How Europe Can Reach Out for the Skies

Written by Charlotte Geerdink (SwissCore) and Serge Dubosson (Mission of Switzerland to the EU)

In 2014 the European Commission released a white paper for the development of a data-driven economy. In Switzerland too, the Federal Council adopted last April an open government data strategy 2014-2018 aiming at improving transparency and stimulating innovation. Big data is increasingly becoming a big topic and many data can be collected via the Internet of Things (IoT). Prior to a thematic workshop organised by SwissCore for Professor of Computational Social Science at ETH Zurich Dirk Helbing, the Swiss Mission to the EU and SwissCore conducted an interview with Dirk Helbing to get his vision on Big Data and the Internet of Things (IoT) going.

Dirk Helbing

You are a Professor of Computational Social Science at ETH Zurich. Can you tell us in a couple of sentences more about what your research focuses on?

I have a very interdisciplinary background. Originally, I am a physicist and focused on complex dynamical systems. Then, I changed to an engineering environment where I dealt with traffic modelling and disaster response management, and now I work in the area of social sciences. Having worked in so many different disciplines enables me to connect the dots, because a multi-disciplinary background is crucial to address societal challenges. One of the challenges I deal with in my research is to examine the likely future of our society, which will be a digital society, I believe: a society in which information and knowledge will be the driving forces. The coordination of the FuturICT initiative made me aware of the revolutionary potential of digital technologies. These technologies are challenging industrial production and services, but also societal institutions as we know them today. Due to the financial crisis we have failed to see that the digital revolution is an important reason for massive unemployment. Unfortunately, another 50% jobs in the industrial and service sector will become obsolete within the next 20 years. Therefore, we need to make sure to equip people with the right skills for the future digital society.

How can European public and private organisations reap the full potential of big data?

Mining big data offers the potential to create new ways to optimize processes, identify interdependencies and make informed decisions. There’s no doubt that Big Data creates tremendous business opportunities, not just because of its application in marketing, but because the information itself is becoming monetized.

Technology gurus preach that Big Data is becoming the oil of the 21st century, a new commodity that can be tapped for profit. As the virtual currency BitCoin temporarily became more valuable than gold, it can be even literally said that data can be mined into money in a way which would previously have been considered a fairy tale. Although many Big Data sets are proprietary, the consultancy company McKinsey recently estimated that the potential value of Open Data alone is $3-5 trillion per year. If the worth of this publicly available information were evenly divided among the world’s population, every person on Earth would receive an additional $700 per year.

Where can big data help us?

The potential of big data spans every area of social activity, from the processing of human language and the management of financial assets, to the harnessing of information to enable large cities to manage the balance between energy consumption and production. Furthermore, big data holds the promise of enabling us to better protect the environment, to detect and reduce risks, and to discover opportunities that would otherwise have been missed. In the area of medicine, big data could make it possible to tailor medications to patients in order to increase their effectiveness and reduce their side effects. Big data could also accelerate the research and development of new drugs and focus resources on the areas of greatest need.

It is clear, therefore, that the potential applications of big data are expanding rapidly. While it will enable personalized services and products, optimized production and distribution processes, and “smart cities,” it will reveal also unexpected links between our activities.

Is Europe making the right kinds of investments for the digital age to come?

We are currently trying to repair 20th century structures and institutions. This absorbs a lot of money, which we could better use to build the new institutions and structures of the digital era to come. Classically we have had three sectors of our economy, namely agriculture, industry and services. We invest quite a few billions every year in agriculture, public roads, public schools etc. In the same way we will have to invest in public digital infrastructures and institutions. We need institutions that can open up the value of data for everyone, not just for big business, but also for small and medium-sized companies, politics, non-government organizations, science, and citizens. Open data plays a major role, but altogether we should think about this as an information, innovation and production “ecosystem” in which different companies, institutions and individuals are nodes and between these nodes there is a flow of information and ideas. For example, one could imagine the European Union to run a job and project platform, which would make self-employment easy and help everyone to find partners with specific skills to co-create new projects and services. We need to build an ecosystem that involves companies and customers alike. Public institutions could be facilitators, like a catalyst.

What does it take to foster the right kinds of innovations?

