This is Icebreaker One’s response to the Department for Business and Trade’s Invest 2035: the UK’s modern industrial strategy. Find the Google document version here.

Please note that throughout this consultation, Icebreaker One uses the terms Open, Shared and Closed data as defined here.

If you have any questions about our submission or require clarifications please do not hesitate to contact us via openenergy@ib1.org. Thank you for considering our submission.

Sectors

Q4: What are the most important subsectors and technologies that the UK government should focus on and why?

The financial, energy and transport sectors are critical first priorities as the UK transitions to a decentralised, green energy future that can be reliably supported by the financial sector. Unlocking access to data through Smart Data schemes will serve to enable, and derisk, these priorities.

Smart Data scheme as defined in The Smart Data Roadmap (DBT 2024):

Smart Data is the secure sharing of customer (individual or business) data, upon the customer’s request, with Authorised Third-party Providers (ATPs). The ATPs can then enhance the customer data with broader, contextual ‘business’ data, which may be provided directly to ATPs or may have been made ‘open’. A Smart Data Scheme is the implementation of Smart Data in a specific sector or group of sectors. These schemes require:

  • A regulatory framework to govern how data is shared.
  • Common and open data standards that reflect the dynamics of the market and minimise the risk to competition and consumer. 
  • Participation of data holders, third parties and regulators. 
  • Effective representation of consumers and other end users. 
  • A funding model that reflects consumer interests.
  •  Interoperability with other Smart Data schemes. 
  •  Interoperability with other Smart Data schemes. 
  • A practical framework for the delivery of schemes.

Business Environment

Q7: What are the most significant barriers to investment? Do they vary across the growth-driving sectors? What evidence can you share to illustrate this?

IB1 can comment on the barriers to investment in the ‘Clean Energy Industries’ and ‘Digital and Technologies’ growth-driving sectors as they are most relevant to our work. 

Data sharing and data access is at the heart of meeting the UK’s decarbonisation goals. 

For example, our flagship programme Perseus will automate access to assurable SME electricity data, so they will be able to see the emissions from their energy use and share it, via reporting solutions, to their banks to unlock green finance (Perseus 2023 Report). This will result in a viable connection between the financial economy and real economy to enable net zero impact in a scalable and assurable manner. When investors have trusted assurable data they are empowered to prioritise investment where needed for maximum net zero impact. 

Assurance gives confidence both to people inside companies that they are allowed to share data externally, as well as those externally knowing that they have permission and confidence in what is being supplied.

Throughout IB1’s programmes, a consistent theme of policy uncertainty has been identified as a barrier to investment and expanding cross-sector and sector wide data and digital strategies. As mentioned in IB1’s response to Ofgem’s The future of distributed flexibility consultation consistency in vision and decision making is vital for the decision makers in the organisations and companies which may be involved.

It is essential to have consistency within sectors and across the pinchpoints where sectors meet and/or markets are increasingly ‘coupled’ (i.e. energy and transport; energy and water; energy and manufacturing). Having a cohesive, consistent vision with clear actions allows for stakeholders to incorporate data sharing and data access at the core of their decision making, and creates the atmosphere for a data sharing cultural change to become business as usual. 

Business Environment – Innovation

10: Where you identified barriers in response to Question 7 which relate to RDI and technology adoption and diffusion, what UK Government policy solutions could best address these? 

To meet the combined needs of economic growth, environmental sustainability and social equity, the UK must fund institutions that can help convene and aid multi-stakeholder collaborations. Such support is essential to deliver open and accessible markets (available to the whole UK economy) and equally to protect our economy from monopoly behaviours. 

Our previous experience has been that projects to co-design market-wide solutions without external or public neutral funding suffer from a collective action problem in which prospective partners are unwilling to contribute to the costs as the benefits of the developed outcome will accrue to them whether they contribute or not. Failure to fund risks a lack of cohesion, duplication, or a very limited trial with limited reusability.

