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Data: the new currency?

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CONTENTS

Introduction........................................P3-4Making the most of big data’s business opportunities......................P4-5Extracting value from data................P6Opening up..........................................P7Trust and security...............................P8Building ‘Fortress Europe’................. P9Cyber-security threats.......................P10-11Conclusions and recommendations..............................P12-14

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Written by Simon TaylorImages: iStock

Sources: World Economic Forum: Unlocking the value of personal data; Bigdata, big impact: new possibilities for international development;Rethinking personal data: a new lens for strengthening trust;Global information technology report: risks and rewards of bigdata. McKinsey: How government can promote open data andhelp unleash over €3 trillion in economic value. Executive Office of the President of the United States: Big data: seizing opportunities, preserving values. OECD: Protecting privacy in adata-driven economy; data protection principles for the 21st century. Eurobarometer: Cyber-security. demosEuropa/WarsawInstitute of Economic Studies: Big & Open Data in Europe: Agrowth engine or a missed opportunity? Organisations represented at roundtable meetings or consulted in research:DG CNECT; DG Justice; European Data Protection Supervisor;IBM; Amazon Web Service; Lisbon Council; Rovio; Digital Europe;Representation of the UK to the EU; Representation of Spain to theEU; Bull; London School of Economics and Political Science; Ora-cle; European Parliament; Open Data Institute; GSMA; Centre forInformation Policy Leadership; Demos; Telefónica.

Go to debates.europeanvoice.com to take part in an online debateon big data from 10-18 July.

The hyperconnected world is producing data at an ever­increasing rate. In 2013, the global production of digital datareached four zettabytes, or four trillion gigabytes, more thandouble the amount generated in 2011.

According to one estimate, 90% of all data has been generatedin the past two years. This data is coming from a variety ofsources. People are using social media to post pictures andvideos. More than 500 million photos are uploaded and sharedevery day while 200 hours of video are shared every minute.This is data that people are deliberately sharing aboutthemselves. But this is only a fraction of the total amount ofdata that is generated and stored by all the digital technologywith which people interact on a daily basis. This includescomputers and internet­connected devices, but also datagatherers such as sensors, infrared cameras, closed­circuit TVcameras, radar and global­positioning satellites.

This huge increase in the generation, collection and storage ofdata offers enormous possibilities to amass useful informationabout people’s behaviours and preferences. This information can be used to discern trends and patterns that can be used todesign products and services to correspond more closely toconsumers’ preferences and also to improve efficiency in the provision of services such as transport and healthcare bymatching resources more closely to demand.

Data analytics has been around for decades, if not centuries.But the massive amount of data being generated by the moderneconomy is a relatively new phenomenon that has been looselydenominated ‘big data’. The term suffers from having a varietyof definitions. For the sake of this report, we define big data as“data that is so large in volume, so diverse in variety or movingwith such velocity that traditional modes of data capture andanalysis are insufficient”. ‘Variety’ refers to the collection of datafrom a range of different sources. This definition is oftenreferred to as the ‘three Vs’. McKinsey, a consultancy firm,

defines big data as “datasets whose size is beyond the ability oftypical database tools to capture, manage and analyse”.

It is helpful to draw a distinction between big data andmassive data. In general, massive data refers to large amountsof electronic information that may require supercomputers to handle the processing because of its size. In terms of format, massive data can be considered as the equivalent ofspreadsheets or rows and columns of data – ie, in a uniform

3

DATA: THE NEW CURRENCY?

Introduction

Continued on page 4

What is happening in one day?

Source: European Voice

Pieces ofcontent shared

on Facebook

1bn

Googlequeries

2.9bn

Email

144.8bnPieces of

content sharedon Instagram

5.2m

App downloadson AppleStore

67.5m

Tweets

340m

Photosuploaded

500m

Hours of videouploaded on

YouTube

100,000

4

Advertising and marketing companies have long been collectingand analysing data with the aim of gathering more informationabout consumer preferences and choices. What big data offers both the retail and services sector is the ability to aggregate data from different touch­points to obtain moregranular knowledge. Data can come in structured forms, such as spreadsheets with columns and tables, but also moreloosely, for instance via social media where individuals indicatetheir ‘likes’ and share them with their friends.

