Data-Intensive Research

Samiksha Shukla
Kritica Bisht
Kapil Tiwari
Shahid Bashir

Data Economy
in the Digital
Age
Data-Intensive Research

Series Editors
Nilanjan Dey, Techno International New Town, Kolkata, West Bengal, India
Bijaya Ketan Panigrahi, Indian Institute of Technology Delhi, New Delhi, India
Vincenzo Piuri, University of Milan, Milano, Italy
This book series provides a comprehensive and up-to-date collection of research
and experimental works, summarizing state-of-the-art developments in the fields
of data science and engineering. The trends, technologies and state-of-the art
research related to data collection, storage, representation, visualization, processing,
interpretation, analysis, and management related concepts, taxonomy, techniques,
designs, approaches, systems, algorithms, tools, engines, applications, best prac-
tices, bottlenecks, perspectives, policies, properties, practicalities, quality control,
usage, validation, workflows, assessment, evaluation, metrics, and many more are to
be covered.
The series will publish monographs, edited volumes, textbooks and proceedings
of important conferences, symposia and meetings in the field of autonomic and
data-driven computing.
Samiksha Shukla · Kritica Bisht · Kapil Tiwari ·
Shahid Bashir

Data Economy in the Digital

Age
Samiksha Shukla Kritica Bisht
Department of Computer Science Lucknow, India
and Engineering
Christ University Shahid Bashir
Bengaluru, Karnataka, India Department of Data Science
Christ University
Kapil Tiwari Bengaluru, Karnataka, India
Bengaluru, Karnataka, India

ISSN 2731-555X ISSN 2731-5568 (electronic)

Data-Intensive Research
ISBN 978-981-99-7676-8 ISBN 978-981-99-7677-5 (eBook)
https://doi.org/10.1007/978-981-99-7677-5

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature
Singapore Pte Ltd. 2023

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Foreword by Prof. Santosh Kumar

In the realm of geopolitics, the currents of change are ceaseless, shaped by the
intricate interplay of factors within and beyond our control. As we stand on the
precipice of an era defined by the convergence of data and the economy, the very
bedrock of global affairs is shifting beneath us. The book you hold in your hands,
with its meticulously crafted chapters and thought-provoking insights, arrives at a
time when understanding this convergence is not only paramount but also a critical
instrument for nations and societies worldwide.
In an age marked by the ubiquitous presence of data and its far-reaching implica-
tions, the concept of the “Data Economy” has emerged as a beacon guiding the course
of our interactions, innovations, and even policies. The chapters of this book offer
a comprehensive exploration of this intricate landscape, from defining the dimen-
sions of the data economy to delving into the pressing challenges, opportunities, and
strategies that this transformation demands.
As we venture deeper into the digital age, we find ourselves on the cusp of a
paradigm shift akin to the Industrial Revolution, with data as the new currency and
catalyst. Various sections of this book meticulously dissect various components of
data economy and how countries understand them. The chapters address the need,
significance, and principles of the data economy, underpinning their discourse with
real-world examples and astute analysis.
As I reflect upon this book’s remarkable contribution to the discourse surrounding
data and economy, I am struck by its impeccable timing. Just as the winds of change
are sweeping across the world, redefining the dynamics of power, influence, and
progress, this book arrives to guide us through these uncertain waters. Its chapters
serve as compass points in a world navigating the currents of digital transformation,
showing how data is altering the very fabric of society, governance, and international
relations.
I commend the authors from Christ (Deemed to be University), India, for their
dedication to shedding light on this vital convergence. It is my sincere hope that
policymakers, scholars, business leaders, and individuals alike will turn to these
pages to glean insights, inspiration, and a deeper understanding of the seismic shifts
underway. As the world grapples with the implications of the data economy, this

v
vi Foreword by Prof. Santosh Kumar

book stands as an invaluable guide, illuminating the path forward as we collectively

shape our shared digital destiny.

New Delhi, India Prof. Santosh Kumar

Professor and Head, NIDM, Ministry
of Home Affairs, Government of India
New Delhi; Formerly, Director
The SAARC Disaster Management
Centre, Disaster Management
Specialist, The World Bank
Foreword by Dr. Fr. Joseph C C

Greetings,
In today’s data-driven world, I’m delighted to introduce you to a book that
uncovers the exciting concept of the data economy. As the Data Economy in the
Digital Age, I am thrilled to see this exploration of how data is reshaping our lives,
economies, and societies.
This book delves into the heart of the matter, offering a clear understanding of the
data economy and its various dimensions. From definitions and challenges to types
and principles, you’ll find a comprehensive overview that only requires an advanced
degree to grasp.
The authors brilliantly explain why we need a data economy and how data’s
sheer volume has transformed our reality. They also tackle the thorny issues of
privacy, ownership, and global significance, making these complex topics accessible
to everyone.
I take great pride in observing professors and researchers from Christ (Deemed
to be University), India, delve into such innovative topics, enriching academia with
their valuable contributions.
This book is a beautiful example of Collaborative Research and Innovation at
Christ (Deemed to be University), India, It transcends the boundaries of a tradi-
tional syllabus; it emerges as a harmonious symphony, blending knowledge, inno-
vation, and boundless ambition. It is a testament to the institution’s unwavering
dedication to nurturing skilled professionals and visionary trailblazers who shape
the future through the transformative power of data-driven insights.

vii
viii Foreword by Dr. Fr. Joseph C C

Whether you are a tech enthusiast or just curious about the world around you, this
book is your guide to navigating the data economy. It is a journey of discovery that
empowers you to understand, engage with, and shape the future that data is weaving
for us all.

Dr. Fr. Joseph C C

Vice Chancellor
Christ (Deemed to be University)
Bengaluru, India
Preface

Data and Economy are two trendy words, but if we consider it a phrase, it creates
an ecosystem.
While what seems like a mere amalgamation of the it-themes of the twenty-first
century, the phrase Data Economy holds much more meaning. Data was once defined
as information from which value can be extracted, and data economy is an extension
of that very idea. Value data can bring in the correct ecosystem—The ecosystem of
Data Economy.
It started with a mere discussion on how data can be monetized and how it is
being done. What followed was the discovery of the phrase “data economy.” While
commonly used in reports and research papers, the term itself is not explored much.
It is based on data sharing across platforms and ecosystems. The data is generated
when a human interacts with an electronic device. From accessing our location to
storing our fingerprints in databases, electronic devices and their servers have become
data warehouses. Electronic devices are only one source from which data is being
created. Access to technology and want for comfort have led to more avenues of data
creation, including sensors and APIs constantly collecting and using real-time data.
With such a data explosion, how do we use it to get the best value that has risen?
While the data explosion pushed the creation of the data economy, the pandemic
brought it into perspective. It is ironic how the world’s wealthiest economies had to
re-evaluate what economic growth meant to them. The pandemic hit everyone with
immense force, but it was those who used data and the digital world boom to come
out of it more vital than ever. Data has emerged as a valuable asset in the economy,
from analyzing results and feedback for vaccine creation to developing applications
to determine the probability of infection. It expands how individuals see data from
an economic point of view.
Data has become an asset with one of the maximum values in the corporate
world: data driving the world’s most prominent mergers and acquisitions. Oil once
determined the prosperity of an economy; it impacted inflation, growth, and GDP.
Today, we have moved from there, but have we entered a world where data is the
new oil, a new determinant?

ix
x Preface

This book, Data Economy in the Digital Age, introduces this critical but unex-
plored ecosystem of the data economy. It begins with answering the 5Ws (what, why,
who, where, when) and explores the developed and developing aspects. Challenges
and ambiguities of the data economy are also discussed alongside its advancements.
The authors have tried to introduce the essence and evolution of “data economy,”
the phrase and not individual words. They encourage the readers to engage with the
ideas presented in this book and take action in their own life or business. Whether
the reader is a data professional or curious about the economy’s future, the authors
hope to find this book insightful and informative.

Bengaluru, India Samiksha Shukla

Lucknow, India Kritica Bisht
Bengaluru, India Kapil Tiwari
Bengaluru, India Shahid Bashir
Acknowledgments

As authors of this book, we express our gratitude to the Almighty for guiding us
through this creative journey. Our heartfelt thanks go to our parents and family for
their unwavering support and encouragement, which have been the pillars of our
endeavors. To our circle of colleagues and friends, your diverse perspectives and
shared knowledge have been invaluable, enriching the content of this book.
We extend our appreciation to the dedicated efforts of Dr. Nilanjan Dey, Editor of
Data-Intensive Research, who skillfully refined our ideas into the final manuscript.
Special thanks to Dr. Aninda Bose, Executive Editor, Springer Nature Group,
London, UK, for recognizing the book’s potential and providing us with this
platform.
We would like to express our gratitude to Dr. Fr. Joseph C C, Vice Chancellor,
Christ (Deemed to be University), India, and Prof. Santosh Kumar, Professor
and Head, NIDM, Ministry of Home Affairs, GoI, New Delhi, Formerly Director
SAARC Disaster Management Centre and Disaster Management Specialist at the
World Bank, your belief in the book’s vision and your contribution to the foreword
have been pivotal in shaping the narrative’s foundation.
The authors wish to express their sincere appreciation for the support and encour-
agement provided by Dr. Fr. Jossy P. George. They are also grateful to Dr. Fr. Joseph
Varghese, Dr. Fr. Sony J Chundattu, Dr. Fr. Lijo Thomas, and Dr. Iven Jose for
their unwavering support and motivation. Furthermore, the authors extend their grat-
itude to Ms. Trisha Prasad; her artistic talents as an illustrator have breathed life
into our words.
In the digital information age, we acknowledge the boundless resources like
Google, Semantic Scholar, and other online platforms that have expanded our
research possibilities. Indeed, we used the data explosion to write about the data
economy.

xi
xii Acknowledgments

To all who have contributed to bringing this book to fruition, your involvement is
deeply cherished and valued. May the pages of this book spark fresh dialogues and
inspire new perspectives.

Samiksha Shukla
Kritica Bisht
Kapil Tiwari
Shahid Bashir
About This Book

In today’s world, data is often called the “new oil”. The phrase “data economy” has
gained significant traction, and this book aims to provide an in-depth understanding
of this concept.
This book is a comprehensive guide that explores the correlation between data and
economics. It starts with introducing the concept of data economy and its significance
worldwide. The book discusses the fundamentals of the ecosystem, including the
principles and components and the need for a data economy.
It provides a neutral perspective on the positive and negative implications of
the data economy. It highlights data monetization’s challenges, opportunities, and
potential value in the data economy. Real-life examples and case studies are included
to help the reader understand the concepts better.
Furthermore, the book discusses how the idea of a data economy varies across
different parts of the world. The contrasts between the concept of the data economy
in the United States and Yemen are discussed individually and comparatively in the
book.
The book also delves into the potential risks related to data privacy, which is a
crucial topic in today’s world. It discusses how the sharing of data and its potential
poses a significant threat to privacy and the consequences of this threat.
Finally, the book concludes with insights into how the data economy will likely
evolve, considering technological advancements and the changing global economic
landscape. The book also provides a case to discuss how the data economy is
integrating with various global sectors.
Overall, this book is an informative and comprehensive guide that provides readers
with a broad perspective on data economy. It captures the reader’s attention with real-
life examples and clearly explains the concepts. It is an excellent read for anyone
interested in the data economy.
This book is aimed at anyone interested in understanding the concept of data
economy and its implications in the present-day world. It would be a valuable read
for individuals working in data science, economics, business, and technology and for

xiii
xiv About This Book

students, academics, and policymakers who wish to gain a deeper understanding of

the topic. The book is written clearly and concisely, making it accessible to readers
from different backgrounds and levels of expertise.
Road Map

In Chap. 1, the reader is introduced to the concept of data economy, its definition,
and the stakeholders involved. The chapter sheds light on the current state of the
data economy, its challenges, and the types of data economy. It provides a detailed
explanation of the different components of the data economy and how it has evolved
from the traditional economy with the explosion of data. The chapter further high-
lights the importance of data economy in today’s world and the principles that should
be followed while practicing data economy. It also includes a section on business
leaders in the data economy and reflective questions to encourage critical thinking
about the concepts discussed.
Chapter 2 aims to provide a comprehensive overview of the role of data in the
twenty-first century and the challenges and opportunities it presents. The chapter
begins by exploring today’s growing volume of data and how it shapes society. It
then delves into the challenges associated with data, including its complexity and
computational and system challenges. The chapter further examines the need for a
data economy at a global level and the role of data in globalization. It then explores the
economics of data, including the building blocks of a market for data and its economic
characteristics. The chapter also investigates the macroeconomic implications of data
proliferation and the need to build a better data economy. Finally, the chapter presents
policy strategies for digital development and reflective questions to encourage critical
thinking and discussion.
Chapter 3 provides a comprehensive overview of data monetization, highlighting
its importance in the digital age. It starts with an introduction to data monetization
and its need, followed by a discussion on the age of open data and the data revolution.
The chapter then delves into the issues of data oligopolies/monopolies and presents
different sectors of data monetization, including data storage, data management, data
sharing, and data analytics/recommendation. As a section, data oligopolies focus
entirely on discussing the private and public entities with the first mover’s advantage
in the ecosystem. It discusses the business models within Facebook and Google that
have made them oligopolies in the market. The chapter is augmented by some case
studies, including Facebook’s acquisition of WhatsApp and Google’s acquisition of
Fitbit. The chapter covers the positive and negative aspects of data monetization

xv
xvi Road Map

from the perspectives of individuals and organizations, including ethical and social
implications. Finally, the chapter gives a detailed overview of the data monetization
tools.
Chapter 4 is a comparative study of the global data economy and explores the intri-
cacies of data economies worldwide. It starts by clearly understanding the difference
between the digital and data economies. The chapter then compares and contrasts
the data economies of developed, developing, and third-world countries, highlighting
their unique features and trends. The chapter provides readers with a global tour of
the data economies, discussing how they vary in different parts of the world. The inte-
gration of sustainability with the data economy is also discussed in the chapter. The
chapter aims to provide readers with a comprehensive understanding of the subject
matter by incorporating real-world examples and reputable sources. The chapter
includes reflective questions at the end to encourage critical thinking. Overall, this
chapter aims to impart a deep understanding of the dynamic and evolving world of
data economies.
Chapter 5 discusses one of the trending topics, the economy of privacy. The
economy of privacy is a term used to describe the market that has emerged around
collecting, using, and protecting personal data. As technology has advanced and data
has become increasingly valuable, how companies collect, store, and use personal
information has been scrutinized. The chapter also presents the value of personal data
for companies and the cost of handling it. It defines data privacy and its regulation’s
importance and benefits. The chapter presents the future direction of privacy in the
data economy.
Chapter 6 aims to present various applications of data economy. It refers to using
data as a resource to create economic value. It involves collecting, storing, analyzing,
and distributing data for various purposes. The data economy can be applied to a wide
range of industry applications, including healthcare, finance, education, efficiency
in production, defense, and tourism.
Contents

