Why it's time to get in the data business (it's worth trillions)

Thu, 2016-07-14 10:42 -- Kevin Ebi

You likely already understand the potential of data to transform your city. But a new report from Council Advisor TM Forum suggests another good reason to invest in data: It can give your economy a huge boost. In fact, just some of the data collected by the world’s cities could be worth $7 trillion.

We’ve long believed in the economic power of data. Las Cruses, NM, uses data to give its businesses a competitive advantage. Quebec uses its data to help businesses and job seekers find each other. Palm Springs, CA, used data to make its downtown more attractive to out-of-towners, the people who did most of the shopping there.

But if money is holding your city back from doing projects like these, the TM Forum report suggests some may be willing to pay you to unlock your data. We share a few findings and tips below, but don’t forget the big one: Don’t do anything that jeopardizes the public’s trust! Your citizens are watching. — Kevin Ebi

How much is the data worth?
There is tremendous interest in several categories of data: education; transportation; consumer products; electricity; oil and gas; healthcare; and consumer finance.

And just those seven categories could unlock $5 trillion a year in new economic value, either through open data or private partnerships, according to a report by McKinsey. Entrepreneurs are already taking advantage of it.

Will anyone pay you for it?
TM Forum finds reasons to be optimistic, but so far the revenue has been small. The English town of Milton Keynes is already building systems that will allow it to charge for data, but there are a lot of unknowns.

The report finds while the potential is there, until it starts charging, there’s no way to know what the data is worth. And it also doesn’t want to hamper progress by waiting to release data until the systems are in place.

Still, even if nobody pays you directly for the data, the overall economic benefit can be worth it.

What about privacy?
Whatever you do, don’t risk losing the public’s trust. TM Forum finds that people are increasingly aware that their data has value and they don’t want it to be misused.

Case in point: England planned to make some patient records available in a database for researchers. It was for a good cause; the researchers would be using the data to improve health care. There was a huge uproar, however, and the project was scrapped.

Get the Smart Cities Open Data Guide…
Open data is about transparency, about giving citizens access to the data their tax dollars help create and it’s about innovation — enabling software developers to transform that data into useful applications that make city services available anytime, anywhere. The Council's Smart Cities Open Data Guide captures lessons learned and best practices from open data pioneers to provide others with a starting point to chart their own initiatives.