Using data from disparate datasets allows companies totarget their marketing campaigns more precisely on consumerswith particular likes, reducing the cost of campaigns andincreasing their effectiveness.

format. For big data, information is obtained from a range ofsources in a variety of formats. This can include connecteddevices, sensors, cameras, etc. One of the characteristics of bigdata is that it relies on mixing different data sets in order togenerate value. For example, Estonia has developed an effectivetraffic management system using mobile phone data. Whereasfor massive data all datasets are processed, for big data part ofthe overall data is analysed for specific purposes. Velocity is acrucial defining element of big data because information, suchas location data, needs to be processed in near to real time toprovide useful information.

The collection of big data offers many business opportunities.But the beneficiaries are not exclusively businesses. Use of bigdata also has the potential to transform the planning anddelivery of a range of public services including healthcare,disease control and transport planning. Amassing huge amountsof data about people’s real behaviour in the public sphere,rather than what people say they do, can produce informationthat is used, for example, to tailor transport provision better todemand or to predict the spread of infectious diseases.

Sandy Pentland, director of MIT’s media lab, talks about a“data­driven world” in which the availability of fine­grained dataabout people’s actual behaviour in social situations can be usedto design better public policies. Pentland also sounds a note ofcaution: he warns that the ability to collect big data could beused to create an “incredibly invasive Big Brother”. The threat topersonal privacy needs to be addressed if the potential of bigdata is to be fully exploited. Otherwise people will refuse toshare their data or will press governments to impose restrictionson data flow that could limit the uses of data. One of the majorchallenges of the big data era is how to ensure the protection ofpersonal data in an environment where the value of thecollected data derives precisely from it being combined withother datasets. Traditional forms of explicit consent to allow theuse of personal data do not readily translate to an economywhere data sets are used for purposes that were not envisagedat the time that consent was sought.

In this report we examine whether data can be the basis of anew transactional relationship between people and companies inwhich both sides benefit from new products and services andincreased economic growth. The report includes recommend­ations to policymakers and industry on the actions needed to reapthe benefits of big data while guarding against possible abuses.

Making the most of big data’s business opportunities

From page 3

Data that is so large in volume,so diverse in variety or movingwith such velocity that traditionalmodes of data capture and

analysis are insufficient

Definition of big data

monitoring. It is already being used by application developers tohelp improve their travel plans. Logistics firms such as UPS areinstalling sensors in their vehicles to monitor journey times andimprove fuel efficiency by avoiding congestion.

The next major development for the automotive sector will bethe advent of Connected Vehicles, where data is sharedautomatically and in real time between the vehicle and roadtransport infrastructure. This will generate datasets that can beexploited through data analytics. Feeding information tointelligent transportation systems should lead to an overallimprovement in traffic flow, fuel efficiency and pollutionreduction. A test carried out in the Netherlands in 2012generated estimates that up to 730 million tonnes of CO2emissions could be saved if applied to the country’s entire fleet.

The value of big data is expected to continue growing asbusinesses increase their investment in big data technology. IDC,a market intelligence firm following the ICT industry, estimatesthat investment will continue to grow by 20% a year over thecoming years. But realising its potential will require companiesto acquire the necessary data­processing capacity to handle bigdata, including hiring qualified staff. For some organisations,there will be a challenge in switching to a data­driven model forsupporting business decisions, rather than relying on pastexperience or a belief that an organisation instinctively knowswhat its market wants.

Big data also has potential for generating cost savings in thehealthcare sector. In the United States, rising healthcare costshave increased the importance of ensuring maximumefficiencies and increased the focus on payment­by­results. Thatrequires the ability to gather data that links patient outcomes toforms of treatment. This information has to come from a varietyof sources ranging from physicians and hospital records tohealthcare insurers’ databases.

Kaiser Permanente, a US healthcare management company,introduced a computer system to gather data about the detailsof cardiovascular disease sufferers and their treatment,including lifestyle advice and education. Data collected aboutpatients and all forms of advice and treatment are collected intoa single database that can be used by healthcare professionalsto check the effectiveness of different types of intervention andmake necessary adjustments. The programme lowered the riskof dying from cardiac disease and lowered cholesterol levels.The company saved up to €1 billion in reduced doctors’ visitsand laboratory tests.

Estimates by McKinsey say that use of big data could reducehealthcare spending in the US by €330bn­€450bn or 12%­17% ofannual healthcare expenditure. Realising this potential willdepend on a number of conditions, including ensuring thatpatient confidentiality rules are respected as datasets arecombined. The transport sector generates large amounts of data including journey times, toll road data and congestion

5

DATA: THE NEW CURRENCY?

