Planning white paper: what it means for developer contributions and costs of development
Out-Law Analysis | 06 Jul 2020 | 4:21 pm | 8 min. read
The infrastructure sector, like other areas of the global economy, will be heavily impacted by the coronavirus crisis and this, together with advances in technology, and shifts in how infrastructure assets are used and valued, will drive digital transformation.
Infrastructure businesses that embrace and respond to this disruption will be best placed to thrive as the market changes to reflect the future of the built environment.. Companies that fail to adapt, invest in innovation or realise the value of data are likely to face a more uncertain future, with the desire for smart cities, transport and other connected infrastructure likely to attract technology companies as challengers in the market.
The importance of developing forward-looking business strategies, including in relation to data, for the future of infrastructure was highlighted in a recent webinar hosted by legal experts at Pinsent Masons, the law firm behind Out-Law. Jeni Tennison, vice president and chief strategy adviser at the UK's Open Data Institute, was special guest on the panel.
The need for a data strategy reflects the changing nature of the infrastructure sector, where data generated and gathered by infrastructure assets is increasingly being considered as helpful in informing decision making and problem solving.
For instance, in Singapore – one of the world leaders in technology innovation – data gathered from intelligent transport systems is helping policy makers to ease traffic congestion and shape city planning, and driving the country's 'smart city' agenda.
Data-based innovation is possible because of the combination of new technologies – from cloud computing software and storage, to wireless connectivity and sensors and powerful analytical algorithms. It means that connected physical infrastructure can now relay information about how the asset is performing and about the external environment in which it functions. This offers the organisations that can harness the data gathered and generated by infrastructure assets the chance to make infrastructure operate more efficiently and effectively, and develop new solutions for interconnected services.
The potential of 'digital twins' of physical infrastructure promises to take this one step further. A digital twin can range from a simple 2D or 3D model of a part of a facility to a fully integrated dynamic model of an entire asset, facility or even country, with each element dynamically linked to engineering, construction and operational data that evolves over its lifetime. This will offer a real-time insight into how infrastructure assets are operating and allow potential inefficiencies, defects and innovative new solutions to be identified sooner. This could serve to reduce the cost of maintenance by enabling issues to be pinpointed and addressed before they develop into problems.
However, businesses also need to look beyond the implications of data and the technologies that enable their exploitation and work out how and where they will fit into changing value and supply chains. One area that is ripe for market disruptors is digitally-enabled marketplaces, for example, which could result in more control being exerted by fewer businesses within the construction value chain.
Like any other resource, to get the best from data you need to have a strategy. A strategy is particularly important not just because of the sheer volume of data being generated and the potential for that data to become a liability for a company where it is not managed properly, but because of the opportunities to generate value from data and improve outcomes for the business and wider society. Understanding the role of data in contributing these benefits will help engineering and construction companies lead on the delivery of the infrastructure projects of the future.
A data strategy will also be important in the context of collaborative arrangements, such as joint ventures (JVs), which are likely to continue to be popular vehicles for delivering major infrastructure projects in future.
The data trusts concept, which involves independent stewards pooling data from multiple providers and enabling access to and use of that data to others for a defined purpose, is one model that shows potential
JVs will be attractive because they will enable infrastructure companies to join forces with technology providers, among others, to pool their know-how, expertise, technology, people and capital to deliver projects. Inevitably, this model will entail data sharing.
To get the most valuable insights from data, it is best to use multiple datasets from multiple sources. Therefore contracts for data sharing should allow for the intentions of the parties. The contract terms could clarify what data can be used, who can use the data, including third parties, how it can be used and most importantly – for what purpose.
As companies realise more and more the value of data sharing, they may wish to look beyond the use of just contracts and consider other data sharing models that are being developed. The data trusts concept, which involves independent stewards pooling data from multiple providers and enabling access to and use of that data to others for a defined purpose, is one model that shows potential.
Building trust is vital for data sharing arrangements to succeed. Jeni Tennison of the ODI highlighted the risk to collaboration if businesses have underlying suspicion over how other parties will handle data or fear they will generate greater value from that data than they can. To build trust between parties, Tennison advised businesses to start by sharing on a small volume of low value, low risk reference data and to work together to develop data standards and on collaboratively maintaining the data. She said this can help businesses build trust to sharing other information in future, and that fears and suspicions of parties can also be addressed by involving someone independent.
Data-related compliance will shape data sharing arrangements. Compliance should not be seen as a barrier to making the best use of data. However, it does require a business to get organised, focus the minds, and play fair. It is common to have business plans and asset registers, and there is a need for the same with data to gain the maximum benefit from it in a compliant way.
Infrastructure businesses that are able to show accountability for use of data, as is required in respect of personal data under data protection laws in many jurisdictions, will have the advantage of better knowing what data they hold as well as its quality for use and re-use.
