Generation 40s – 四十世代

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Why big data must be shared to realise Hong Kong’s smart city vision

CommentInsight & Opinion

Christine Loh says data transparency across government departments and access to information from private companies providing public services are needed to create a smart, sustainable city

Experts have warned that Hong Kong could slip behind in the use of big data. The challenge requires data sharing across government departments, so they can compare information and assess correlations for Hong Kong to function better across the board. Being a smart, sustainable city is all about maximising efficiency by saving as well as sharing resources.

Managing a city in the age of the internet of things requires governments to have the relevant data in the first place. In some cases, authorities have the data because essential services, such as electricity, water and transport, are provided by the public sector.

There are cases where all or some of those services are in private hands. Unless there are arrangements whereby private operators are required to provide the data to the authorities, accessing it is not easy.

In Hong Kong, electricity data belongs to private companies as power generation and supply are in private hands. While the electricity companies provide excellent services at a reasonable cost to users, they are not obliged to share all their data with the government. Now that energy saving has become a major part of the city’s climate-change efforts and creating a smart city is another policy objective, not having the data is an obvious hindrance.

The new schemes of control reached last year for the two electricity companies are more data transparent than before but there is room for improvement. Data for individual buildings would enable the government to draft sharper policies and help occupants be more energy efficient.

This contrasts with freshwater supply, which is provided by the Water Supplies Department, where the government has the full range of data to consider what it can do to save water. While it uses technology to identify leaks and get public water pipes fixed quickly, the department only stepped up dealing with private water pipe leaks after a highly critical Ombudsman report in 2015.

Another problem is the inability to raise water tariffs. The government is fully aware Hong Kong’s cheap water encourages wastage but fears legislators will object to any increase. So, the challenge in this case has not been the lack of data for analysis but the lack of will to deal with problems.

Mobility data presents other challenges. While the government is the largest shareholder of the MTR Corporation and can presumably access the data it needs, this is not the case for all other trips. Buses, minibuses, taxis and ferries are all operated by private companies. Small providers, such as minibus owners, may only collect minimal data.

Private companies providing public services say they can’t share data because of privacy issues or because it is commercially privileged information. In the case of water supplies, no one has complained about the government knowing how much water users consume or indeed waste. It is hard for the energy companies to make a case on privacy grounds. As regards whether releasing the data would lead to unfair competition between the two electricity providers, there could be arrangements whereby the full data could be given to the government on a confidential basis, which the government could then release publicly in a form that avoids unfair competition.

Transport data is mostly anonymous, although new services such as Uber don’t want anyone to access their personal ride histories. Even here, the companies can provide data without showing details about riders.

Data is king and it is a major policy issue for the government to work out with the private sector.

Christine Loh is chief development strategist and adjunct professor at the Hong Kong University of Science and Technology’s Division of Environment and Sustainability


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Hong Kong has been left behind in China’s digital revolution

South China Morning Post
CommentInsight & Opinion

William Zheng

William Zheng says it’s time to admit the city is now lagging behind the mainland following the digital leap forward across the border. Hong Kong can catch up by seizing opportunities for both business and investment

Urban planning and social engineering have given Hongkongers and Singaporeans a modern lifestyle admired by many, including mainland Chinese. But after the great digital leap forward on the mainland over the past decade, this may no longer be the case.

My recent visit to Hangzhou (杭州) was eye-opening. At dinner at a restaurant, my companions and I were shown a QR code instead of a menu. We scanned the code and the system connected us to the restaurant’s WeChat mini app, where all guests could see one another’s order and add or delete items easily. For payment, Alipay or WeChat Pay was preferred to “troublesome” cash.

Over the next few days, my renminbi notes remained untouched in my pocket. Everywhere I went, I used Didi Dache or Uber for transport. Store owners, including those selling roasted sweet potatoes on trishaws, were happy to accept mobile payments, even for amounts below 1 yuan (HK$1.10).

While many Hongkongers use their Octopus cards for payment, chat with friends on WhatsApp and share their lives on Facebook and Twitter, mainland city dwellers are paying their bills through Alipay, talking on WeChat and sharing their lives on Weibo. The mainland’s great firewall has created an interesting digital divide across the Shenzhen River.

Nevertheless, censorship and tight internet controls have done little to dampen the spirit of start-ups on the mainland. Attend any start-up pitching session in Shenzhen and you will be amazed by the speed of learning, the passion and the ambition of young technopreneurs who dream big. And you will be impressed by the huge risk appetite and deep pockets of Chinese tech investors.

Projects abound in areas such as e-commerce, online payments, the sharing economy, artificial intelligence and virtual reality. Although some industries have fallen victim to the bullet-train speed of the Chinese internet economy, leading to empty malls, the efficiency and convenience brought to Chinese consumers is phenomenal.

