FOS­TER­ING AN IN­NO­VA­TION ECOSYS­TEM AROUND OPEN DATA Back­ground and Con­text

Round­table:

Arabnet - The Quarterly - - Technology -

As part of Dubai’s vi­sion to be­come the hap­pi­est and smartest city in the world, the Dubai Gov­ern­ment – through the work of Smart Dubai Of­fice and Dubai Data Es­tab­lish­ment - has for­mu­lated the “Dubai Data Law, which al­lows shar­ing of data among gov­ern­ment en­ti­ties and other stake­hold­ers to serve as the foun­da­tion for turn­ing Dubai into a Smart City.” Open Data has the po­ten­tial to di­rectly in­crease GDP by 1-4% ac­cord­ing to stud­ies by ODI, Mckin­sey & the EU Com­mi­sion de­pend­ing on ex­tent and ap­pli­ca­tion. How­ever, open­ing data to the public is not suf­fi­cient to foster an in­no­va­tive ecosys­tem; strate­gies need to be put in place to stim­u­late and at­tract in­no­va­tors to build upon it. In col­lab­o­ra­tion with the Smart Dubai Of­fice and nexgen, Arab­net hosted a round­table of lead­ers from the gov­ern­ment, pri­vate sec­tor and in­no­va­tion ecosys­tem to share insights and gen­er­ate col­lab­o­ra­tive strate­gies for fos­ter­ing an in­no­va­tion ecosys­tem around open data in Dubai. The find­ings of this round­able are high­lighted here. gov­ern­ment en­ti­ties share their data with one another; there is a regime dic­tat­ing how data should be shared thereby ad­dress­ing se­cu­rity and other is­sues re­lated to open data. Open data suc­cess fac­tors in­clude: 1. Data qual­ity and con­sis­tency 2. Data col­lec­tion process and ease of

ac­ces­si­bil­ity 3. Trusted ma­chin­ery: a proper plat­form/ model to pro­vide and man­age or­ga­nized data The Law ad­dresses both the public and pri­vate sec­tors, and en­sures the ex­change of in­for­ma­tion be­tween all data

providers in­clud­ing the gov­ern­ment. The Smart Dubai Of­fice is cur­rently in the process of de­vel­op­ing the Smart Dubai Plat­form for or­ches­trat­ing data and mak­ing it avail­able openly through IOT (In­ter­net of Things) lay­ers, sen­sors and the in­fra­struc­ture it­self. ar­ray of sec­tors - a large share com­ing from health­care and con­sumer ser­vices (trans­porta­tion, ed­u­ca­tion…) - where com­pa­nies are pri­mar­ily sit­ting on in­for­ma­tion as­sets, not treat­ing them as as­sets, nor man­ag­ing the as­sets. In UK, 40% of com­pa­nies that are us­ing gov­ern­ment data are over 10 years old, and al­most half of them (46%) are not in the IT sec­tor. Other ma­jor sec­tors in­clude Food & Bev­er­age, ag­gre­gat­ing restau­rant and su­per­mar­ket data. Open data growth is also promis­ing in Europe; an open data in­cu­ba­tor called Odine has made 5 mil­lion Euros avail­able to star­tups. Odine has al­ready funded its first round of 7 star­tups in difffff­fer­ent sec­tors, one of them re­ceiv­ing about 650,000 Euros.

Another ex­am­ple is Spain, which has built a thriv­ing In­fo­me­di­ary sec­tor, where com­pa­nies gather and or­ga­nize large amounts of data and act as an in­ter­me­di­ary be­tween those who want and those who sup­ply the in­for­ma­tion. Com­pa­nies in this sec­tor have ac­cess to gov­ern­ment-pro­vided open data and are al­ready lever­ag­ing in­for­ma­tion to pro­vide ad­vanced ser­vices. Re­search con­ducted last year sug­gests that Spain has over 600 com­pa­nies in the in­fo­me­di­ary sec­tor - typ­i­cally star­tups but not all - em­ploy­ing over 15,000 peo­ple with ac­crued in­vest­ments of 1.5 to 2.0 bil­lion Euros. These com­pa­nies fall into many cat­e­gories in­clud­ing cul­ture, direc­tory ser­vices, mar­ket re­search and fi­nan­cial data among oth­ers. While 80% of these com­pa­nies work in sev­eral sec­tors, a vast 50% work in mar­ket re­search, mak­ing it the largest seg­ment. lo­ca­tions on their mo­bile phones has be­come in­creas­ingly lim­ited to pro­tect con­sumer pri­vacy.