1 Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Data Economy: An Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.1 Data Economy: Domain Definition . . . . . . . . . . . . . . . . . . . . . 3
1.1.2 Stakeholders in the Data Economy . . . . . . . . . . . . . . . . . . . . . 4
1.1.3 Data Economy—The Present Stage . . . . . . . . . . . . . . . . . . . . . 6
1.1.4 Data Economy—The Challenges . . . . . . . . . . . . . . . . . . . . . . . 7
1.2 Types of Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.3 Components of Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.4 Evolution of Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.4.1 Evolution of Data Economy with the Explosion of Data . . . 12
1.4.2 Evolution of the Data Economy from the Traditional
Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.5 Principles for Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.6 Importance of Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.7 Business Leaders in Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2 Navigating the Data Deluge: Challenges and Opportunities . . . . . . . . 19
2.1 Data Volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2 Data in the Twenty-First (21st) Century . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3 Challenges with Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.3.1 Data Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.3.2 Computational Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.3.3 System Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.4 Need for a Data Economy at the Global Level . . . . . . . . . . . . . . . . . . 25
2.4.1 Globalization and Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.5 The Economics of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.5.1 Supply: The Decision to Produce Data . . . . . . . . . . . . . . . . . . 29
2.5.2 Demand: The Economic Value of Data . . . . . . . . . . . . . . . . . . 29
2.5.3 The Price of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.6 Building a Better Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

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xviii Contents

2.7 Policy Strategies for the Data Value Chain . . . . . . . . . . . . . . . . . . . . . 34

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3 Data Monetization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 Need for Data Monetization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.3 The Data Revolution: A Global Perspective . . . . . . . . . . . . . . . . . . . . 41
3.4 Data Dominance Unveiled: Google and Facebook’s Oligopoly
in the Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.5 Sectors of Data Monetization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.5.1 Data Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
3.5.2 Data Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.5.3 Data Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.5.4 Revenue Generation from Data Analytics
and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
3.5.5 Advertising and Marketing for Data Monetization . . . . . . . . 50
3.5.6 E-commerce for Data Monetization . . . . . . . . . . . . . . . . . . . . . 51
3.5.7 Financial Data for Data Monetization . . . . . . . . . . . . . . . . . . . 52
3.5.8 Monetization of Healthcare Data . . . . . . . . . . . . . . . . . . . . . . . 53
3.5.9 Monetization of Education Data . . . . . . . . . . . . . . . . . . . . . . . . 54
3.6 Data Economy Leading to Mergers and Acquisitions . . . . . . . . . . . . 55
3.7 Exploring Data Monetization: Individual and Organizational
Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.8 Data Monetization Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4 Comparative Study of the Global Data Economy . . . . . . . . . . . . . . . . . . 63
4.1 Digital Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
4.1.1 Defining the Digital Economy . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.1.2 Evolution of Digital Economy . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.2 Distinguishing Data Economy from Digital Economy . . . . . . . . . . . . 67
4.2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4.2.2 Fundamental Characteristics of the Digital Economy . . . . . . 68
4.2.3 Data Economy a Difference . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
4.3 The Data Economy in Developed Countries . . . . . . . . . . . . . . . . . . . . 71
4.3.1 Impacts of the Digital and Data Economy
in Developed Nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.4 Data Economy in Developing Countries . . . . . . . . . . . . . . . . . . . . . . . 73
4.4.1 The Data Economy’s Role in Development . . . . . . . . . . . . . . 75
4.5 Data Economy in Third World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4.5.1 Role of the Data Economy in the Third World:
Pioneering Innovation Amid Challenges . . . . . . . . . . . . . . . . . 78
4.6 Data Economy’s Current State Comparison Across World . . . . . . . . 80
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Contents xix

5 The Economy of Data Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

5.1 Economy of Data Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
5.2 Value of Personal Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
5.2.1 Value of Personal Data for Companies . . . . . . . . . . . . . . . . . . 90
5.2.2 Value of Personal Data for Individuals . . . . . . . . . . . . . . . . . . 90
5.3 Data Handling Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
5.4 Data Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
5.4.1 Data Privacy Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
5.4.2 Data Privacy Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
5.4.3 Data Privacy Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
5.4.4 Data Privacy Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
5.5 Data Protection and Privacy Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
5.6 Balancing Privacy and Economic Benefits . . . . . . . . . . . . . . . . . . . . . . 95
5.7 Importance, Relevance, and Future Directions of Economy
of Data Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
6 Application of Data Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
6.1 Data Economy in Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
6.2 Data Economy in Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
6.3 Data Economy in Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
6.4 Data Economy in Policy Development . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.5 Data Economy in Tourism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
6.6 Future Research Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
About the Authors

Dr. Samiksha Shukla is currently employed as an Associate Professor at the Depart-

ment of Computer Science and Engineering, Christ (Deemed to be) University,
Bangalore. Her research interests include Computation Security, Artificial Intel-
ligence, Machine Learning, Data Science, and Big Data. She is a certified AWS
educator. She has presented and published several research papers in reputed jour-
nals and conferences. She has co-edited data science and security books (Springer,
2020, 2021 & 2022) and also co-authored Springer Brief on Data Ethics and Chal-
lenges. She has 18 years of academic and research experience. She is a reviewer
for the Inderscience Journal, Springer Nature’s International Journal of Systems
Assurance Engineering and Management (IJSA), and IEEE and ACM conferences.
Dr. Shukla is an experienced and focused teacher committed to promoting
students’ education and well-being. She is passionate about innovation and good
practices in teaching. She has constantly engaged in continuous learning to broaden
her knowledge and experience. Her core expertise lies in Computational Security,
Artificial Intelligence, and Healthcare-related projects. She is skilled at adopting
a pragmatic approach to improvising solutions and resolving complex research
problems. Dr. Shukla possesses an integrated set of competencies encompassing
Teaching, Mentoring, Strategic Management, and Establishing a Centre of Excel-
lence via industry tie-ups. She has a track record of driving unprecedented research
and development projects with international collaboration and has been instrumental
in organizing various national and international events.

Ms. Kritica Bisht is an aspiring analyst and economics enthusiast interested in inte-
grating data and economics. She completed her B.Sc. in Economics and Analytics
from Christ University, where she has consistently been a high scorer. Ms. Kritica
has gained diverse experience across various fields, including business development
and academic research. She has participated in research projects focusing on privacy-
preserving machine learning and analyzing the interrelation of the economy world-
wide. She is working with a South Korean company to strategize their market entry
points in India.

xxi
xxii About the Authors

Ms. Kritica has been an active member of various bodies within her university,
including the University Content Team, where she was the coordinator and the editor-
in-chief for the department’s first newsletter. Kritica finds solace in books in her
free time and constantly seeks opportunities to learn and grow. With her passion for
economics and data, she is eager to contribute to the field and make a positive impact.

Mr. Kapil Tiwari is currently pursuing his Ph.D. from Christ University, India,
while being a Software Development Manager at Amazon, Mr. Tiwari has accumu-
lated twenty years of experience in software industry. His roles in OpenText, EMC,
Sun Microsystems, SS&C, and Siemens Information Systems Ltd. have given him
exposure to managing, designing, and developing cloud and on-premise software
systems. Mr. Tiwari is an alum of C-DAC ACTS Bangalore and Devi Ahilya Univer-
sity, where he pursued his M.Sc. in Information Technology. His research interest
lies in the domains of Data Privacy and Security, wherein he has contributed with his
research papers and books. He is pursuing his Ph.D. in Privacy Preserving Machine
Learning (PPML), where he is contributing through the creation of ML architectures
to ensure privacy for various contributors in the field. Mr. Kapil also has rich exposure
to Finance Technologies, Content Management, and the Medical domain.

Dr. Shahid Bashir is working as an Assistant Professor of Economics in the Depart-

ment of Data Science at Christ University. He received his Doctorate in Economics in
2021 from the Department of Economics, Central University of Kashmir. Dr. Shahid
received the University Gold Medal from the Central University of Kashmir and the
Maulana Azad National Doctoral Fellowship from the University Grants Commis-
sion, New Delhi. He has qualified for UGC-NET in economics four times consecu-
tively. His research specialization lies in the area of Macroeconomics. Dr. Shahid has
also published macroeconomics, health economics, and growth economics research
papers. In addition, he has presented his research work at many national and
international conferences and has attended many faculty development programs/
workshops. He teaches theoretical and applied econometrics, financial economet-
rics, and research methodology at Christ University. He also specializes in teaching
Public Economics, Microeconomics, and Quantitative Techniques in Economics. He
is a life member of the World Economics Association, UK, and the Indian Economics
and Allied Sciences Association (IEASA).
Chapter 1
Data Economy

Abstract The data economy, an intricate amalgamation of data and economic prin-
ciples, has emerged as a transformative force in the modern world. Defined by the
intricate interplay between data and economic activities, it encompasses a diverse
range of sectors and stakeholders. This paradigm shift stems from the recogni-
tion that once a mere record, data has evolved into a prized resource, profoundly
influencing business strategies, policy decisions, and societal progress. The data
economy’s essence lies in its multifaceted components and stakeholders. It involves
individuals, businesses, governments, data intermediaries, nonprofit organizations,
academia, and society, forming a complex web of contributions and collaborations.
However, this burgeoning landscape is challenging. Data privacy, security, access,
interoperability, governance, and the digital divide emerge as significant obstacles,
necessitating ethical guidelines, robust infrastructure, and a skilled workforce to navi-
gate these complexities. The data economy’s impact is far-reaching, evident in its
diverse types. The big data economy thrives on vast datasets and algorithmic analysis,
revolutionizing industries, and decision-making. Personal data economy capitalizes
on digital footprints to tailor experiences, while the industrial data economy optimizes
processes through real-time insights. The algorithm economy ushers in automation
and AI-led decision-making, albeit raising concerns of bias and job displacement.
Amid this evolution, principles guide responsible data use: ownership, privacy, secu-
rity, fairness, transparency, interoperability, innovation, and responsibility. These
principles ensure equitable value distribution, mitigate risks, and drive innovation.
The data economy’s significance is underscored by its role in fostering innovation,
improving efficiency, enhancing customer experiences, job creation, and economic
growth. It thrives on the relentless growth of data, which, by 2025, is projected
to reach 175 zettabytes. As industries harness this wealth of information, the data
economy acts as a cornerstone, propelling societies toward digital transformation,
economic prosperity, and unparalleled innovation.

Keywords Data economy · Data privacy · Data governance · Evolution ·

Principles

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 1
S. Shukla et al., Data Economy in the Digital Age, Data-Intensive Research,
https://doi.org/10.1007/978-981-99-7677-5_1
2 1 Data Economy

1.1 Data Economy: An Introduction

An amalgamation of the two trendiest words, data and economy, the phrase “Data
Economy” holds immense value today. To understand the phrase, what becomes
integral is to understand both terms individually and the correlation between the
two. This understanding can then help translate the value of the data economy.
• Data

Originating from the Latin word meaning “anything given,” data have been used to
define factual information for the longest time. However, it did not hold much value
inherently for the longest time.
• Definitions of Data

Data refers to the information, facts, or principles provided, acknowledged, or accepted as

the basis for making inferences, constructing arguments, or developing an ideal system of
any nature.
—Webster’s Third New International Dictionary
Known facts or things used as a basis for inference or reckoning.
—Oxford Encyclopaedic English Dictionary
Data can be described as factual information, conceptual ideas, or explicit instruc-
tions that are structured in a formalized manner, making them suitable for communication,
interpretation, or processing using either human or automated methods.
—Anonymous
Observations on the numerical magnitude of economic phenomena such as national
income, unemployment, or retail price.
—Dictionary of Modern Economics

Today, while explaining the accuracy of algorithms and AI models, the saying,
“Garbage in, Garbage out,” is very common. However, the context of calling data
garbage has changed with time, as all data holds value today. It is the degree of
processing and relevancy that today leads to the categorization of data.
• Economic factors

Even the economy and what it entails has changed continuously, although it derives
itself from “Economics,” which, according to Adam Smith, is defined as:
An inquiry into the nature and causes of the wealth of nations.