Many infrastructure businesses in Europe will also find that they are subject to cybersecurity rules that apply to providers of 'essential services' in many sub-sectors of infrastructure, such as electricity and gas networks and healthcare systems. In such cases those providers are responsible for the security of the networks and information and are obliged to notify major security incidents to regulators.
Data-related risk is also increasingly extending into the sphere of competition law, including in cases where data is central to the way dominant companies in markets operate. There is increasing scrutiny of an organisation's ability to gain insight and knowledge from the data they hold; it is not just about the volume of information they have at their disposal. EU digital single market reforms envisage potential new measures to open up access to data.
It is not just about data considerations. To develop forward-looking business strategies, such as greater data usage, thought must be given to how the necessary technology and expertise is accessed. Digital transformation and data commercialisation depend on a range of technologies such as cloud computing, integrated circuits and the Internet of Things (IoT).
Patent owners for standardised technology are likely to be on the alert for new users of their technology, like engineering and construction firms, and so considerations such as IP licensing and the risk of patent infringement must be considered at the start of new projects
IoT is illustrative of the types of themes businesses must take into account – connectivity, standardisation sustainability and, of course, data commercialisation. In simple terms, IoT is taking all the physical places and things in the world and connecting them to the internet. It is a combination of technologies including: sensors capable of sending and receiving data about changes to the environment; and wireless networks capable of connecting those sensors such as Wi-Fi, cellular – 4G and 5G – or low-power wide-area networks (LPWAN).
IoT has numerous applications, such as predictive maintenance, remote monitoring or in enabling the creation of a digital twin. IoT can help achieve a business's sustainability objectives. For example, remote monitoring of data points such as energy usage and temperature allows improvement of a facility's energy efficiency by capturing and re-using waste heat generated by its servers. Future "smart" infrastructure JV projects will have these technologies at their heart.
Currently the trend is for infrastructure companies to license in technologies such as IoT as needed, but those businesses should consider investing in their own research and development or acquiring technology themselves so as not to rely solely on third party technology. Infrastructure businesses should be cognisant of the implications for them, their business model and the balance of power in JV arrangements if all the innovation at the heart of a JV project is held by a technology company.
Innovation does not necessarily require heavy spending. Businesses could do a lot simply by being more tolerant of experimentation within the business and looking at its existing intellectual property (IP) strategy – specifically how to identify and capture IP.
Wireless communication technologies necessary to enable IoT are on the whole standardised and their use is protected by patents and other IP rights. Just because it is standardised does not mean the technology is free to use. What technology implementers must pay to use standardised technologies is a hotly contested issue in the courts of many jurisdictions. Patent owners for standardised technology are likely to be on the alert for new users of their technology, like engineering and construction firms, and so considerations such as IP licensing and the risk of patent infringement must be considered at the start of new projects. The story so far with such patent holders in the mobile sector has been that they target well-funded new entrants to the market and, preferably, the seller of the end product or service, as opposed to component suppliers.
It is highly likely that a long term infrastructure project will create IP over its lifetime that will be relevant to new business lines. This is something infrastructure businesses must consider at the outset too to ensure they are freely able to use this new IP outside of the particular project.
The coronavirus crisis has provided powerful examples of how changing user needs can dramatically impact what is required from infrastructure and how flexible and resilient the infrastructure needs to be to respond. Almost overnight, the pandemic forced a rethink about how transport systems operate, and further highlighted society and business's dependence on communication networks.
Infrastructure businesses need to adapt to these changes by embracing the opportunities technology and data offer if they are to emerge stronger from the disruption we expect to see in the market
Technology and data can be harnessed to provide the flexibility required from our infrastructure, with mobile-as-a-service apps, for instance, providing "occupancy information" to highlight less crowded routes, and sensors able to track the movement of people and better enable social distancing. Models built around technology and data, including 'on demand' and demand-responsive transport can also help manage capacity and use in the sector.
Across many jurisdictions, including notably with the European Commission's own roadmap to recovery, investment in cleaner and greener physical infrastructure has been identified as central to economic recovery from the pandemic by policymakers and industry alike. Technology and data have a role to play in helping infrastructure operate much more efficiently and in an environmentally-friendly way.
Ultimately, these themes of flexible, cleaner and more efficient infrastructure reflect the change that we are seeing to the way that infrastructure is being valued by governments, asset owners, industry and society around the world. In the UK, for example, the Cambridge Centre for Smart Infrastructure and Construction, and Centre for Digital Built Britain recently published a paper which is all about re-envisioning infrastructure as a platform for human flourishing.
The paper highlights three major changes we are seeing in the infrastructure sector:
Infrastructure businesses need to adapt to these changes by embracing the opportunities technology and data offer if they are to emerge stronger from the disruption we expect to see in the market.
29 Jun 2020
02 Mar 2020
Planning white paper: what it means for developer contributions and costs of development