“Data is the new oil.” Allegedly coined in 2006 by Clive Humby, the British mathematician who created the Tesco Clubcard, this phrase quickly attained mantra status among tech pundits. If overused, it is nonetheless a useful comparison. Like oil, data can be harnessed for societal benefits.
But big data’s significance extends beyond the realm of business. The UN, for example, has been active in highlighting the wide-ranging potential of big data in accelerating progress towards sustainable development goals, whether it is by making it possible to map mobile traffic to predict (and contain) the spread of pandemic diseases; using financial transactions to expand access to credit to microbusinesses; or combining satellite imagery, eyewitness accounts and open data to track deforestation. We are only starting to scratch the surface of this potential.
Part of this could be attributed to eroding trust in business generally – even in Western Europe, according to business consultancy Gallup, 52 per cent of people believe corruption in business is widespread. And part of it stems from notorious breaches of confidence such as the Facebook-Cambridge Analytica scandal. But this mistrust also comes from the perception that consumers are being exploited, their identities being converted into capital they never see.
So, though it is the US and China that dominate tech, what can European businesses do to help build societal trust in the data economy? Sourced from our conversations with CEOs in our Europe Delivers report which seeks to mobilise business-led action to regenerate growth in Europe, here are three ideas on how to get this job done:
Seize the early-mover GDPR advantage
In 2018, Europe took a first step in creating this governance, with the implementation of the General Data Protection Regulation (GDPR). By imposing a common set of data rules across Europe, GDPR enables businesses to manage data more effectively across its borders while protecting consumers by requiring that privacy is embedded into the design of the system.
There are of course concerns that GDPR could place European businesses at a disadvantage, most notably by restricting the development of the artificial intelligence needed to win in the ‘algorithmic economy’.
While unevenness in regulatory frameworks can create a disadvantage for the early mover, GDPR may give Europeans a head-start in building fluency in how to develop and run profitable business models against a backdrop in which consumers a) are much more circumspect about how their data is used, b) expect a return for its use, and c) wield the power, thanks to technology like blockchain, to decide who gets to use it. In this future, trust isn’t a nice-to-have brand characteristic, but a fundamental precondition to securing access to the data required to compete.
Challenging this shift is the fact that businesses have become accustomed to free data; it will be a wrench to unpick what some have called ‘data slavery’, in which human data is the free labour that powers AI. Some tech start-ups – like CitizenMe and Datacoup – are emerging to help people make money from their data, but at least for now, this alternative has limited reach, as it requires too much effort from consumers. But we can expect more innovation here as the public comes to see data, not as an abstraction but as an extension of human identity.
Demonstrate data’s vast societal benefits
Businesses’ use of data has traditionally focused on driving greater productivity. Finnair, for example, has used PACE, a software, to optimise flight profiles and cut fuel consumption in its A350 fleet. These kinds of efficiency improvements often translate into societal benefits. Finnair’s PACE programme is also delivering progress towards climate aims, the airline’s ambition being to cut CO2 emissions by 17 per cent from 2013 levels by 2020.
These efficiency improvements are critical, but there is an even bigger game in town: how we can use data to increase our collective capacity to transform our societies in service of a regenerative, inclusive growth model. Data can help us radically improve how we organise our urban centres, so that they can accommodate the 1.3 million people who move into cities every week, while also reducing emissions and improving quality of life.
In addition to driving commercial solutions to human problems, several companies are also steadily increasing their role in data philanthropy. From London to Seoul and New York to Dubai, major cities around the world are already using sensors to capture data and then analyse it in order to improve services for inhabitants. The Chinese city of Nanjing, for example, is using sensors installed in 10,000 taxis, 7,000 buses and 1 million private cars to parse traffic data and send citizens commuter information on their smart phones. New routes are being created to ease congestion, without additional spending to build new roads.
Open up to unleash data’s full value
One of the biggest technical obstacles to putting data to good use is that it is often collected in silos. If it is held in disparate systems, its full value cannot be extracted.
Regulators are in some cases pushing businesses to open up their data. In some cases, businesses themselves are trying to drive data-sharing in their industries. Schneider Electric is breaking down barriers to the free flow of data with the Schneider Electric Exchange, the world’s first cross-industry, open ecosystem dedicated to solving sustainability and efficiency challenges. Launched in 2018, the Exchange is open to all, operates globally and provides access to a community of experts, a data and software exchange marketplace and partner resources.
Implicit in all these initiatives to liberate data is the increasing recognition by businesses that it is not the data itself that gives competitive advantage but rather its analysis and application.
As we look to reenergise and reconstruct our economic system, we need to learn from our recent past, moving beyond the post-industrialisation mindset of harnessing as much of the natural world into capital, as cheaply and quickly as possible.
We risk falling into this pattern with data we risk, this time converting as much of our resource base into bytes of information. Data is a game-changer, but reaping its potential demands unprecedented deliberateness. If we are clear about what are aims are, we can direct data in such a way as to build healthy, efficient societies and thriving, competitive, trusted businesses.
Philip Smith, COO and EVP 'Europe Delivers' programme at Xynteo