Wearable devices, data and the platform economy

Wearables are an example of product and service businesses coming together in a way that aligns perfectly with the concept of the platform economy. In this signal blog post we discuss the wearable markets and envision its future potential when embracing the fast-paced developments in technology, data analytics innovations and business models.

What’s up with wearables?

Wearable technology, or simply wearables, are yet another application domain, where the opportunities of the platform economy are immense. These smart electronic devices incorporated into clothing or worn on the body as implants or accessories have potential to not only provide entertainment or infotainment but even ground-breaking solutions for aging, wellbeing, healthcare, emergency management, safety, housekeeping, etc. Wearables can in fact be the connector that allows data on an individual, such as location, activity, mood or vital functions, to be integrated into other data reserves in a smart and useful way, for example to help find a route to a destination, track exercise intensity, provide feedback to improve mood or give personalised tips for nutrition or health.

For the time being the most widespread wearables are smartwatch type activity and fitness trackers, such as those by the wristband market giant and pioneer Fitbit or the Finnish smart ring design award winner Oura. Suchlike devices usually track, among others, steps, calories consumed, heartbeat and hours slept. But we’re bound to see more as the following three take place: (1) More sophisticated sensors and tracking technologies are being introduced into wearables. (2) The range of wearables will diversify from wristbands (and smartphones) towards IoT-connected smart clothing, implants, etc. (3) Abundant data alongside with innovative thinking will allow unimaginable new ideas to turn into products and services.

New technologies are being embedded in wearables

One example of recent developments is how contactless payments have become a part of the wristband functionalities, such as Fitbit Pay. Another welcome novelty is featured in Matrix Powerwatch, a smartwatch that converts body heat into energy to power itself, so that you never need to charge it.

From the health care perspective, an interesting innovation is non-invasive glucose monitoring with a smartwatch. When mature and accurate enough, this technology embedded into everyday wearables could make a big difference for diabetics. Apple has announced interest in developing a solution, but the forerunner in applying the technology is HealBe, although they use it in their GoBe device for the time being only to measure calorie intake. In fact, this is also one of the first non-manual food intake tracker in the wearables business.

A complementary example is how AI has been trained to detect diabetes with nearly 85 percent accuracy by simply looking at heart beat over time. So in fact, even with the sensor technologies of current wearables, pre-screening of diabetes could already be a part of the data analytics.

Cross-pollination of data means new services and new business logics

The full potential of what the platform economy has to offer with wearables can be realised when multiple data sources are brought together. By this we mean data collected by one wearable device as well dynamic data from other wearables, other gadgets and basically any other data collecting objects. Equally important are the more static datasets, information reserves and knowledgebases that provide further context to analyse and process data captured by wearables. For example, imagine wearing a smartwatch that has been measuring your activity and food intake through the day. This data collected by your wearable could be compared against nutritional recommendations as well as reflected upon the ingredients available in your smart fridge. Combining all this data, a recommendation to fix a protein-packed omelette in the evening could be provided by your smart watch. Of course, there are also great risks with increasing data flows and interfaces, so attention needs to be paid to ensure for example reliability, safety and privacy.

In the current market setting we can see multi-sided platform business emerging around wearables. Wearable manufacturers are growingly willing to let third-party app developers to interface with the data their device collects instead of relying solely on their own software. This allows room for services to grow and improve. For example, an Indian online fashion store Myntra has built a software platform for wearable devices not only for its own line of products but also for those developed by third-party device makers. The core idea of the Myntra Wearable Platform is, well in line with platform thinking, to allow device manufacturers to integrate their wearables to talk to one another as well as to encourage external app developers to make use of the data.

The development of the wearable market and the service business around it means also new flavours in business models. One categorisation of strategies lists (1) product model, focusing on device sales, including product and service, (2) subscription model, focusing on as-a-service approach and recurring fees, (3) cross-selling model, focusing on selling allied products after device purchase and (4) data-sharing model, combining physical product sale with additional information products. The platform economy can accommodate all four business models, but the most fruitful outcomes for the consumer would probably emerge with the openness and multi-sided market opportunities enabled by the data-sharing approach.