A complex system aiming to determine optimal resource allocation can be called

an economy. It is a system where production, consumption, and exchange activities
are interrelated.
An economy refers to the entirety of activities associated with the creation, utilization, and
exchange of goods and services within a given entity, irrespective of whether it is a country
or a small community
—Investopedia
1.1 Data Economy: An Introduction 3

An economy comprises consumers who purchase products and services, busi-

nesses that employ consumers and produce goods, and government entities at
different levels that buy products, employ workers, and collect taxes. Their collective
interactions create a simplified economy.
At the very core, the data economy is also based on this concept. Nevertheless,
the valuation and denomination have changed with the data explosion that occurred
during the end of the last century. While data has been recorded and documented for
almost a century, they have recently received high importance and demand.
• Defining Data Economy

A layman’s explanation of the data economy is as follows:

A digital ecosystem is a dynamic environment where diverse data from various sources
are collected, structured, enhanced, utilized, and shared to generate valuable insights and
benefits
—Wikipedia
The data economy measures the overall impacts of the data market –, i.e., the marketplace
where digital data is exchanged as products or services derived from raw data – on the
economy as a whole.
—European Commission

The data economy is a value loop in which data is shared across platforms,
creating an ecosystem. It seeks collaboration from various sectors—it is compre-
hensive and involves government and capitalistic firms. The data economy is not
a domain-specific discipline but a universal shift toward facts and a number-driven
economy.
Here, businesses, governments, private and public organizations, and individuals
gather, classify, analyze, and leverage data to their advantage, as it holds valuable
information on consumer behavior, emerging market trends, growth opportunities,
and more.

1.1.1 Data Economy: Domain Definition

• Production, Distribution, and Consumption of Goods and Services based on

Data
Data is increasingly becoming a primary input for the production, distribution, and
consumption of goods and services in various sectors of the economy. For example,
companies can use data to develop new products and services, optimize their supply
chain, and enhance customer experience. Governments can use data to provide better
public services, make informed policy decisions, and monitor economic activity.
4 1 Data Economy

• Data as an Economic Resource

Data is now considered an economic resource with a value that can be traded and
monetized. Data can be owned, licensed, or exchanged and can be used to create
new products and services or improve existing ones. Data can also be sold to data
brokers who aggregate and sell it to other businesses or can be used to train machine
learning models.
• Economic Activities Related to Data

The data economy involves various data collection, processing, analysis, and dissem-
ination activities. These activities include data collection through sensors, social
media, and other sources; data processing using algorithms and machine learning
models; data analysis to generate insights; and data dissemination through reports,
dashboards, and other tools.
• The Ecosystem of Actors, Technologies, and Policies

The data economy is characterized by an ecosystem of actors, technologies, and

policies facilitating data creation, sharing, and exploitation. The actors include indi-
viduals, businesses, governments, and other organizations that create, collect, and use
data. The technologies include data storage, processing, analytics tools, and data plat-
forms and networks that enable data exchange. The policies have laws, regulations,
and standards that govern data collection, use, and protection.
• Business Models, Practices, and Technologies

The data economy is also characterized by developing new business models, prac-
tices, and technologies enabling economic data exploitation. These include data-
driven business models like the sharing and subscription economy and data analytics
tools and technologies such as big data, machine learning, and artificial intelligence.
The data economy is a complex and multifaceted concept encompassing various
economic activities related to data creation, collection, storage, processing, analysis,
and dissemination. It involves the development of new business models, practices,
and technologies that enable the exploitation of data for economic purposes, as well
as the result of policies and regulations that govern the use and protection of data.

1.1.2 Stakeholders in the Data Economy

There are various stakeholders involved in the data economy. These stakeholders
work collaboratively to ensure that the data economy is developed ethically, trans-
parently, and accountable to maximize the benefits of all. The following are the
stakeholders in the data economy.
1.1 Data Economy: An Introduction 5

• Individuals

One of the most critical stakeholders of the data economy, as they hold the foundation
data for building the ecosystem. Individuals generate data through their activities and
interactions with various businesses. They have all the right to control their data at
home, which is used and shared.
• Businesses

Businesses are also critical stakeholders in the data economy; currently, data drive
innovation, create value, and boost performance. The data can be generated through
their operations and services or acquired from third parties.
• Governments

Governments play a critical role in the data economy. It is related to the production,
distribution, and use of data. They are responsible for regulations and policymaking.
The government can ensure ethical practices in the data business, such as collection
and storage, privacy, and the security of all involved. They create policies, laws,
and regulations to encourage data sharing, collaborations, and innovations for public
interest and benefits. The government develops a conducive environment for the data
economy to grow, ensuring that the benefits of data are shared widely and equitably,
balancing the interests of various stakeholders.
• Data Intermediaries

They are essential in a data-driven economy; they act as agents between data
producers and consumers. They help to exchange and collaborate data between the
two groups. They specialize in data collection, aggregation, analysis, and distri-
bution, making data available for businesses. The crucial role of data intermedi-
aries is to help producers monetize their data. They allow producers to package
and sell their data. In this way, they help producers unlock the value of their data.
Consumers also benefit from data intermediaries by aggregating and organizing data
from multiple sources; they can give valuable insights and analysis to organizations
to make informed decisions. However, they raise concerns about privacy, confiden-
tiality, security, and ethical use of data, as they handle sensitive information from
multiple sources.
• Nonprofit Organizations (NPOs)

They can play a crucial role in implementing the data economy by promoting data-
driven decision-making and advocating for data security, privacy, confidentiality, and
data usage for social good. NPOs can build data literacy and awareness programs
by training the staff, beneficiaries, and partners. They can bring it to the ordinary
person and enhance the responsible use of data. NPOs can play a significant role by
leveraging data to drive social impact. NPOs can better understand social issues and
create an equitable society using data.
6 1 Data Economy

• Academia

Academic institutions play a significant role in the data economy by building new
algorithms, tools, and data collection, storage, and analysis models. These tools are
utilized by businesses and government agencies to make data-driven decisions. These
academic institutions’ trained professionals are policymakers and implementors of
a data-driven culture.
• Society at Large

The data economy is a fast-growing sector that involves collecting, generating,

storing, processing, analyzing, and monetizing massive amounts of data. Society is
crucial in providing human resources by regulating policies and ethical frameworks.
Civil society, individuals, and organizations can also participate in data governance
discussions to ensure the standards are transparent, fair, and inclusive. They are
significant data contributors to the data pool through social media use, online activi-
ties, and various other digital integrations and intelligent technologies. Society helps
make people aware of how their data is collected, processed, and utilized, and they
receive fair compensation for their use. It also helps shape the data economy’s future
by promoting Open Data initiatives and developing new data governance models.

1.1.3 Data Economy—The Present Stage

The foundation of the data economy lies in sharing data within intercompany ecosys-
tems. Developing new skills, leveraging emerging technologies, and establishing
novel organizational and governance structures are necessary to promote increased
collaboration. The Internet of Things (IoT) sector has started monetizing data and
creating a new revenue stream. Several tech giants are using the data economy to
reach new heights of profits and success. Various researchers have also hinted at the
benefits of data sharing across organizations. According to Ref. [1], an organized
data economy can increase efficiency and productivity, especially in the production
phase of the corporation.
Well-defined data has started as a key player in increasing economic activities,
generating income and prospects for millions. These data are also growing at a
meteoric rate, with the MIT Technology Review suggesting that the total amount of
data to be generated by 2025 is set to 175 zettabytes [2]. Enterprise data is expected
to increase at an annual rate of 42% [2].
1.1 Data Economy: An Introduction 7

1.1.4 Data Economy—The Challenges

Creating an actual data economy has its challenges, and several obstacles need to
be addressed to realize the full potential of the data economy. Here are some of the
challenges:
• Data Privacy and Security

One of the main challenges in creating an actual data economy is ensuring data privacy
and security [3, 4]. The increasing amount of personal and sensitive data gener-
ated and processed raises concerns about data breaches and misuse. Data breaches
can damage individuals’ privacy, security, and trust, negatively impacting the data
economy.
• Data Access and Interoperability

Another challenge in creating an actual data economy is ensuring access and inter-
operability. Data silos and proprietary data formats can limit the sharing and reuse
of data, leading to inefficiencies and missed opportunities. To create an accurate data
economy, there needs to be open and standardized data formats and protocols that
allow for seamless data sharing and interoperability.
• Data Governance and Regulation

Data governance and regulation are critical challenges in creating a true data
economy. There need to be clear and transparent regulations governing data collec-
tion, processing, and use to ensure ethical and responsible data practices. There also
needs to be a balance between data access and privacy, which can be challenging.
• Legal and Regulatory Environment

The legal and regulatory environment can impact countries’ readiness to embrace
the data economy. Countries with clear and stable legal frameworks that govern
data collection, processing, and use are more likely to be ready to embrace the data
economy.
• Digital Infrastructure

Digital infrastructure is another challenge in creating a true data economy. The avail-
ability of reliable and affordable high-speed internet, cloud computing services, and
data storage is essential for developing a robust data economy. However, not all
regions have equal access to digital infrastructure, which can limit their participation
in the data economy.
The scarcity of digital infrastructure can also impact countries’ readiness to
embrace the data economy. Countries with reliable and affordable digital infras-
tructure are more likely to be ready to participate in the data economy.
8 1 Data Economy

• Cultural and Social Factors

Cultural and social factors can also impact countries’ readiness to embrace the data
economy. Countries with a culture that values data privacy and security may be more
hesitant to embrace the data economy. In contrast, countries with a culture that values
innovation and technology may be more willing to embrace it.
• Skill Gaps

Finally, the skill gap is another challenge in creating a true data economy. The data
economy requires a skilled workforce to collect, analyze, and interpret data. There is
currently a shortage of data professionals, which can limit the growth and innovation
potential of the data economy.
The skill gap is also a factor that can impact countries’ readiness to embrace
the data economy. Countries with a skilled workforce that can collect, analyze, and
interpret data are more likely to be ready to participate in the data economy.
Creating an actual data economy requires addressing various challenges related to
data privacy and security, data access and interoperability, data governance and regu-
lation, digital infrastructure, and the skill gap. Countries’ readiness to embrace the
data economy depends on the legal and regulatory environment, digital infrastructure,
cultural and social factors, and the skill gap.

1.2 Types of Data Economy

The data economy [5] is fueling future generations and a fast-running wave of the
internet revolution, extracting insight from the well of information. Our every move
is captured (digital footprint) by the tech giants. The internet service provider sees
a huge billion-dollar market. This digital footprint (every mouse click and social
media access) reveals our interests, movements, desires, etc. Data is a treasure trove
of information, a valuable asset, and a currency that all the tech giants in Silicon
Valley trade in. All real intelligence agencies need data. The data economy is also
called the digital gold rush. It has tremendous potential to produce good services,
utilities, and various applications.
Nevertheless, there is a downside: an enormous black market for the data, and
many individuals do not know how their data is being gathered. Companies, in many
different ways, use the data collected from the individual. For example, hyperdynamic
pricing, such as searching for a vacation package to travel somewhere, will get a
different price depending on the time of the day. Due to the cashless economy,
stepping outside and buying coffee is monitored and monetized.
The data economy can be classified into the following:
• Big Data Economy

Big data is a significant contributor to the digital economy. The amount of data
generated every second is increasing at a tremendous rate. Some companies are
1.2 Types of Data Economy 9

monetizing this growing data and benefiting financially and in market competition.
These large-scale data use algorithm-based analysis to gather insight, bring out the
policy and regulations, and measure the overall growth of the business. For example,
a disease prediction that used to be a specialist job can now be done with a machine
with similar or better accuracy (IBM’s Watson System can do the cancer diagnosis
job better than humans).
Google provides free services, such as Google Docs, Google Sheets, and Google
Books. To outside observers, it looks vague, but the data generated through these
services is utilized at various avenues. The spell correct can be used to build a better
system to help typo-intensive searches. The Data Exhaust is the byproduct of online
activities and is becoming a recognized valuable resource. It is one of the reasons
large companies give products and services at rock-bottom prices to keep track of
consumer habits. In addition, data repurposing is currently a primary business. The
power of big data comes with a great deal of responsibility.
• Personal Data Economy

The personal data economy is related to digital data created by and about individuals.
It is creating a new dimension in the world economy. A wide variety of personal data
is collected, such as user profile and location data, health, bank, and employment
records, such as dislikes, tweets, phone calls, and purchase history, all of which
are at the disposal of the service providers. It will continue to grow. Industries are
utilizing these data to revolutionize the service-delivery model that can be monetized.
Governments use these data to provide essential public services in a better manner.
The personal data economy revolves around monetizing an individual’s virtual
identity. The private data cloud is blooming and monitoring their every digital inter-
action. Meta Me or Exo Human are the terms used to describe the digital version
of ourselves. Whatever name it refers to, the fast-growing volume of big data and
its value is guiding the world economy forum to define personal data as a new asset
class on par with oil.
Researchers have accelerated the development of new drugs and treatment
protocols. End users benefit from free, personalized consumer experiences like
internet searches, social networking, or buying recommendations. In this data world,
consumers become suppliers and controllers.
• Human-Driven Data Economy

Data has become the world’s most important raw material. The human-driven data
economy is fair, where data is used impartially and ethically. It is linked with MyData
Movement, which follows a human-oriented approach.
Successful digital services are based on trust and are valuable for all stakeholders
in a fair data economy. In a human-driven data economy, personal data flows freely
and are available to all operators despite the organization’s size. This idea is beneficial
for companies and society.
10 1 Data Economy

• Industrial Data Economy

The industrial data economy uses data generated by industrial processes and equip-
ment to create value and innovate. It includes data generated by supply chain
operations, manufacturing processes, etc. The industry data economy is gaining
momentum with the growth of data and IoT. The growing data from sensors embedded
in industrial equipment can be analyzed in real-time to obtain better insights for
decision-making. Predictive maintenance is one application of the industrial data
economy where data from sensors and other sources is used to predict the life of the
equipment and plan the maintenance cycle to minimize downtime and expenses.
An example of an industrial data economy is data analysis to optimize the produc-
tion and supply chain. The data from different sources can provide insight into bottle-
necks and deficiencies in the process and improve upon it. However, the industrial
data economy raises concerns about cybersecurity, data privacy, and job impact.
• Algorithm Economy

