tune it so that white lighting would attend to your window at night and keep you up all night because circadian rhythms were messed up. But really, it's hard to see the impact of this, when you're just looking at a two dimensional diagram, being able to look at something interactive or three dimensional or look at you know, foot candles on the throw and how bright is going to be coming through and you know, I got to get shaved and not you know Venetian blinds, because it's going to otherwise come through. I mean, there's so many dimensions and I think even the additional technologies that can help people simulate the impact of the technology before they really take a substantial risk and other you know, certainly the cost or the time or even the public backlash or getting something wrong, because it could have avoided it. I think that's really important.

Jim Frazer  

Yeah, I mean, this this reminds me of a of a small city, in in the northeast, were less than 100,000 people and it was a small college campus two miles outside of town, and a satellite classroom or to downtown. The mayor wanted to put up kiosks to lead the kids, the students to the downtown and back and forth. But the key the cost of a kiosk is quite substantial. And when we really looked at all of the stakeholders, what actually came out of this well, better lighting, well LED lighting saved energy, enough energy to create some free Wi Fi high bandwidth internet for the students and downtown business district. As well as it also funded for two kiosks. So it really, really needs to look at this integration and of all these applications, but also be able to communicate to in this case the students that you'll have better Wi Fi, then you could do your homework outside or in this remote building. As well as offering the mayor what he wanted to so that he could drive the funding, which was a couple of kiosks that he could pose with in his campaign literature.

Herb Sih  

Right. Right. Now, is it? Yeah, I mean, even the kiosks have gone through such an evolution, Jim. You know, we used to somewhat joke that if, and again, and there's some truth to this it, sometimes you have to what I'll call it quicker wins for these public private partnerships to be successful, because the citizens will see planning meetings, and they'll hear a lot of buzz in the media, but then now they're looking for something that's visible, because some of the most important things that you're going to do are invisible putting up public Wi Fi it's not like you can see it going through the airwaves. I mean, people should know it, when they don't have it, they get frustrated, when you put it up. While they're thankful you don't get a lot of thank you cards in the mail. But it's invisible, you can't see it. Those kiosks are sometimes we kind of joke, they're like oversized iPads, that you take a six-and-a-half-foot kiosk, shovel the sidewalk, and all of a sudden, the citizens saying, oh, that's, that's smart city headline that I saw on this must be the result of it. But those kiosks really have evolved from just what I'll call a gimmicky Wi Fi hotspot, to much more interesting things beyond Wayfinding, the digital advertising model hasn't quite worked out, as people have thought. But really, especially in this era of added sensitization that cabinetry, that safe place to be able to pull power and have a secure location,

Jim Frazer  

know exactly what vehicle location, 5g equipment on the street on the roadside.

Herb Sih  

There are so many things that those kiosks can do. And we haven't even figured out half of them their future, that physical location is so important, it's everything. And there's so many different things that manufacturers are early-stage companies really should be thinking about, because the needs of the city and the people. I mean, there's all types of stuff, when you have a physical location that's close to the action that you can do.

Jim Frazer  

Exactly. Herb we're nearing the end of us of our hour. Let me ask somewhat of a a comprehensive question. So if I am that city manager how, what's a cookbook approach? You know, how do I create a successful public private partnership.

