Who will mine Australia’s data?

The global Big Data and Analytics market is estimated to be US$125 billion dollars in 2015.

While Australia will definitely benefit from the efficiencies and insights promised by Big Data, the question is how many of the promised jobs and how much economic benefit derived from delivering big data services will actually occur in Australia.

The machinery sector has been the early adopter of IoT but how will the data of the future flow?

It is not widely known, but Australia has been a leading adopter of earlier Big Data industries, namely geospatial data such as satellite imagery, weather satellites, radar satellites. The industry analyses around 1200TB (terabytes) of data a year to derive information for forestry, mining, border security sectors and many more (geosciences report). The ACIL Tasman 2010 study predicts the Australian geospatial industry contributes an extra $4 billion to GDP from a sector that turns over $30-40 million in revenue. Australia manages to do this despite not actually owning a surveillance satellite.

The question is will the big data revolution follow this lean model, or will we invest in big data infrastructure in Australia. One could estimate that the IoT (Internet of Things) driven analytics market is an order of magnitude bigger than the geospatial industry due to is increased granularity and scope of information based on platforms, people, and places.

Whilst many talk about the future benefits of the IoT, we need to look carefully at how the data of the future will flow and who will own it. One of the early adopters of IoT is the machinery sector which builds platforms such as cars, trucks, planes, power generators, farm machinery, and defence assets to name a few. These platforms generally have sophisticated software and a range of sensors that control their actions. Increasingly the vendors of these platforms integrate an ability to call home to provide maintenance data directly back to their support centres to provide a range of services.

These services include:

  • preventative maintenance based on data gathered
  • superior logistics and inventory management based on instant knowledge of global faults and fault causes
  • new platform demand prediction for the vendor based on existing platform fleet utilization
  • optimisation of platform operation and design based on infield operation of the global fleet of platforms
  • software and security updates to the platform reducing the need for costly recalls
  • ability to sell ancillary services such as content to the user

Australia has abandoned much of its manufacturing base, effectively removing our ability to build platforms in this country. Additionally the Internet has allowed overseas vendors to interact directly with their customers, removing the need for an Australian service agent. The IoT revolution now allows vendors to interact directly with the platforms that they have sold to the customer. In fact, a growing trend is the software in the platform isn’t even owned by the customer, it is licensed or leased for the life of the platform.

Based on this, it is very likely that the data generated by the platform will also pass directly to the overseas vendor and may or may not be the property of the customer.

Given this trend, one must ask how Australia can derive benefit from the big data analytics if it doesn’t own the data, or have access to the data. The answer is that the vendors will likely offer the data back to the customer as a service (Data as a Service). The vendor though may only release a subset of the data back to the customer in order to protect its “intellectual property”, potentially diminishing its full value to the customer.

The full impact of being a minnow in the big data economy is unknown at present, but a few futuristic scenarios can paint a picture.

Imagine a farm machinery vendor with a high penetration in the Australian grain industry. The vendor would know the utilisation of their fleet of harvesters and potentially other settings that indicate the quality of the harvest, such as kilogram per hectare, streaming daily into their service departments. Combining this with the available Australian weather data it might be possible to predict the Australian wheat harvest well before the authorities in Australia can determine it. The vendor can then sell this data to an overseas investment company who operates in wheat futures. The potential windfall could be staggering, especially as the same story plays out in each season around the globe.

Similar stories could be told with real-time energy generation or transport utilization as a measure of current economic activity. There are of course many other options to use Big Data in the future.

If Australia wants to participate in the big data economy and have local jobs analysing big data, then it needs to take efforts to generate that data locally, or at least be smart consumers of platforms so that we have superior access to such data.

The following steps should be taken:

  • Australia should enact laws that seek to protect data generated by Australian industry regardless of the method of generation of that data.
  • Australian consumers and industries should become smart buyers of products that seek to export data to foreign states or companies. Contracts should clearly state that if data is sent for maintenance that there must be a mechanism for local extraction of the data as well.
  • In the absence of the above two, owners of platforms should investigate other data gathering devices that can syphon off relevant data from the platform in lieu of receiving it from the platform vendor directly.

Recently China, Holland and Russia have placed bans on certain services that store information on their citizens in overseas servers. This is primarily for privacy and national security issues, the potential economic impact of big data analysis of this data is yet to be a stated concern.

Dr Daniel Floreani is Principal Consultant and Director of Flocom Consulting, with more than 25 years of experience in the communications industry, in very diverse roles including Sales, Business Development, and Service Delivery. Daniel also holds a PhD in communications, and has focussed on Government, Defence and R&D initiatives throughout his career.

Do you know more? Contact James Riley via Email.

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