The USA and the EU have quite different innovation cultures. Overall, Americans like to explore new things and if these have undesired side effects, they are trying to fix them by new innovations. But this creates a situation where you keep fixing the system. Europeans like to avoid negative outcomes to preserve what they already have, but it seems to be getting less. They like to figure out the possible implications before implementing anything. But I believe there is a solution that is better than both of these approaches.

To reap the full benefits of Big Data, we certainly need to have a more innovative approach in Europe, but how to decide if an innovation is good or bad? The main point is that, thanks to the Internet of Things (IoT), we can now measure positive and negative externalities, i.e. external effects. We just need one simple rule: Everyone who produces negative externalities should pay for them within a multi-dimensional value exchange system, and positive externalities should be rewarded. This will promote a networked thinking, which aims to reduce negative externalities and increase positive ones, thereby creating a trend for the better.

By networking, new synergy effects can be created. In principle, there are uncountable new possibilities of value generation, and the principle is that we will be all better off, if we don’t just think for ourselves, but also consider the positive and negative impact on our neighbourhood. Considering this will create benefits for ourselves and for society alike. In other words, when properly considering “externalities”, private and public benefits get more aligned and our socio-economic system will thereby evolve to a better and better state. When the externalities are neglected, we are faced instead with a downward spiral that is heading towards a “tragedy of the commons”, i.e. a state where everyone is worse off, as problems such as environmental pollution, climate change, over-fishing, or tax evasion show.

How may networked thinking transform our economy in future?

Interestingly, the way people think and decide is changing already. For example, there is now a trend towards a sharing economy. People probably started to share because of the financial crisis. They noticed that not everyone needs to own everything (for example a car, a drilling machine, or a washing machine), if most of the time we don’t use it. Sharing goods allows everyone to have a higher standard of living even if money is short. At the same time, the sharing economy has the benefit of being more sustainable. The sharing economy can also stimulate more social interaction.

But the sharing economy is just one aspect of the networked economy. Another aspect is that companies will eventually learn more about what customers really want. Companies are used to producing huge amounts of standardised products, and then many millions are spent on advertisements to make people buy these goods. In the future, however, companies will learn to produce personalized goods and services that are tailored to our wishes. Companies will engage in partnerships with their customers. We can therefore anticipate changes in consumption patterns, which are related to networked decision-making.

What kind of approach should Europe take when it comes to Big Data?

If we don’t want to lose freedom and democracy, informational self-determination is absolutely crucial. The relevant question is: who owns or should own personal data? Some of the related questions are legal issues, in fact, quite crucial ones. Let me give my perspective on this. If someone takes a picture of me, that person cannot just commercialize my picture without my permission. One should apply the same principle to personal data, because personal data creates a picture of me. I further believe that it should not be possible to transfer unlimited rights of use of personal data by a mouse click, as it is often implied by “accepting” the terms of use of a web service. We need to be able to exercise our right of informational self-determination in a differentiated way. If we ought to stay in control of our lives, we must be able to decide ourselves what is being done with our data.

Is diversity good or bad?

Protecting socio-economic diversity is of similar importance as protecting bio-diversity. Diversity is key for innovation, societal resilience, collective intelligence, personal development and individual happiness. And diversity is one of the key assets that Europe has to offer. We need to learn how to turn this into our advantage rather than flattening Europe to make it all the same. So far, we are not making the best possible use of our diversity. But thanks to the data that is now becoming available about our society, we get a better picture of the outcomes of socio-economic interaction mechanisms, and we can learn to change these interaction mechanisms to improve the outcomes. We have demonstrated, for example, how the use of digital driver assistance systems can dramatically reduce congestion on freeways and in cities. But one could also build digital assistance systems for our economy and for social cooperation. Such systems can help to reap the benefits of diversity.

I am convinced that it would be good for Europe to engage in more than just one standard for everything. To fuel economic prosperity and social well-being, one should offer several good opportunities to choose from in all relevant areas. But to find better solutions, we need to experiment more. Of course, this should happen in a scientifically informed way and on the basis of European values. Concretely, this means to create opportunities to try out different approaches in different cities and countries, like in a living lab. Obviously, one should carefully evaluate the implications of these choices, and then the best solutions should be copied by other places.

What other information technologies can help us with this?