The algorithm economy [6] is an emerging trend where an algorithm is the primary
mechanism for economic activity. This model uses algorithms to automate tasks
and decision-making that humans performed earlier. In the algorithm economy, the
baseline algorithm determines the value of services and products. With the growth
in data, IoT device algorithms are becoming powerful. The algorithm economy has
led to the evolution of a new business model for monetizing algorithms and the data
they generate. The organization can buy, sell, or trade the data and algorithms in
an algorithm economy. The concept of algorithm economy is backed by artificial
intelligence (AI) and machine learning (ML), which allows algorithms to learn and
improve over time. This training leads to better efficiency and productivity along
with reduced costs.
One example of an algorithm economy is the application of algorithms in online
advertising. Companies such as Amazon, Tatacliq, Flipkart, Facebook, and Google
use futuristic algorithms to analyze users’ digital footprints, i.e., their data and
behavior, to post target advertisements. This algorithm uses data points, such as
browsing behavior, search history, and purchase history, to build a detailed profile of
individual users’ interests and preferences. In this scenario, the company’s value is
not only in its product or service but also in the algorithm used to target and deliver
the advertisement. Another example could be using algorithms in financial markets
to make investment decisions.
However, there will be a significant impact of the algorithm economy on employ-
ment, as it may replace humans. Along with this, there are some ethical concerns,
such as the biases that may be present in the data used for training. To address these
concerns, experts suggest developing ethical guidelines to ensure that the algorithms
are used responsibly in the best interest of humankind.
1.4 Evolution of Data Economy 11

1.3 Components of Data Economy

• Free Flow of Data

According to a European Centre for International Political Economy (ECIPE)
study, removing barriers to the free flow of data could increase the global GDP by
$1.1 trillion by 2030. The study also found that free data flows can lead to more
innovation, higher productivity, and better consumer welfare.
• Data Accessibility and Transfer
According to a survey by the European Union, 64% of European businesses
face problems accessing data from other member states, highlighting the need for
improved data accessibility and transfer. The study found that data fragmentation
is a significant challenge for businesses operating in Europe, with different legal
and technical requirements across member states hindering the free flow of data.
• Liability
A survey by Cisco found that 75% of IT decision-makers consider data secu-
rity a top priority, highlighting the importance of liability in the data economy.
The study found that cybersecurity incidents can result in significant financial
and reputational damage for organizations, underscoring the need for clear and
effective liability frameworks.
• Portability, Interoperability, and Standards
A study by the European Commission found that a lack of data portability and
interoperability is a significant challenge to the growth of the data economy. The
study found that data portability and interoperability could increase competition,
reduce costs, and improve innovation in the data economy. The study also empha-
sized the importance of standards in ensuring data compatibility and consistency
across different systems and platforms.

1.4 Evolution of Data Economy

The evolution of the data economy [7] can easily be traced back to the development
of data and human perspectives. At the core of the data economy lies the presence
of enormous data and the value it generates. Today, big data is the most precious
untapped resource that, when exploited using technologies, can lead to greater public
good.
The data economy’s evolution can also be described in these two forms:
• Evolution of the data economy with the data explosion
• Evolution of the data economy from the traditional economy.
12 1 Data Economy

1.4.1 Evolution of Data Economy with the Explosion of Data

Information and data were once words used interchangeably in ancient times.
However, today, data has evolved, and so has its meaning. Not all data is information,
but all information is a form of data today.
Data and their storage have evolved from being stored in papers to today’s complex
databases that use technologies such as quantum computers. This transformation, as
shown in Fig. 1.1, has been directly related to the complexities in the data economy.
How people perceive data and its usage has changed with the world entering big
data. The shift from data as an accomplice to data as a change factor has occurred in
only a decade.
• Data as an Accomplice
In the early 1990s, data were primarily seen as a tool for record-keeping
for legal and policy purposes. Statisticians typically handled data management
and analysis, and the concept of data science itself was still relatively unknown.
However, with the rise of the internet, the role of data began to evolve rapidly.
• Evolution of the Internet
The evolution of the internet in the late 1990s and early 2000s paved the way
for a new era of the data economy. With consumers’ widespread adoption of the
internet, companies began to collect vast amounts of data on their customers’
behavior, preferences, and interests. These data became increasingly valuable
as companies started to use them to inform their marketing strategies, product
development, and other business decisions.

Fig. 1.1 Evolution of the data economy with data explosion

1.4 Evolution of Data Economy 13

• Increase in Usage of the Internet by Consumers

The growth of the internet also led to the emergence of big data. As data volume,
variety, and velocity increased, traditional statistical methods became inadequate
for managing and analyzing it. It led to developing new tools and techniques for
working with big data, such as machine learning, data mining, and predictive
analytics.
• Big Data
Today, data has evolved into a critical accomplice in the business world.
Companies of all sizes and industries use data to gain insights into their customers,
streamline their operations, and gain a competitive advantage. The rise of artifi-
cial intelligence and the Internet of Things (IoT) is only increasing the value and
importance of data in the global economy.

1.4.2 Evolution of the Data Economy from the Traditional

Economy

The evolution of the data economy as shown in Fig. 1.2 can be traced back to
the emergence of digital technologies in the late twentieth century. But before the
shift toward data, the global economy has a completely different perspective toward
economy and its meaning.
Traditional Economy
Before the rise of the data economy, the traditional economy was characterized by the
production and distribution of physical goods and services. Economic activity was
driven by physical resources such as land, labor, and capital, and businesses relied
on traditional production and distribution methods. A key success metrics within the
traditional economy was that of profit and monetary gain. Another striking feature
was that of importance on product and not the process. Most institutions tried to
keep costs down through physical and visible components of raw materials and mass
production techniques. Intricate details of optimization within production lines were
not looked into.
Digitally Enabled Economy
The emergence of digital technologies in the 1990s and 2000s led to a transformation
of the traditional economy to a more technical economy with businesses beginning to
collect and analyze vast amounts of data on their customers, products, and operations.
These data were used to inform business decisions, improve efficiency, and create
new products and services. But during this stage too, the economy was primarily
driven by traditional forces with data only an added catalyst.
During the phase of evolution, while data creation became a mass concept, the
utilization of the technologies around it were not accessible to people. The access to
technological advancement was restricted, and hence, the value within data was not
completely discovered.
14 1 Data Economy

Fig. 1.2 Evolution of the data economy from the traditional economy

Data Economy
With internet growth, the drive toward data economy also fastened. As an increasing
number of people began to use the internet in the 1990s and 2000s, businesses began
to collect vast amounts of data on their customers’ online behavior, preferences, and
interests. It led to the development of new tools and techniques for working with
big data, such as machine learning, data mining, and predictive analytics. Today, the
data economy is characterized by creating, storing, and analyzing vast amounts of
data across various industries and sectors. Data drives innovation, informs business
decisions, and creates new products and services. Unlike the traditional economy,
where physical goods were at the forefront, the data economy placed immense value
on information and data, sometimes prioritizing it over the profitability metrics.
In conclusion, the evolution of the data economy from the traditional economy
has been driven by the emergence of digital technologies, the growth of the internet,
and big data. As data continues to become more ubiquitous and valuable, they are
1.6 Importance of Data Economy 15

expected to play an increasingly important role in shaping the global economy in the
years to come.

1.5 Principles for Data Economy

There are specific guidelines for the responsible use of data to create value for
individuals, businesses, and society. These principles are used to ensure that the data
is used in an ethical, secure, and transparent manner.
• Data Ownership: This principle says that the individual and organization own
the data. In turn, they have control over the data and the right to decide how it
will be used and shared.
• Data Privacy: This principle is for data collection and storage; the data should
be collected, processed, and stored to respect individual privacy and comply with
legal and ethical standards.
• Data Security: The data should be safeguarded against unauthorized access,
disclosure, and usage. Relevant organizational and legal measures should be
applied to ensure data security.
• Fairness and Transparency: The advantage of data needs to be shared fairly
across various stakeholders. The data should be used with the consent of all the
entities involved. Transparency means that individuals and organizations should
be informed about how their data is utilized and know how to share and use it.
• Interoperability: This feature allows data sharing by different systems and
applications on various platforms and technologies to collaborate and work.
• Innovation: Data should be used in such a way that it brings innovation to
individuals, businesses, and society entirely.
• Responsibility: The people involved in the data business should ensure that the
data is used ethically, transparently, and securely. Thus, benefits can be shared
fairly.
These are the principles to ensure the responsible use of data and its benefits to
different stakeholders.

1.6 Importance of Data Economy

Data is growing at a tremendous rate. The data will grow to 175 zettabytes by
2025. The data economy refers to economic activity through data collection, storage,
processing, and analysis. A wide range of industries, such as finance, healthcare, tech-
nology, and manufacturing, benefit from the data economy. Various reasons show
that the data economy is a crucial element of the economic ecosystem.
16 1 Data Economy

• Innovation: This is the era of innovation. The product life cycle is reduced, so
companies that are quick in innovation will win the race compared to their tradi-
tional counterparts. Data harnessing from various sources can help organizations
innovate new approaches for better product design and services. The data economy
can fuel innovation by providing access to a vast data pool and enabling businesses
to identify trends and optimize processes to create personalized experiences for
the customer.
• Improved Efficiency: The company that participates in the data economy can
improve its business efficiency and reduce costs by simplifying the processes,
identifying the areas of improvement, and automating the work. It can lead to an
increase in productivity, competitiveness, and profit.
• Better Customer Experience: The data economy can support businesses in deliv-
ering personalized experiences to their customers by providing transaction data
insights. By identifying their preferences, requirements, and behaviors, compa-
nies can customize their products and services to meet customer expectations
better.
• Job Creations: The data economy is a significant source of employment, with an
increasing number of jobs in machine learning, data science, data analysis, and
artificial intelligence. As organizations rely more on informed decision-making
using data, the demand for skilled professionals in this area will persistently grow.
• Economic Growth: The data economy is critical for economic growth in the
digital transformation era. Organizations leverage the data benefits to create new
products and services: Businesses can widen their horizons, create new jobs, and
increase revenues.

1.7 Business Leaders in Data Economy

The data economy is rapidly evolving, and countries, institutions, and individuals
worldwide are vying for a larger share of its potential. According to the McKinsey
Global Institute, data has the potential to generate an additional $3 trillion in value
annually in just seven industries globally [8]. This valuation reflects the significant
impact of data in building new capabilities, technologies, and collaborations. Busi-
ness leaders and decision-makers in the data economy are experiencing numerous
benefits. A study by MIT Technology Review found that 66% of those who share
data are experiencing improved collaboration with business partners and vendors
[2]. Furthermore, 53% of surveyed business leaders reported that participating in the
data economy helps create new business models [2]. Data enables these new business
models by providing a secure and reliable platform for estimation and growth.
The Organization for Economic Co-operation and Development (OECD) also
recognizes the potential of data to transform every industry. The OECD’s recent
report highlights the benefits of data in increasing awareness and enabling informed
decision-making. For instance, data related to weather, crop production, planting,
References 17

insects, manure, and irrigation can help farmers make more informed decisions and
optimize their operations.
Despite the explosive growth of data sources, a survey by MIT found that almost
half of decision-makers and business leaders use data for essential insights, missing
opportunities to discover innovative approaches to designing products, services, and
technologies [9]. By harnessing big data, organizations can solve problems and meet
rising global demands while driving innovation.
McKinsey predicts that data-fueled artificial intelligence applications could
generate $13 trillion in new global economic activity by 2030 [10]. This projec-
tion could determine the next world order, similar to how oil production created
economic power players in the past. While China and the US could emerge as AI
superpowers, data sources such as an oil-driven economy can extend beyond a few
places [10]. Instead, diverse data sources are needed to facilitate the emergence of
new and unexpected players.
To succeed in the data economy, organizations must find innovative ways to derive
value from rapidly increasing data while enabling faster innovation for growth and
sustenance. A country’s digital competitiveness can be measured based on the volume
of broadband consumed, the number of active internet users, institutional openness
to data flows, and the volume of broadband consumption per capita. These measures
can help identify the world’s top “gross data product” producers and determine which
countries are leading the data economy.

