Will data exchanges become like the stock markets?
It is widely accepted that the Fourth Industrial Revolution, characterized by a fusion of technologies that would blur the lines between the physical, digital and biological spheres, would undoubtedly be ‘data’ driven. The world, however, is in a difficult position to decide how to regulate the use, storage and ownership of “data”, and of course how to extract the most from data whose generation is increasing exponentially.
The digital universe is now expected to double every two years, and by 2025, it is estimated that 463 exabytes of data, or the equivalent of 212,765,957 DVDs, will be created around the world every day! That’s a pre-pandemic estimate, of course. The massive increase in digital dependence induced by the pandemic could have forced us to re-estimate the immediate future.
The European Union drew up its General Data Protection Regulation in 2018, and in India a parliamentary panel was reviewing the draft data protection law.
A 2011 World Economic Forum report titled “Personal Data: The Emergence of a New Asset Class” described “data” as a “new asset class” and claimed that a massively increased amount of personal data “Generates a new wave of opportunities for the economy and the creation of societal value. China appears to have followed suit.
In fact, amid the chaotic management and harvesting of data in the West, China has now launched a transparent and regulated data exchange through the new Shanghai Data Exchange which began trading on November 26. Well, when British mathematician Clive Humby called data “new oil” in 2006, few could imagine that big data could ever be traded like crude oil, that’s for sure.
The Shanghai data exchange is seen as an important step in accelerating the flow of data and unleashing digital dividends. The initial data offerings include 20 products from China Eastern Airlines, Ucloud, Cosco Shipping, China Mobile Insight and other Chinese companies, from an initial batch of 100 companies that have signed up as data merchants.
A 2018 research paper titled “Can China Lead the Development of Data Exchange and Sharing Markets?” »Published in ‘Communications of the ACM’, of course, perceived that with technological advances (blockchain, AI, big data analytics, cloud computing) and maturation policies (privacy, digital ethics), better data sharing and trade ecosystems would aid the economic transition to a new level of global competitiveness.
Yes, the idea of setting up data exchanges has been fueled in China for some time now. In 2013, Chinese businessman Wang Sanshou, dubbed the “Data King,” paved a new way for mining data assets and successfully activated government data to unleash the value of data. Wang Sanshou proposed to set up a platform to exchange big data held by local governments and state-owned enterprises.
However, China’s first small-scale data exchange experiments did not reach critical mass. The Guiyang Data Exchange, created in 2015, has never recorded a significant volume of exchanges. In the past six years, around thirty big data exchange platforms have been established by various local government authorities and private companies in China, to exchange entire datasets, web crawlers, interfaces programming applications and analytical results. In December 2017, Chinese President Xi Jinping said, “Data is a new factor of production, a fundamental and strategic resource, and an important productive force.”
And in August 2021, the National Bureau of Asian Research wrote, “In 2020, the Central Committee and State Council of the Communist Party of China (CPC) added ‘data’ to land, labor, capital and to technology as a new factor of production in its ‘field allocation system and mechanism’.
The Shanghai Stock Exchange allows companies that collect data to maximize the value of their business while allowing buyers to use the data to increase the productivity of their business. The transaction, however, will not be completed if the data buyer cannot explain the exact scenario in which the data will be used. If this initiative is successful, its contribution to economic efficiency can be compared to the creation of well-regulated capital markets in the West, who knows!
I always prefer to draw a parallel between “Data” and the anatomically fully functional android from “Star Trek” who had fought for his own humanity. “He [Data] evolved, he embraced change because he always wanted to be better than he was, ”said Jean-Luc Picard, the captain of the USS Enterprise in Star Trek. Well, the future of data is still pretty uncertain.
The author is professor of statistics, Indian Statistical Institute, Kolkata