The Treasury on the Economic Value of Data

Late in 2018 the UK’s Treasury published a discussion paper on the Economic Value of Data. The Paper commits the UK Government to holding “a wider set of conversations that government … over the coming year, as we develop a new National Data Strategy”.

So: 2019 may be the year we see the UK Government develop a National Data Strategy. That’s an important milestone.

Mydex has studied this Paper carefully and shared our thoughts with the Treasury. In our view it’s got some really good stuff in it. But it also exhibits some dangerous blind spots and misunderstandings.

Our two most important points are as follows.

One step forward …

First, the Treasury Paper represents a potential breakthrough in Government thinking about data (including personal data) via its recognition that society’s ability to unleash the full potential of data is restricted by three structural/architectural barriers and issues. They are:

1. that innovative uses of data can generate powerful positive externalities that may not always accrue to the data creator or controller. This can result in data being under-exploited or under-shared (Paragraph 1.13)
2. that significant potential value that may be produced by merging complementary datasets rather than keeping them separate; (Paragraph 1.14 )and
3. that there is currently a mismatch between those who hold potentially valuable data and those with the skills and inclination to exploit data assets (Paragraph 1.15)

In our response to the Treasury we call on the Government to support the creation of a new personal data infrastructure that addresses these issues by:

1. enabling the positive externalities arising from innovative uses of data by enabling and empowering individuals, and services working for these individuals, to access and use the personal data held by current data controllers;
2. enabling data sets from multiple different data controllers to be merged under the control of the individuals whose data it is;
3. addressing the mismatch between those who hold potentially valuable data and those with the skills and inclination to exploit data assets by encouraging new services that fulfil the above functions.

… and one step back

Our second point is less positive. Unfortunately, the Treasury’s analysis of the economic value of data is way off beam, focusing almost entirely on the supposed benefits of ‘insight’ and ‘analytics’ while overlooking the massive potential economic benefits of using data to take cost, effort, friction and risk out of data-based processes — a category which now includes the vast majority of services provided in this country across public, private and third/social sectors.

The Treasury seems to have drunk a full draught of Silicon Valley Kool Aid about the amazing potential of artificial intelligence — so much so that everything else takes a back seat, including the possible benefits that may arise from empowering citizens with their own data.

As a result, the Treasury paper frames the economic opportunities of data in a highly particular way that effectively endorses and promotes the unique and special interests of just a tiny handful of US companies (e.g. Google, Facebook, Amazon, IBM, Microsoft etc), while overlooking the needs and interests of the rest of the UK economy (including the public and third sectors and citizens, participating directly in their own right, as well as most private sector firms large and small).

If this approach goes unchallenged, Government policies and priorities risk being misdirected so that one small part of the data world — AI — gets the lion’s share of investment and critical developments such as the development a personal data infrastructure that enables individuals to participate directly in the data economy risk ending up ignored.

Let’s start debating!

It’s a really positive thing that the Treasury has published a paper designed to trigger a debate about the economic value of data. Judging by the contents of this paper, it shows we REALLY need such a debate. We urge you to join it.