Data economy wonderland – why is pursuing it so important right now?

With its international partners, Sitra’s IHAN project is building a fair data economy where digital services share data in a transparent and confidential manner. While a fair data economy benefits everyone, it requires a new sense of community to become a reality.
SItra. Photo: Miikka Pirinen

Writer

Jaana Sinipuro

Project Director, IHAN - Human-driven data economy, Sitra

Published

SItra. Photo: Miikka Pirinen

Writer

Jaana Sinipuro

Project Director, IHAN - Human-driven data economy, Sitra

Published

We recently conducted an interim evaluation of our fair data economy project, IHAN, conveniently right after the publication of The Economist’s series of articles analysing the data economy. The article entitled Are data more like oil or sunlight?, published on 20 February 2020, ended with the following words: “If people, as well as firms, can trust the continent’s data infrastructure, they will be willing to share more and better data, which means better services for everyone. If such a ‘virtuous cycle’ were to take off, it would be quite a reversal of the old world’s fortunes.”

In the early stages of our project, I would often answer questions such as: “Why is the Finnish Innovation Fund doing an international project and is it in the interests of the Finnish people?”. When we expanded on our original plan and moved from creating an account system for data exchange, similar to the IBAN system, to conceptualising a fair data economy, I was asked: “Is it worth taking unnecessary risks?”. When we launched a business programme for small and medium-sized enterprises at the beginning of March, I was pressed for answers to the question: “Has Sitra decided to become a market disruptor?”.

The data economy and its rules are only starting to take shape.

The global data economy is a Fortnite game or an electric sauna heater connected to your smart home’s network: our everyday life is data. Why should we not try to understand the data economy and make our everyday lives safer – in terms of data as well?

More and more information, personal information included, is required to fight against threats, such as the current coronavirus outbreak. This type of data collection and analysis may require giving more extensive rights to authorities and weighing privacy against the right to use data. MyData The term MyData refers to: 1) a new approach, a paradigm shift in personal data management and processing that seeks to transform the current organisation-centric system to a human-centric system; 2) personal data as a resource that the individual can access and control. Personal data that is not under the respective individual’s own control cannot be called MyData. principles and the interpretation of European values as practices are now more relevant than ever before. At the same time, solving severe problems will open up new opportunities for co-operation between traditional research and citizen science. Crisis will hopefully give rise to a new sense of community.

There is a demand for information and everyday tools

At the beginning of this year, we published the Digital Profile Test and our Digitrail survey in an effort to raise awareness. Constantly increasing digital services are becoming a part of our everyday lives while the way we use these digital services, including social media, is still taking shape. We need to be able to shape our digital lives to suit our needs.

A fair data economy requires co-operation, practical tools, rules, and regulation.

A recently published study on the welfare effects of quitting social media proves just how important change can be. The nerds of Silicon Valley ban their children from using the applications they have made so addictive with algorithms. Millennials refuse to buy smartphones to resist surveillance capitalism. These are all signs of how the data economy and its rules are only starting to take shape.

The fair data economy is under construction

The actions of platform giants, data breaches, faltering trust and increasing regulation have supported the objectives of our project. The data economy is still a work in progress. A work in progress can and should be criticised. At the moment, economists are arguing about how the value of data should be modelled and measured, whether it should even be measured, and whether data should be compared to oil or sunlight. How should valuable data be controlled and who should profit from it?

The Finnish Journal of Foreign Affairs discussed big data and artificial intelligence in an article (link in Finnish) a year ago. The article compared the attitudes to AI regulation of the EU, whose core value is privacy, of the market economy of the United States and of an authoritarian China.

According to Teemu Roos, who was interviewed in the Finnish Journal of Foreign Affairs, there is no need for separate legislation, but the current legislation should be updated to adapt it to the era of big data and artificial intelligence. The journal also quoted Ingrid Schneider, professor of ethics in information technology at the University of Hamburg, who has developed four theoretical models for future data governance. In the future, we are likely to see a hybrid of these exaggerated data governance models, considering that each of these models has its pros and cons.

How should valuable data be controlled and who should profit from it?

