FOSTERING AN INNOVATION ECOSYSTEM AROUND OPEN DATA Background and Context
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.