“If we’re not careful, this could go terribly, terribly wrong” – Will governments see smart cities as a goldmine for data?

August 13, 2018


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For many of us, the collection and use of our data conducted by large corporations have become the norm. We have come to accept that this is the price to pay in order to make use of certain services. In light of this, if we are not paying for a product, we most likely are the product. While this has always been an issue of big corporations, it looks like governments could soon be looking to profit from the world’s latest most valuable resource, data and our activity.

A recent article in Forbes posed the questions “When Will Cities Begin To Monetize Their Residents’ Data?” In the article, the author, Kalev Leetaru described how his data had been used by his home city for profit. After submitting mandatory tax information, Leetaru began receiving numerous spam emails about events in the surrounding region.  He states that “After reaching out to the spammers, it turns out they had all received my contact information from the city, which was making use of its involuntarily collected tax data to create commercial-oriented mailing lists for surrounding business districts.”

Evidently selling data is not beyond the city’s code of ethics. This begs the questions – What would happen to data in a smart city which has the potential to increase the volume and accuracy of data. Facial recognition technology which can pinpoint your movements, reactions and habits would be a marketers’ dream. If a city sold this information, it could be sitting on a goldmine.

Pavol Magic, the CEO of Biotron

To get a better understanding of what a future like this might look like, we spoke with Pavol Magic, the CEO of Biotron, a fully transparent personal data analytics platform empowering individuals and organizations, who said “We can all agree that data collected from citizens could improve their well-being if used properly, e.g. to improve the infrastructure and public transport based on their typical movement, as well as in many other use cases. It could even cover the costs of a universal basic income or similar welfare.”

He adds “However, it raises a ton of questions. First of all, will I be able to control what data is collected and how is it used? If a commercial entity must provide an opt-in / opt-out mechanism in EU due to the GDPR, will the government have to do the same? And who will establish the rules and control mechanisms? Because it’s one thing if an online retailer knows the size of my clothes, but completely different when a government has my medical data and information on my movement and behavior and wants to sell it to the highest bidder. As we’ve seen numerous times, similar activities can lead to disastrous outcomes. One of the current examples is the use of facial recognition and AI in China to monitor the behavior of citizens, “rewarding” them for positive actions, and punishing for bad ones. If we’re not careful, this could go terribly, terribly wrong.”

Clearly smart cities could offer a lot of advancements for their citizens, however, to what extent these advancements are in place to help the people, or to help market to the people may become questionable. Let us hope that the new technological services of smart cities remain products for the people to use, rather than turning us into the products of these cities for large companies.

Disclosure: This article includes a client of an Espacio portfolio company


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