Selected articles and websites

Cerillion: Business Models for Wearables in the IoT Economy
Engadget, Velazco: Data from wearables helped teach an AI to spot signs of diabetes
Engadget: Healbe’s GoBe 2 calorie tracker teases the future of wearables
ETtech: Myntra debuts a wearable platform along with its first wearable product Blink Go
European Commission: Smart Wearables: Reflection and Orientation Paper
Fitbit Official Site for Activity Trackers
Fitbit Pay
Gadgets & Wareables: Review Healbe GoBe 2: putting the automatic calorie-tracker to the test
Healbe GoBe Automatic Body Manager
Matrix PowerWatch
Oura Ring
The Conversation: Turning your health data into a “wellness score” might not be good for you
Wikipedia: Wearable technology

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Platforms and forestry

Platform economy brings along new opportunities for forestry, ranging from more efficient management to new data-driven services and enhancing of industrial ecology. Increases in the amount and accessibility of forest data as well as data on the raw material cycles enable new solutions and collaborations and invites novel cross-sectoral innovations. Combined with advances in material technology, forests are set to become a key component in the emerging circular economy.

Why is this mportant?

There are three main areas of impact platforms can have in the forestry sector. The first is the gathering, analysis and use of forest data. Digital platforms provide an easy access to forest data. Globally this is linked especially to monitoring forest growth and identifying illegal logging. In Finland the use cases have more to do with increased efficiency of forest management, transparent sales and new services based on data.

The second area of impact is the control of the flow of materials, including wood, cellulose and further refined products. Recycling and end-of-life management also come into the picture. Wood and particularly cellulose, and their recycled fractions, can be the (raw) material for a wide range of products from packaging and clothes to fuels and energy. However, this requires good data on the characteristics of material flows and the efficient coordination of these flows. Here a platform-based system and operation model can be helpful.

The third area of impact is increased collaboration between different actors. A traditional approach is to center the activities around a specific place or plant, and there are signs of a new wave of such industrial ecology platforms, such as the Äänekoski bioproduct mill. What is especially interesting from the point of view of platform economy are the more data-driven and virtual collaborations.

Things to keep an eye on

Having good and reliable data on forests as well as the flow of wood-based materials is essential. Therefore it is worth following how the Finnish law concerning forest data proceeds, as well as what kind of players exist in the forest data business. For example, the US company Trimble acquired two Finnish companies, Silvadata and Savcor, in 2017. Furthermore, as an increasing number of new cellulose-based materials enter the market, it is good to look at the bigger picture of material flows and collaboration between actors.

Selected articles and websites

Bittejä ja biomassaa – Tiekartta digitalisaation vauhdittamaan biotalouteen
Design Driven Value Chains in the World of Cellulose dWoC
Trimble Connected Forest
Infinited Fiber brings radical change to the textile industry
Forest Solutions Platform
Global Forest Watch
The Äänekoski bioproduct mill – a new chapter in the Finnish forest industry
Trimble doubles down on Finnish companies
Finnish plastic replacement raises EUR 1 million
Metsätietolain muuttaminen

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Accounting of information flows: Data balance sheet

Systematic accounting of data and information flows is about to be acknowledged as an integral part of regular internal and public reporting by organisations.  Alongside finances and corporate social responsibility, the topic of data has now found its way to annual reports. Forerunners publish even dedicated accounting reports for data and information flows, something which can be recommended in data-driven sectors.

For example, Finnish Transport Safety Agency Trafi recently published their second data balance sheet (tietotilinpäätös), an annual report describing their data strategy, related architectures and inventory of data and information flows. This supports Trafi in their aim to be a forerunner in collecting data but also opening it up for maximum use for societal benefit. Through digital public sector services and open data policy, Trafi among others encourages data flows between authorities, between authorities and (typically data-producing) users and towards companies to boost business. Examples of Trafi’s data include statistics and registers on vehicles, licences, permits and accidents. Another pioneer in data accounting is the Finnish Population Register Centre, having compiled data balance sheets since 2010, although due to the nature of the registers only a summary of the report is available for the public.

Why is this important?

Platform economy is all about unleashing the cornucopia of opportunities linked to data. Users and producers as well as the functioning of the platform create, process, store and exchange data, and these data and information flows form the key type of interaction in platform economy. Furthermore, many of the emerging technology areas linked to platforms, such as artificial intelligence, blockchain or automation, are extremely data-intensive.

Management of data has therefore become an increasingly critical and strategic part of activities of companies, public sector authorities and even individuals. On the one hand, data is an asset of real value, but on the other hand, this value can only come to fruition and grow through sharing and opening. This challenges existing business logics in many sectors, where data previously had little or no role or where data flows and information systems used to be strictly in-house matters.