References

1. World Economic Forum (2020) Share to gain: unlocking data value in manufacturing
2. (2021) Capitalizing on the data economy. MIT Technol Rev. https://www.technologyreview.
com/2021/11/16/1040036/capitalizing-on-the-data-economy/. Accessed 08 May 2023
3. Shukla S, George JP, Tiwari K, Kureethara JV (2022) Data privacy. In: Data ethics and chal-
lenges. SpringerBriefs in Applied Sciences and Technology(). Springer, Singapore. https://doi.
org/10.1007/978-981-19-0752-4_2
4. Shukla S, George JP, Tiwari K, Kureethara JV (2022) Data security. In: Data ethics and chal-
lenges. SpringerBriefs in Applied Sciences and Technology(). Springer, Singapore. https://doi.
org/10.1007/978-981-19-0752-4_3
5. Farboodi M, Veldkamp L (2019) A growth model of the data economy. Working Paper,
Columbia Business School, New York
6. Berg T, Burg V, Gombovic A, Puri M (2020) On the rise of FinTechs: credit scoring using
digital footprints. Rev Financ Stud 33:2845–2897
7. Jones CI, Tonetti C (2020) Nonrivalry and the economics of data. Am Econ Rev 110(9):2819–
2858
8. Elizabeth AD, Manyika J, Chui M, Farrell D, Van Kuiken S, Groves P (2013) Open data:
unlocking innovation and performance with liquid information. McKinsey. https://www.mck
insey.com/capabilities/mckinsey-digital/our-insights/open-data-unlocking-innovation-and-
performance-with-liquid-information. Accessed 08 May 2023
9. Kumar S (2022) Rise of data economy. https://newsonair.com/2022/09/17/rise-of-data-eco
nomy/. Accessed 08 May 2023
10. Bughin J, Seong J, Manyika J, Chui M, Joshi R (2018) Modelling the global economic
impact of AI. McKinsey. https://www.mckinsey.com/featured-insights/artificial-intelligence/
notes-from-the-ai-frontier-modelling-the-impact-of-ai-on-the-world-economy. Accessed 08
May 2023
Chapter 2
Navigating the Data Deluge: Challenges
and Opportunities

Abstract This chapter provides a comprehensive exploration of the profound impact

of the exponential growth of data in the twenty-first century. The first part of the
chapter discusses the unprecedented increase in data volume and its implications
for data management and processing. The massive influx of data demands efficient
storage, processing, and analysis strategies to derive valuable insights. The chapter
also emphasizes the evolving significance of data in the modern era, driving innova-
tion and influencing decision-making processes across various industries and societal
domains. Challenges with data are examined, including issues related to data secu-
rity, privacy, quality, and the complexities of handling diverse data sources. Finding
practical solutions to these challenges is critical to harnessing the full potential of
the data deluge. Moreover, the chapter explores the emergence of a data economy at
the global level, highlighting the strategic importance of data as a valuable resource
for economic growth and development. Building a better data economy is proposed
as a strategic goal, involving initiatives for data sharing, promoting data literacy, and
establishing responsible data governance frameworks. Finally, the chapter highlights
the pivotal role of policy strategies in shaping the data value chain. Policy measures
for promoting data access, safeguarding data privacy, and encouraging data-driven
innovation are discussed in detail.

Keywords Big data · Challenges with data · Privacy · Data value chain ·
Economics of data · 7 Vs of data

2.1 Data Volume

A tidal surge of new information from a variety of sources, such as the Internet of
Things, Open Data on the Web, data from mobile applications, sensor networks, and
social network data, along with the natural growth of datasets within organizations,
generates a need for new data management strategies that can handle these new
data environments. Significant players have used “big data” to identify data with

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 19
S. Shukla et al., Data Economy in the Digital Age, Data-Intensive Research,
https://doi.org/10.1007/978-981-99-7677-5_2
20 2 Navigating the Data Deluge: Challenges and Opportunities

various properties over the past few years. Laney defines big data from a three-
dimensional perspective as “High volume, high velocity, and high variety information
assets that require new forms of processing to enable enhanced decision-making,
insight discovery, and process optimization” [1]. Big data’s fundamental attribute is
volume. The administration of data at ever-increasing sizes and complexities is made
more difficult by the advent of “big data.” However, what is novel is the difficulties
presented by the 7 Vs. of big data (see Fig. 2.1).

(i) Volume: This is big data’s defining feature. The “big” in “big data” refers
to the data volume. It is widely acknowledged that gigabytes cannot store
enormous amounts of data created daily. Hence, the conversation revolves
around utilizing zettabytes, exabytes, and yottabytes of data these days. For
instance, every minute, over 50 h of new videos are added to YouTube. Just
think about all the information that YouTube generates.
(ii) Variety: “Variety” means various informational avenues. Structured, semi-
structured, and unstructured forms of “big data” exist. Audio, video, image,
and text files, among others, make up the vast majority of today’s data output.
However, they are notoriously difficult to map because they lack a predeter-
mined set of rules that can be used to identify and isolate the most crucial
information.

Fig. 2.1 7 Vs. of big data

2.2 Data in the Twenty-First (21st) Century 21

(iii) Velocity: “Velocity” is the rate at which information can be retrieved and
processed. Thousands of new social media postings, videos, audio files, and
photographs are uploaded to sites such as YouTube and other video-sharing
sites every second.
(iv) Variability: Variability should be distinguished from variety. “Variability”
describes information that is in a constantly changing state. Data interpretation
is the primary focus of variability. Variability is the degree to which the same
thing can vary from one time to the next. An example of this would be a store
that sells soda and has six different flavor combinations available; however,
if you buy the same flavor combination every day and it tastes different each
time, that is an example of variability. The same is true of data; if it changes
continuously, it might affect the data quality.
(v) Veracity: “Veracity” refers to the importance of having correct data. Veracity
pertains to the accuracy and authenticity of the data. Data must undergo valida-
tion to ensure that it accurately represents essential business functions and that
any data manipulation, modeling, and analysis does not compromise the data’s
accuracy. Additionally, it refers to the reliability or quality of the information
from which companies can draw meaningful conclusions.
(vi) Visualization: When discussing data visualization, the consideration arises of
how the findings can be conveyed to management for decision-making. Infor-
mation can be presented in various formats, such as tables, charts, spreadsheets,
and presentations. Data visualization plays a vital role as it guarantees that the
information, irrespective of the design employed, can be read, comprehended,
and accessed by anyone.
(vii) Value: The ultimate goal of big data is value creation. The company needs
to see some value after investing time, energy, and resources. If used and
appropriately processed, big data can aid a user in providing value.
The Vs. is predicated on transitioning from a focus on causal links to predictive
analysis in business strategy and the rapid advancement of underlying technologies
[2–4]. What would it reveal about big data if the meaning of all these Vs. is extrap-
olated? Data are enormous, and it is growing larger every minute. However, with
hundreds of data types, big data is evolving rapidly. Companies can only reap the
full benefits of big data if they take the time to learn about its facets.

2.2 Data in the Twenty-First (21st) Century

Information has never had such a profound influence and significance. The COVID-
19 situation has exposed the importance of data to businesses and the world. The
affected countries used data to their advantage to monitor the epidemic, halt its
spread, and resume normal operations. Information has been around since and is
now a major cultural force. However, the collection and analysis of data of such high
volume has been a recent development. It has led to information being the “new oil.”
22 2 Navigating the Data Deluge: Challenges and Opportunities

The ecosystem has been heading in this direction for decades, but introducing cutting-
edge technologies during the past few years has clarified that the system has entered
the Data Age. Data are pervasive today, and many of them are unseen. According
to a recent study in Australia1 (a survey of more than 2200 global business and IT
leaders), two-thirds of Australian business leaders predict that the volume of avail-
able data will increase by approximately five times by 2025. More than 50 zettabytes
(50 trillion gigabytes) of data are currently in circulation, and the average person
is estimated to create 1.7 megabytes of data per second. The information available
will only grow when technologies such as AI, ML, and 5G are implemented. It is
challenging to envision a scenario where the world’s data volume will experience
a fivefold increase within the upcoming five years. It was before the digital revolu-
tion was hastened by COVID-19. This data deluge has allowed for a new level of
innovation.
Over two-thirds (67%) of businesses believe that data will increase in value during
the next decade. Organizations need more time to be ready to leverage the data
they amass and will be left in the dust as the world quickly approaches and passes
200 zettabytes of data. As a result of the COVID-19 pandemic, even noncommercial
entities are being pushed to adopt Data Age practices rapidly. The world is changing
and developing at a breathtaking rate; therefore, it is crucial to consider the conse-
quences of inaction for the organization. Data will be recognized as a facilitator of
digital transformation at scale, and 2020 will go down in history as the year the world
saw a significant shift in innovation and technology, similar to the Dot Com boom
of the 1990s. The Agrarian and Industrial eras no longer limit us; data govern every
aspect of individuals’ lives. You will not have another shot at this golden opportunity
to join the new age’s elite. What corporations make of this once-in-a-lifetime chance
will have far-reaching effects.

2.3 Challenges with Data

Healthcare, public administration, retail, biochemistry, and other interdisciplinary

fields have recently gathered vast data. Today, there are several challenges in fully
realizing the potential of big data; these range from the design of processing systems
at the lower layer to analysis at the upper layer to a series of unresolved questions in
scientific research. Some of these difficulties arise from big data, others arise from the
analysis models and methodologies used, and still others arise from the constraints
of the data processing infrastructure (see Fig. 2.2).

1 “The Data Age is here, are you ready? Splunk”

2.3 Challenges with Data 23

Fig. 2.2 Challenges with data

2.3.1 Data Complexity

Although the industry today deals with complicated data items, big data has given
access to unprecedented large-scale samples to tackle computing challenges. Diverse
data types and patterns, intricate interdependencies, and wide variations in data
quality are hallmarks of “big data” hallmarks. Big data’s inherent complexity
(comprising complex types, structures, and patterns) makes it difficult to perceive,
represent, comprehend, and compute, leading to significant increases in compu-
tational complexity compared to standard computing models based on total data.
“Retrieval, topic discovery, and sentiment analysis are just some of the traditional
data analysis and mining jobs that become incredibly challenging when working with
massive data” [5]. There is a lack of knowledge about handling the complexities of big
data. Specifically, experts must work with massive data distributions and association
relationships among them. Domain experts’ intervention is required to understand
big data complexities. The lack of expert availability hampers efforts to develop
cutting-edge computational models and approaches for problem-solving in big data.
The difficulty of formulating or quantitatively describing the essential aspects of the
complexity of extensive data is a central issue. The complexity theory of big data
can be used to better understand the fundamental features and emergence of complex
patterns in big data, streamline its representation, improve knowledge abstraction,
and direct the development of computational models and algorithms for processing
24 2 Navigating the Data Deluge: Challenges and Opportunities

extensive data. First, theory and models for data distribution are developed within
multimodal interrelationships. Data complexity and spatiotemporal computational
complexity have intrinsic linkages that must be sorted out.

2.3.2 Computational Complexity

Due to its multiple sources, vast volume, and fast-changing nature, big data is chal-
lenging to process, analyze, and compute using conventional computing methods
such as machine learning, information retrieval, and data mining. Traditional methods
for processing moderate datasets, such as statistics, analysis tools, and iterative algo-
rithms, cannot be employed directly in such computations. Newer data processing
methodologies need to be explored, and assumptions of independent and uniform
data distributions should be avoided. There is a need to re-evaluate and explore the
computability and computational complexity to solve the challenges with massive
data. Large data-centric, novel, and highly efficient computing paradigms, creative
methods for processing and analyzing big data, and the support of value-driven
applications in specific fields are all requirements for any new approach to big data
computing. Studying the computability of big data and developing new computing
paradigms are aided and hindered by the advent of unique aspects in big data
processing, such as insufficient samples, open and unknown data linkages, and imbal-
anced distribution of value density. Investigating data-centric computing paradigms
based on the properties of big data is necessary to solve the computational complexity
of big data applications. Algorithms for distributed and streaming computing will
need to be developed, and a computing architecture tailored to big data will need
to be put into place, with careful attention given to integrating and optimizing data
storage, processing, and transmission.

2.3.3 System Complexity

Scientific investigation of big data requires processing systems capable of handling

various data and applications. Data with a large volume, intricate structure, and
low average value present processing challenges due to their high computational
complexity, extended duty cycle, and real-time needs. Such requirements not only
lead to additional challenges in designing system architectures, computing frame-
works, and processing systems but also impose tight constraints on these systems’
operational efficiency and energy consumption of these systems. The most crit-
ical problem that needs to be solved in system complexity is the development of
highly energy-efficient large data processing platforms, including creating system
architectures, computing frameworks, processing modes, and benchmarks. Discov-
ering answers to these problems lays the groundwork for constructing, executing,
testing, and enhancing extensive data processing systems. Their solutions will pave
2.4 Need for a Data Economy at the Global Level 25

the way for more efficient hardware and software system architectures, particularly
in distributed storage and processing optimized for energy consumption.

2.4 Need for a Data Economy at the Global Level

Data are the new energy source for the digital age. The entire ecosystem is surrounded
by enormous data-generating gadgets and outlets, made possible by the prolifera-
tion of sensors and wireless connectivity. Data-driven insights are necessary for any
industry’s operations, including those adopting disruptive technologies to partici-
pate in digital signage. This exponential data growth has opened up new avenues
for its application, which has helped strengthen the economy. It shifts the emphasis
from the physical abundance of commodities such as oil, coal, and minerals to the
immeasurable data value in today’s economy. The “data economy” is still in its early
stages at present. In any case, “Who will be the winner in this data revolution?” is the
central question. It is common knowledge that the United States and China are the
world’s two most critical data-rich countries. Will one of them emerge on top when
the era of open data gets rolling? What if another victor emerges out of the blue? At
the very least, will this contest increase the existing digital divide? It is not just the
United States and Canada making strides in data innovation; other countries such as
India, the United Kingdom, Singapore, Switzerland, Germany, New Zealand, South
Korea, and Japan are doing the same thing.
Steps must be taken to ensure data is utilized creatively and productively as the
data economy becomes crucial to a nation’s progress and future wealth. It encom-
passes the perspectives of people, communities, businesses, and governments. Data
belongs to its rightful owners, individuals, and businesses, who leverage it to generate
revenue, engage customers, and enhance their overall functioning. As a consequence,
its significance must be balanced. Finally, the government uses data to improve citi-
zens’ lives through welfare schemes and data-driven policies. At the same time, it
is crucial for the government to have a reliable data infrastructure, have a high level
of regulatory compliance, build a data-literate workforce, and equip its population
with essential data skills. Because of this, a strategic and well-planned application of
data can profoundly impact all economic sectors and foster new avenues for growth.
It will also make it easier for authorities to deal with various societal issues. Data
scientists, for instance, can utilize big data tools and AI to create accurate models for
foreseeing the effects of climate change and natural disasters. It can aid in discov-
ering treatments for fatal diseases, developing improved diagnostic guidelines, and
other similar endeavors. High-quality employment opportunities can be created, and
businesses of all types and sizes can grow and better serve their consumers with the
support of the data economy. It is reasonable to expect several “early adopter” coun-
tries to implement this data economy within the next decade. When this starts gaining
momentum, other countries will undoubtedly join the race to the top of the digital
transformation rankings. In subsequent years, this could result in a “data-sharing
economy.”
26 2 Navigating the Data Deluge: Challenges and Opportunities

Meanwhile, many nations are being prompted by COVID-19’s aftermath to accel-

erate the paradigm shift toward embracing the data economy. These developments
will also lead to a greater focus on data protection and ethics and the need to assist
businesses without sufficient data maturity or actionable expertise in making better
use of data. Concurrently, many organizations will have the ability to produce superior
data-driven judgments retrospectively. According to the World Economic Forum, the
global data economy is worth US$3 trillion. However, other issues must be resolved
in addition to developing tools to compare the data economies of different coun-
tries. Like, for example, who owns the data? Will income disparities prevent data
experts from using their expertise? Could geopolitical factors lead to information
monopolies?