Hong Kong, once the most modern city in China, has fallen behind. Many rightly point out that our education system is not promoting creativity, costs are too high for start-ups, and society’s tolerance of failure too low.

Furthermore, the ability to change in scale is a key factor in an internet economy, and many innovators in Hong Kong, who are not familiar with the environment and user habits on the mainland, find it hard to grow. Chinese technopreneurs, meanwhile, can easily replicate their services to over 660 Chinese cities, serving 700 million users.

Hong Kong could still benefit from the Chinese digital leap forward. Hong Kong merchants should work on WeChat and Weibo more and incorporate them into their marketing and mainland development strategies. If Hong Kong retailers could learn to use Alipay and WeChat Pay to serve mainland tourists, they would have fewer cash management problems.

The city could also learn to invest in the field. The city’s tycoons, who made their wealth in more traditional industries, should review their risk appetite and attend the pitching sessions in Silicon Valley, Shenzhen or Shanghai, listen well, and invest cleverly.

Hongkongers should ask themselves: do we want to admit that the mainland has overtaken us in internet development? And, how do we move out of our comfort zone and integrate into the fastest-growing part of the Chinese economy?

William Zheng is a veteran journalist who has served and led major Singapore and Hong Kong media organisations in his 20-year career

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Crackdown on tax havens is just another way to ensure citizens can’t escape the clutches of big data

South China Morning Post
Comment›Insight & Opinion

Niall Ferguson

Niall Ferguson says the trend of government and business tracking our every move – in some cases, in an attempt to deter crime – exposes us to another kind of danger, that of surveillance

In Notes from Underground, Dostoevsky fired a broadside against all the Victorian do-gooders who dreamt of a perfectly rational society. “You seem certain that man himself will give up erring of his own free will,” he fulminated. He foresaw a ghastly future in which “all human acts will be listed in something like logarithm tables … and transferred to a timetable … [that] will carry detailed calculations and exact forecasts of everything to come”. In such a world, his utilitarian contemporaries believed, there would be no wrongdoing. It would have been planned, legislated and regulated out of existence.

We are nearly there. Or so it seems.

Yes, I know. Corruption is impure. Crime is a felony. And illegal immigration is against the law. Altogether: Sin is wicked! So I should have cheered British Prime Minister David Cameron’s international anti-corruption summit last week. I should be a paid-up supporter of the campaign to close down tax havens. I should be glad to see the back of 500-euro bills. And I should feel a thrill of patriotic pride when I hear Boris Johnson pledge to regain control of Britain’s borders.

And yet every one of these steps towards a more perfect world makes me feel Dostoevsky’s disquiet.

Now, I do not condone corruption, tax evasion, organised crime or unregulated migration. Nevertheless, I am deeply suspicious of the concerted effort to address all these problems in ways that markedly increase the power of states – and not just any states but specifically the world’s big states – at the expense of both small states and the individual. What makes me especially wary is that today, unlike in Dostoevsky’s time, the technology exists to give those big states, along with a few private companies, just the kind of control he dreaded.

Consider some of the most recent encroachments on liberty. The British government announced it will set up a publicly accessible register of beneficial owners (the individuals behind shell companies). In addition, offshore shell companies and other foreign entities that buy or own British property will henceforth be obliged to declare their owners in the new register. No doubt these measures will flush out or deter some villains. But there are perfectly legitimate reasons for a foreign national to want to own a property in Britain without having his or her name made public. Suppose you were an apostate from Islam threatened with death by jihadists, for example.

Or consider the phasing out of the 500-euro bill, fondly known in the underworld as the “bin Laden”. I have little doubt that when someone elects to transfer one million dollars by putting the equivalent in “bin Ladens” into a small bag and handing it to someone else, both parties are up to no good. Yet getting rid of bin Ladens is the thin end of a monetary wedge.

Economist Ken Rogoff is one of a number of economists who want to get rid of banknotes altogether. They argue cash is an anachronism, heavily used in the black and grey economy, and easily replaced in an age of credit cards and electronic payments. But their motive is not just to shut down the mafia. It is also to increase the power of government. Without cash, no payment can be made without being recorded and potentially coming under official scrutiny. Without cash, central banks can much more easily impose negative interest rates, without fearing that bank customers may withdraw their money.

The state wants data. What you earn. What you spend. Where you are. But what the state knows is just a fraction of what Facebook knows about you. The reason Mark Zuckerberg is a billionaire is that, as you blithely share your likes and dislikes with family and friends, you tell Facebook almost everything there is to know about you. Advertisers will pay Facebook vast sums for that information. But do you really think advertisers are the only people who want Facebook’s data? (Fact: it was one of the internet companies named as collaborators in the US National Security Agency’s leaked Prism surveillance programme.)