Arguments favouring the introduction of data accounting to regular managerial and strategy work of organisations include both discovering opportunities but also addressing threats and uncertainties. Systematic data accounting helps internal monitoring and improvement, and an open approach helps to expand collaboration and partnerships with others (users, customers, companies and authorities). Accounting should also include responses and preparedness for safety and security issues as well as strategies related to data ownership, surveillance and fulfilment of possible regulatory requirements.

Things to keep an eye on

A significant change factor in the topic of data management in Europe is the data protection regulation (EU) 2016/679 that is to be applied in all European Union Member States in May 2018. This regulation addresses the protection of natural persons with regard to the processing of personal data and on the free movement of such data.

European Data Protection Supervisor lays out a definition of accountability in the meaning that organisations need to “put in place appropriate technical and organisational measures and be able to demonstrate what they did and its effectiveness when requested”. Suchlike measures include “adequate documentation on what personal data are processed, how, to what purpose, how long;  documented processes and procedures aiming at tackling data protection issues at an early state when building information systems or responding to a data breach; the presence of a Data Protection Officer that be integrated in the organisation planning and operations etc.”

Another great resource on the topic is the recent publication by the Finnish Government´s analysis, assessment and research activities on use and impacts of open data.  The report describes the openness of major data resources maintained by the public administration and on means to assess the economic impacts of open data in Finland. An analysis of the relationship between firms’ use of open data and their innovation production and growth is also provided. To conclude, the report proposes specific recommendations how to enhance the impact of open data in our society, including the use of tools such as data balance sheets.

The European Digital single market strategy and especially the subtopic of online platforms fits well into the above-mentioned discussion. Issues addressed under these activities include for example concerns about how online platforms collect and make use of users’ data, the fairness in business-to-business relations between online platforms and their suppliers, consumer protection and the role of online platforms in tackling illegal content online.

Guidance on how to prepare a data balance sheet is provided by for example the Finnish Data Protection Ombudsman in English and Finnish.

Selected articles and websites

General Data Protection Regulation (EU) 2016/679 – EUR-Lex
European Data Protection Supervisor: Accountability
European Commission: Digital single market – Online platforms
Valtioneuvoston kanslia: Avoimen datan hyödyntäminen ja vaikuttavuus
Liikenteen turvallisuusvirasto Trafi: Tietotilinpäätös 2016
Väestörekisterikeskus: Tietotilinpäätös
Data Protection Ombudsman: Prepare a data balance sheet
TechRepublic: Data’s new home: Your company’s balance sheet

Heidi Auvinen

Research Scientist VTT Technical Research Centre of Finland Ltd
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Persuasive computing

In the aftermath of the US election, the power of social media filter bubbles and echo chambers has again evoked discussion and concern. How much can algorithms influence our behaviour?

Why is this important?

Data is a key part of the functioning of any platform, and analysis and filtering of data streams allows, for example, tailoring of the platform’s offering based on user data. This is evident in content platforms such as Facebook or Youtube, which learn from your behaviour and customise the user view and suggested contents accordingly. This filtering for personalised experience is valuable and helps the user navigate in their areas of interests, but there are also various drawbacks.  Filtering and especially its invisibility can cause ‘filter bubbles’, where the user experience is threatened to limit to information that reinforces existing beliefs. This leads to polarization. What is even more troubling is that the algorithms can be tweaked to manipulate the feelings of users, according to a 2014 study done by Facebook without the users knowing.

Things to keep an eye on

The debate is now on-going as to how much algorithms can affect our actions. Some claim that the analysis and manipulation of social media feeds was instrumental in the US elections, while some say that the claims are overrated and the hype mostly benefits the analytics companies. In any case, the filtering of data is not inconsequential and there are increasing calls for more transparency to the filtering algorithms as well as for the ownership of the behavioural data collected through platforms. In part this issue becomes more and more topical with the advances in artificial intelligence, which makes data analysis more sophisticated and accessible. There are also interesting experiments – often with artistic goals – in confusing the algorithms in order to make the data they collect unusable by the platform owner.

Selected articles and websites

Will Democracy Survive Big Data and Artificial Intelligence?
The Rise of the Weaponized AI Propaganda Machine
The Truth About The Trump Data Team That People Are Freaking Out About
Robert Mercer: the big data billionaire waging war on mainstream media
How to hide your true feelings from Facebook
Persuading Algorithms with an AI Nudge

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Use cases of AI for platforms

Why is this important?