2.4.1 Globalization and Data

Globalization is different than what it was even a decade ago. The fabric that holds the
world together has shifted, and many businesses must reconsider their strategies to
thrive in the new operating environment. The twentieth-century form of globalization
was characterized by rapidly expanding trade in goods as multinational corporations
established global supply networks. Today, global trade growth has leveled off, and
it appears unlikely that it will soon reclaim its prior peak relative to world GDP. The
same holds for international financial flows. However, globalization has remained the
same. It has gone digital. In the past decade, cross-border data transfers have increased
by a factor of 45, and more than ninefold growth is anticipated by 2023. What
precisely constitutes these cross-border digital flows? Through private networks used
to share information and manage foreign operations, corporations create a substantial
amount of internet traffic. Users produce a significant chunk of it through their
interactions on digital media, such as social networking, online marketplaces, and
video-sharing sites. The largest of these sites can accommodate tens of millions of
users, and Facebook’s user base is larger than the entire population of China. These
accessible platforms provide firms with effective global markets, a large pool of
potential clients, and various tools for reaching out to them. More than 12% of all
international trade in goods now occurs online, and half of all services sold globally
are digital. These shifts have enabled SMEs worldwide to compete with the largest
companies in their fields. These days, businesses have more chances than ever to go
global and become more productive. However, many must abandon long-held beliefs
to achieve them, particularly concerning the five areas discussed below.
1. Global Footprint and Organizational Structures: Multinationals once
expanded by building a replica of their entire firm in each country where they
operated. As a result, international businesses typically find themselves mired
down by redundancy, higher operating expenses, and a disjointed corporate
culture. However, modern digital technologies have enabled businesses to go
global with fewer employees and resources. By forming virtual teams that can
2.4 Need for a Data Economy at the Global Level 27

work together remotely, businesses can enter new markets without sacrificing
responsiveness. They can better acquire skilled staff and relocate to areas with
rising demand. While regional managers have the final say over personnel matters
such as hiring, functions such as human resources can leverage self-service digital
platforms and intranets to provide uniformity across a broad range of topics. One
possibility is to set up central international offices for certain core functions,
complemented by regionally based sales and marketing groups. Companies that
sell digital products or services have an even more significant advantage since
they can expand into new foreign markets without first establishing a physical
presence there. Using the public cloud, in the beginning, Netflix expanded its
online streaming subscription business to 190 countries.
2. Changing Nature of Global Value Chains: As digital globalization alters indus-
tries’ value chains, businesses might reorganize their supply chains and the chan-
nels through which they interact with customers. With the help of these massive
worldwide platforms, a company in Tennessee can discover the cheapest price
for components from a small supplier in Thailand. The largest multinational
corporations can use digital solutions to coordinate the activities of their many
suppliers worldwide. Some use control towers that look straight out of NASA
mission control; these systems integrate data from various sources, including
sensors, actuators, RFID tags, GPS tracking, and other sources, into dynamic
models that help managers work around bottlenecks. However, some businesses
place a premium on speed to market and are shifting away from the complexity
of lengthy worldwide supply chains.
3. Refine Product Strategies: Companies that sell in several international markets
stock a wide variety of products, some specifically designed to meet the needs of
consumers in each region while also being priced competitively. Success with this
strategy depends on having granular market insights that can only be obtained
via digital tools, which can also be used to handle the increased operational
complexity. However, many businesses, especially those in the tech industry,
adhere to the “one world, one product” approach. Apple only provides three
distinct iPhone and iPad models, and they all sport the same uniform look and
feel no matter where they are marketed. Google’s global reach means that the
company’s search, mapping, and email services are not tailored to any specific
location. Companies like Facebook, Uber, Airbnb, and others have expanded
internationally with slight modifications to their generic digital platforms.
4. Go Big: Hollywood has taken the lead in the modern era of worldwide product
rollouts. For a long time, studios would wait until a film’s U.S. run had ended
before releasing it internationally, where the foreign box office could still
compensate for domestic disappointments. Within ten days after its U.S. release
date, only three nations showed the highest-grossing movie of 1995, Die Hard:
With a Vengeance. Over half of Star Wars: The Force Awakens record-breaking
opening weekend box office came from abroad in 2015. Thanks to the internet’s
ability to disseminate information quickly, customers worldwide have instanta-
neous access to feedback from other buyers. If a film fails to perform poorly in
one region, it will be rejected universally. Many industries beyond multiplex can
28 2 Navigating the Data Deluge: Challenges and Opportunities

leverage data to predict trends and preferences. Businesses in the media, fashion,
and trend-driven consumer goods industries are taking enormous risks, hoping
their products will become worldwide sensations.
5. New Competitive Landscape: Digital marketplaces such as Amazon, Myntra,
and Flipkart allow businesses of any size in any part of the world to launch
products rapidly and enter new markets, creating a more fluid and competitive
environment. With a more globalized labor market and shorter product cycles,
organizations have to fight for scarce technical and managerial skills in an increas-
ingly price-sensitive market due to the proliferation of the internet. Having the
most advanced digital assets and capabilities is becoming increasingly impor-
tant in the competition for market share. These tech giants utilize cutting-edge
tools to gain a competitive advantage in foreign markets and take advantage of
economies of scale.

2.5 The Economics of Data

Data, as a type of information, has a significant relationship with the economics of

information. The extensive body of literature on this subject, primarily focusing on
incomplete or imperfect information, provides valuable insights into understanding
the economics of data. Stiglitz offers a comprehensive overview of this field [6]. In
line with Jones and Tonetti, it clearly distinguishes between data and ideas, which
are alternative forms of information [7]. Essentially, an idea refers to information
that gives instructions for accomplishing a task, such as a recipe for creating a drug
or a blueprint for constructing a machine. On the other hand, data is comparable to
raw material, serving as an ingredient contributing to completing a task.
This data definition is intentionally broad, so the subsequent discussion sections
may appear abstract. Data exhibits heterogeneity across several dimensions, such
as subject matter, timing, format, and quality. These characteristics can impact its
economic properties and implications [8]. One crucial dimension to consider is the
extent to which the data may be associated with an individual’s (personal data) or a
firm’s (commercial data) activities and confidential information. Another significant
aspect is the level of analysis that the data contains. “Data” refers to recorded infor-
mation that has been observed or standardized via observation or measurement. For
instance, this could include factual details about a transaction, surveillance camera
footage, location information, or an individual’s online browsing history. On the other
hand, digital content such as software programs, motion picture files, or synthetic
credit scores involve substantial effort and proprietary knowledge in their production.
2.5 The Economics of Data 29

2.5.1 Supply: The Decision to Produce Data

The entity responsible for gathering and storing data is known as the data collector,
and this process incurs certain expenses. These costs can be categorized as either
fixed or variable. An excellent example of a fixed cost is the money a public trans-
port service spends to set up a system of smart payment cards and scanners for its
customers. On the other hand, some costs vary depending on the amount of data
collected, such as storage capacity or compensating labor involved in generating the
data. For example, in a clinical trial, participants may be rewarded for undergoing
experimental treatment. Farboodi and Veldkamp highlight that when data are gener-
ated as a byproduct of economic activity, such as production or transaction data, the
marginal costs of data collection tend to be very low [9]. For instance, an airline tracks
the number of passengers on its flights and their respective payments. However, even
in such cases, data storage and protection still represent variable costs for the data
collector, which can be substantial.
Technological advancements naturally influence the cost associated with data
collection, and recent changes have brought about two significant alterations to the
cost curve. First, the rapidly decreasing price of digital sensors such as cameras,
microphones, global positioning systems, accelerometers, and storage technology
advancements have significantly reduced data collection expenses. Second, the emer-
gence of third-party data intermediaries, such as cloud storage services, has shifted
the cost curve downward for data-collecting firms. These intermediaries convert
fixed costs into variable costs, diminishing the economies of scale experienced by
data collectors. Furthermore, these intermediaries operate at a large scale, reducing
the economies of scale for data collectors. These changes in the costs of collecting
and storing data have increased the amount of data being collected across a wide
range of phenomena by an expanding number of data collectors.

2.5.2 Demand: The Economic Value of Data

Considering the costs of creating and storing data, one might wonder why data
collection is pursued. To answer this question, the need is to examine the demand
for data influenced by its economic utilization. A data collector will only choose
to record data if the costs involved are outweighed by the anticipated revenues
derived from it. During the initial stages of digitalization, many companies often
discard a significant portion of the data generated by their operations and users’
activities, assuming it holds little value. The literature primarily focuses on two crit-
ical data roles in the modern economy. First, data serves as an input for producing
goods and services, contributing to innovation and enhancing efficiency. Second,
data are crucial in generating and transferring information among economic agents,
influencing strategic interactions, and addressing information frictions.
30 2 Navigating the Data Deluge: Challenges and Opportunities

• Data as a Factor of Production

Data is a crucial input for producing goods and services. Its primary function is to
generate knowledge that can be utilized in two main ways. First, data can be used
for the ongoing production of existing goods or services. For instance, weather fore-
casting services rely on observational data, while targeted advertisements require
data to reach the intended audience effectively. Additionally, data plays a vital role
in developing new products and services. However, extracting value from data as an
input requires costly processing and analysis, typically performed by skilled profes-
sionals. The entity responsible for aggregating and analyzing the data is known as
the data processor. It is important to note that the data collector and processor are
sometimes the same entity, mainly when data is traded among business entities.
Data analysis is critical in fostering innovation, as it allows for valuable insights
to be derived from data, leading to new products and services. The emergence of big
data and advancements in machine learning algorithms have significantly enhanced
the capabilities of data analysis in addressing complex problems. As a result, data
have become an indispensable input in developing and producing a wide array of new
products. For instance, vehicles with sensors can collect data on driver actions during
city navigation, generating a vast dataset of human decisions in various scenarios. By
employing machine learning algorithms to analyze these data, patterns can be iden-
tified, enabling the prediction and replication of human decision-making in intricate
road environments. This, in turn, facilitates the production of safe self-driving cars.
• Data Generates and Distributes Information

The second role of data in the economy involves its contribution to creating and trans-
ferring information. When a company collects data about its operations, it facilitates
learning through experience. By analyzing the data, firms can gain insights to modify
and enhance their business practices. As a firm operates over a more extended period,
it produces more corporate data as an incidental outcome of its operations. This
growing dataset allows the firm to learn from its past production decisions, improving
efficiency. Farboodi and Veldkamp employ a comparable viewpoint, wherein data
are conceptualized to provide knowledge that mitigates uncertainty about random
factors pertinent to the production process [9].
Both personal and corporate data possess significant information on economic
entities, including customers and companies. Access to these data can shift infor-
mation imbalances within these agents’ markets. Efficient financial transactions can
occur when access to data helps decrease information asymmetries between buyers
and sellers. For example, a seller with access to data about potential consumers’
preferences and purchasing habits can provide a personalized product or service.
This can involve targeted advertisements for products that align with their interests.
Similarly, consumers with access to product features and specifications may better
assess whether such things will suit their requirements. It may include data on product
reliability, such as reviews from previous customers, information on popularity
2.6 Building a Better Data Economy 31

derived from influencer endorsements on social media, or the ability to compare

products quickly through retail aggregation services. Overall, access to data can
enhance market efficiency by reducing information disparities between buyers and
sellers.

2.5.3 The Price of Data

Data exhibits variations that are not uniform, as they can be distinguished based
on numerous attributes. These attributes include the entity or subject it describes,
the time and location of its collection, its structure level, and its compatibility with
other types of data. Within specific categories of data, it may be feasible to establish
meaningful markets with a single price, which will significantly vary across different
data types and over time. The data market involves agents trading data at prices that
reflect the trade-offs discussed. However, determining the appropriate fee to clear the
market is complex. The level of complementarity or substitutability between different
data types affects their prices. When combined, certain data types can complement
each other, allowing for discovering connections that would remain hidden if the data
were analyzed in isolation. On the other hand, some data types may be substituted for
one another, especially if they describe similar populations or have similar properties
within a given domain of interest. For instance, the driving data generated by one
driver may be as instructive in resolving the difficulties of autonomous vehicles as
the data produced by another driver.

