Exploring the new data economy

By: Michael Dingle Partner, National Deals Technology Leader at PwC Canada

Canada needs to confront the challenges of a data-driven economy if we want to compete in the age of this new economic asset.

It’s everywhere. It’s growing. And it’s indispensable. Those companies who ignore it do so at their own peril. Those that understand (and monetize) it properly will reap rewards for decades to come.

We use it to refine internal processes, innovate new products and services and find customers. It has become an invaluable resource, and companies are grappling to obtain and protect it.

Welcome to the data age.

How much is our data really worth?

Data strategies have created wide economic moats for some and eroded long-standing advantages for others. Companies have been forced to adapt as new business models turn old ones on their head. Just look at GE’s Predix platform or MindSphere from Siemens. The old rules no longer apply.

So what does this brave new world of data mean for Canadian companies? Simply put, if they want to thrive in the new data economy, they’ll need to stay smart, nimble and be able to answer these four key questions:

How can we monetize it fully?

We all know data has value-but how much exactly? Several features of data can make pricing difficult (it can be copied; it can be a non-rival good; it doesn’t expire when consumed, etc.), which make commercial transactions complex and opaque. How can companies forge data partnerships if they don’t know the value of their own data assets?

Research shops like Gartner are only now developing data pricing and valuation methodologies (infonomics) that recognize the realized, probable and potential values of a company’s data. Canadian businesses must first and foremost identify and grow the intrinsic value of their data assets if they wish to keep their balance sheets strong.

Who owns it?

Companies have long considered the ability to gather data as a core competency. And many Canadian businesses are getting pretty good at using it to improve internal processes and make core products better for customers.

But what about other ways of monetizing data? Too many companies struggle to articulate the various ways they’re using data to boost the bottom line. Explaining data monetization must become a core value proposition if Canadian businesses want to get full credit for the data they’re generating and putting to use.

Data used to be the Wild West of tech; without any real oversight or consumer demand for transparency, companies used data largely as they saw fit. Not anymore.

How can we see in the dark?

Regulators are becoming increasingly wary of category leaders building data moats. The EU has hit Google with a record-breaking 2.4 billion Euros antitrust fine for boosting its own shopping service while raising barriers to entry for other retailers. This opens the door for further investigations into how tech giants use their data monopolies.

Pressure to regulate data use is also coming from the bottom up. Consumers increasingly want to know how their data is being monetized-and demand a share of the benefits for their so-called data labour. Privacy and transparency are now table stakes. Canadian companies need to rapidly construct strategies for dealing with these demands, rather than relying on consent through vague terms and conditions.

Canadian companies are waking up to the need to ensure structured data sets are properly controlled, scrubbed, and scrutinized in a way that makes sense for business. But there remains a considerable opportunity in dark (unstructured) data.

A huge percentage of potentially useable business data is unstructured today. Finding a way to shine a light on this dark data and unlock its value (either through innovation, commercial deals with tech cos, or acquisition) will be the next frontier for Canadian business. Already, companies in other markets are starting to do this; Apple’s purchase of Lattice in May is one good example.

It comes down to this: Canadian companies need to think strategically about their data prowess if they wish to succeed in the new data economy. If they don’t, they’re on the wrong side of a double-edged sword that’s growing in size each and every day.

Originally published on LinkedIn on July 24, 2017.