In a series of posts related to the World Economic Forum’s Rethinking Personal Data: Strengthening Trust report, John Rose and Carl Kalapesi of The Boston Consulting Group discuss the importance of establishing clear rules so that the potential benefits of personal data can be achieved. You can download the report and see related videos, podcasts, and other materials on our Rethinking Personal Data page as of 16 May.
Personal data is everywhere. We volunteer data about ourselves on social networks, payment providers capture information from our transactions, governments record our financial details, mobile phones track our location at any given moment, and hospitals capture and store our medical tests and clinical diagnoses digitally – all of which can be used to make inferences about what we might do next online.
Used appropriately, personal data can create new economic value, as the recent valuations of companies collecting and utilizing personal data would suggest. And it can foster significant social value, benefiting industry, individuals and governments alike. A new report, scheduled for release on 16 May, will reveal, however, that unlocking this potential value requires the establishment of rules and safeguards that balance the interests of all stakeholders.
The report, Rethinking Personal Data: Strengthening Trust, suggests that personal data is a highly valuable asset, like oil or water. And like these assets, it needs to flow or move to create value. But unlike these and many other tangible assets, data is not consumed when used. Instead, its use increases its value because new data elements are accumulated, providing greater insights into individuals. This increased insight, coupled with new data mining and “big data” technologies, often leads to new ways to use and create value.
Without a set of trading rules – clear guidelines for using data and safeguarding against misuse and theft – little of the potential economic and social value will be realized. Establishing such trading rules is complicated by the myriad potential uses of data, the speed at which new uses are being invented and the inexhaustible quantity of the data itself.
Given this, the approach to establishing trading rules – and the rules themselves – needs to be different from those for other asset classes. The rules must be complex enough to encompass the extensive and diverse ways in which data can be used and flexible enough to adapt to the new uses of data that are being invented almost daily. They need to balance the potential value that personal data can unlock with the rights of individuals and societies to determine what are, and are not, legitimate uses of data. And they need adequate safeguards to ensure both compliance with these rules and protection for individuals from the unauthorized access of their data. There is a need to balance the interests of all stakeholders in establishing rules for securing and using personal data.
Rethinking Personal Data: Strengthening Trust, published by the World Economic Forum in collaboration with The Boston Consulting Group (BCG), provides a global perspective on some of the most recent developments in personal data, including different regulatory approaches, and is a welcome counterpoint to much of the current debate that has focused predominantly on privacy and protection. It also identifies the key issues that need to be resolved to strike a balance between the value creation of personal data and the potential negative aspects of its increased collection and use.
Authors: John Rose is a senior partner and managing director at BCG and project adviser to the World Economic Forum’s Rethinking Personal Data project. Carl Kalapesi is a consultant at BCG and project manager for the World Economic Forum’s Rethinking Personal Data project.