In the data economy, you only get out as much as you are willing to put in
“Europe versus China and the United States” or “People versus the multinational giants of GAFA (Google, Amazon, Facebook, Apple) and BAT (Baidu, Alibaba, Tencent)”. Anyone who knows anything about the data economy is bound to have noticed the constant confrontational rhetoric between two different interested parties.
The competition for market share makes us think of the data economy as a zero-sum game. It is as if there is a cake that needs to be shared between countries, continents or companies. We use competitive vocabulary or even war terminology to discuss the matter and draw overly dramatic images.
How can we get past this adversarial way of thinking?
The juxtaposition of companies and citizens creates an impression of hostile conglomerates that are not interested in privacy or data security. Occasionally, these caricatures are necessary, and even I use them in my rhetoric to make my audience think about the current status and its problems. How can we advance to the next level of discussion and explain what this is all about?
The data economy is currently experiencing what the internet went through in the mid-1990s. We are aware that change is coming, but we are not able to make the right choices to take advantage of it. The effort to utilise data is often limited to hiring data experts to conduct interesting experiments because other companies are doing so. If these experiments fail to revolutionise the company’s business activities, the old daily routine is maintained with an awkward sensation. This also makes the voice of sceptics even louder, just like in the early days of the internet in the 1990s.
A sustainable data economy is based on trust.
The data economy is a victim of its own success. If the value of data is considered to be high, the data is guarded as if it were a key business secret and, paradoxically enough, that is exactly what prevents the company from taking advantage of the data and realising its value. All business managers should understand the three basic principles of the data economy:
1) Data only has value when it is used.
2) Unused data is a major cost.
3) The value of data increases every time it is used.
Having understood these three principles, a company initiates its first experiment with artificial intelligence, which ends in failure. The following three facilitators of the data economy should then be recognised:
4) Innovation occurs between organisations and in co-operation.
5) The value of shared data is greater than the sum of its parts.
6) A sustainable data economy is based on trust.
American internet giants are the best at taking advantage of point number four. They are constantly attracting small companies and developers. Even though they have the greatest resources in the world, innovations do not automatically pop up where the money is. Instead, they happen unexpectedly, when an apple hits someone in the head or a petri dish is accidentally left in a laboratory.
The fifth principle is often dubbed “Metcalfe’s law” in telecommunication contexts. The device that is the first to connect to a network is useless, the second one starts to adds value, but all the other subsequent devices connect with all other devices in the network, and the expenses of connecting to the network in relation to the benefits of a growing network become insignificant. The same principle applies to the use of data. For example, individual pieces of data regarding a person’s genes, blood tests, location, diet or exercise can be somewhat redundant, but put together they can create an overall impression of the person and form the basis of completely new preventive health services.
How can your company become a reliable data economy partner?
The sixth and final point is the most important of them all. Sharing and combining data requires trust from both economic operators and the general public. Trust is difficult to establish but easy to lose. It is the most essential driving force of the data economy.
If you believe that these six principles are superfluous, the title of this blog entry summarises its content neatly: “In the data economy, you only get out as much as you are willing to put in”. If you want to be a part of the future, and the data economy in particular, your organisation must look into how it can make its data available to others, how it can become a trustworthy partner and how it will take advantage of data generated by other parties. These measures will ensure that you are involved in developing the solutions and innovations of the future. When this message becomes a generally accepted principle, we can finally stop using confrontational rhetoric and talk about a fair data economy.