Financial and Monetary Systems

What’s the value of your personal data?

Nathan Eagle
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Hyperconnectivity

Passive data is your digital footprint, bits that have been left behind as you go about your day. This trail of bits could come from anywhere – from interacting with branded content on social media, to swiping your credit card to pay for a taxi. Just a few seconds ago, you generated a few bits of passive data by clicking on a link to read this article.

Being “passive”, this data is not something that you generate consciously. Passive data is a byproduct of your everyday technological existence, which is why many people are not aware of its intrinsic monetary value.

Like a raw material, passive data can be mined and used in many different ways. Advertisers can use your browser history to predict what kind of product you are likely to buy; health organizations can use the purchasing patterns of you and your neighbours to gauge when an influenza outbreak is coming. A lot of different types of organizations can extract value from your passive data. Right now, that’s exactly what they are doing, to the tune of hundreds of billions of dollars.

There is a whole industry of high-value businesses – which operate rather euphemistically as data management platforms – built around the capture of individual data. According to the Data-Driven Marketing Institute, this industry generated $156 billion dollars in revenue in 2012 – approximately $60 per every one of the world’s 2.5 billion internet users.

As impressive as this figure sounds, it really is just the first step for the data economy. By the end of the decade, the global internet population will reach 5 billion, and the amount of data will grow exponentially with the addition of 10 billion machine-to-machine connections and a 11-fold rise in mobile data traffic. With an increase in applications across industries, it’s reasonable to project that individual data will soon be worth over $100 per internet user. Within just 10 years, this industry will be generating more than half a trillion dollars per year.

So, as creators of this multibillion-dollar data, will individuals like you and I be compensated?

Nathan Eagle 2

 

Today, the individual users of the internet are at the bottom of a broken economy. Value that is generated from individual data is being collected by third parties, and sold on to any cash-rich organization that is willing to buy it. The data generator receives nothing for their input.

To start pushing some of this value back to the individual, we need to view personal data as an asset rather than as a by-product, and find ways for people to actively access its value.

There are already many ways for internet users to take control of their data. On your Facebook profile, clicking a link allows you to export all your personal data as a zip file. If you can possess your own data in such a ready form, what is to stop you from selling it directly to the organizations that want it?

The data market doesn’t yet exist on this scale. However, Facebook is demonstrating how close we are to creating a new model where individuals have control. I co-founded Jana with the belief that personal data is exactly that: personal. Should people choose to share it, they should be compensated for its value. This new model can turn data into an asset, consumers into producers, and empower billions of internet users by making them beneficiaries of a transactional exchange.

This is an exchange that can add value in every direction. While individual internet users will have a way to actively monetize their data, buyers will also benefit from better insight into the needs and wants of consumers. They will have a way to develop relationships with individuals that are consciously, actively sharing their data. The first step in building this relationship is acknowledging that personal data is personal property.

If the value of passive data is hundreds of billions of dollars, then the value of the data that individuals choose to share – reliable, honest insight into their motivations as consumers – should be much greater. By recognizing people as individuals, we can access that value, and share in its rewards within a fully inclusive data economy.

Author: Nathan Eagle is the CEO of Jana, a World Economic Forum Technology Pioneer

Image: German crypto specialist and chief scientist with Berlin’s SR Labs Karsten Nohl poses with a USB stick at his office in Berlin, July 30, 2014. REUTERS/Thomas Peter 

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