SMART BUILDINGS & CITIES BUSINESS MODEL INNOVATION

The project’s objective was to research business model innovation for smart buildings, specifically exploring value propositions for user-centricity and sustainability. The research involved the investigation of business model innovation appropriate for providing smart or IoT-based (“Internet of Things” – the interconnected network of physical and digital) indoor climate experiences; responding to the user experience; and cooperating with other organizations in the building industry ecosystem. Smart technology has disrupted business models by shifting the market towards businesses that can demonstrate their value in the form of services, while increasing customers’ demand for customization and instantaneous response.

As cofounder of the Active House Alliance, the VELUX Group has experienced a cross-organizational furthering of its mission to make better living environments through fresh air and daylight; but it has not been clear how VELUX could utilize its competencies to shape the smartbuilding business of the future. This project involved developing better understandings of how VELUX could innovate business models tolink user experience to building response, while also coordinating with other building and tech organizations on the whole building level. The objective was connected to a larger imperative to facilitate Danish building organizations in need of digital transformation.

The research was used to build four business cases based on a 40-month organizational ethnography at VELUX, interviews with building users and stakeholders, and participation in industry-relevant events and conferences. These consist of:

• A pilot case to investigate the user experience of the indoors of the sustainably designed and smartly monitored Green Solution House on Bornholm;  
• A second case focused on the partnerships that enabled the affordable renovation project RenovActive in Brussels, Belgium;
• A third case examining the former development of the Quayside smart city project and the emergent smart homes and Proptech (property technologies) sectors in Toronto, Canada;
• A fourth case and establishment of a living lab for smart technology-facilitated indoor health at Kokkedal Skole, a Danish public school in Fredensborg Kommune and leading site of the kommune’s Fremtidens Folkeskoler (The Future’s Public School’s) program.

Success criteria were achieved over the course of the project, and were as follows: (1) development, testing, and user profiling for real-time indoor comfort service, including launching of a living lab; (2) characterization of smart building business model innovation processes; (3) publication in at least three international, peer-reviewed academic journals; (4) a report in collaboration with another organization; and (5) dissemination at both building industry and organizational conferences. The main findings are presented in culminative project report on smart business model innovation. 

READ THE REPORT HERE

• Smart building value propositions depend upon technological interoperability and organizational partnership alike. Financially viable smart building will thus entail open innovation and joint business models across the business ecosystem – both between building and tech organizations and between established and startup companies.
• Smart building data fails to capture many of the social phenomenon critical for providing quality service in use models (e.g. reflecting data on cold temperatures but failing to capture the user was too warm and wanted fresh air; or reflecting data on high CO2 but failing to capture the user was concerned about privacy and security). Post-occupancy studies will continue to play an important role in ensuring performance until social training is prioritized in machine learning and smart building responsiveness.
• Whereas sustainability and circularity are increasingly considered in building design and construction, the biggest challenge in the industry is to consider these factors during building operations, that is, during the use phase. While smart technologies can support the verification of building performance, user interaction and the provision of user interfaces will be critical to influencing sustainable behavior and lifestyles in the built environment.