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The data economy is an economy based on data, data technologies, products, and services. The data economy has its origins in the new economy—the transition from a manufacturing- to a service-based economy.
The data economy, a global phenomenon, is a digital ecosystem consisting of various participants, such as data suppliers and users. The term refers to the ability of organizations and people to leverage data as an asset. Data is utilized to make strategic decisions, improve operational efficiencies, drive sustainable growth, well-being, and innovations. The value and impact of data are increased by situational, contextual, historical, and temporal factors. Integrating, refining and sharing data increase its value and impact. The effective use of data can lead to company growth, improvements in quality of life, and the creation of efficient societies. However, the effective use of data can be hindered by unrefined data form, data models, and issues with the efficient exchange of data.
Data economy categories
Big data economy
Human-driven data economy
The human-driven data economy is a fair and functioning data economy in which data is controlled and used fairly and ethically in a human-oriented manner. The human-driven data economy is linked to the MyData Movement and a human-centered approach to personal data management.
Personal data economy
Transition to data economy
The size of the EU data economy was estimated to be more than €285 billion in 2015, representing over 1.94% of the EU GDP. Key sectors in the data economy either are or are on the way to becoming data-driven, for example, manufacturing, agriculture, automotive, smart living environments and telecommunications. Healthcare and pharma are also at the core of the data economy.
We are moving towards a fair data economy that benefits everyone. Management of personal information makes everyday life easier and adds to well-being. A unified procedure opens up opportunities for user-oriented innovations and business activities.
Individuals have control over the data concerning themselves. Individuals can actively define the services and the conditions under which their personal information is used. The service providers worthy of people’s trust can also get access to significantly more extensive and varied data e-services.
Approaches to data breaches are problematic. Challenging issues include compensation to victims, incentives for enterprises to invest in data security, and uncertainties for corporations about regulatory burdens and litigation risks. Data portability might decrease interest in innovations.
The regulation of the data economy is closely linked to privacy. The present approach is flexibility, finding a balance between protecting privacy and allowing citizens to decide for themselves. The European Union EU GDPR regulation is one cornerstone of this new regulatory framework. A new paradigm for data governance is needed, with data ethics as a central component in all regulatory reforms.
The data economy raises concerns about regulatory uncertainties and incoherence, privacy, ethics, the loss of control of data, and the ownership of data and related rights. Mathematical models and algorithms based on them are too often opaque, unregulated, and incontestable.
Some concerns have been raised about internet companies controlling the flow of data and using it to gain power.
The critiques expressed in the 2012 General Data Protection Regulation GDPR draft of the European Commission have now led to concrete regulations:
- “This is why it is time to build a stronger and more coherent data protection framework in the EU, backed by strong enforcement that will allow the digital economy to develop across the internal market, put individuals in control of their own data and reinforce legal and practical certainty for economic operators and public authorities.”
- Artificial intelligence
- Cloud computing
- Data analysis
- Digital economy
- Digitization economics
- Electronic business
- Electronic commerce
- Information economy
- Information society
- Internet of Things
- Knowledge economy
- Knowledge market
- Machine learning
- Network economy
- New economy
- Open data
- Platform economy
- Virtual economy
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- Building a European Data Economy
- European Data Portal: The size and trends of the EU data economy
- Principles for a Data Economy (with the American Law Institute, ALI)
- Human-driven data economy (Finnish Innovation Fund, Sitra)
- MyData Global Network
- Open Knowledge International
This article needs additional or more specific categories. (November 2018)