2.6 Building a Better Data Economy

Never before has there been such exhaustive documentation of the human race. In
real-time, the smartwatches record individuals’ heart rates, and AI can then consider
the probabilities of cardiovascular disease. Bluetooth and GPS may monitor people
browsing the gourmet food section and candy aisle. Social media data such as likes
and time spent on the platform are mined for information that can be used to assess
a person’s creditworthiness. While using a shopping platform, the search terms are
processed by natural language processors, generating highly personalized advertise-
ments. These ads have invisible connections to us, which gradually alter our pref-
erences. Individual data generation and collection have become a significant aspect
of today’s economy. The value it creates is staggering. Research and development
efforts to increase productivity often use big data and AI analytics. They have the
potential to expand access to financial services. Policymakers could better under-
stand the effects of lockdowns during the epidemic because of information on the
real-time movements of entire populations. Apps that track contacts have notified
those who may have come into contact with COVID-19 carriers. While data could
track, react to, and respond to the spread of COVID-19, the pandemic has highlighted
32 2 Navigating the Data Deluge: Challenges and Opportunities

two fundamental issues with data flow in the global economy [10]. The first issue is
that the data economy is not transparent and does not always protect people’s privacy.
The second issue is that information is kept in private repositories instead of being
shared openly.
• Data Ownership

Where does all the information collected by the ubiquitous smart devices’ GPS,
microphones, and accelerometers rest once it has finished tracking every move?
Whoever can get their hands on them in most countries will collect, process, and
resell them. Users’ consent is often obtained by clicking a box below a wall of
legalese, which is hardly a reliable method of obtaining truly informed consent. There
is considerable economic value in conducting analysis based on such granular data
since it opens the door to altering behavior. It is not a one-way path since users can
access numerous valuable data-driven services at no cost. Are they receiving enough,
though? Many consumers may not even be aware that a transaction involving their
personal information has occurred, much less that they have consented.
There is an economic externality caused by this since the price of lost privacy
is often overlooked during data exchanges. As a result, there is possibly too much
data collection and not enough individual value sharing due to the market’s opacity.
People may unknowingly give an app developer access to their precise location if
they agree to install a weather app and allow it to detect its current city automatically.
By signing up for a weather app with a modern interface, users are led to believe that
they must consent to share their location to use the program to its full potential. In
reality, individuals are leaving a digital footprint that details their regular activities,
whereabouts, and interactions with others. While the meteorologist may never be
able to anticipate precipitation accurately, the system may better predict the user’s
creditworthiness than the scores compiled by traditional credit bureaus [11].
• Paradoxes of Privacy

The question is whether or not to value privacy. The existence of a “privacy paradox”
has been documented by researchers. People often give privacy a high rating when
asked how important it is to them in surveys. However, when going about their regular
lives, these people frequently part over susceptible personal data for little in return. If
this paradox were a favorable sign, it would have been for contact tracing apps [12].
Unfortunately, adoption has been minimal in many nations where these methods are
optional. People are eager to provide their location information in exchange for a
weather forecast.
Nevertheless, they are unwilling to do the same to protect their health while
fighting a worldwide pandemic that has already killed more than 2 million people.
One possible reason is that, unlike weather app developers, public health authorities
have not been as forthcoming about their contact tracing app’s data collection and
usage plans, which raises privacy issues. Another advantage is the potential for
sensitivity in allowing governments to link location data with data on an illness
diagnosis. In any case, knowing someone’s medical history could make it harder for
2.6 Building a Better Data Economy 33

them to obtain insurance in the future or open the door to other forms of prejudice
and discrimination.
• Responsible use of data

The Big Tech corporations that control most social media, online retail, and search
engine markets also control most of the data produced by smart gadgets, making
these data a private good. It is no surprise that firms hoard this information, given
its importance [7]. These vast data reserves bolster their platform networks. They
may hinder competition, as more data leads to more significant analysis, attracting
more use, data, and profits. The public’s requirements go unfulfilled because of
the finders-keepers model, which not only encourages the collection of excessive
amounts of data but also results in the data being underutilized at the very time it
may be most helpful. Sharing data can help advance research across many medical
and technological fields. Think of the potential gains in the scalability of big data
analytics for epidemiological studies. Having a single researcher analyze patient
experiences in their home country may be a good start. Nevertheless, the key to the
success of many cross-border collaborations is having multiple researchers work
together and draw on the experiences of many more patients worldwide.
How can data be leveraged to serve the public good better? It is essential to
strike a balance between economic interests and incentives for innovation and the
need to create public confidence by protecting privacy and integrity. Defining the
norms of the data economy is a significant first step in this direction. The General
Data Protection Regulation (GDPR), which occurred in Europe in 2018, establishes
several rights and duties governing the data economy. Residents of the EU now
have the right to regulate how their data are processed and to access that data, and
ever-heavier fines uphold these rights. Researchers have started to observe how the
GDPR has affected the digital economy. However, there are still questions about
operationalizing these rights without turning them into mere box-checking exercises.
More control over personal data should rest with the individual. There may be a
case for establishing public data utilities that would balance societal demands with
individual rights as a byproduct of credit registries. Consider a separate organization
in charge of gathering and anonymizing specific categories of personal data, which
would subsequently be made available for study with the permission of interested
parties. Uses include contact tracing to combat pandemics, improved macroeconomic
forecasts, and prevention of terror funding and money laundering.
Additionally, policies can aid consumers in avoiding becoming hostages inside
specific ecosystems, enhancing market contestability and competition. Policies are
essential for protecting data from cyberattacks. An individual corporation may invest
less in cybersecurity than would be in the public interest because it does not fully
absorb the loss of public trust in the overall system when its customers’ data are
compromised. This issue is particularly relevant to the financial sector, where it is
essential to preserve public confidence. Many nations have established open banking
policies, and key pillars include safe infrastructure, cybersecurity standards, and
regulations to enable the interoperability of sensitive personal data.
34 2 Navigating the Data Deluge: Challenges and Opportunities

• Global Approach

Many nations are adopting policies to promote a more transparent, fair, and dynamic
data economy. However, their divergent strategies may make the global digital
economy even more fragmented. These risks can be found in various data-intensive
industries, from international trade in goods to cross-border financial flows. Because
it is challenging to share individual outcomes of biomedical trials in the pandemic
setting—a problem that existed even before the pandemic—differing privacy protec-
tion regulations make it more difficult to collaborate on necessary medical research
across borders [13]. Global coordination is never easy, especially in a field as compli-
cated as data policy, where several national and international stakeholders and regu-
lators exist. Dealing with the pandemic’s aftermath has given people a new opportu-
nity to consider the necessity of common minimum global principles for data sharing
worldwide while upholding individual liberties and state security prerogatives.
The modern era also provides a chance to investigate cutting-edge technology
solutions. Consider whether a worldwide immunization registry could help to accel-
erate the recovery in international travel. While this could make use of traditional
paper-based international health cards, it would also necessitate the creation of stan-
dards, an interoperable data management system, agreements to protect individual
privacy, and barriers to access for other uses to report and consult on people’s vaccina-
tion status—which might be connected to digital identity. International cooperation
is strongly recommended to ensure that the advantages of the global data economy
may contribute to developing a more resilient, healthy, and just global society.

2.7 Policy Strategies for the Data Value Chain

This discussion reaffirms the importance of a comprehensive policy framework to

lower and expand data frictions across many phases and actors in developing data
economies. In this section, this paradigm is used to examine how countries try to
translate their various policy initiatives into cohesive national “data pathways,” that
is, policies with a broad focus on data and the digital economy.
Research suggests that larger countries would try to catch up by initiating some
policy measures across the entire data value chain. For example, China and the
European Union have comprehensive value chain policies. In contrast, Brazil and
India have policies covering various phases [14–16]. However, this approach may
be more suitable for higher-income countries or larger emerging economies already
possessing capabilities across the entire data value chain. On the other hand, as
highlighted in this section, there is evidence that other nations, particularly those
with lower income levels, are pursuing a focused strategy by targeting specific areas
or stages where they can specialize. This strategic approach could lead to broader
spillover effects in the future. Examining the key pathways and visions of catch-
up can be an initial step in understanding how data policies can be strategically
implemented to promote overall development. Based on the analysis, this chapter
References 35

discusses four emerging global pathways of policy: (1) active data localization, (2)
strategic data sharing, (3) leveraging opportunities in low-income data processes,
and (4) developing sector-specific applications linked to data.

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3. Mayer-Schönberger V, Cukier K (2013) Big data: a revolution that will transform how we live,
work, and think. Houghton Mifflin Harcourt Publishing Company, New York
4. O’Neil C (2014) On being a data skeptic. O’Reilly Media, Inc., California. Retrieved from
http://www.oreilly.com/data/free/files/being-a-data-skeptic.pdf
5. Xiaolong J, Wah BW, Cheng X, Wang Y (2015) Significance and challenges of big data research.
Big Data Res 2:59–64
6. Stiglitz JE (2002) Information and the change in the paradigm in economics. Am Econ Rev
92(3):460–501
7. Jones CI, Tonetti C (2020) Nonrivalry and the economics of data. Am Econ Rev 110(9):2819–
2858
8. Shukla S, George JP, Tiwari K, Kureethara JV (2022) Data and its dimensions. In: Data ethics
and challenges. Springer, Singapore. https://doi.org/10.1007/978-981-19-0752-4_1
9. Farboodi M, Veldkamp L (2019) A growth model of the data economy. Working Paper,
Columbia Business School, New York
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to secondary research uses of data. Eur J Hum Genet 28:697–705
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scoping study. GEG South Africa, Pretoria, South Africa
15. Azmeh S, Foster C (2018b) Bridging the digital divide and supporting increased digital trade:
country case studies. Discussion Paper, GEG Africa, Pretoria, South Africa
16. Gruber H (2017) Innovation, skills, and investment: a digital industrial policy for Europe.
Associazione Amici Economia Politica Industriale 44(3):327–343
Chapter 3
Data Monetization

Abstract Data monetization refers to leveraging data generated by a company to

create measurable economic advantages. It can lead to various business benefits,
such as increased revenue or reduced expenses. This book chapter delves into the
dynamic realm of data monetization, investigating its significance and implications
across various dimensions. The chapter is structured into seven sections. Beginning
with the “Need for Data Monetization,” the first section underscores the rationale
behind harnessing data as an economic asset. The second section, “The Data Revolu-
tion: A Global Perspective,” explores the widespread impact of data in transforming
industries and societies worldwide. Focusing on digital behemoths, the third section
reveals the “Data Dominance Unveiled,” dissecting the duopoly of Google and Face-
book in the data economy. Thereafter, the fourth section delves into the sectors
of data monetization, identifying diverse domains capitalizing on data-driven strate-
gies. Shifting the focus to industry dynamics, the fifth delves into the “Data Economy
Leading to Mergers and Acquisitions,” uncovering how data-driven strategies shape
corporate consolidations. The sixth section examines the complexities faced by both
individuals and entities in navigating data monetization. Finally, the last section intro-
duces data monetization tools, shedding light on technological enablers facilitating
efficient data monetization strategies. By dissecting the multifaceted facets of data
monetization, this chapter offers a comprehensive understanding of its global impact,
ranging from industrial paradigms to individual experiences, thereby contributing to
the broader discourse on the data-driven economy.

Keywords Data monetization · Data revolution · Data oligopolies · Mergers and

acquisitions · Data storage · Data management

3.1 Introduction

Data monetization is a relatively new concept, and currently, there has yet to be a
universally accepted definition [1–3]. Data monetization involves extracting value
from data [4]. Wixom defines data monetization as “exchanging information-based

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 37
S. Shukla et al., Data Economy in the Digital Age, Data-Intensive Research,
https://doi.org/10.1007/978-981-99-7677-5_3
38 3 Data Monetization

products and services for legal tender or receiving something with an equiva-
lent value” [5]. The rapid growth of data generation and collection in organiza-
tions and digital societies presents significant opportunities for companies to create
value and generate revenue. Various studies [6–8] have highlighted the potential for
data monetization, which involves deriving value from data [4]. It can be achieved
through two main approaches. First, companies can employ implicit monetization by
enhancing internal business processes and decision-making, leading to cost reduc-
tions and subsequent revenue generation. Second, explicit monetization involves
directly selling data-driven products and services to generate revenue [4].
Until now, the primary focus in data monetization research and practice has been
on utilizing data for internal purposes [3, 4]. This emphasis on internal data usage is
unsurprising, as it offers a convenient starting point for generating value [4]. However,
recently, there has been a growing interest in developing data-based business ventures
and devising innovative strategies to monetize data externally, which involves gener-
ating revenue by selling data-driven products and services (explicit monetization).
This trend has been observed in various industries, including the financial and retail
sectors [9, 10]. Despite these developments, companies still need help maximizing
the potential of data usage [11] and seeking ways to leverage data most effectively.
Furthermore, companies can harness their data to achieve more intangible advan-
tages, such as establishing new partnerships or negotiating improved terms with
suppliers, by sharing their data with external parties in a mutually beneficial manner.
In certain instances, organizations recognize the significant value of their data and
opt to provide data services to external companies on a substantial scale. Facebook
and Google exemplify pioneers of this approach, as they utilized their free platforms
to amass extensive data assets that they could subsequently sell worldwide. Compa-
nies have three main options to monetize their data: (1) utilizing data insights
to improve their organizational decision-making and operations, (2) enhancing their
products and services by incorporating data-driven information, and (3) selling data
and data-based offerings [12]. Data monetization involves commercializing data and
information assets, where organizations utilize their data and information to gain
financial returns or equivalent value [13]. Prakash defines data monetization as the
process of generating extra revenue by leveraging existing data sources, both internal
and external, to produce valuable insights and observations [14]. Major companies
such as Amazon, Facebook, and Apple, among others in the Fortune 500, adopt
data-driven business models to create new products, enhance services, and improve
customer experiences while generating additional revenue streams. This approach
treats data as a product and manages it accordingly [15].
Based on Wixom’s definition of data monetization, there are three main strategies
to derive value from a company’s data: selling the data, selling insights derived
from the data, and selling and marketing services based on the data. These
approaches vary in their potential for creating opportunities and the level of effort
needed. The most direct approach is to sell either raw or processed data directly to
external parties [3, 4, 16]. It can be lucrative for organizations to generate revenue,
3.2 Need for Data Monetization 39

especially if the data are unique and not easily obtainable elsewhere [13]. However,
the downside to this method is the potential privacy concerns since the buyers gain
ownership of the data [4]. The second approach involves companies providing data-
driven insights derived from data analysis but limiting access to the original data,
which ensures better security and privacy. However, compared to selling raw data,
offering data-driven insights may have a smaller customer base because customers
can utilize raw data in more diverse ways [4]. Finally, the third approach involves
developing innovative services for data delivery, typically using multisided business
models [9, 16]. A well-known example of this approach is selling advertising space,
which allows business customers to target specific user groups based on user data.
These services could also include consulting or process outsourcing [13]. In this
approach, the data remains concealed, and customers cannot access the original data
[4].
In the data-driven economy, established companies must develop effective proce-
dures and strategies to capitalize on their data to remain competitive [17]. In contrast,
start-ups have the advantage of starting with a clean slate. However, incumbent
firms face challenges due to their existing businesses and organizational structures
[18]. Consequently, they often need help breaking away from their current corporate
culture and structures, which can impede their efforts in data monetization [11].