We thought it was Big Brother we had to worry about. It turned out to be Big Data.

Niall Ferguson is Laurence A Tisch professor of history at Harvard and a senior fellow of the Hoover Institution, Stanford

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Big data move brings big business opportunities

South China Morning Post

Theos Evgeniou and Joerg Niessing

For firms to enjoy benefits from the revolution through early adoption, they need to enhance their organisational and technical capabilities

It has been undoubtedly one of the most discussed business topics in recent years, and one that caused strong urgency among executives around the world: the big data revolution, or potentially fad, according to some sceptics, has led to a boom of technology investments that bring memories of the internet bubble more than 15 years ago.

Cases of successful use of data, big or small, are abundant, but so are the failures to do so. A recent survey of more than 100 executives conducted at Insead indicates that more than half of the companies are still in the planning phases of using big data or have not even started to consider the potential, with less than a third already executing some big data projects.
Many firms invested in big data technologies to have a cost advantage

According to a recent study of executives in Asia-Pacific by the Economist Intelligence Unit, more than 40 per cent are not even sure their companies have any big data strategy, and only 6 per cent consider their companies as well advanced in adoption. However, well over 70 per cent do believe in the potential of big data to improve business performance.

The gap between aspiration and practice is still large, as expected during the hype period of any potential innovation, but the challenges are common and the value is real.

Research does show the benefits companies can reap from big data: investments in big data technologies and the use of data to support business decisions do have an impact on a firm’s productivity, which is measurable, as expected, with data.

Big data, often driven by digitisation, has been affecting many aspects of business, marketing and sales being among the early adopters, according to our research.

Firms that are leveraging big data do understand their customers better and provide them with better tailored products or services in real time across multiple channels. Many cases – not only cases of companies from Silicon Valley – support these findings.

For example, in South Korea, Tesco installed virtual stores in subway tunnels a couple of years ago. The virtual stores consist of electronic billboards, displaying shelves stocked with products, each with its own barcode. Customers, while waiting for the train, can use a phone application to scan the barcodes and add the products to their online basket. They can choose a desired delivery time, often within 60 minutes.

Through this offering, Tesco was able to collect more data about their customers (shopping basket, order history, preferred products, time of the day, etc) that was then used to optimise offers that were sent to the customers in the future. This innovative technique was a huge success supporting Tesco’s move to the No1 position among online retailers in Korea.

Moving away from marketing-related aspects, we also found in our research that many firms invested in big data technologies to have a cost advantage. One of the leading independent reinsurance groups based in Singapore, for example, was looking for the most effective and strategic way to leverage the explosion of big data.

Illustration: Lau Ka-kuen [1]Transferring data between various applications and systems and generating useful insights were challenging. By using a cloud-based analytics platform for underwriting that was powerful and fast enough for handling big data, the firm is now able to derive better business insights faster, more flexibly and, most importantly, at lower costs.

Companies in advanced stages are already exploring the next frontier: not only do they improve decision-making using data, better serve customers and run business processes, but they also develop new businesses around big data.

Monetisation of data is becoming increasingly the focus of the leading firms. A cellphone provider in South Africa was able to create a new business through using the payment history of their customers for credit scoring. Banks were able to use this information as a surrogate credit score to determine to whom they would give a loan or not.

The opportunities are endless. But the reality is that most companies have not even started their journey into the data world and executives are still not clear what the potential of big data for their organisation is. What are the key challenges and where to start from?

Our work finds that some of the usual challenges in technology adoption known for decades are still the key culprits today, with more to add. To begin with, creating a complete view of the relevant data for a business decision requires integrating data across multiple sources, typically owned by different business units.

Big data often requires breaking through organisational silos and challenging owners of information.

As always, effective adoption of new technologies is also about effective organisational change. Technical challenges are of course not absent: with data stored in legacy systems in non-standardised ways, with endless data quality issues, any data analytics project suffers from the barrier to first create high-quality, complete data before using it at all.

Finally, but not least, given the speed with which big data and analytics are adopted by organisations and the new necessary data science skills that are different from traditional information technology ones, a key bottleneck becomes the availability of talent for such initiatives.

The labour market of data scientists is nascent, making experienced experts highly sought out – and highly unavailable.

As always, there is no silver bullet for successful adoption of big data, but early evidence indicates that experimenting and then maturing the organisational capabilities in analytics has great benefits not only to improve business decisions, but also develop new businesses and sources of revenues.

Theos Evgeniou is professor of decision sciences and technology management at Insead and academic director of Insead eLab, the research and analytics centre of Insead that focuses on data analytics for business. Joerg Niessing is affiliate professor of marketing at Insead and executive director of Insead eLab