The Risks and Rewards of Data Sharing for Smart Cities

Study by Massimo Russo and Tian Feng: “…To develop innovative solutions to problems old and new, many cities are aggregating and sharing more and more data, establishing platforms to facilitate private-sector participation, and holding “hackathons” and other digital events to invite public help. But digital solutions carry their own complications. Technology-led innovation often depends on access to data from a wide variety of sources to derive correlations and insights. Questions regarding data ownership, amalgamation, compensation, and privacy can be flashing red lights.

Smart cities are on the leading edge of the trend toward greater data sharing. They are also complex generators and users of data. Companies, industries, governments, and others are following in their wake, sharing more data in order to foster innovation and address such macro-level challenges as public health and welfare and climate change. Smart cities thus provide a constructive laboratory for studying the challenges and benefits of data sharing.


BCG examined some 75 smart-city applications that use data from a variety of sources, including connected equipment (that is, the Internet of Things, or IoT). Nearly half the applications require data sourced from multiple industries or platforms. (See Exhibit 1.) For example, a parking reservation app assembles garage occupancy data, historical traffic data, current weather data, and information on upcoming public events to determine real-time parking costs. We also looked at a broader set of potential future applications and found that an additional 40% will likewise require cross-industry data aggregation.

Because today’s smart solutions are often sponsored by individual municipal departments, many IoT-enabled applications rely on limited, siloed data. But given the potential value of applications that require aggregation across sources, it’s no surprise that many cities are pursuing partnerships with tech providers to develop platforms and other initiatives that integrate data from multiple sources….(More)”.