Growth of the big data market

Source: Wkibon

0

$10bn

2013 2014 2015 2016 20172012

$20bn

$30bn

$40bn

$50bn

$60bn

$10.2bn

$16.8bn

$32.1bn

$48bn

$53.4bn

$5.1bn

6

individuals are prepared to share their data and allow them tobe passed to other organisations. Even where data isanonymised before being shared, it is relatively easy to link databack to specific individuals by comparing information from arange of databases. This has prompted fears that insurers could,for instance, use data to identify high­risk patients and raisetheir insurance premiums or introduce exclusion to theirinsurance cover. Procedures for anonymising data should bestandardised to maximise individual privacy.

Big data has the potential to improve the provision of essentialpublic services such as healthcare. In 2008­09 the HarvardSchool of Public Health carried out a study in Kenya into howhuman population movements affected the spread of malaria.Scientists collected data from almost 15 million mobile phonesand mapped calls and text messages to establish the length oftrips and population movements. The data was anonymised andthen compared with data about the spread of malaria from twomalaria research projects. The study found that the spread ofmalaria was determined more by the movement of infectedindividuals than of infectious mosquitos.

The study identified areas where intervention would be mosteffective. The area with the highest rate of infection was LakeVictoria and it was identified as a source of infection for otherregions. Thanks to the ability to target intervention, malariadeath rates went down by 25% compared to 2000.

The San Francisco­based Global Viral Forecasting Initiative usesadvanced data analysis based on a variety of internet resourcesto identify the locations and drivers of disease outbreaks beforethey become epidemics. This method has proved successful inpredicting outbreaks up to a week before global bodies such asthe World Health Organization.

The use of individuals’ health data throws up one of thebiggest challenges surrounding big data: the extent to which

Extracting value from big data

Measuring data

Source: European Voice

One digit

1octet

1,000 octets= 1 kilooctet

1,000 kilooctets= 1 megaoctet

A one-pagetext document

30kilooctets

A song

5megaoctets

A two-hourmovie

1gigaoctet

1,000 megaoctets= 1 gigaoctet

transport agency, provides third parties with real­time data ontrain departure and arrival times to allow passengers to makebetter travel plans. The European Commission has madeincreasing the availability of open data from public organisationsone of its priorities. EU governments approved rules in April thatwould make all public sector information available for re­use,provided it is generally accessible and not personal. Under therules, public sector bodies would be able to charge only themarginal cost of reproduction, provision and dissemination ofthe data. Data would be made available in machine­readableformats where possible.

The private sector also holds enormous amounts of data thatcould be used to develop new applications and services.Companies are traditionally reluctant to share data that theybelieve is commercially valuable or sensitive. There are anumber of government initiatives to get companies to ‘handback’ data by sharing what they have collected with consumers.The Midata initiative run by the Open Data Institute in Londonmakes available data collected and held by companies. Firmsfrom the energy, mobile phone and banking sectors madeavailable data so that customers could learn more about theirown behaviour and make more informed choices whenpurchasing goods online.

Making full use of the potential of open data will requireefforts to agree common standards for the format of data andthe rules for using it.

In order to take full advantage of the potential of big data, it is essential that the vast amounts of data generated byorganisations is made available in a usable form as open or‘liquid’ data. Open or ‘liquid’ data needs to be machinereadable, accessible to a broad audience at little or no cost andcapable of being shared and distributed. According to a reportproduced by McKinsey in 2013, improving use of open data inseven sectors – education, transport, consumer products,electricity, oil and gas, healthcare and consumer finance – wouldproduce $3 trillion (€2.2 trillion) in economic value.

The Organisation for Economic Co­operation and Development(OECD) estimated in a 2011 report that by fully exploiting publicdata, governments could cut administrative costs by 15%­20%,saving €150bn­€300bn. The data could come from publicauthorities, which are some of the most data­intensiveorganisations. Governments already have statisticaldepartments to collate data about their population. Theinformation derived from running mass­transit schemes andenergy networks is a source of valuable public data.

There are numerous examples of the benefits of making suchpublic data openly available, particularly in the transport sector.Transport data can be used by developers to create usefulapplications for passengers. Trafikverket, Sweden’s public

7

DATA: THE NEW CURRENCY?

