Business Model Options

Where should a civic digital trust reside? How does it sustainably resource its operations? How does it avoid conflicts of interest?

• The trust could be a new department within government or an arms' length agency of government. Governments already have representative democratic election processes, are stewards of the public interest, and it can be argued that politicians already have a fiduciary duty to their constituents.

• It could be a not for profit, either existing or established for the specific purpose of running the data trust. A neutral third party might have the least potential for conflict of interest beneficiaries.

• It could be a for profit social enterprise. A for profit corporation could be lean, agile, and generate sustainable sources of revenue while ultimately serving a higher public purpose.

An example of a relevant arms-length agency of government is the Toronto Public Library. It is the world's largest neighbourhood-based library with the mission to empower Torontonians to thrive in the digital age and global knowledge economy. The Toronto Public Library is governed by a Board appointed by Toronto City Council. The Board is composed of eight citizen members, four Toronto City Councillors and the Mayor or his designate.

An example of a relevant not for profit is Code for Canada. Code for Canada is a national nonprofit that connects government innovators with the tech and design community. Their programs enable governments to deliver better digital public services and empower communities to solve civic challenges using technology and design. Code for Canada runs Civic Hall Toronto, which enables government innovators, entrepreneurs, nonprofits and community to share, learn and collaborate. Code for Canada has a privately appointed nine member Board of Directors.

An example of a relevant for profit enterprise is T4G. T4G is a privately held values-based company and certified B Corporation with offices across Canada. T4G builds intelligent software and provides advanced analytics services.

These examples are merely illustrative of a range of possible business models. We do not intend to imply that any of these organizations are considering establishing a civic digital trust. Each of these business models has different strengths and weaknesses, which are summarized in the following table:

Types of Business Models

Government Department or Agency

Not For Profit Organization

For Profit Social Enterprise

Applicable Privacy Legislation

Freedom of Information and Protection of Privacy Act or Municipal Freedom of Information and Protection of Privacy Act

Personal Information Protection and Electronic Documents Act (only if the not for profit was engaged in a commercial activity)

Personal Information Protection and Electronic Documents Act

Control and Enforcement

Government agency as regulator to ensure shared citizen data use does not violate privacy laws. End users must still comply with minimum legal standards applicable to the end user.

Internal process. Compliance with regulatory standard. Entity can remove participation of data user and potentially enforce rights in court. End users must still comply with minimum legal standards applicable to the end user.

Subject to regulatory oversight. Compliance with regulatory standard. Entity can remove participation of data user and potentially enforce rights in court. End users must still comply with minimum legal standards applicable to the end user.

Data Providers

Government collected Data Public/Private partnerships

Government collected Data Public/Private partnerships

Collective/ Conglomerate

Data User

Government Citizens Local businesses Private Sector in general

Government Citizens Local businesses Private Sector in general

Usually, Collective or Conglomerate But could include Government, Citizens, Local Buinesses, Private Sector in general

Value Generated

Sharing data for the public good, improvement of quality of life for citizens (greater individual and collective benefit). Informed economic decisions. Infrastructure and resource efficiency Development and prototyping of new solutions Enables more competition of services for consumers

Enables “reciprocal relationships between the public (the trust), technology companies (the licensee), and technology stakeholders (the users or investors or contributors or public)” More democratisation of data (not just government or large private companies) Creates strategic partnerships

Flexibility and responsiveness to changing technologies and trends

Monetization Model

Limit data that can be made open Social value exchange

Limit data that can be made open

Limit data users (stakeholders)

Risks

Governments currently lack the skills and resources Technical solution effectiveness and data breach concerns Slow uptake/progress in meaningful sharing of data by private sector Resistance of citizens to share data- lack of trust

Missions of private/public are often competing End-User identity profiling. Multiple overlapping data rights, specifically PII data. Data sharing agreements unclear on data publishing decisions. Technical solution effectiveness and data breach concerns Sector specific data risks and unintended consequences, eg. healthcare Slow uptake/progress in meaningful sharing of data

Absence of social mission/ disconnect with data subjects Commercial and legal risk for private entities involved Public trust needs to be established

Barriers

Limitations on how to achieve effective legal use of PII data. Data control and access among multiple competing stakeholders. Lack of established business models

Lack of established business models Need for long-term vision and commitment: Potential change in organization if technology/ priorities change

Changing regulatory environment - limit risk and exposure to shareholders

Interviews with subject matter experts emphasized the models of oversight for the trust needs to have representation from many stakeholders to balance the interests of the public sector, citizens and businesses. One interviewee thought that only residents should have a seat at the table. Another said that if you only have residents, the trust becomes just another consultation process: all influencers need a seat at the table to create a genuine negotiating space.

Monetization Strategies

A civic digital trust requires significant resources to cover the cost of ongoing operations. Below are common methods to extract value from underlying business assets that are commonly used in today's digital economy.

• Freemium

  • A business model where a product of service has both free access (usually limited in functionality) and a premium version (unrestricted access) that allows users to test or utilize the functionality as needed.

  • Collective public private contribution of data sets for access other data repositories (open data, de-identified data sets, etc)

  • This model of value capture is dominant in the mobile Apps. Typically free to download the basic version and any upgrades or further access require payment

• Subscription Model

  • A recurring fee for continued service or access

  • We see this model prevalent with digital assets from hosts such as Netflix and Spotify

• Fee for Access

  • Users can pay a fee for access to the products and services of a business

  • This model is starting to emerge for online web access to news articles, by charging fees to non-subscribers

• Pay-Per-Use

  • A metered service, where the user of the product or service has access and charged for the interactions when used

  • Typically seen in cloud-based SaaS (Software-as-a-Service) models

• Social Value Exchange

  • Value exchange does not have to be monetary. Private institution might gain access in order to provide better public services

• Third Party Pays

  • Government, philanthropy or corporate sponsors may cover the costs of operations