Social Europe

politics, economy and employment & labour

  • Themes
    • Global cities
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter
  • Membership

It’s now or never for national data strategies

Diane Coyle 2nd March 2020

As a critical resource that is unlike anything that came before it, big data demands a robust policy response.

data strategies
Diane Coyle

Everybody seems to agree that data will play a fundamental role in the economy of the future, whether through health discoveries, smart energy grids, autonomous vehicles or other areas of innovation. The problem is that nobody knows precisely how the new forms of economic value will be created, who will benefit or what the regulatory response should be. In addition to enthusiasm about the power of big data, there are growing concerns about its potential to be abused, including in the case of facial recognition and other applications that involve a significant erosion of privacy.

In any case, the volume of data being generated annually has grown at a staggering pace, increasing fourfold in just five years, by some estimates. Given this pace of growth, ensuring that the data explosion serves society’s interests has gained new urgency. Yet too little is known about who holds what data, or about the potential value of some forms of data as opposed to others.

Potential social value

As an economic matter, data are fundamentally different from most other goods and services such as cars, haircuts and indeed oil. Two features of data, in particular, make assessing their value difficult, while at the same time underscoring the distinction between their potential value to society and their private-market value.

The first characteristic, in the economic jargon, is non-rivalry: data can be used by many people simultaneously. Once data are created and catalogued in a useful format, they can be furnished to additional users at low or even no cost. But, as with other public goods such as parks or roads, collecting, compiling and formatting socially useful data may require significant upfront financing. That is why there are already so many restrictions on access to existing data; those who have built the databases need to recoup their costs.


Become part of our Community of Thought Leaders


Get fresh perspectives delivered straight to your inbox. Sign up for our newsletter to receive thought-provoking opinion articles and expert analysis on the most pressing political, economic and social issues of our time. Join our community of engaged readers and be a part of the conversation.

Sign up here

The second key feature of data concerns externalities: the value of data to any one user is closely linked to actions taken by others. The erosion of privacy is one oft-mentioned negative externality associated with the collection and selling of personal data. But an issue that has received less attention is the potential for data to yield positive externalities. Private companies already derive valuable commercial insights from combining data about individual customers into larger sets. But these benefits pale in comparison to what could be gained if the relevant data sets were not siloed in different public and private organizations.

Of course, the specific informational content of any given data set also affects its value. Is the data set for a population of users general or specific? Does it include geographic and temporal characteristics, and is it accessible and interoperable across different platforms? All of these considerations matter for determining use value. And while there is already a data market, data are far from becoming a standardised commodity whose value can readily be established through trades.

Complicating matters further, the same data can have very different value to different users. The economic value—both commercial and in terms of wider economic welfare—of any specific data set is context-specific. Yet, just as too much of the current policy debate treats all data as a homogenous good, so does the preoccupation with ‘personal’ data and privacy—while an important issue—divert attention from the ways that data could be put to good public and social use.

Maximising benefits

How can we broaden the scope of the current debate? First, we must accept that markets alone will not make the most of this new resource, owing to non-rivalry and various externalities. Because market forces will produce too much of some types of data and too little of other types, governments will have to step in to ensure that the benefits of public and private data are being maximised.

Specifically, that means maintaining fair competition in private, data-intensive markets (as envisioned in the European Commission’s newly proposed data strategy), and ensuring that private and public service providers can gain access to and combine different sources of data. Governments should not be granting exclusive rights to public-sector data that could be used by other third parties to deliver social benefits. In fact, policy-makers should even consider mandating that certain forms of private-sector data be made accessible to third parties, to ensure interoperability between platforms.

To be sure, these proposals presuppose significant institutional innovation. Governments will need to support the institutions that will be trusted with protecting, monitoring and controlling access to data. While some of these institutions will need to be created from scratch, there are already experiments with new forms of digital governance, such as data trusts and data stewards.

In addition to fostering institutional reform, policy-makers will also need to make some tough choices. There is a trade-off between incentivising investment in high-quality data and granting wide access to it. Policy-makers will need to strike a balance between these concerns, perhaps by exploring the use of time-limited and non-exclusive rights or a data equivalent to patent pools.

When it comes to funding public data, the financial and licensing terms of public-sector deals with private companies will need to be transparent, so that other parties can make a case for more valuable uses of the same data. On the pretext of commercial confidentiality, the official bodies that are currently selling access to public data are making it harder for themselves to get a good deal. They are effectively preventing competition, and thus undermining their own legitimacy by sowing distrust among the citizens whose data is being sold.