Herb Sih  

So if I were to give kind of a point, form narrative, real quick back first, understand what you're trying to achieve who are the stakeholders that are involved in, and usually its citizens residents, but also, some of the folks that city managers need to be thinking about whether they like it or not, as most cities are competing for people people provide that workforce that attracts employers, and that high quality life and the job that you want, comes from people. So you've got to build a very high quality, highly livable safe, secure city. So if you don't have a safe and secure and a high quality life, I mean, you're really on the back end, and by the way, your neighboring community, whether it's across you know, the city limit, or in another state, I've seen signs, billboards saying, Hey, move to x community, we get the $15,000 to move. So city managers really need to think, okay, what are we trying to affect? And a lot of times it's an economic development dimension, the next thing that we got to think about is okay, what's our time frame, to include everything from problems that are firsthand what funding they have available, the ability to be able to pair up funding you can float up municipal bond, if you can achieve cost savings, there's ESCO models to where you can get at a cost reduction that's being paid for by performance you can look at federal funding, maybe you can get a grant, maybe it's all for those things, if you've got emerging technology that can be useful. But the funding piece, you got to assess, what is the funding, but now it goes back to ROI. What is the impact that the city needs to be able to make this a valuable use of both their money and their time, and, frankly, the trust of the citizens? If you cannot define those, you can reach out to the additional stakeholders to start creating these partnerships forgot? Who is it? Why would they be interested? And are they available right now with a useful technology that can start implementing a holistic point of view, that's the last piece, you got to have a holistic view because all the technologies are interconnected. You can't look at things in silos. Nothing exists in a silo today. And if you don't understand the tendency of the technologies or how one thing can make another technology more valuable by complementary data or creative, then you know, you're really missing the boat. That's true. I mean, there are there are

Jim Frazer  

the economic, the social and environmental aspects to this. But ultimately, it's it is important to remember that public agencies tend to rely on one of three models to actually drive revenue and its sales tax, income tax or prop would be tax. So ultimately, at the end of the day, you're looking to amplify the sources from, from one or all of those.

Herb Sih  

That's absolutely true. I think the one that's recently emerging, and it hasn't emerged fully is the pandemic really forced an almost overnight virtualization of more city services than people really were intending to virtualize. Because you couldn't go to work, you couldn't provide the services and the citizens couldn't come in for the services to, but the city services had to continue. So that cost reduction factor is very real, and such as technology and jobs. It's a workflow, the cost of time. And so there's a number of ways you can finance things. And it's not always perfectly obvious from a pure basis. But there's a lot of work studies, technology impact you know, analysis that can be conducted by different groups that can really try and do some quantification of the impact of technologies.

Jim Frazer  

Great. Well, well, Herb, we've, we're nearing the end of our hour. Do you have any last comments for our audience today?

Herb Sih  

Well, the last, the last comment I'd have is public private partnerships are real. They're not going away, they're more useful than ever before, they're really a way to, I think, even speed up the innovation process that ultimately has a bigger impact on people. And I think more than ever, we've got all types of challenges that we really have got to address. So my hat's off for those that are on the frontlines of the public private partnerships in the innovation, the folks that are making it happen like your firm. But aside from that, I mean, we all are in this together, we've got to think collectively together, but we all can play a role if we just kind of speak the common language and realize that we can help each other in these partnerships.

Jim Frazer  

Oh, great. Well, thank thanks, Herb. Again, my guest today was herb see of. And Herb, let me ask you, if our listeners would like to reach out and contact you, what is your contact information? Sure, while you can go to pioneer partners website,

Herb Sih  

it's p3 pioneers.com. Again, we came out of the Think Big Partners era, which was our original kind of company, you can find plenty of our work product on that as well. You can always contact me by email as well, it's herb.sih@p3pioneers.com. And you can find us through different partners who we work with large technology companies, engineering firms, again, we're technology and vendor agnostic. We've got a lot of great people out there. And if anyone wants to contact us, we're happy to just point you in the right direction, have an intelligent conversation. Certainly we're happy to help people make an impact in their community to whether your city or technology company or whatever it is. We just brought all this together.

Jim Frazer  

Well heartfelt thank you very much for joining me today. And hopefully we'll have you on again with new developments in the world of smart city public private partnerships. And to everyone who's listening in today. Thank you very much for attending this podcast and we look forward to you listening in on future episodes as well. Thank you very much.

SUMMARY KEYWORDS

technology, public private partnerships, stakeholders, people, kiosks, cities, city, called, community, understand, partnership, herb, create, companies, project, challenges, impact, smart, interesting, models

SPEAKERS

Herb Sih, Jim Frazer, ARC Advisory Introduction