12 Feb THE DATA ECONOMY DEFINED & EXPLAINED
The data economy is a concept that touches on the system of production, distribution and trade of data assets between different stakeholders that hold commercial and consumer value. As data proliferates across society, it increasingly becomes an economic input, driver and output powering models, decisions and transactions that create financial and non-financial value at scale.
The global diffusion of technologies like smartphones, cloud computing, automation and artificial intelligence has fueled exponential data growth over the past decade across governments, businesses and even personal ecosystems. Such an information deluge combined with analytics abilities to extract contextual intelligence has powered the emergence of the data economy.
Data’s economic properties resemble those of oil in many ways. Like oil, immense upfront investments are required for initial data mining and refinement. The processes to procure, store, combine, analyze, productize and distribute data or data-based insights also mirror oil value chains. Both oil and data can then enable or improve downstream products, services and business innovations when supplied as production inputs.
Core components of the data economy system include data generators, aggregators, processors, productizers, distributors, brokers, end-use enterprise consumers, and application developers. Overlapping stakeholders participate across multiple roles in this complex, decentralized network. Specialized marketplaces and exchanges have emerged to facilitate trading of data assets including analytics-ready datasets, reports, statistics, forecasts, models, and other derived data products.
The data economy unlocks immense economic potential but also risks and liabilities around privacy, security, accountability and fairness that societies continue balancing. But regulatory frameworks internationally recognize data as a new asset class with economic rights and responsibilities attributed to participants across supply chains.
Information permeates entire economies by improving efficiency, enabling innovation and powering artificial intelligence behind the technologies fast transforming every global industry. And Deloitte estimates the value of overall data transactions impacting the global economy exceeded $2 trillion as of just a few years ago. As data commercialization and diffusion accelerates, its position as the “new oil” and indispensable economic asset continues solidifying.