In some other re­gions, the gov­ern­ment plays a big role in giv­ing ac­cess to data man­age­ment plat­forms (DMPS) to con­sumers. House­hold in­for­ma­tion, along­side other data, is given to DMPS to uti­lize the seg­mented data, al­low­ing ad­ver­tis­ers to ben­e­fit from user in­for­ma­tion to do bet­ter tar­get­ing. The main chal­lenge is to dis­tin­guish the PII from the non-pii data, thereby al­low­ing for the dis­tri­bu­tion of use­ful in­for­ma­tion and en­sur­ing the safety of pri­vate in­for­ma­tion.

On the other hand, users them­selves have been in­creas­ingly shar­ing sen­si­tive in­for­ma­tion through GPS, google maps and other ap­pli­ca­tions. What re­ally makes such ap­pli­ca­tions work is the data that the user is ac­tu­ally gen­er­at­ing him­self through fin­ger­prints, sign-ins and so on. The chal­lenge is how to get ac­cess to the user gen­er­ated data ag­gre­gated on the user’s mo­bile phone, and the ca­pac­ity of the net­works to hold and process the bulk of data, while mak­ing sure sen­si­tive in­for­ma­tion is not shared pub­licly.

• open data suc­cess. One risk to look out for is over­lap be­tween gov­ern­ment and pri­vate sec­tor in the pro­vi­sion of ser­vices – and the gov­ern­ment should be care­ful not to cross the line from serv­ing as a plat­form to be­com­ing a com­peti­tor for the pri­vate sec­tor. To foster an ecosys­tem, the gov­ern­ment and the pri­vate sec­tor should align their efffff­forts to foster growth and thus en­cour­age en­trepreneurs and star­tups to be brave and sup­port in es­tab­lish­ing the city as a re­gional hub.

Ac­cord­ing to some Dubai gov­ern­ment of­fi­cials, in some cases data shar­ing should be man­dated such as in the health­care sec­tor. Based on UK’S 16 years of ex­pe­ri­ence in open data (shared by one round­table par­tic­i­pant), one of the main suc­cess fac­tors for open data in the Mid­dle East is the efffff­fec­tive­ness of feed­back and col­lab­o­ra­tioncol­lab­o­ra­tion- be­tween data users, their com­mu­nity and the gov­ern­ment - and the gov­ern­ment’s abil­ity to re­spond to that feed­back. The gov­ern­ment needs to un­der­stand what kind of data the public want, in ad­di­tion to learn­ing about the data be­ing gen­er­ated by the pri­vate sec­tor. More­over, the gov­ern­ment should give way to the pri­vate sec­tor to ad­dress and pro­vide so­lu­tions to is­sues such as trans­porta­tion.

Beyond align­ment with the pri­vate sec­tor, efffff­fec­tive com­mu­ni­ca­tion be­tween Dubai’s gov­ern­ment and the public is crit­i­cal to fur­ther un­der­stand con­sumer needs when it comes to open data ac­cess and smart city ser­vices. In Spain and UK, the gen­uine or­ganic re­la­tion­ship be­tween the gov­ern­ment and public en­ti­ties has al­lowed for the re­cent boom in open data com­pa­nies.