The Internet of Things allows for real-time measurements of our world, and through the multi-dimensional value exchange system one can now create real-time feedbacks in a way that would allow systems to self-organise in favourable ways. It only takes the right kinds of interactions between the system elements to let a complex dynamical system create a certain kind of outcome or functionality. Complexity science allows us to understand which kinds of systemic behaviour to expect.

With the increasing amount of data about our world we can now reveal the hidden forces behind socio-economic change and behind success or failure, such as specific conventions or social norms. We can visualize the hidden forces which keep our society together, pretty much as microscopes, telescopes and other instruments allowed us to reveal the forces of nature.

The approach I am talking about is based on tailored measurements. The current “big data” approach, in contrast, collects and keeps as much data as possible, and is fishing for patterns in the resulting data ocean. But these may be spurious patterns without a meaning. This problem is called “over-fitting”, which means that models are fit to random details of datasets. Therefore, having more data does not necessarily produce better results.

How can we improve over the classical big data approach?

Thanks to the digital revolution, particularly the spread of the Internet of Things, we can now build better systems based on “smart data”. The elementary particle accelerator in CERN is actually the best example. It’s probably the largest public big data system in the world, but 99.9% of the detector data is thrown away immediately, because one could never analyse all these data. Therefore, “smart” measurements are being made. Depending on what the researchers expect to see when trying to verify or falsify certain scientific hypothesis, they keep only the relevant data – the data required to answer a particular kind of question.

Similarly, we can build a smart data infrastructure that allows us to address questions about our economy and society, and it could be the basis of a novel kind of European search engine, too. I call this smart data infrastructure the Planetary Nervous System. The idea behind it is to create an open, intelligent and participatory software layer on top of Internet of Things as the fundamental information infrastructure for the emerging digital societies of the 21st century.

Today, many people use smartphones, each of which contains about 15 measurement sensors. If built in a way that respects the principle of informational self-determination, we can use these sensors to learn about our environment, and we can add other wirelessly communicating sensors, too. For example, one could easily create noise maps of cities or create a collective earthquake sensing and warning system, or reconstruct cities digitally in three dimensions, all without violating peoples’ privacy. In the system that we envisage, you can decide for each single sensor if you want to use the measurement data just for yourself or share it with others.

Like Wikipedia or OpenStreetMap, the system would be built on the principle of data sharing, i.e. everyone could use data from this commonly created real-time data stream. But to work well, everyone should give some data back. To make this happen, we want to build the system in such a way that everyone can trust and benefit from it: business, politics, science and citizens alike. It would, therefore, have to be a transparent, participatory, and fair system. And it would offer possibilities to earn money, too.

Being able to generate Big Data via the Internet of Things, certain skills are required from Europe’s workforce. What is the role of education to accommodate the needs of the Internet of Things?

I believe that schools will change dramatically. Schools nowadays are too much oriented at standardisation and at memorising things that are not so useful anymore, at least that is also what pupils believe themselves. Teacher should become coaches and curricula should change in such a way that programming courses are an important part of the curriculum. In the Silicon Valley, I have seen kids play with the Internet of Things. It’s important that children get fascinated early by the things that will be important for them. A curiosity-driven education is essential to create an innovative spirit. For the jobs of the future, we need a lot more creativity. Pupils must also learn how to collaborate with each other, and how to anticipate externalities of their decisions.

Imagine 2025: in what kind of world will we live in? In other words, will big data control every step that we take?

It is hard to predict the future because timing is an issue, as some developments occur faster than others. Financial instability is a big concern. The current financial system is basically one-dimensional, and that’s why it keeps causing problems. Multi-dimensional finance as I propose it would mitigate some of the problems, and it would allow the diverse European countries and cultures to thrive on specialized products and services. It’s important to remember that money is basically a coordination mechanism and that we can come up with better ones. It’s probably time to do this now. Other concerns are the creation of a sustainable energy system, but Europe is on a good way with the smart grids it is building. Finally, we need to pay more attention to climate change, demographic change, international conflict, and the digital revolution. In particular, we must decide ourselves between a digital society that’s controlled in a top-down way by a few stakeholders and a diverse, participatory society, where everyone can benefit. I believe we are at a “tipping point”. We will see dramatic changes in just a few decades, but we also have entirely new opportunities to change the world to the better.

A contribution from Brussels by Charlotte Geerdink (SwissCore) and Serge Dubosson (Mission of Switzerland to the EU)

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