Opening up

Open data in Europe

Source: https://index.okfn.org

The Open Data Index assesses the state of open government data around the world. Score out of 1,000

UK

Denmark

The Netherlands

Finland

Sweden

Bulgaria

Malta

Italy

France

Austria

Portugal

Slovenia

Czech Republic

Spain

Ireland

Croatia

Poland

Hungary

Germany

Greece

Slovakia

Romania

Lithuania

Belgium

Cyprus

94.0%

83.5%

74.0%

70.0%

67.0%

52.0%

51.5%

51.5%

51.0%

50.5%

49.5%

48.5%

46.5%

46.0%

46.0%

44.5%

42.0%

41.5%

41.0%

39.5%

37.5%

35.5%

32.0%

26.5%

3.0%

Score as apercentage

940

835

740

700

670

520

515

515

510

505

495

485

465

460

460

445

420

415

410

395

375

355

320

265

30

8

read all the terms and conditions that online companies askindividuals to approve in order to have access to their data. Inreality, most users click ‘yes’ without knowing the terms forusing their data.

The EU, which has some of the strictest data protectionlegislation in the world, is in the process of revising its rules,which date back to 1995. The rules require prior consent fromusers before data can be collected and strict rules onsubsequent uses of that data. A fundamental element of thelegislation is the right to be forgotten where users can ask todelete information held about them unless there is a publicinterest for that information to remain in the public domain.Companies warn that it can be difficult in practice to guaranteedeletion as data can be held across a wide variety of databases.According to draft EU rules, companies that fail to respect dataprivacy could be fined of up to 5% of their annual turnover.

The era of big data poses major privacy challenges. When theage of computing started in the second half of the 20th century,information, such as tax or bank account details, was collectedby a range of organisations, public and private, and held ininformation silos. Individuals gave their explicit consent to theseorganisations to collect and store this data but it was rarelyshared with other parties. Then, with the explosion in computertechnology, the internet and connected devices from the 1990sonwards, it became easier to collect and store data. Businessesemerged that made use of this data for sales analysis andmarketing purposes. Western countries developed a legalframework to control the collection and use of personal data,encapsulated in the OECD’s privacy guidelines from 1980.

The guidelines were first created at a time when the captureand use of data was less complex. Organisations collected datafrom individuals and stored it on computers. To protect dataprivacy, the guidelines focused on the use of collected data,limitations to its use and consent. This worked when data washeld by organisations without being actively shared. Now, datacan be generated without direct human interaction, such asthrough machine­to­machine transactions and GPS data.Companies have an incentive to obtain data from a range ofsources to generate value. But traditional models for obtainingindividuals’ permission to use data, known as ‘notice andconsent’, do not fit well with the new paradigm of huge dataflows. It would take users an estimated 250 working hours to

Trust and security

Confidence about internet transactions

3%

7%

28%

62%

Denmark

Very confident

Sweden UK Latvia Malta Ireland Lithuania Finland Czech Rep Estonia Netherlands Lux. Cyprus Poland Slovenia Austria EU27

4%

4%

35%

56%

4%

14%

31%

50%

10%

7%

31%

51%

15%

10%

28%

46%

8%

9%

37%

43%

11%

13%

33%

41%

6%

13%

41%

38%

6%

12%

42%

38%

4%

9%

51%

35%

10%

11%

44%

32%

11%

14%

40%

31%

13%

20%

36%

28%

12%

17%

42%

27%

8%

16%

49%

27%

24%

17%

25%

31%

2%

10%

49%

39%

Denmark and Sweden show high levels of confidence, with the lowest levels of confidence in Greece, Bulgaria and Portugal (figures from before Croatia joined the EU)

250Estimated number of workinghours that it would take toread all the terms and conditions that online companies ask individuals to approve in order to have access to their data

future,” says Axel Voss, a German centre­right MEP.

One approach to address the challenge of consent is to focuson anonymised data which, in theory, no longer identifies theindividual who generated it. This is an approach that is attractiveto companies. “The location of the customer is personal, butwhen you process it, you can anonymise it. Lots of data is user­generated but is not personal data after it is anonymised,”argues Stefano Fratta of Telefónica. Opinions diverge about howrobust data anonymisation can be. Some tests have shown thatit is possible to identify a data subject from anonymised datausing only relatively few pieces of information. A team ofresearchers at Harvard University was able to identify individualsfrom a genetics database by cross­referencing the informationwith other public databases. Using only three pieces ofinformation, the team achieved an accuracy rate of 42% and thisrose to 97% when first names or nicknames were added. PeterHustinx, the European Data Protection Supervisor, says: “Inreality it is now rare for data generated by user activity to becompletely and irreversibly anonymised.”

