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A new data economy: Funding city services

Given today’s financial and operational pressures, cities are looking for new ways to drive change and fund local services – and data is a largely untapped resource.


The dramatic effects on cities in Scotland, and around the world, of digital technologies are evident every day. Across any city’s infrastructure – its roads, transport systems, sewers, communications networks and energy grids – more and more citizen services are provided using digital technologies. All around us, there are growing numbers of sensors in public spaces and underground. As a result, an ever-increasing flow of data will be collected and stored by private companies and city departments across the globe.


For city services departments, this data is a highly valuable asset. It could be harnessed to:

  • help partners work more collaboratively to deliver smarter, more integrated services
  • achieve goals such as reducing congestion, improving air quality and enhancing safety
  • fund improvements to city services, with minimal up-front investment and risk.

So, how can this work in practice?


A multi-sided model


In any city, a plethora of companies and public bodies provide various services. Let’s take street lighting as an example: the city needs to supply and pay for its lighting; a value chain of partners provide services and infrastructure – from the power to the light-bulbs, to the maintenance and management.


With cameras, sensors and control systems all gathering huge volumes of data in the process, how could all that data be used by these partners to help improve the service? To take it further, the data itself is an asset that could become part of a new city financing model whereby the city and its partners can form mutually beneficial agreements by sharing and trading access to data.


Service providers – transport operators, waste collection, traffic management, road maintenance and so on – can grant access to the data they capture as part of their contract with the city, or they can pay for access to data in order to improve or lower the cost of their services. In this way, the data becomes a currency that’s exchanged and used in a new multi-sided market to finance city services and provide further benefits for citizens.


Smarter, more sustainable services


To make this new ‘data economy’ possible, cities need to start making changes at various levels. Today’s service contracts are unlikely to address the complexity of arrangements required for the legal and secure exchange of data in this way, and siloed organisational models limit collaboration between different providers and domains.


To make this new ‘data economy’ possible, cities need to start making changes at various levels.


For instance, waste collection contracts are focused on routes and weights of waste collected (with this information often buried in static reports). Data from sensors in bins is most likely used only to optimise the waste collection process. Yet if combined, it could provide intelligence on waste at the neighbourhood level to reduce truck mileage, cut the numbers of trucks, and improve traffic flow around the city. It could also be used more proactively to empower and incentivise citizens to reduce waste.


And there are many other examples; for instance, public transport. Providers are already connecting and sharing data to offer a smarter, more connected transport infrastructure on which citizens can make real-time choices about which service to use. If data was triangulated with other agencies, it could also be used to improve road safety, reduce pollution and reduce emergency response times. And cities can use and share data, via apps and connected devices, to help citizens make those better-informed choices and to target city services more effectively.


Cultural shifts


The key point here is that the city no longer buys point solutions: it facilitates an ecosystem of partners to use its connected infrastructure to make savings and enhance quality of life. It also generates business opportunities and invites start-ups, universities, knowledge centres and other innovators to create new solutions.


To fully realise and operate this kind of multi-sided model will also require a shift in culture and mindset.


New initiatives are already making inroads into ensuring that data is more accessible and shared securely. Yet to fully realise and operate this kind of multi-sided model will also require a shift in culture and mindset. Our future will be data-driven, and cities can pave the way for transformation to create secure and prosperous environments in which citizens, communities and businesses can thrive.


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