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By Ian Oppermann, Chief Data Scientist, NSW Department of Finance, Services and Innovation
A Truly Digital Economy
The irresistible digitization of our lives coupled with innovative application of analytics have led to astonishing changes in the way we understand the world, the services we create and the level of intimacy companies have with customers.
The rapid rise of data analytics has meant that large and small players alike can generate value from the data streaming from our increasingly connected, online world. Companies create value by asking questions that were once out of reach, or by customizing to the level of the individual by analyzing search, purchase, shipment, use, and feedback of digital products and services.
“Many of today’s innovators are aggressively targeting areas of high frustration for customers and high profitability for incumbents, eroding some of their most valuable products”
A growing number of start-ups are also challenging long standing incumbents by exposing and attacking information asymmetries endemic in traditional business models. Many of today’s innovators are aggressively targeting areas of high frustration for customers and high profitability for incumbents, eroding some of their most valuable products. Sectors from entertainment to financial services have seen dramatic change with waves of technology driven innovation coming from new entrants challenging for a share of the market. Industries that struggle to innovate are being disrupted by new, more nimble competitors.
What is true in industry is also true for government. The advent of ridesharing and home sharing business models underpinned by digital innovation has precipitated changes in regulation in multiple jurisdictions. Points of high frustration for citizens or systems which are not yet digital are in focus for reform at both state and commonwealth level. The goal of many governments is to create a “citizen centric” perspective with a single point of entry to government, and a single view of the experience of dealing with government.
Underpinning this transformation to a smarter, truly digital economy is the ability to share data beyond the boundaries of an organization, company, or government agency. Future smart services for homes, factories, cities, and governments rely on sharing of data between individuals, organizations, and governments. The ability to create locally optimized, individually personalized services depends on sharing of ever more personal information in the form of preferences, context, and usage patterns.
Beyond the technical challenges, data sharing comes with a range of legal obligations, privacy considerations, data security requirements, and concerns about unintended consequences of data sharing. These factors are highly dependent on the question of whether personal information is present in sets of data sets.
Aggregation of individual data is often used as a means of reducing the personal information factor in a data set. Part of data sharing challenge is that there is no way to unambiguously determine if there is personal information in aggregated data. Consequently, different levels of aggregation are used by different organizations depending on a perceived value of risk associated with the data to be shared. The implications of this can be profound when thinking of the use cases which come in and out of scope depending on the level of aggregation used.
The practical reality is that data sharing does not occur in a vacuum. In almost any imaginable environment, aggregated data can be linked with data from other sources and so decomposed to a more personal level. The ability to increase the level of personally information factor is limited only by the ability to link extraneous data to the sets which have been shared.
There is also the human context to be considered. Each of us knows something of the world, of relationships, of individuals and of history. The level of personal information within shared data can be increased by the individual context of the person receiving it. The complexity of human environments makes the evaluation of the existence of personal information so challenging to assess.
Reframing the Challenge - Thinking of Bits Not Atoms
A fundamental shift in mindset is required when we think about the pervasive role, use and value of data in the digital economy and in a digitally enabled society. Often discussions on the digital economy are framed as is if digital products and services are simply the digital manifestation of physical goods, or of traditional services, which are exchanged bilaterally and effectively monopolized or extinguished on consumption.
Questions such as “who owns the data?” and “can I have access to all of my data?” are challenging to address as data does not exhibit the characteristics of a traditional asset (including software), of a traditional factor of production (land, labor or capital), or even of intellectual property. The ability to effortlessly use, replicate, and share data means it cannot be considered in the same way as a physical asset with an “owner”. Rather, it is important to think of rights, roles, responsibilities and limitations for those who access data in the various processes from collection, use, sharing, and storage.
It is also useful to focus on the services derived from data rather than the data itself. Reframing thinking in this way means the focus can be shifted to the impact from the use of data. Service creation, delivery, and even consumption can then be described in terms of rights, responsibilities, restrictions, and obligations. The simplest of services may just be making data available.
What is at Stake?
As the digital economy increasingly becomes a single global marketplace, productivity in the digital services sector has become the new benchmark for international performance. Productivity growth in the digital economy means taking advantage of advances in technology, as well as increasing use of data available from government, industry, and citizens.
The challenge to address head on is to identify, adapt or develop frameworks for data sharing: identify best practice where it is known to exist; consider existing models in an Australian context, or identify “whitespace” opportunities to develop frameworks for Australia.
The prize is the opportunity to create benefit for Australian Industry, increased efficiency of government, greater decision making transparency for the citizens of Australia, while still protecting the rights and the sensitive, personal information associated with each of us as individuals.
Headquartered in Sydney, Australia, Dept. of Finance, Services and Innovation is a part of the Govt. of New South Wales that functions as a service provider to support sustainable government finances, government procurement, information and communications technology, corporate service etc.