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There is consensus that the use and sharing of data can create social and economic value for people, organisations and for the wider economy (find out more about the value of using and sharing data). However, there are multiple issues both for estimating this potential value, and for designing mechanisms and incentives to ensure that this value is effectively unlocked – and that ongoing sharing and fair value exchange is supported.

At the Open Data Institute (ODI), we want to support people, organisations and societies to unlock the value of data. In this context, we understand ‘value’ as ranging from economic value for people and companies, all the way to the broad wellbeing of society, including both monetary and non-monetary benefits. Unlocking this value, in turn, requires creating frameworks that can help us understand and navigate the different mechanisms, processes and structures by which data, and particularly data flows, create benefits for organisations and for society. These frameworks can also help us explore the ways in which value-creating behaviours and practices can be sustainably incentivised.

In 2020, the ODI and the Bennett Institute for Public Policy released a report on The Value of Data that outlined the issues around estimating the potential social and economic value of data, as well as the economic and informational characteristics of data that play a role in determining such value.

In this project, which kicked off in the summer of 2022 and will run through March 2023, we will develop materials and tools to support organisations aiming to unlock the value of data that they hold or that is within their ecosystem.  From January to March 2023, we will build on the research conducted for the Value of Data report, as well as research carried out since by other organisations and academic researchers. We will use this research to develop materials and tools that can help organisations understand the value of the data they hold or that exists within their data ecosystems, and to promote practices and behaviours to unlock it.

To do so, we will collate existing research on the value of data, datasets and data flows and make them accessible and usable. We will also put together a set of case studies that illustrate how this research can be useful in practice. We will develop a draft tool that organisations can use to assess the value that can be created by using or sharing data.

We’re aware that many organisations have conducted research aimed at estimating the value of data and data sharing. Rather than retread the same ground, this project will build on past work with the aim of operationalising it to produce impactful content and tools aimed at a non-specialised audience. To do this, we will leverage not just previous ODI research on the topic, but also the ODI’s experience in developing frameworks and building tools such as the Data Ecosystem Mapping tool, the Data Ethics Canvas, and the Data Landscape Playbook, and the guide for assessing risk when sharing data.

The social and economic value of sharing data: emerging lenses

As laid out in the Value of Data report, data, as an economic asset or good, has particular characteristics that differentiate it from other goods or assets that organisations normally hold:

  • It can be used multiple times without being depleted, which makes it hard to know how it might be used in the future and thus to quantify its potential value over time.
  • It is non-rival, meaning that the same data can potentially be used by multiple actors at the same time without them needing to compete for access to it.
  • It often involves externalities: datasets can often gain value when combined with other data, meaning that actors other than those who currently hold the data may be able to create more value from it if they are granted access.
  • Certain sources of data may have option value: their value may increase in the future if it can be put to productive uses that have not yet been thought of or anticipated by its current holders.
  • Its value is strongly linked to access: all other things being equal, the more accessible data is, the greater the value that can be created from it.

Because of these characteristics, market-based mechanisms don’t provide an accurate way of valuing datasets, as they don’t account for their impact on social welfare. Under a normal market situation, data holders may be able to capture value by controlling access to non-rival data that could potentially create social benefits if reused by other actors. In contrast, the social value that could be created by allowing others to use data for socially beneficial goals is underrepresented in the prices that these actors are willing to pay for access.

From an economic perspective, this means there’s a gap between private value – that is, the value that individual actors collecting and sharing data are able to capture – and social value, which is the total value or benefit that society could get from using that data. In this scenario, it may be tempting to assume that mandating data sharing or limiting the capacity of data holders to exclude other actors could solve this problem and bridge this gap. However, such measures may also lead to nonoptimal scenarios, as they may fail to take into account the costs that data stewards incur in collecting and processing data. In many cases, their capacity to control access to the data they collect and process, or to the insights that can be generated from it, is what allows them to generate revenue from their data stewarding activities and thus cover those costs. Thus, mandating data sharing could have the unintended consequence of reducing the collection and processing of data. Additionally, there’s a need to take into account the risks associated with sharing data, such as digital security and privacy risks, as well as the need to ensure that data sharing doesn’t compromise other legitimate interests, such as intellectual property rights of those holding the data.

Therefore, there’s a need to find middle ground approaches by exploring mechanisms that can adequately incentivise data sharing and reuse, while ensuring that data collectors and data subjects are adequately compensated for their contributions to social welfare.

Next steps

Through desk research and expert interviews over the next months, we will explore questions including:

  • What aspects of data are important to take into account when thinking about its value and how it can be unlocked?
  • How can organisations measure the potential value that the data they hold or that is held within their ecosystems can yield to them and to the wider society when shared?
  • How can the benefits of data sharing or use for the wider society be quantified?
  • How can governments, civil society or industry bodies adequately reward organisations for the service of collecting, maintaining and sharing data?
  • How can organisations that steward data develop business models that enable them to increase access to it while being adequately compensated?

To explore these questions, over the next four months we will be:

  • Putting together an annotated bibliography including academic and non-academic works that explore the ways in which the economic and societal value of datasets and data flows can be estimated.
  • Compiling a set of practical real-world examples that serve to illustrate how value can be created from data and how existing frameworks can be useful, in practice, to assess this value.
  • Engaging with stakeholders from different organisations to test our initial assumptions and prototypes of a framework.
  • Developing an initial draft of a tool to help organisations assess how they can create value from data.

Get in touch

This project is collaborative in nature, and we welcome all forms of input. If you have ideas or examples of frameworks for assessing the economic and societal value of data held by organisations, mechanisms for incentivising data use, re-use or sharing, or any other suggestions or contributions that are relevant to the topics covered by this project, please do get in touch: [email protected]