Funding city services through the new Economy of Data
In the age of political devolution, cities will be empowered to find new ways to fund local services – and data is a largely untapped resource.
In today’s hyper-connected world, city services are on a journey of transformation. As more and more public services are delivered online, there is an ever-increasing flow of data across multiple digital channels.
In my last blog “The city and the connected citizen”, I explored how cities can become data-driven, using data to help citizens make informed choices, to improve city life, and to target city services more effectively. Yet while data can be used in all those ways, it’s also an asset in its own right. In fact, in the face of austerity, cities can treat data as a ‘currency’ to fund improvements to city services with minimal up-front investment and risk. So how can this work in practice?
Within the ecosystem of partners delivering services in a city, some are contracted city services providers and others are commercial service providers. In a digitally connected world, these partners can form mutually-beneficial multi-sided relationships and agreements using data.
This multi-sided model is based on connections not just between providers, but also between the citizen and the city, so that:
- Citizens can choose and pay for commercial services that are offered to them based on their profile and the data that is shared about them
- Providers of commercial services pay for having access and using that data
- Contracted city services partners provide and use data as part of the contracted services, lowering their costs and the cost to the city, for the benefit of the city, the citizen and the providers.
Data as a currency
To operate this multi-sided model, data needs to be made available and shared securely through contracts, through apps and smart devices, and through services that are delivered based on shared data.
The city can open up access to the data it holds where and when needed, with individual data only shared with active consent from the relevant person. Citizens who sign up for services from the city or contracted service providers can share their data (based on profiles) to enhance the quality or personalization of services. Service providers can pay for accessing the data. Contracted service providers to the city can grant access to data captured while delivering services (traffic management, collecting waste, public transport and so on). In this way, data becomes a currency that is exchanged and used to finance city services and deliver value to citizens and providers. Payment for the systems to support this Economy of Data can be through added value or hard currency. Read more on Data as the new currency here.
Changing processes and mindsets
To make the new Economy of Data possible, cities need to start making changes at various levels. Today’s service contracts, for instance, are unlikely to contain a paragraph on data. Take waste collection as an example. Waste collection contracts are focused on routes per day and the weight of waste collected, with this data provided in regular reports. Whereas the data from sensors in bins is used only to optimize the waste collection process and is not shared. Repurposing the data on the completion level of bins could provide new services to citizens or support more severe enforcement on littering.
These kinds of changes require a shift in mindset as well as in processes and systems. By achieving this shift, cities can pave the way for innovative new business models and collaborations to create sustainable, secure and prosperous environments in which communities and businesses can thrive.
You can read more about our vision for the Data-Driven City and how to harness data for the benefit of everyone in cities in our new opinion paper, MyCity: a Data-Driven City.