Clear definitions of rules for anonymisation processes for dataprocessors will play a major role in boosting trust and ensuringthat consumer rights are balanced with the potential to developnew services. In April, legal and technical experts on privacy anddata protection from the EU and the US held a roundtablemeeting to explore ways to bridge the gap between Europeanand US legal systems of data privacy. The aim is to find globally­

accepted privacy values to form the basis ofinteroperable solutions in both jurisdictions. Thegroup, initiated by Jacob Kohnstamm, chairmanof the Dutch data protection authority, willpresent a report in 2015. The answer may be tomove away from trying to secure consent andtowards a system of greater transparency inwhich companies are clearer about what theyare using data for. Part of this is a privacy­by­design approach by which companies developservices with the highest level of data protectionbuilt in. One way of implementing this as acommercial service is by offering data protectionseals, which would require organisations tomeet clearly­defined standards for dataprotection. This idea is winning support from EUgovernments as a possible solution to thechallenges of revising data protection rules.Privacy seals could indicate that an organisationwas processing data in compliance with relevantaspects of the regulations, including coreprinciples, privacy­by­design and securitymeasures. The market for privacy seals iscurrently dominated by the US, and the EUwould need to develop its own harmonisedstandards.

As the EU’s legislation imposes much stricter rules than those inother jurisdictions, such as the US, global companies warn thatthe EU is creating a data fortress blocking data flows to otherparts of the world. The revelations by Edward Snowden, aformer National Security Agency contractor, that the USgovernment was spying on global telecommunications data haveboosted support for even stronger data protection rules fromMEPs.

The European Parliament has also called for a suspension ofsafe harbour agreements with the US. These agreements allowEU bodies to share data with US companies provided they arecertified as meeting EU data protection standards. The EuropeanCommission is examining ways to strengthen safeguards in theseagreements to offer greater protection to EU citizens. Thedemands have prompted warnings that EU companies will beexcluded from the business possibilities of processing globaldata. But MEPs are adamant that privacy protection must bemaintained. “We may be losing ground to the US when it comesto big data but we have a fundamental right to protect. Weshould be careful with big data if we want to have privacy in the

9

DATA: THE NEW CURRENCY?

Building ‘Fortress Europe’

We may be losing ground to theUS when it comes to big databut we have a fundamental rightto protect

German centre-right MEP Axel Voss

Fairly confident Not very confident Not confident at all Don’t know

Belgium Slovakia Germany France Hungary Bulgaria Romania Italy Portugal Spain Greece

Source: European Commission

14%

19%

41%

24%

15%

19%

45%

20%

14%

21%

50%

11%

18%

31%

39%

9%

33%

29%

29%

8%

26%

15%

31%

16%

27%

30%

25%

13%

27%

18%

36%

12%

26%

30%

32%

10%

6%

15%

54%

24%

6%

18%

51%

23%

10

among law enforcement bodies. The EU has launched theEuropean Cyber Crime Centre within Europol to deal withinternational threats and co­operation with a particular focus on addressing organised crime and online fraud, childsexual exploitation and network security.

The EU has been co­operating closely with US law enforcementagencies to share information about online behaviour in order toidentify terrorists or other criminals. It has negotiated a numberof agreements to cover the terms for sharing informationincluding the Terrorist Financing Tracking Programme (TFTP) toset out procedures for sharing data from SWIFT, an electronicbank transfer system. MEPs argue that the data­protectionsafeguards in this and other agreements are not strong enoughand have argued that the agreement should be suspended andrenegotiated.

The revelations by Edward Snowden about NSA surveillance of

Threats in the online sphere have the potential to inflict thegreatest damage to trust and confidence. A Eurobarometer pollfrom November 2013 found that 37% of those surveyed wereconcerned about the misuse of their personal data in onlineactivities; 35% were concerned about the security of onlinepayments. Globally, victims’ annual losses from cyber­crimeactivities are estimated at €290 billion a year, greater than thevalue of the illegal trade in marijuana, cocaine and heroin, whileEuropol puts the value of the global cyber­crime economy at $1 trillion (€739 billion).