Public signalling and funding enables IB1 as convenor and facilitator of industry co-design to support an effective methodology and increase buy-in from partners and testers, resulting in better outputs and adoption.

Business Environment – Data

Q12: How can the UK government best use data to support the delivery of the Industrial Strategy?

Icebreaker One Founder and CEO Gavin Starks is a co-chair on the Smart Data Council, alongside Minister Madders (and previously Minister Hollinrake). 

The Industrial Strategy should endorse and build upon the Data (Use and Access) bill and ensure that the work on Smart Data is fully connected and integrated into planning processes. 

The UK must implement national data as infrastructure so that it provides consistent control, sharing, and security for data, much like other public infrastructures such as roads and utilities. 

To make the most of its value, and reduce risks, we need to connect data with those who need it and put in place the right protections for everyone. This supports net-zero investment decisions by connecting assurable real economy & financial economy data between organisations and between sectors.

Equally important is to ensure that negative incentives, corporate capture, unintended monopoly positions, and data misuse are addressed through robust data sharing governance processes. As the data sharing economy develops in a manner which is increasingly fluid and cross-sector there is an ongoing need for policy and regulatory development which horizon-scans, assesses, and defines responsibility for addressing different aspects of the regulatory landscape. Providing this form of policy and regulatory join-up presents essential support to the incentivising and de-risking of investment in strategic sectors. 

IB1 supports a principles-based approach to implement its national data infrastructure so different sectors can move at pace on their own, develop their own customer-facing values and business propositions, get them out into the market, but all anchored on

principles of data rights, of machine interoperability and of fair value exchange: reciprocity is at the heart of all of this work.

Key principles for designing data sharing as infrastructure:

  • Decentralised solution: guiding principles while allowing different sectors or other operational environments to tailor to user needs/circumstances.
    • Example: critical national infrastructure sectors must be particularly mindful of national security
  • As digitalisation of the energy sector, and indeed the wider economy, accelerates it is essential that any governance mechanism is built to function flexibly within a shifting technical landscape. There will be a continual balance between addressing user needs and potential threats, necessitating robust governance to be participatory and responsive to a full spectrum of social and environmental considerations shaping the operational landscape, for example including capacity to respond to forthcoming Net Zero 2030 milestones. 
  • Security: Data required for investment must undergo a thorough assessment of risks, benefits, security measures, and potential international standards as there may be implications for data transfer and use across the UK and international borders. 
  • Clear and consistent use of definitions and communications surrounding data. IB1 uses the data spectrum to communicate the definitions and differences between Open, Shared, and Closed data. 
  • Build upon prior art: IB1 recommends simple and low friction options which builds on previous implementation in other industries, for example Open Banking which has been endorsed by the Competition and Markets Authority (CMA) and the Financial Conduct Authority (FCA)

Joined up approach to be interoperable with initiatives across the economy.

Q13: What challenges or barriers to sharing or accessing data could the UK government remove to help improve business operations and decision making?

As noted in the IB1 response to Ofgem’s Data Sharing in a Digital Future call for input where we identified the following challenges or barriers for data sharing:

  • Too much emphasis on a technical solution – implementing a data sharing infrastructure must not take a technical-led approach. It must address governance, user needs, business, social, legal, engagement and communications to be successfully implemented and ensure the solution is fit for purpose, and can be adopted by the market. We observe that technical-led programmes tend to fail to gain traction or deliver against material user needs.
  • Complexity and collective agreement across the industry – the energy industry is complex and rapidly changing. It can be difficult to meaningfully engage. This requires robust industry engagement across any of the growth-driving sectors. 
  • Cultural change and industry readiness – it is essential to understand and interact with the current data sharing culture within the organisations and companies, they must be engaged to understand their value proposition. 
  • Appropriately defining and governing the roles of Ofgem regulated and non-regulated participants (and similar regulatory bodies across the sectors).
  • Appropriate legal support and resourcing – a mechanism must develop the applicable data licences, and needs to be appropriately resourced to be able to do so. 

