Terabytes of treasure – cities unlocking new opportunities for services and SMEs

Subnational governments are sitting on a treasure trove of data. From waste and transport to local taxes, huge quantities of data are produced daily.

This data is often garbled, disconnected, hard to analyse, or personal and sensitive. But it can also be incredibly powerful – helping city administrations make services more targeted and effective, save time, reduce costs, and provide insight into the causes of, and solutions to, costly social problems. Take for example, East Sussex County Council in the UK who used collision data collected over a decade to reduce dangerous road accidents.

Over the past decade, we have seen a surge in cities’ interest and efforts to leverage innovation and data use. It appears to be having an impact. A recent OECD survey of 147 cities covering the US, Europe, South America, Asia, Africa and Oceania suggests that residents in cities with higher levels of innovation and data use are happier and more satisfied with key services.

Opening the treasure chest

As well as using data to improve their own services, local governments can open it up to create economic opportunities for others. Increasingly, start-ups and SMEs are creating new services for their consumers built with open data made available by city governments.

Take the case of BikeCitizens, a German-Austrian start-up, which is now operating in over 430 cities worldwide. BikeCitizens offers cyclists the best cycle routes, based on open data on bike-sharing service locations in cities, and open weather data. The benefits go both ways: BikeCitizens provides aggregated data collected from its users back to cities to help local authorities understand cycling in the city and explore ways to improve urban design for cyclists, contributing to the broader smart mobility and well-being agenda in cities.

The data dividend grows when firms can combine data from multiple sources – public and private, open and shared. Today, we are seeing many promising examples of this. For instance, the city of Amsterdam offers an open data portal with over 300 databases that can be used for both commercial and non-commercial purposes.

A similar approach has been taken by many other cities around the globe, leading for example to the creation of urban Data Analytics (uDA). This is a Madrid-based start-up which helps local residents make informed decisions around buying, renting, selling, investing or refinancing properties by combining open and shared data on a variety of issues, such as education and job offers, housing density, parks and gardens, noise levels, private transport network, and parking areas.

Unpicking the lock

Despite these encouraging signals on the potential for effectively using city-generated open data, there are still many barriers. First, countries currently do not seem to place a sufficient focus on enabling SME access to external data. Recent OECD work on turning data into business as a means of helping SMEs scale up suggests that most countries are still at an early stage in developing data governance (i.e. access, use and protection) systems.

While there are some emerging efforts to enable SMEs’ access to data and leverage its potential benefits, public action often stumbles over complex range of questions related to interoperability, transfer and data privacy/ protection. But too few cities have developed partnerships with the private sector to help navigate these.

To move in the right direction, city administrations first need to develop a data strategy backed by political leadership and staff with the right skills. For example, the Mayor of the District of Columbia (DC) in the US established the Lab@DC, a scientific team working in collaboration with various District agencies, to leverage data and scientific methods to test, evaluate and improve public policies.

Cities must also invest in identifying relevant opportunities to harness the win-win potential of partnerships with the private sector. A good example is the Smart Lamppost Asset Marketplace in the Netherlands, which provides insights to both cities and businesses on the functioning and use of smart lampposts, IoT-based multifunctional devices that combine sensors, cameras, electrical vehicle (EV) charging and more.

This partnership gives cities control over IoT solutions in public spaces, while providing local businesses, including start-ups and SMEs, with opportunities to use the data to develop innovative solutions to support more liveable, sustainable and inclusive urban spaces, e.g. by improving energy-efficiency in city lighting.

Potential gains from better data policies

Urban policy makers must tread cautiously. They must balance the desire to unlock opportunities with the need to respect data privacy and security. This is all especially important given that local governments and SMEs were among the ones hit the hardest by cyber-attacks during the COVID-19 pandemic.

Yet breaking down the silos and improving the accessibility of data to firms of all sizes is crucial to delivering on the promise of open data. Open Data Days are a chance to the highlight the huge opportunities that can be realised through a better use of this data.

It can create a virtuous circle of improved public services for citizens and businesses, more economic opportunities for entrepreneurs and SMEs, as well as the potential to deliver on broader sustainability and societal goals.

Read more

Read more on the OECD work on Smart cities and Digital for MEs.

Policy Analyst at | Website | + posts

Lora Pissareva is a Policy Analyst working at the SME and Entrepreneurship Performance, Policies and Mainstreaming unit at the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE). She coordinates analytical work on the scaling up of SMEs and start-ups, with a focus on building an inventory of policies in support of scalers across multiple dimensions, including SME data governance, access to scale up finance, networks and internationalisation, and innovation. In 2014-15, she successfully completed the Mercator Fellowship on International Affairs, which included placements with the International Crisis Group in Lebanon and the German Development Agency (GIZ) in Afghanistan. Prior to the fellowship, she gained work experience as a management consultant at Roland Berger Strategy Consultants in Germany and Iraq, focusing on business environment reform and private sector development. She holds a double diploma in Public Administration and European Studies at the University of Münster and Twente (Netherlands) and a Master’s degree in International Affairs from Sciences Po Paris.

Counsellor at | Website | + posts

Laurence TODD is Counsellor at the OECD Centre for Entrepreneurship, SMEs, Regions and Cities. Prior to joining the OECD, Laurence worked in the UK Civil Service in the Ministry of Defence, Her Majesty’s Treasury and for three years in the Office of Prime Minister David Cameron as a policy advisor and private secretary. Laurence also spent three years in Malaysia as Research Director at an independent think tank. Laurence graduated in Philosophy at the University of Bristol and holds a Masters in Public Policy from Sciences Po.