Single incidents can have a huge cost. In 2011 Sony’s OnlineEntertainment network was hacked, affecting 24.6 million usersand breaching the security of 12,700 credit card holders. Theincident is estimated to have cost the company €1bn­€2bn. InMay this year, eBay, the online auction site, was hacked and thecompany warned its 145m customers to change their passwordsto protect against fraud.

In addition to the economic damage from cyber­crime, theintegrity of information networks can be attacked by criminals,enemy governments or malicious hackers. As so many essentialservices, such as energy, transport and finance depend on securenetworks, attacks that impair the functioning of networks canhave serious financial consequences. The World Economic Forumestimated in 2013 that there was a 10% likelihood of a majorinformation security breakdown with a potential costs of €184billion. In May this year, the website of the Belgian foreignministry was hacked.

The EU launched a cyber­security strategy in early 2013 toaddress shortcomings in the current system. Not all memberstates had a dedicated cyber­security strategy in place; only afew member states were co­operating to tackle cross­borderthreats and many companies were failing to ensure adequatesafeguards against cyber­attacks. The network informationsecurity directive, which has been agreed by the EuropeanParliament but has yet to approved by member states, requiresall member states to set up a national cyber­security strategyincluding Computer Emergency Response Teams (CERTS) to reactto attacks and security breaches. National authorities will beexpected to share information to improve the reaction toattacks, which are often targeted at several member states atthe same time. Companies that operate network infrastructureswould have to inform national authorities about attacks,whether or not a breach had taken place.

Effective cyber­security strategies are essential to addresscitizens’ concerns about online security. Individuals will be wary ofmaking credit card purchases or using online banking if they feelthat they are vulnerable to data breaches or identity theft online.

Tackling cyber­crime depends on international co­operation

Cyber-security threats

€184bnWorld Economic Forum estimate of the potential costs of a major informationsecurity breakdown

committee also called for the suspension of the ‘safe harbour’agreement that facilitates data transfers from the EU to the USby setting out data protection standards which US companieshave to meet in order to qualify to process data from the EU.The European Commission is currently renegotiating the terms ofthe ‘safe harbour’ agreement with the US.

global telecommunications have increased calls for more robustdata­protection rules. In February, the European Parliament’scivil liberties committee voted to demand tougher dataprotection rules and said that the EU should block an agreementon a transatlantic trade and investment partnership (TTIP) withthe US if the deal weakened EU data protection rules. The

11

DATA: THE NEW CURRENCY?

Source: European Commission

Main concerns about cyber security

Losing personal dataSecurity of online

payments

Not receiving goods or services No concerns

Prefer to conduct transactionin person

40% 38%

19% 21%

24%

12

commodity itself. It has value to both parties in an exchange butthere is an asymmetry in the value that different partiesattribute to it and can extract from it. As this report has shown,the economic potential of big data is enormous and growing, aslong as companies have the right personnel and infrastructure toextract that value. Consumers and individuals, on the otherhand, may be unaware of the value of their data or find itdifficult to retain some of that value for themselves. Somecompanies expect individuals to share their data for free inreturn for being able to use certain services. In the era of bigdata, where datasets are combined in increasingly complexways, individuals quickly lose any share in the value that the useof their data creates.

If the benefits of big data are to develop in an equitable way,consumers will need to understand better how their data iscollected and what it is used for in order to be empowered toretain some of the value of their data. This will require greaterefforts by governments and educators to ensure that dataliteracy becomes a part of basic education. There are directbenefits to consumers from sharing data through improvementsin healthcare services or shorter journey times. But thesebenefits have to be made more explicit so individuals know the

The aim of this report is to review the issue of big data and toproduce recommendations for policymakers and industry.

It is clear that the modern economy will increasingly depend onthe use of the huge amounts of data that the connected world isproducing at ever­increasing speed. The volume of data willincrease further as more and more physical objects areconnected to the internet, creating the internet of things.

