The Economic Value Of Data

As the importance of artificial intelligence has risen, the value of data has risen in unison, to the point where commentators have taken to calling data the ‘new oil’ of the economy.  Indeed, many ascribe the progress made in AI to the increasing amount of high quality data we are now able to produce.

A recent paper for the UK Treasury Department highlights the tremendous value this holds to transform the UK economy.

“Data-driven innovation holds the keys to addressing some of the most significant challenges confronting modern Britain, whether that is tackling congestion and improving air quality in our cities, developing groundbreaking diagnosis systems to support our NHS, or making our businesses more productive,” the report says.

Data challenges

Despite the strong research base and intangible economy making it well placed to lead the data-driven economy, there remain a number of challenges to overcome first. Not least among these are concerns about the way data is managed. In addition to adhering to the EU’s GDPR regulation, the Data Protection Act 2018 also aims to provide an update on the data protection framework in the UK to render it fit for the future.

The government also have an important role to play in ensuring the flow of data remains strong so that those organizations that want to innovate have access to high quality and well-maintained data.  This is a task the authors believe the UK government is well placed to perform.

“The UK tops the Open Data Barometer, having released over 45,000 datasets,” they says. “The government has committed to continue the drive for open data, maintaining [the UK’s] position as the world leader.”

The report also emphasizes the importance of driving interoperability and data standards.  Data becomes valuable when a wide range of actors link and aggregate datasets. This can only really happen when common standards are followed that allow for the interoperability of data. The report urges the government to play a key role in driving these standards.

The final challenge identified by the paper revolves around the legal framework of data sharing. It’s widely accepted that the sharing of data is key to the growth of AI and other forms of data-driven innovation, but barriers often prevent small firms and startups from striking agreements with data holders.

Therefore, the authors believe that establishing a market for non-personal data is likely to be crucial in shaping the future of the data-driven economy. This is likely to involve the creation of standardized, repeatable terms of access to data that will form a kind of ‘data trust’ that can then be used by small businesses.

With the UK government has stated it wants to position itself at the forefront of the AI and data revolution, and whilst it has made tremendous strides in many areas, such as the pioneering Open Banking regulations, it remains frustratingly slow to capitalize on data in the National Health Service.

“The opportunities of data-driven innovation span both the public and private sector, and government has made significant investments in driving the digital transformation of the civil service, to ensure there is a skilled body of civil servants with deep expertise in digital and data-driven technologies,” the report concludes.

Suffice to say, the UK government are not alone in attempting to position themselves at the forefront of the AI economy, with many countries around the world striving to do likewise. Indeed, there is a strong argument to support the notion that China will have a natural advantage, due to both the data generated by their vast population, and their slack rules around data usage. The paper does nonetheless provide an interesting overview of some of the challenges facing the data economy, and the steps being taken by the UK government to address them.