Welcome! This week I will be discussing the lifeblood of a smart city, the data marketplace, and how to successfully create it.
Smart cities add value to many different stakeholders and for that reason, involve a wide variety of challenges. They could make it easier and more intuitive to get around, reduce the burden of long bureaucratic processes, decrease crime rates and even help combat climate change.
Personally, the most fascinating part of a smart city to me is its responsiveness and flexibility. The idea of a city as a true sentient being. For me, it would feel like being a small part of a living organism that maintains homeostasis by gathering data and adjusting accordingly. Constantly sensing, changing, improving, learning, evolving.
Two key things that enable this evolution, this constant hum of change, are data sharing and technology. New technology will provide better sensors to gather data, improved analytics, efficient and secure data storage and finally, an intuitive and value-added way to implement changes. This mining and exchange of valuable information will inevitably lead to the creation of a data-based economy or a data marketplace.
So, what is this “data marketplace”? What does it look like?
Think of data as labor. It takes residents of a city some effort and time to produce data. Depending on the valuable applications of this data and how much demand there is for it, a natural exchange of goods/value is established between data producers and institutions that can extract value from it (businesses, governments, etc.) The following is a quick and very simplified example:
Data marketplaces are the environment or ecosystem in which data is safely monetized and exchanged. McKinsey explains how the data marketplace works and adds value quite accurately and succinctly,
Digital marketplaces are platforms that connect providers and consumers of data sets and data streams, ensuring high quality, consistency, and security. The data suppliers authorize the marketplace to license their information on their behalf following defined terms and conditions. Consumers can play a dual role by providing data back to the marketplace.
Much like the economy we currently participate in, the fairness and legality of these value exchanges will eventually be overseen by governmental agencies. There are laws that protect you and me from unsafe work conditions, unfair compensation for our work and discrimination. The enforcement of these basic rights, the formation of data worker unions, and other facets of the data economy are very eloquently explored in (honestly, one of my favorite articles ever written) by The Economist here.
How do we optimize the data marketplace?
There are several start-ups attempting to build data marketplaces like Datacoup. This current period of ferment, in which many small players are entering the market will be a very productive one. This process will decide the dominant design and players that support the smart cities of the future. What are some ways in which these organizations can successfully establish this data place? McKinsey, once again, has some insightful thoughts on the matter.
Chan, B. (2018, August 03). The Smart City Ecosystem Framework – A Model for Planning Smart Cities. Retrieved September 26, 2018, from https://www.iotforall.com/smart-city-ecosystem-framework-model-for-planning-smart-cities/
Data is giving rise to a new economy. (2017, May 06). Retrieved September 26, 2018, from https://www.economist.com/briefing/2017/05/06/data-is-giving-rise-to-a-new-economy
Deichmann, J., Heineke, K., Reinbacher, T., & Wee, D. (2016, October). Creating a successful Internet of Things data marketplace. Retrieved September 26, 2018, from https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/creating-a-successful-internet-of-things-data-marketplace
Image credit: Sidewalk Labs website