05 Apr 2023
by Charles Hosmer

Unlocking the value of data by supporting international data ecosystems | #techUKDigitalTrade

The same data can be used in many ways by different organisations to unlock new forms of social, economic and commercial value. But what are the barriers to doing so? And how do we overcome them on an international level?; #techUKDigitalTrade

Nobody would ever deny that the banking system is vital to the functioning of the wider economy. Yet many policymakers have so far misunderstood the value of the data ecosystem to sectors across the economy. Fewer have considered the benefit or technicalities of developing a truly international data ecosystem.

But what is the “Data Ecosystem”? It’s the context in which data moves together with the participants and infrastructure responsible for shaping it. The “participants” are the creators and users of data, ranging from big tech to small manufacturing businesses to individuals.

The “infrastructure” includes the public policy (e.g privacy and transfer laws), logistics and market mechanisms of the data market.

When we discuss goods, Free Trade Agreements (FTAs) are discussed alongside port and rail infrastructure as you cannot move goods, and therefore trade goods, without them.

But data is the same. Structural and logistical barriers to data sharing exist even in a liberal data policy environment that must be overcome for data to move. These barriers may not be as tangible as missing physical infrastructure is to goods trade, but the effect remains the same - data cannot partake in the opportunities created by an FTA.

Mission One of the National Data Strategy highlights how information deficiencies in understanding the functioning of existing privacy regulation, the inability to locate parties interested in held data, and the costs of adopting data from another organisation due to poor data standards impede data flow.

How does data sharing unlock the value of data?

Data moving between data creators and different potential users can aid the development of new products, services and processes that unlock new economic, social and commercial value.

For example, climate data can be used to develop a weather app or determine the best location for a new windfarm – vast differences in economic and social value arise as a result.

In a well-functioning data market, both use cases would be enabled by data flow. However, limitations in knowledge, confidence and cost as described above prevent this flow and the realisation of the data’s true value.

This phenomenon is especially acute internationally. Often, the organisations most capable of unlocking the benefits of a dataset are foreign to the data creator.

If creators struggle with information deficits on potential domestic use cases of their data and the conversion of data standards, these struggles are amplified when dealing with organisations in different regulatory settings. 

For instance, it may take a British, Japanese or American AI firm to best use the weather data of a Brazilian company for the benefit of wind farm development in Brazil. But due to the amplified barriers to data sharing, the foreign AI firms are never identified by the Brazilian company. Alternately, the data is in a Brazilian standard which cannot be readily used by the models of the foreign companies. Consequently, the AI companies lose out on a business opportunity, and Brazil loses out on better infrastructure.

What should government do next?

To move goods internationally, governments built roads, canals, ports and railways. Data needs the same treatment to unlock the economic, social and commercial benefits within.

The UK should collaborate, first with our closest counterparts with similar data ecosystems, on infrastructure that facilitates international data movement. The internationalisation of Mission One should be a government priority.

Physical and Digital Infrastructure, made up of new organisations and digital technologies, can be developed as part of bilateral or multilateral programmes between countries with the aim of increasing data flows between the participants of each data market.

This infrastructure can include data intermediaries; entities that exist to match data creators with data users of different nations; and Privacy Enhancing Technologies, software that allows data experimentation without sharing data access, can remove the need for compliance with different national privacy rules.

Seeking to align the policy infrastructure of national data ecosystems through collaboration on data standards in line with the FAIR Principles would ease data flows by ensuring similar levels of data quality and format among different jurisdictions, reducing the cost of adopting foreign data.

Institutionalised cooperation should be sought to achieve this, clear remits for cooperation codified in FTAs and other international agreements.

Some great work is being done in this space such as the UK/US Data Dialogue and the PET’s Prize Challenge. But a small number of initiatives between one or two countries is not enough when society is already this far into the new digital age, we need to internationalise our data ecosystem fast to unlock new value to society and trade.

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Charles Hosmer

Charles Hosmer

Associate, DRD Partnership

Charles Hosmer is a former UK Free Trade Negotiator for Digital Trade now working as an Associate at DRD Partnership, advising companies on how to shape public policy.