This blog explores how data is used and services are created through an information value chain that brings together stakeholders from across different sectors and verticals. This will help city government, transport operators and industry understand how they need to start thinking about data and operational technologies when commissioning new services—either infrastructure like control centers, or transport modes such as new bus contracts—to allow additional economic and social value to be created.
Defining The Information Value Chain
The information value chain describes how an actor or series of actors takes raw data and adds value through various processes to produce information products and services. The value chain starts from the implementation of operational technologies, through the processing of raw data and development of information services. This chain generates value not only from the end product, but at each stage and through each flow of information in the process. An understanding of the value chain helps to recognize the business models for the activities that make up a smart mobility solution, to see what gaps in provision there might be, and to understand how the various actors can work together.
Stages In The Information Value Chain
1. Data Sources
Data comes from the public and the private sector. The technologies to collect this data will include Intelligent Transport Systems (ITS), mapping systems, social media such as Twitter and Foursquare, and so on. Citizens may also choose to allow their location data to be crowd-sourced to provide alternative sources of passenger or traffic data. Alternatively, their data may be collected by other actors (e.g. telecoms or satnav system operators) and anonymised to preserve privacy. This data may be owned by city governments, by the transport operators or by private operators of sensors and data platforms.
2. Raw Data
The raw data generated by intelligent infrastructure provides a rich raw material resource, encompassing information about journey time, usage patterns, service availability and other transport system characteristics. Data generated through ITS and other investments in operational technologies are generally a by-product of the primary purpose of that investment—to operate and control transport assets. This raw data may be owned directly by the city, by their agencies, or by the commercial organization operating infrastructure on behalf of the city or directly for citizens. Therefore there will be different business models associated with the raw data.
3. Information Components
While raw data alone may have few direct applications on the ground, the information components derived from data analysis have substantial value in guiding urban planning, transport system design and service management both in real time and for the future.
Information components are generated through data processing, which may be completed by the infrastructure owner or by a third party. Where a third party is involved, economic value is created by the purchase and supply of a processing service. For example, Google has turned its proprietary Google Map API into one of the most widely used components of mobility information services. In turn, the information component itself generates value through its direct application in urban planning and service provision or through its transfer and use by another entity.
4. Information Services
Information services are the final product in the value chain, and have the greatest potential to generate value directly for individual travelers (citizens and businesses) and transport operators. Information services may be developed through the acquisition of private, purchased or freely available information components.
The value chain for information services connects actors who each play a part in generating value25 and who also benefit from different types of value creation. Each actor moves in and out of the value chain in a fluid way, taking different roles at different stages in the process.
• Travelers (citizens and businesses) contribute data through their use of city infrastructure, mobile technologies and information services. They also benefit from the use of these facilities by gaining improved access to city services, employment, friends and family.
• Regional, national and international organizations establish standardization of procedures, data generation and interaction, to assure best practices, interoperability and productisation, aimed to improve efficiency and reduce costs.
• City governments set policy and regulations around data collection and data sharing, invest in digital infrastructure, collect data from citizens and city activities, and use that data to inform urban planning, design and operation.
• Transport operators include public sector agencies and their suppliers, which specify, install and operate digital infrastructure, collect and analyze data, and use that data to inform service planning and delivery.
• Private businesses include those that own and operate digital assets on their own property and gather data from those assets, as well as organizations that create economic value from their activities in data processing, analytics and information service development, both international corporations and start-ups.
Each individual role is essential to the creation and multiplication of value. A key challenge in the delivery of smart systems comes in enabling actors to fulfill multiple roles effectively, and capturing the added value generated by each new contribution. Challenges also exist in bringing together the contributions of public and private sector actors on a common platform, which removes the disincentives and barriers to data sharing and enables the full wealth of data from across the city to be made available to all who can use it.
The development of information services relies on a sequence of actions, from the installation of intelligent infrastructure to the collection and processing of data and final development of information services. Value is created by and for different actors at each stage in the sequence, such that the overall value of an information service exceeds the total sum of its constituent pieces. Value can be described in terms of the economic and financial benefits accruing to stakeholders throughout the value chain, as well as the efficiency, user experience and environmental benefits that can also be realized.
Value chains will emerge messily or explicitly depending on the available raw data and information components. Cities may not always be able to predict the services that are possible or that will be delivered. Identifying where to intervene will require expertise in navigating this new technology space, but equally in managing relationships with third parties such as citizens, app developers and the private sector, with an interest or control over any part of the chain.