The Data Value Chain

The Data Value Chain: Economic drivers, opportunities and challenges

June 22, 2018 | | Serafino Abate

The volume of data in the world is increasing exponentially. We are at the beginning of a data revolution that is transforming the world’s economies and society.  Many organisations, regardless of industry focus, now consider data to be a strategic asset and a central source of innovation and economic growth.

But data cannot be analysed and viewed in a traditional sense – as at its very core it is dynamic, and constantly changing: this merits fresh analysis and thinking.

The combination of individual pieces of data actually increase intrinsic value by delivering new insights and correlations. Therefore, data has to be viewed as a new form of asset and an asset that can multiply and grow by combining data from different sources. Using one piece of data does not in itself consume that data: rather it can still be used by others, or built on and reused many times over. Therefore being able to collect and exploit large volumes of data in an efficient manner has become an important source of value.

In this new report The Data Value Chain – we analyse the data economy using a value chain framework, and present the data value chain in terms of the types of data considered, the activities and business models involved, and potential policy issues arising.

What is interesting and new is that we outline a framework for the data value chain: from an analysis of how data is generated, to how it is collected, through to how it is analysed and eventually to how it is exchanged. This presents a very clear picture of how organisations operate within this space, and where and at what point value can be derived.

Through an understanding of the structure and activities of the data value chain, we can explore a number of important issues and questions that should be to the forefront of policy analysis: how to balance scale, scope and platform advantages with market power; how to balance data-driven efficiencies and any restrictions on competition and innovation; and how to ensure the right between consumer protection and market forces.

What is clear is that current competition and regulatory approaches may not be suitable for data driven businesses. To realise data’s full potential, as well as to ensure we meet a wide set of policy objectives, we need to change the way in which we analyse and assess these types of business models to ensure that the data value chain delivers real competition and innovation. The analysis also highlights how sector specific regulations may be impeding greater competition and innovation. Combined, our recommendations highlight key areas that require further investigation and discussion.

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