In examining the specific nature of big data, its complexity andthe challenging privacy issues it generates, it becomes clear thatviewing data as a new currency only goes part of the way tocapture the role of data in social interactions. Currenciesfunction because the parties that use them agree about theirunderlying value: they are an intermediary for traded goods andservices. Data, on the other hand, functions as a traded

Conclusions and recommendations

The economic potential of bigdata is growing, as long as companies have the right personnel and infrastructure to

extract that value

terms of the exchange. This exchange may take the form of apayment or the offer of new and better services that depend onconsumers making their data available. There are exampleswhere customers readily share sensitive data, such as bankingand investment details, because they are confident that theirdata will be protected and used to provide better services. Thisis a model that could be extended to the big data era.

At the same time, businesses, individuals and policymakers haveto be aware what big data is not: it is not an infallible guide tosocial trends. Like other forms of data collection and analysis, big

13

DATA: THE NEW CURRENCY?

Recommendations

1. Improve digital literacy2. Know the limits of big data3. Open up data4. Boost trust and security5. Make redress real6. Get the regulation right7. Protect freedom of

expression and humanrights

8. Enable global data flows

1

2

Continued on page 14

data shows correlation in datasets between behavioural patternsand trends. But to prove causal links between differentphenomenon, intelligent analysis will still be needed.

To take an example, Google Flu Trends, an attempt to predictthe spread of influenza based on online searches, producedresults that diverged massively from actual disease tracking data.What the search had measured was queries about flu ratherthan cases. Taking big data findings as a reliable predictor ofsocial behaviour would be to overstate the potential of big dataand risk making errors in public policymaking.

Improve digital literacyCurrent levels of data literacy are woefully inadequate. Bothpolicymakers and individuals have a limited understanding of thedigital economy. Governments, businesses and educators mustwork together to educate people about how the digital economyworks and how data is used. At the heart of this initiative shouldbe the aim of empowering citizens and equipping them with theknowledge to make better informed decisions.

Action point: Take action to increase data literacy.

Know what big data can doBig data is good at identifying correlations. It is not good atidentifying causation. There is a need for intelligent analysis toassess what we can conclude from big data and what we cannot.

Action point: Clarify the limits of what big data can do.

Open data Governments should take steps to ensure that data held by publicauthorities is made available as freely as possible and at minimumcost to users while ensuring that data privacy rules are respected.Companies should share the data they hold that can be used todevelop new services for consumers.

Action point: Increase access to data held by public authoritiesand the private sector.

Trust and securityConsumers’ and citizens’ confidence in how individuals’information is used and protected in the era of big data isessential if the digital economy is to grow. Governments mustensure that fundamental principles of data privacy are respectedwhile ensuring that rules are flexible enough to allow forinnovation. Individuals will never understand the full complexityof the data ecosphere, so giving them control over their datathrough data vaults or privacy seals could play an important rolein contributing to trust.

Action point: Establish rules that balance respect for data privacywith flexibility to support innovation.

3

4

14

Provide sanctions for abuse and ensure the right to redressThe financial potential of big data creates very strong incentives for some businesses to use personal data even when their use might conflict with data privacy. Measures will be needed to balance these powerful incentives withstrengthened disincentives for abuse. This will require fines forcompanies that fail to protect personal data, and procedures fordeleting or amending data that is inaccurate or in breach of dataprivacy laws.

Action point: Ensure ethical big data practices through sanctionsfor abuses and incentives to protect individuals’ rights.

Get regulation rightBig data is qualitatively different from other forms of data as itdepends on mixing data from different sources and applyinginsights from data analysis to a new set of individuals. Asophisticated regulatory approach, including competition issues, will be needed to deal with those actors in the data chainthat are guilty of abuses. Clear rules about anonymisation willhave a key contribution to make.

Action point: Develop an integrated approach to data protection,competition and consumer protection.

Protect freedom of expression and human rightsGovernments should ensure that their national legal frameworksand actions are consistent with international human rights andstandards of freedom of expression and privacy.

Action point: Ensure compliance with international human rightslaw and freedom of expression standards.

Ensure global data flows Creating a ‘Fortress Europe’ for data will limit the potential forgrowth and innovation. The European Union and the UnitedStates must redouble efforts to work out common standards forthe handling of personal data that allow for the free exchange ofdata. These standards should cover open data and anonymisation,among other issues.

Action point: Step up efforts to agree common EU­US standardsfor the handling of personal data.

From page 13

5

6

7

2010

2011

2012

2013

2020

1.21.8

2.8

4

40

Data generation

Amount of dataproduced per year(in zettaocet)

Source: European Voice

90%of data generated over the last two years is as much

as in the previous history of the world

8

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