If data is considered to be private goods, the result may be a society where the poor pay with data and the rich with money. If data is classified as public goods governed by a state or a city, there is a risk of becoming a Big Brother society. However, if data is common goods governed by a community that benefits from it, the challenge is to determine how a community is defined and who creates the community’s rules. If the data is governed by a representative and independent fiduciary trust, we need to decide how many trusts there will be and who will supervise them.

The fair data economy is built in co-operation with various actors

After our project’s interim evaluation, we can be satisfied with what we have achieved in two years. Our success boils down to the following factors: intuition and analysis, co-operation and timing.

On the NGI Forum panel in the autumn of 2019, Joan of Arc and Robin Hood sat next to each other. Next to me was Francesca Bria, who compares her role as the Chief Digital Technology and Innovation Officer of Barcelona to the role of Robin Hood. Barcelona, New York and Amsterdam have been pioneers in the use of data as public goods, emphasising fair data use in their procurement activities. Without calling myself a saint, I sometimes feel like I am pursuing the delusion of a fair data economy in the same way as Joan of Arc or fighting windmills like Don Quixote. Intuition, creativity and courage are indispensable when facing the impossible. Staying with like-minded people will keep you stuck in the slow lane.

Without co-operation, information cannot be processed.

Our team and international co-operation network consist of different kinds of people who represent different countries and skill sets. Without resourceful and enthusiastic technical developers, our requirement specification would be nothing more than a quickly fading piece of paper.

The Economist interviewed our co-operation partner, the Lisbon Council, who co-produced the first version of our Roadmap for a fair data economy. Without this active European think tank, our road map would have only extended from our office to Helsinki’s West Harbour. Without co-operation, information cannot be processed. This requires frequent opportunities for encounters and continuous maintenance of networks.

We are updating the measures proposed in our road map to reflect the EU’s newly published data strategy and, together with different ministries, we would like Finland to take on a bigger role in the EU.

The IHAN business programme invites SMEs to develop services that comply with the principles of the fair data economy

In March, the application period for our IHAN business programme (the programme in Finnish) for SMEs began. According to our company survey, Finnish enterprises are uncertain about their potential in a data economy dominated by platform giants.

If we want to benefit and gain added value from data, it is crucial to develop our business management skills. The purpose of the programme is to test the theories, tools and materials of the IHAN project together with SMEs. During the programme, we will help Finnish SMEs create services that comply with the principles of a fair data economy. Data sharing that is based on trust and the consent of an individual is considered a competitive advantage.

The business programme’s training materials will be made publicly available for further development and general use. Our goal is to develop the concept to allow as many participants as possible to either adopt the theories or to teach others. We will also continue to have discussions with the ministry and other sponsors about how the programme will be continued if it proves beneficial to enterprises.

Together towards a digital service network where European values are respected

In Shaping Europe’s Digital Future, the EU defines the future of a digital Europe where the technology works for people, the economy is fair and competitive, and society is open, democratic and sustainable. The strategy also states that clearer rules on transparency, behaviour and accountability are necessary to ensure public confidence.

To achieve these goals, we need co-operation between like-minded people and, more importantly, encounters between people with different views. We need to learn from other, more traditional, sectors and dare to think and dream bigger.

Let’s make sustainable data use a part of corporate social responsibility, CSR.

Responsible investing and CSR reporting, which covers the environment, society and good governance, are on the rise. How do we bring sustainable and transparent data use into these approaches, and how can we utilise data in material flow management and in the development of sustainable solutions? What is the net impact of digitisation?

In these miserable times, we need a new sense of community. Over the past few weeks, we have seen more and more signs of a new attitude to the importance of data: not only is it seen as something that brings value to a business, but also as a key to solving problems related to environmental or societal changes. One good example of this is the GovLab’s data network initiative, which seeks new collaboration models for data co-operation across the public and private sectors (source: the Data Stewards Network).

Both intuition and analytical reasoning suggest that the right time for seeking solutions is now. In order to do so, we will need new partners. Through co-operation and the utilisation of a wide range of experience, we can create a reality that is not a data economy wonderland where fairy-tale characters wander about, but rather a digital service network of our own where privacy is respected, and which is based on our own values.

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