There is currently a lot of hype around artificial intelligence (AI), but what opportunities does it offer for platforms? Roughly put: intelligent interfaces, comprehensive collection and advanced analysis of data. Chatbots and other conversational interfaces offer a natural way for people to communicate with a service offered by the platform, either via typing or voice. AI can offer customer service, online tutoring, expert advice or even a personal assistant. In the background it can go through massive amounts of data and recognise patterns. This has applications from health diagnosis to extracting information from street signs and from combating fraud to identifying key “influencers” of social media. The more data is fed to AI, more capable it gets.

Things to keep an eye on

All the big players are investing heavily in AI, with the hopes that they become the de facto platform for all things AI. How this plays out remains to be seen. It is also uncertain how the public opinion towards AI evolves: so far we have been a bit wary of letting always on personal assistants into our living rooms or trusting AI with our health data. The ethics of AI are still being discussed although the technology and services are advancing rapidly.

Selected articles and websites

Artificial intelligence and the evolution of the fractal economy
How Artificial Intelligence and Robots Will Radically Transform the Economy
7 Ways to Introduce AI into Your Organization
Google, Facebook, and Microsoft Are Remaking Themselves Around AI
Here’s What Artificial Intelligence Will Look Like in 2030
Why artificial intelligence is the future of growth
Would you want to talk to a machine?
Google’s Featured Snippets on Desktop Now Written By Artificial Intelligence
Uber Bets on Artificial Intelligence With Acquisition and New Lab

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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Artificial Intelligence

Artificial intelligence has made tremendous progress over the last decades, moving from beating humans at games towards a wide range of fields. In 1999, IBM’s big blue defeated the world best Jeopardy champions, and 17 years later Google bested the world’s champion “go” player. Recently, Big Blue was employed to develop an antiviral to attack the Zika virus with great success. The new “macromolecule” was effective against not only Zika but multiple other viruses as well. LTP news estimates that “AI is going to change every endeavor of human activity from Medicine to Government to Manufacturing, Law, Finance and beyond.  By 2025, AI Will Have a 5-Trillion-Dollar Direct Impact on the Workforce“.

Why is this important?

  •  AI replaces jobs, and platforms enable this: platforms act as the mediator between the AI and the user, and offer the interface and central place to ask for e.g. law advice.
  •  AI provides new services. This is especially the case for healthcare, where improved pattern recognition can detect tumors, or evolutionary algorithms can design new medicine. Add to this the possibility to turn code into biological products via synthetic biology, and the range of services expands.
  •  AI provides the boost that data analytics needed to make sense of the data collected and created via platforms. Platforms enable the recording of every transaction, which results in vast amounts of data, which can be useful also outside the interests of marketing.

Things to keep an eye on

The range of application areas of AI will expand, covering new industries, such as financial analytics, advising, insurance and law. Bank of America estimates the market for AI-based analytics to grow to 70 billion dollars by 2020. At the same time, artificial intelligence is becoming more and more ubiquitous; people use AI-based services everyday without realizing it. As a counter trend to the hype and excitement over the potential of AI, concern about its malevolent potential has also been raised, ranging from AI causing mass unemployment (most probable) to unleashing “a global propaganda war that sets governments and populations in opposition”.

The Finnish government recently released its action plan for enhancing the innovation ecosystem around intelligent robotics and automation in Finland, with a focus on security, privacy, user centricity and service design. Currently, the main innovation hub around AI and robotics in Finland is Airo island. A good example of a Finnish company applying AI is Zenrobotics, which makes recycling robots based on machine vision. The Finnish “Curious AI Company” is focusing on the development of advanced artificial intelligence and is now trying to apply its unsupervised machine learning to various pilot areas. Finns also take part in the discussion around AI, see for example the predictions on AI by Jarno M Koponen.

Selected articles and websites

A Government resolution to promote the development of intelligent robotics and automation
The next AI is no AI
AI and Communication: Machines That Can ‘Hear’ and ‘Understand’ Voices
Siri creators unveiled a new AI platform that seems to blow Siri out of the water
New Infosys AI tool could transform the way companies maintain complex systems
The AI Revolution: The Road to Superintelligence
New AI security system cleverly combines machine learning and human intuition
DimensionalMechanics raises $4.7M for enterprise artificial intelligence platform

 

Mikko Dufva

Research Scientist VTT Technical Research Centre of Finland Ltd
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