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New Infrastructure Financing Models

Data monetization can boost infrastructure investments' liquidity and enhance investments in infrastructure projects.




Through digitalization, data generated by infrastructure can help develop new business models to hedge risk, create efficiencies, enhance new revenue models, introduce new models for infrastructure funding, or create value beyond the infrastructure itself. The world's largest taxi company owns no cars, the world's largest retailer owns no inventory, and the world's largest accommodation provider owns no real estate. What they hold instead is data. And it is data, almost exclusively, (Daley, 202) which generates their vast revenues. So, can infrastructure date.


Data Natural Resources

Land in economics refers to all of the natural resources that businesses need to make and distribute goods and services and was designated as the origin of economic value by the physiocrats, a collection of French economists who came before the better-known classical political economists (Smith, Ricardo, Marx, and others).


"What is valid for land is true for data as a result of technological advancement."

Organizations are challenged with rising clients’ expectations for seamless digital services, diminishing return on investments and competition from emerging players to increased regulation, pricing pressures and global disruptions to operations and supply chains. Organizations have relied on land, human, financial and intellectual capital to grow and compete over the last centuries. Now there is a new form of resource in town, data.


What is valid for land is true for data as a result of technological advancement. Data is a natural resource more available than land, a gift that is given by nature. Data is essential to the government and industries to survive and thrive in this digital age. Soon, data will be an asset reported and accounted for in a company’s balance sheet and be reflected in calculating a company’s market capitalization value. (Jain, 2020), and create the following solutions and business models.


"Data valuation will enable better decision-making and enhance customer experiences, not as sold information only to unlock the embedded value within the data."

Data Valuation Business

Digitization of infrastructure will ensure secured data acquisition, transmission, and storage of relevant information by outfitting roads, bridges, drinking water and sewer pipelines, buildings, ports and with sensors and other data collection systems. When combined with the emerging deployment of IoT, data can generate an incredible amount of added value. Data as an asset has inherent value. Therefore it should be valued on a dollar scale. Data valuation will enable better decision-making and enhance customer experiences, not as sold information only to unlock the embedded value within the data.


A business with a general process of determining the economic value of data will encourage investments in digitalization upgrades to existing infrastructure and also ensure new infrastructure is smart enabled. Infrastructure data valuation business can be used to determine the fair value of data and add to the general capitalization of a company for a variety of reasons, including infrastructure financing.


"Infrastructure data intelligence can contribute to infrastructure service improvement and forward-looking strategies, understanding consumer preferences and tendencies."

Data Portfolio Business

By integrating performance or structural health metrics within infrastructure, new revenue streams can be unlocked to evaluate the economic viability. This solution can decrease the risk and the cost of infrastructure development, construction, and operations. Countries like Germany and Netherlands are already exploring data monetization models in infrastructure.

Rather than the traditional tolls revenue generation model, public agencies in Germany and Netherlands consider farming out bridge data portfolios to asset management companies collecting anonymized data on traffic volume, truck weights, and structural health. (Adriaens, 2021) In turn, those companies can sell the data in markets to materials suppliers, insurance companies, marketing firms and hedge fund investors.


Infrastructure Data Intelligence Business

Data intelligence uses analytical tools and methods to form a better understanding of the information that is collected to improve services or investments. The bundling of identification and locating systems, communication solutions, security, industry gateways and multi-sensors for process instrumentation, and future critical technologies like 5G can serve as a basis for new business models for infrafintech. Data can be harnessed to deliver insights to make financing more efficient and develop the next generation of infrastructure financing models. Sensors on roads and bridges can monitor deterioration and the impacts of trucking.


"As infrastructure data become more readily available, Infrafintech innovators will develop new financial models to accelerate data monetization ecosystem."

Data intelligence can contribute to infrastructure service improvement and forward-looking strategies, understanding consumer preferences and tendencies. These insights could be used to price a fee structure for logistics companies to reduce lifetime use or maintenance requirements. The data on water flow, traffic congestion, air pollution can be processed to illuminate how to deliver services more efficiently and cost-effectively. (Peter, 2021)


Conclusion

Data and data monetizing can provide many benefits, including the potential to add new revenue streams. It allows businesses to form mutually beneficial relationships with other organizations to improve data collection and data quality, enhance investment. It can boost the liquidity of infrastructure investments and improve the attractiveness of investing in infrastructure projects.


The entrepreneurial community will be well served as the available data grows. As specific infrastructure data become more readily available, Infrafintech innovators will develop new financial models for monetizing infrastructure data, increasing the infrafintech ecosystem.



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