‘The data monetization trend calls for a common framework, but we need to prioritize questions of trust’

Referring to the battle between the US versus Chinese models of digitalization, Marten Kaevats, National Digital Adviser of Estonia, said that both models were ‘big brother-like’ and that we needed ‘a third option’.

“The EU is pushing for this with GDPR and getting slowly closer,” he said. “At the Tallinn Digital Summit, we convened recently to talk about ‘trusted connectivity’; an agreement on how to leverage the capacity of the private sector to invest in infrastructure. Nowadays, infrastructure is not only about bricks and mortar, but it carries a digital component too and one that needs to be trusted.”

This type of framework should be established by the Blue Dot Network – the US, Japan and Australia – but should also get countries like Estonia on board, he said, adding:

“We are hoping this idea gets traction [because] we are coming to a stage where data monetization is a thing but there needs to be some trust in it as well. And coming from a small country that has so far operated with transparency and integrity regarding data handling, we want to provide for our citizens without acting like big brother.”

Where do governments’ roles end and companies’ begin?

While government intervention is generally accepted to be necessary to respect peoples’ privacy, the question of ‘to what extent?’ remains up for debate.

In the healthcare industry, questions arise around electronic heath record data, for instance, such as: Who can have access to this data? And how can it be useful?

“The frameworks exist,” said Katrin Siebenbürger Hacki, Director of Medows Sàrl. “Then businesses need to answer the question of how to create value from this data through innovative business models.”

In agreement was Marten who said governments’ job was to create the architecture for the room in which companies can operate.

“By that architecture I mean the legal architecture and the everyday cultural practices. In creating an open system in Estonia, we have seen the value of creating a mindset that is fully open and adaptable. The means redesigning processes and building a room of trust in which innovation can happen and no-one is afraid to say ideas out loud – and that’s the difficult part.”

Siebenbürger said companies should be responsible for maturing their strategies, data-wise and in the same way as they were the strategy for their products or services. She said businesses needed to ask questions such as ‘What’s the strategic objective from getting this data and what value are we providing to the customer and other stakeholders?’

Nowadays, more and more value in the healthcare system comes from data, she said. People want their prescriptions to be accessible in digital, for instance, to be able to benefit from a wealth of treatment suggestions they might be looking for. “It’s not the value of data per se but of the services offered. Data is abundant and cheap. Profitable, and useful, business models are what creates value,” she stressed.

‘Actually help people if you want to gain their trust’

While countries might have the right infrastructure and technology in place, attitudes and mindsets regarding data handling can be hard to change, said Professor Bris.

Marten said lessons on that could be learned from Estonia, who had been on a path of gradually gaining trust for 25 years.

“People by design are reluctant to change but the way you get things moving is to get people and societies onto a positive feedback loop; get them hooked on something and give them a kick – a reminder – once in a while, such as ‘Oh I don’t have to stand in line!’ Doing something that actually helps people will get a society’s trust,” he said.

Another way to get people’s trust in digitalization is to tap into the growing notion of ‘privacy budgets,’ said José Parra Moyano, Assistant Professor, Department of Digitalization, Copenhagen Business School. This is about people asking: ‘How much privacy am I willing to give away for a particular service or product?’ he explained.

“Consumers’ privacy budgets are decreasing, so societies are becoming more privacy aware,” he said. “When WhatsApp updated their user term and conditions earlier this year it was perceived as being too intrusive. People shifted to equivalents that they perceived as being less ‘privacy expensive’.”

Companies should ask: ‘How much will my consumers demand? X amount. So, let’s develop products in line with that,” he said.

Addressing data inequalities: global tax or unions and education?

How to address the fact that countries that develop the least data, often those in the developing world, are now in a race to catch up? ‘Is the UN’s calls for a tariff on data the solution?’ asked Bris.

“Data cooperatives and unions are a potential way to close the gap,” said Parra Moyano. “A group of data poor people can join a union and pool together. They can sell rights to access.”

We need an awareness about the use of data that is nothing to do with age, said Marten. “Data brokers also exists in Estonia,” he said. “We need to build these tools on a global level, to help these countries to leave the cheque book and fax machines behind and start working in the new economy.”

“I’m not sure about a global tax; data flows are complex,” said Siebenbürger.

“Data is not stored in one place. Global collaboration is the first step, and we are seeing some happening already. The key for me is economic development, talent development and universities in the country.” It all comes down to the wider ‘leapfrog idea’ – areas with poorly developed tech being able to move ahead rapidly avoiding intermediary steps – to make sure countries can catch up, she said.

And with data such as that generated by the World Competitiveness Center and released today, economies have one more tool in understanding where they are doing well and where they can improve in their abilities to support digital transformation.

You can read this article on IMD.org as well.