How is your digital twin feeling today? As much we would like to refuse this new reality, most of us have a digital twin that produces a ton of data, even when we are asleep. Anything significant that happens to a person in the real world is instantly mirrored somewhere in the digital reality. Some of this data we share willingly via social media and a good chunk of it is recorded and processed without our knowledge.
Then, there is this whole new realm that we call ‘data economy’, where both companies and individuals exchange data. Most importantly, it will and already has a tremendous impact on our lives, creating new economic, political, and business frameworks.
In the past four years, the value of the data market in the US has grown from $129 billion to $211 billion. While the numbers are truly jaw-dropping, the exact same dataset will have a different value for different entities, be it corporations or individuals. As much as economists love to compare data to oil, gold, and other natural resources, none of these comparisons can encapsulate all the intricacies contained in data as a whole.
Depending on the case, though, these comparisons can be quite valid. Similar to gold mining companies that employ thousands of people to produce one of the most valuable resources in the world, many companies employ thousands of people to process data for it to become useful. For example, Apple hires an inordinate amount of people from different linguistic backgrounds to review how well Siri understands its users.
However, in general, labeling data as an asset wouldn’t do it justice as a dataset’s value strongly depends on its purpose and ownership. In many cases, companies can generate surplus data that provides little value for them in particular but can provide immense benefits for others. Moreover, the true value lies not in the raw data but in insights that can be generated from it. This makes it difficult to put a price tag on data, which significantly complicates negotiations between dataset buyers and sellers.
Then, there are even more complications regarding personal data value and ownership. If an AI-based real estate platform did a perfect job of helping me to find a few housing options that I really like based on my personal details, is it me who owns this data or the company? This is why the notion of open data is emerging.
In an ideal world, equal access to data is an extremely effective way to economic prosperity. However, this will only work if everyone from the customer to the biggest enterprise will share all of their data. In the context of personal data, these fantasies are already crushed on the regulatory level by the GDPR and other similar laws. And the majority of corporations will forever be reluctant to share some of their datasets, as it’s often their most reliable source of revenue.
Instead, we need much more sophisticated data governance solutions that will manage data access and ownership while taking data privacy and regulatory compliance into account. Blockchain is a key technology in this regard. It allows companies to safely sell, buy, and exchange information by tracking who exactly can access a particular dataset.
We are already seeing forward-looking companies making this happen. For example, US-based Ping Identity, which provides federated ID management for large enterprises, has recently acquired a blockchain-based security management startup. Another startup called Oasis Labs has developed a blockchain-based platform that helps companies in handling their sensitive datasets, with a particular focus on healthcare.
On top of private technology-oriented initiatives, we will need governmental institutions to be highly involved in this pursuit of fair data exchange. The startups and data science consulting firms are still waiting for regulatory clarity. Data policies can also vary depending on location, which is a huge barrier to international data flows.
It’s critical to note, however, that governments can’t really be blamed for creating these barriers as they are doing their best to ensure that people’s data and sovereignty are protected. As we’ve already figured out, the growth of the data economy is too rapid for regulatory institutions to catch up.
And even then, technology doesn’t really help in establishing prices for personal data. While some experts insist that individuals need to put prices on data themselves, this is a rather unlikely scenario. If the majority of people are still confused about cookie popups on websites, can we really expect them to adequately bargain on their data? In any case, as the documentary Social Dilemma has revealed to the least tech-savviest of us, there is a real price to be put on your personal information.
As history suggests, this issue is most likely going to be resolved by collective effort. We are going to see the emergence of organizations with people collaborating together to establish prices for their data and ensure that it’s used responsibly. And yes, these data co-operatives will look very similar to trade unions, and will most likely take even more time to build and become useful.
The future where data is at the forefront of the economy is inevitable, but it will take a long time for the organizations, governments, and their citizens to adapt.