Business Environment – Infrastructure

Q14: Where you identified barriers in response to Question 7 which relate to planning, infrastructure and transport, what UK government policy solutions could best address these in addition to existing reforms? How can this best support regional growth?

The government role in remove removing challenges and barriers to sharing and accessing data include:

  • Working with industry to determine where the lines are drawn between centralised, pre-competitive and competitive areas;
  • An open consultation on what the role of regulation is, at what granularity, and the form of regulation (i.e. prescriptive, principles based, other)
  • Constructively query the implementation of data sharing initiatives to ensure they serve the needs of human users and an environment where increased machine readability is important. This may include factors such as:
    • Human: language/terminology adoption and interoperability, user needs for supporting documentation (e.g. operational materials, policies, onboarding), interpretability of decision making.  
    • Machine: journey towards machine readability and interoperability of rules regimes
  • Ensure those governing, operating and participating can be helped in their assessments of compatibility and interoperability
  • Prioritise and create clear (and stable) roadmaps that enable investment to be made
    • In relation to ecosystem evolution – perhaps opportunity to learn across strategic sectors and influence their own regulatory landscapes. E.g. energy sector experimenting with regulated actors having a ‘digital spend envelope’ which is revisited on a slightly more frequent cadence.

Business Environment – Competition

Q19: How can regulatory and competition institutions best drive market dynamism to boost economic activity and growth?

The digital and data economy has a different market pattern than other sectors, as identified in Unlocking digital competition Expert Panel digital markets are subject to ‘tipping’ in which a winner will take most of the market. As mentioned in Question 14 it is essential to split out the precompetitive and competitive elements to establish a clear framework for collaboration and innovation. 

A robust pre-competitive approach to data sharing infrastructure  focusses on providing access to essential infrastructure while allowing competition to occur at higher-value layers. This fosters a balanced environment of innovation within defined frameworks, without undermining fair access to critical resources, and ensuring that negative incentives, corporate capture, unintended monopolies and vendor lock-in is avoided.

Business Environment – Regulation

Q20: Do you have suggestions on where regulation can be reformed or introduced to encourage growth and innovation, including addressing any barriers you identified in Question 7?

The Industrial Strategy should endorse and build upon the Data (Use and Access) bill and ensure that the work on Smart Data is fully connected and integrated into planning processes. 

Partnerships and Institutions

Q31: How should the Industrial Strategy Council interact with key non-government institutions and organisations?  

As a neutral non-profit, IB1 supports the development of solutions and solicits guidance from a wide range of stakeholders – including commercial and non-commercial companies, non-profits, community organisations – to ensure a solution meets a wide range of user needs and is driven by consensus. This advances solution adoption and innovation. 

General remarks:

IB1 emphases the importance of the required data sharing culture change and industry readiness and willingness to share data. It is essential to understand and interact with the current data sharing culture within the organisations and companies, they must be engaged to understand their value proposition. 

Through IB1 programmes and years of expertise, we support following a use case approach to data sharing initiatives. This approach centres user needs, and makes a business case for the effort of data sharing. A use case driven approach allows for:

  1. Market incentives: there must be an economic argument that policy can then amplify or mandate. If there is no financial incentive, there will be no movement (regardless of central vs decentralised, mandate or not — mandates are also often ignored). Midata was mostly tech-led, Open Banking was use-case led.
  2. Removal of friction: Removing transactional friction may seem like something everyone wants, but not if your current business model relies on it. There must be “something in it” for everyone, or at least a path to cost reduction or a new business model. Removing friction can help everyone go together: this is never a ‘technology problem’ (e.g. absence of a data ontology).
  3. Mandates: if the friction is ‘too high’, regulatory intervention is necessary to mandate participation and move the market. However, if the market can demonstrate self-initiation, then ‘endorsement’ from the government can be sufficient to drive impact. Value creation must be visible in both cases.