A new direction for the data economy will be found in Europe
Why Brussels? Why not California? What made this influential magazine draw what some would consider a surprising conclusion?
The time of “overexploitation” of the data economy is over. When a new operating method takes over the world in an unregulated market, the laws of nature win, meaning that the strongest and fastest will prevail. This happened when forests were burned down during periods of slash-and-burn agriculture to make room for crops, and when the gold rush took place.
In the data economy, the first-wave of participants entered the market forcefully and quickly and were able to lure consumers in an unregulated market using an attractive business model funded by advertising.
Google won the competition between search engine companies with its simple and fast service that returned the best search results. But unlike others, it based its revenue model on profiling users and customising advertisements based on searches and users. Facebook began as a simple service that connected university students, but it quickly learned to exploit the wider public’s yearning for social interaction. Because of our insatiable appetite for what the online world provides, we are willing to provide companies with enormous amounts of information about ourselves, and these firms have flirted with – and at times crossed – the boundaries in using this mass of data.
Regulation will always be slightly slow to catch up with innovation, often reacting to situations that have already materialised. This is certainly the case with data use. The GDPR, built on European values and the privacy of individuals, was created to secure people’s rights. The solution is very different to the Chinese “everything is the government’s property” or the American “fully market-driven” models. The foundations of the GDPR – emphasising the individual’s role and managing the right to use data – led The Economist to turn its eyes to Europe as a future model for a sustainable data economy.
At Sitra, we believe in the model of a sustainable data economy. In the long term, only using data with the individual’s permission and knowledge can lead to the gaining of people’s trust. We conducted a survey in four countries (France, Germany, the Netherlands and Finland), which showed how people’s trust had diminished and why there is a need for transparency in the use of data.
We began investigating the data economy in early 2017, and in 2018 we decided to launch a relatively large-scale set of projects to solve the key problems of the data economy: the lack of transparency and portability of data, and the absence of rights governing the use of individuals’ data and of a technical platform for data portability. We refer to this work in general as the human-driven data economy and the data management and portability system as IHAN.
The Economist encouraged everyone to turn their attention to Brussels with regard to the global data economy as the whole. This is what we did last year when we started preparing a discussion paper with the Brussels-based think tank, the Lisbon Council. The purpose of our joint discussion opener, A roadmap for a fair data economy – Policy brief, is to awaken Europeans to the changes in the data economy. We would like to thank The Economist for drawing the world’s attention to Europe and we look forward to robust discussions that will challenge the old prevailing models.