Cor­po­rate in­vest­ment has been steadily gain­ing trac­tion in the MENA re­gion, with more than a dozen com­pa­nies in­vest­ing strate­gi­cally in new ven­tures in the past few years. While cor­po­rate in­vestors are the lat­est to en­ter the MENA in­vest­ment scene, their num­ber has grown steadily since 2012, and to­day com­pa­nies across sec­tors – from tele­com to re­tail to phar­ma­ceu­ti­cals – are launch­ing in­vest­ment ini­tia­tives and ac­tiv­i­ties. More than half (56%) of the re­gion’s cor­po­rate in­vestors are Gcc-based com­pa­nies, ac­cord­ing to ‘ The State of Digital In­vest­ments in MENA’ re­port, and UAE con­tin­ues to top the list, with 31% of cor­po­rate in­vestors, fol­lowed by Saudi Ara­bia with 25%. In a re­gion where a grow­ing num­ber of en­trepreneurs are start­ing to dis­rupt tra­di­tional mar­kets with their in­no­va­tive ideas, ac­cess to fund­ing from cor­po­rate VCS and ac­cel­er­a­tors is play­ing a crit­i­cal de­ter­mi­nant in the shap­ing of the ecosys­tem, fos­ter­ing in­no­va­tion and star­tups’ growth.

route that in­creases the vis­i­bil­ity of the re­gion as an in­no­va­tion hub while at the same time pro­vid­ing new tech­nolo­gies with a place to grow and pros­per.

By fund­ing dis­rup­tive in­no­va­tions ac­com­plished by star­tups, cor­po­ra­tions can lever­age the in­no­va­tion by in­vest­ing in the star­tups or even ac­quir­ing them. For Lana Ghanem, Man­ag­ing Di­rec­tor of Hikma Ven­tures (the cor­po­rate ven­ture cap­i­tal arm of Hikma Phar­ma­ceu­ti­cals), in­vest­ing in in­no­va­tion was the main rea­son be­hind set­ting up their CVC: ‘in­vest­ing in digital health is be­com­ing more of a ne­ces­sity than a nice to have, it’s a way for us to difffff­fer­en­ti­ate our­selves as a global player, it’s a way for us to be at the fore­front of emerg­ing tech­nolo­gies in the space and…in the phar­ma­ceu­ti­cal in­dus­try’.

Iden­ti­fy­ing the right startup busi­ness to part­ner with, ac­cel­er­ate or build can be a tricky choice to make for many cor­po­rates. For CVC’S, it’s about find­ing the most com­pelling and prof­itable op­por­tu­ni­ties based on sev­eral difffff­fer­ent cri­te­ria. ‘ We’re look­ing to in­vest in com­pa­nies or star­tups whereby we can ex­pe­dite their growth, so we’re look­ing to be the pi­o­neers in bring­ing in emerg­ing tech­nolo­gies in the West to our part of the world, and to tak­ing tech­nolo­gies and com­pa­nies that are in this part of the world glob­ally’, said Ghanem, who also cred­its in­ter­nal re­sources and ex­per­tise for the ease of eval­u­at­ing op­por­tu­ni­ties.

As for CVCS for in­ter­nal start-ups, con­ceiv­ing and de­vel­op­ing busi­nesses and know­ing where to drive in­no­va­tion is an en­tirely difffff­fer­ent ball­game. ‘It’s very dif­fi­cult to have an idea, go through that ges­ta­tion pe­riod which can be up to 2-3 years, and turn it into an op­er­at­ing busi­ness,’ ad­mit­ted Samer Chou­cair, Vice Pres­i­dent of Cres­cent En­ter­prise Ven­tures, an in­cu­ba­tor for in­ter­nal star­tups. Nev­er­the­less, hav­ing a theme or vi­sion to fol­low sim­pli­fies the process. For ex­am­ple, in the case of CE Ven­tures, busi­nesses de­vel­oped must be so­cially con­scious, en­vi­ron­men­tally friendly, and fi­nan­cially sus­tain­able. Once those cri­te­ria have been met, the rest of the process is fairly stan­dard, al­beit still chal­leng­ing. ‘ The ideas are con­ceived in­ter­nally by difffff­fer­ent mem­bers of the Cres­cent team, and we are left alone to do the re­search, de­velop the busi­ness plans and build these busi­nesses.’