Support Progressive Ideas: Become a Social Europe Member!


Support independent publishing and progressive ideas by becoming a Social Europe member for less than 5 Euro per month. You can help us create more high-quality articles, podcasts and videos that challenge conventional thinking and foster a more informed and democratic society. Join us in our mission - your support makes all the difference!

Become a Social Europe Member

Figuring out how to get the best out of data is still an inchoate effort. But as our new report for the Nuffield Foundation shows, the issues and trade-offs involved are becoming clearer all the time. Above all, policy-makers need to recognise the urgency of the challenge at hand. Now is the time to start developing data strategies, policies and regulations. Otherwise, the gains of the data age will be seized by a small number of big companies and much of the potential benefit to society will be squandered.

Republication forbidden. Copyright Project Syndicate 2020 It’s now or never for national data strategies

Diane Coyle
Diane Coyle

Diane Coyle is professor of public policy at the University of Cambridge. She is the author, most recently, of Cogs and Monsters: What Economics Is, and What It Should Be (Princeton University Press, 2021).

You are here: Home / Politics / It’s now or never for national data strategies

Most Popular Posts

Russia,information war Russia is winning the information warAiste Merfeldaite
Nanterre,police Nanterre and the suburbs: the lid comes offJoseph Downing
Russia,nuclear Russia’s dangerous nuclear consensusAna Palacio
Belarus,Lithuania A tale of two countries: Belarus and LithuaniaThorvaldur Gylfason and Eduard Hochreiter
retirement,Finland,ageing,pension,reform Late retirement: possible for many, not for allKati Kuitto

Most Recent Posts

Russia,journalists,Ukraine,target Ukraine: journalists in Russia’s sightsKelly Bjorkland and Simon Smith
European Union,enlargement,Balkans EU enlargement—back to the futureEmilija Tudzarovska
European Health Data Space,EHDS,Big Tech Fostering public research or boosting Big Tech?Philip Freeman and Jan Willem Goudriaan
migrant workers,non-EU Non-EU migrant workers—the ties that bindLilana Keith
ECB,European Central Bank,deposit facility How the ECB’s ‘deposit facility’ subsidises banksDavid Hollanders

Other Social Europe Publications

strategic autonomy Strategic autonomy
Bildschirmfoto 2023 05 08 um 21.36.25 scaled 1 RE No. 13: Failed Market Approaches to Long-Term Care
front cover Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship

Hans Böckler Stiftung Advertisement

WSI European Collective Bargaining Report 2022 / 2023

With real wages falling by 4 per cent in 2022, workers in the European Union suffered an unprecedented loss in purchasing power. The reason for this was the rapid increase in consumer prices, behind which nominal wage growth fell significantly. Meanwhile, inflation is no longer driven by energy import prices, but by domestic factors. The increased profit margins of companies are a major reason for persistent inflation. In this difficult environment, trade unions are faced with the challenge of securing real wages—and companies have the responsibility of making their contribution to returning to the path of political stability by reducing excess profits.


DOWNLOAD HERE

ETUI advertisement

The future of remote work

The 12 chapters collected in this volume provide a multidisciplinary perspective on the impact and the future trajectories of remote work, from the nexus between the location from where work is performed and how it is performed to how remote locations may affect the way work is managed and organised, as well as the applicability of existing legislation. Additional questions concern remote work’s environmental and social impact and the rapidly changing nature of the relationship between work and life.


AVAILABLE HERE

Eurofound advertisement

Eurofound Talks: housing

In this episode of the Eurofound Talks podcast, Mary McCaughey speaks with Eurofound’s senior research manager, Hans Dubois, about the issues that feed into housing insecurity in Europe and the actions that need to be taken to address them. Together, they analyse findings from Eurofound’s recent Unaffordable and inadequate housing in Europe report, which presents data from Eurofound’s Living, working and COVID-19 e-survey, European Union Statistics on Income and Living Conditions and input from the Network of Eurofound Correspondents on various indicators of housing security and living conditions.


LISTEN HERE

Foundation for European Progressive Studies Advertisement

The summer issue of the Progressive Post magazine by FEPS is out!

The Special Coverage of this new edition is dedicated to the importance of biodiversity, not only as a good in itself but also for the very existence of humankind. We need a paradigm change in the mostly utilitarian relation humans have with nature.

In this issue, we also look at the hazards of unregulated artificial intelligence, explore the shortcomings of the EU's approach to migration and asylum management, and analyse the social downside of the EU's current ethnically-focused Roma policy.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube