In a newly released document the government highlights the importance of data as an enabler, creating entirely new business models. The paper, titled The Economic Value of Data, sets out a number of challenges which it claims will enable data driven innovation to spur productivity and economic growth.
“Data-driven innovation holds the keys to addressing some of the most significant challenges confronting modern Britain,” the paper said,
“The UK’s strengths in cutting-edge research and the intangible economy make it well-placed to be a world leader, and estimates suggest that data-driven technologies will contribute over £60 billion per year to the UK economy by 2020.”
Public Sector Innovation With Data
In the public sector, data is playing an increasing role in transforming public services. This is particularly true in transport, where there has been significant data driven innovation. Over the last ten years, Transport for London (TfL) has led the world in opening transport data free of charge, including to external app developers.
A recent study by Deloitte found that use of this data now contributes up to £130 million per year to the London economy, for example through time-saving for Londoners, reduced costs for TfL, and high-value job creation.
New Consumer Experiences
The paper goes on to discuss how data can also be used to personalise services and improve the consumer experience in areas like mapping, retail and video/music streaming and create brand new products across a range of sectors – from unlocking new healthcare treatments, to enabling smart devices, adding that personal data is a huge source of economic and social value to businesses and consumers, and as technology is increasingly used to personalise user experiences, reliance on personal data is expected to increase.
However, according to research less than 10% of UK businesses use customer relationship management software to collect, store, and share customer information within their businesses, and only 6% of businesses use this information for marketing purposes, showing a huge gap and market where data driven innovation can create value for SMEs willing to invest.
The government paper recognises that recent events have raised public questions and concerns about the way that personal data, can be collected, processed, and shared with third party organisations and hopes that The Data Protection Act 2018 will give individuals stronger protection over how their data is used.
Challenges for a Data Driven Economy
The paper outlines a number of tasks which must be overcome in order to take advantage that data driven innovation can deliver to the economy.
- Addressing the question of control and data ownership
- Maintaining protection of personal data
- Creation of open data initiatives for public sector innovation
- Promotion of interoperability and data standards
- Enabling legal data sharing frameworks
The government states that this is just the beginning of a set of wider initiatives to promote a data driven economy, and have announced a new National Data Strategy to take advantage of the economic value locked up in the UK’s digital information.