No­tably the big­gest chal­lenge faced by these cor­po­rate in­cu­ba­tors is the task of hir­ing the right peo­ple to run the busi­nesses. ‘ We’re look­ing for peo­ple who have the skill set, the knowl­edge, and the in­dus­try know-how while at the same time hav­ing the en­tre­pre­neur­ial mind­set that will al­low them to deal with the chal­leng­ing en­vi­ron­ment of a startup,’ re­vealed Chou­cair. The hired in­di­vid­u­als, more com­monly known as in­trapreneurs, are in­di­vid­u­als that be­have like en­trepreneurs in ma­jor com­pa­nies; com­pa­nies that are em­brac­ing in­trapreneur­ship in or­der to stay ahead of the com­pe­ti­tion, re­cruit risk-tak­ing in­di­vid­u­als, and achieve suc­cess.

pro­gram. Of all cor­po­rate ac­cel­er­a­tors launched over the past three years, half used ac­cel­er­a­tors part­ners, Deloitte anal­y­sis found.

The ben­e­fits of spon­sor­ing an ac­cel­er­a­tor are many and in­clude in­sight into emerg­ing tech­nolo­gies and trends; rapid, cost-ef­fi­cient re­search and de­vel­op­ment; eco­nomic re­turns (if a startup is ac­quired or goes public); as well as ac­cess to high-cal­iber tal­ent. By pro­vid­ing men­tor­ship and sup­port to promis­ing star­tups, ac­cel­er­a­tors make it pos­si­ble for large, slow-mov­ing cor­po­ra­tions to stay rel­e­vant and com­pet­i­tive. As Gary Ste­wart, Di­rec­tor of UK Wayra, stated ‘ The whole point re­ally is about build­ing or bring­ing in­no­va­tion back into the com­pany’.

Cor­po­rate ac­cel­er­a­tors tend to work with com­pa­nies that fo­cus on an area of need for that com­pany, there­fore when it comes to choos­ing star­tups for their pro­gram; it’s largely about find­ing the right fit. ‘ The unique part of what we look for is our abil­ity to help ac­cel­er­ate you [the startup] in a way that no one else can. It’s a lesser story of whether you [the startup] are a good fit for us, but whether we are a good fit for you [the startup] as well’, said Aaron Fu, Man­ag­ing Part­ner of In­no­va­tion Nest. Star­tups that are fa­mil­iar with a cor­po­rates’ ac­ces­si­ble mar­kets and strate­gic part­ner­ships and have a vi­sion on how to make use of them are also at a greater ad­van­tage. ‘ What we look for very much is the startup telling us a story around why we are a strate­gic fit for them, and whether that’s lever­ag­ing our net­works across the world’.

While this slightly nar­row fo­cus may seem like a dis­ad­van­tage, sev­eral ad­van­tages come with part­ner­ing with a cor­po­rate ac­cel­er­a­tor such as gain­ing ac­cess to eq­uity-free fund­ing, in­dus­try-fo­cused men­tors, cor­po­rate re­sources and fu­ture loyal cus­tomers. In ad­di­tion, start-ups ben­e­fit from ac­cess to a cor­po­rate’s ecosys­tem of part­ners, cus­tomers, and dis­tri­bu­tion chan­nels, which can help them scale glob­ally, and usu­ally will con­tinue to re­ceive con­tin­u­ous sup­port and some­times in­vest­ments from the ac­cel­er­a­tor once their time is through.

Lana Ghanem, Man­ag­ing Di­rec­tor of Hikma Ven­tures

Samer Chou­cair, Vice Pres­i­dent of Cres­cent En­ter­prise Ven­tures Gary Ste­wart, Di­rec­tor of UK Wayra

Aaron Fu, Man­ag­ing Part­ner of In­no­va­tion Nest

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