3.2 Need for Data Monetization

Now the fundamental question of “What is data monetization?” is answered, it is time

to shift the focus to the most significant one—“Why should organizations choose to
monetize their data?” The precise answer to this question is that data monetization
is crucial for current and future success. Understanding the rationale and advantages
of data monetization will empower companies to make informed decisions and fully
exploit the value of their data assets. By embracing data monetization, businesses can
unlock new revenue streams, gain a competitive edge, foster a data-driven culture,
and explore valuable collaborations, which are crucial for thriving in the dynamic
digital landscape. From a research perspective, four significant reasons underscore
the importance of monetizing data.
• In the present-day business landscape, intangible assets hold immense value:

Among the numerous valuable intangible assets, data is one of the most significant. It
is plausible that the value of data alone surpasses the combined value of the physical
products manufactured, transported, or traded. Refraining from implementing a data
monetization strategy leads to overlooking one of the company’s most valuable assets.
Figure 3.1 illustrates the gradual shift in the proportion of corporate value attributed
to tangible and intangible assets over the past 45 years. Currently, intangible assets
account for 90% of corporate value.
40 3 Data Monetization

Fig. 3.1 Metamorphosis of corporate value: tangible versus intangible assets. Source Ocean Tomo,
A part of J. S Held, Intangible Asset Market Value Study, 2020 [25]

• Data asset trading is the future:

Generating economic value from data offers immediate benefits and positions orga-
nizations to capitalize on future prospects. The emerging trends of data asset moneti-
zation and data trading indicate that data will soon become a prominent traded asset
class. Although the data market is still in its early stages and relatively immature,
the signs point toward a potential boom in data trading. By proactively enhancing
data maturity and initiating data monetization efforts now, organizations will be
well prepared to leverage strategic data asset trading opportunities as they emerge,
avoiding the need to catch up at a later stage.
• Data monetization offers a substantial competitive advantage to organiza-
tions:

Staying ahead of competitors and maintaining that lead, especially in mature indus-
tries with well-established brands and products, is challenging. However, lever-
aging data effectively can make a significant difference in achieving these goals. By
harnessing data to make informed decisions, optimize operations, enhance product
quality, introduce innovative offerings, identify emerging trends, gain insights into
customer behavior, or even explore opportunities for selling data to external parties,
data monetization becomes a powerful tool in securing the competitive edge required
for success.
Incorporating data monetization strategies enables businesses to extract maximum
value from their data assets, providing them with the intelligence and agility to
outperform rivals and excel in their respective markets. It helps them stay ahead of the
curve, adapt quickly to changing landscapes, and meet evolving customer demands,
ultimately driving sustainable growth and prosperity. Embracing data monetization
3.3 The Data Revolution: A Global Perspective 41

is key to achieving and maintaining a leadership position in a fiercely competitive

business environment.
• For sustainable growth, new streams of revenue are essential.
Data monetization presents a valuable chance to leverage existing resources and
establish fresh revenue streams contributing to the organization’s expansion. This
new revenue can be generated through external sales, data licensing, or by devel-
oping innovative products and services derived from data-driven insights. Whichever
approach is chosen, data monetization results in quantifiable value creation. Orga-
nizations unlock untapped potential and open doors to diversified income sources
by effectively monetizing data assets. Whether through direct data sales or by capi-
talizing on data-driven opportunities, this strategic move enhances the organiza-
tion’s financial prospects and bolsters its overall growth trajectory. Data monetiza-
tion, therefore, plays a pivotal role in ensuring an organization’s sustainable and
prosperous future.

3.3 The Data Revolution: A Global Perspective

The data revolution has ushered in a new era of unprecedented opportunities and
challenges worldwide. This section explores the key players driving this transforma-
tive revolution, focusing on the United States, China, and India, three countries at
the forefront of the data-driven landscape. The data revolution represents a paradigm
shift in how societies, businesses, and governments operate. With the proliferation of
digital technologies, data have become an invaluable asset with the potential to drive
innovation, economic growth, and societal progress. As organizations and countries
harness the power of data, they gain a competitive edge and position themselves for
future opportunities.
• United States (USA)
The USA has been a trailblazer in the data revolution. Silicon Valley in California has
become the global epicenter for technology and innovation. Leading tech giants such
as Google, Facebook, Amazon, and Apple have revolutionized how data are utilized,
fostering groundbreaking advancements in artificial intelligence, machine learning,
and data analytics. The USA’s robust digital infrastructure, conducive regulatory
environment, and entrepreneurial spirit have created a thriving ecosystem of data-
driven start-ups, propelling the country to the forefront of the digital age. The USA has
been at the forefront of the data revolution, primarily due to its robust technological
infrastructure, world-class research institutions, and vibrant startup culture. As a
result, the country has witnessed significant breakthroughs in various industries, from
healthcare and finance to transportation and entertainment. The USA’s data-driven
economy continues to be a driving force in global digital innovation.
42 3 Data Monetization

• China:

China has rapidly emerged as a significant player in the data revolution, driven by its
massive population and ambitious technological initiatives. Major tech companies
such as Alibaba, Tencent, and Baidu dominate the Chinese digital landscape and
have expanded their global influence. The Chinese government has prioritized tech-
nological advancement and innovation, investing heavily in artificial intelligence,
5G networks, and smart cities. The country’s data-driven initiatives, such as the Belt
and Road Initiative and the development of smart cities, exemplify its ambition to
lead the global digital economy. Furthermore, China’s vast consumer base and the
adoption of digital technologies in everyday life have created a dynamic market for
data-driven businesses and applications. As a result, China is making remarkable
strides in leveraging data to drive economic growth and influence the global digital
landscape.
• India:

India has embraced the data revolution and is rapidly becoming a significant player
in the global digital landscape. With a burgeoning tech-savvy population and an
expanding startup ecosystem, India is witnessing a surge in data-driven innova-
tion across various sectors, including e-commerce, fintech, healthcare, and agri-
culture. Initiatives such as Digital India drive digital infrastructure development and
foster data-centric solutions to address socioeconomic challenges. As India’s digital
economy grows, it is expected to play an increasingly significant role in the data
revolution. India’s large consumer base and increasing internet penetration offer
immense opportunities for data-driven businesses to scale and succeed. The govern-
ment’s push for digital inclusion and the rise of mobile technologies have facilitated
the integration of data-driven services into daily life. As a result, India’s data-driven
economy is evolving rapidly and holds significant potential for future growth.
As the data revolution gains momentum, collaboration between countries is
becoming essential. Cross-border data sharing, joint research ventures, and tech-
nology partnerships foster global innovation and drive progress. However, the data
revolution also raises critical concerns about data privacy, security, and ethical use,
requiring collaborative efforts to address these challenges. The data revolution is
an unstoppable force that is reshaping the world. The United States, China, and
India, among other countries, are leading this transformative era. As they navigate
the complexities of data-driven economies and forge collaborations, they will collec-
tively shape the future of the data revolution, driving economic growth, innovation,
and societal advancements on a global scale. These countries and several others are
actively vying to establish themselves as leaders in the data-driven economy. Each
nation recognizes that the ability to collect, analyze, and leverage data effectively can
provide a significant competitive advantage in various sectors, including technology,
healthcare, finance, and manufacturing (see Fig. 3.2).
3.4 Data Dominance Unveiled: Google and Facebook’s Oligopoly … 43

Data Advancements
Revolution in Technology

Economic Big Data

Growth Analytics

Data Artificial
Monetization Intelligence

Data-Driven Internet of
Insights Things

Fig. 3.2 Key components of the data revolution

3.4 Data Dominance Unveiled: Google and Facebook’s

Oligopoly in the Data Economy

The contemporary digital landscape is characterized by the omnipresence of data,

fueling a transformative shift in economic dynamics and societal interactions. At
the forefront of this evolution stand two tech titans, Google and Facebook, whose
mastery over data has propelled them to positions of unparalleled dominance. Google
and Facebook emerged during the late 1990s and early 2000s, a time of rapid techno-
logical advancements and the growing importance of the internet. Google started as
a search engine in 1998, while Facebook was founded in 2004 as a social networking
platform for college students. Their early entry into the digital landscape allowed
them to build a solid user base and establish their respective platforms, so much so
that they are now competing to be oligopolies and monopolies within the domain.
An oligopoly is a market structure in which a few large firms dominate the industry,
often resulting in limited competition. Due to their collective dominance, these
firms significantly influence pricing, products, and market dynamics. Conversely,
44 3 Data Monetization

a monopoly is a market structure where a single company controls the entire market,
leaving no room for competition.
Below are the strategies that have paved the path for their ascendancy, exploring
the challenges posed by their data oligopoly and examining the broader ecosystem
where innovative competition still thrives.
• Data-Centric Expansion: The ascent of Google and Facebook to their current
positions owes much to their strategic diversification beyond their initial offerings.
Once a search engine, Google expanded into services such as Gmail, Google Maps,
and Android OS. Facebook extended its influence by acquiring platforms such as
Instagram and WhatsApp. This expansion amplified their data collection capacity,
securing their foothold in diverse user activities.
For example, Google’s data-centric expansion is its journey from a search
engine to a multifaceted tech giant. Google expanded into the mobile operating
system market with the Android OS. By 2023, Android OS had become the
most widely used mobile OS globally, powering billions of devices. Android’s
open-source nature allowed Google to gather extensive data about users’ mobile
behaviors, preferences, and locations. This strategic expansion not only solidified
Google’s dominance in the mobile sector but also amplified its data collection
capabilities.
• User-Centric Ecosystems: Crafting user-centric ecosystems is a pivotal facet
of their dominance strategy. Google’s mastery over search algorithms personal-
ized results based on user behavior, thereby fostering loyalty. Facebook’s curated
content feeds became addictive, enhancing user engagement and data generation.
These tailored services revolutionized user experiences and contributed to the
accumulation of user-generated data.
Example: Facebook’s user-centric ecosystem strategy can be exemplified by its
acquisition of Instagram in 2012. Initially, a photosharing app, Instagram became a
social platform with distinct features yet remained integrated within the Facebook
ecosystem. This move allowed Facebook to capture different user demographics
and behaviors. The curated visual content and engagement-driven interactions
on Instagram generated vast user data, contributing to Facebook’s overall data
dominance.
• Data Harvesting and Personalization: Google and Facebook refined data
harvesting techniques to create personalized experiences. Google tracked search
queries, browsing history, and location data, while Facebook collected insights
from social interactions and preferences. This rich data facilitated precise targeting
for advertisers, leading to revenue growth and further data accumulation.
Example: Google’s data harvesting and personalization strategies are evident
through its personalized search results. By tracking users’ search queries,
browsing history, and location data, Google tailors search results and advertise-
ments to match users’ preferences. For example, if a user searches for hiking trails
in a specific location, Google uses this data to display relevant results and ads,
enhancing the user experience while amassing more data for targeted advertising.
3.4 Data Dominance Unveiled: Google and Facebook’s Oligopoly … 45

• Ecosystem Lock-In: Both companies strategically executed ecosystem lock-in

tactics. Google’s integration of Android OS and services such as Google Drive
made it difficult for users to depart from their ecosystem. Facebook’s acquisi-
tions and seamless cross-platform integration fostered user retention. These tactics
consolidated their data control and solidified their positions in the market.
For example, integrating WhatsApp into its platform exemplifies Face-
book’s ecosystem lock-in strategy. After acquiring WhatsApp in 2014, Facebook
gradually integrated it with its main app, enabling seamless communication across
platforms. Users became accustomed to using both media for different purposes
within the same ecosystem, making switching to alternatives harder. This strategy
strengthened Facebook’s control over user data and interactions.

Data Oligopolies’ Challenges: Impacts on Innovation, Data Privacy, and User

Autonomy
While Google and Facebook have mastered data and consolidated their posi-
tions, many challenges have emerged, spanning innovation, data privacy, and user
autonomy.
• Innovation Impasse: The dominance of data oligopolies raises concerns about
innovation. Smaller competitors face substantial barriers when entering markets
ruled by Google and Facebook. The incumbents possess resources to fine-tune
algorithms, invest in research, and outpace potential disruptors. It suppresses
innovation, resulting in the limited emergence of fresh solutions.
• Data Privacy Quandary: A significant consequence is the mounting concern for
data privacy. As data oligopolies accumulate vast amounts of personal informa-
tion, ethical concerns about data misuse and breaches emerge. Notable incidents
such as Facebook’s mismanagement of user data highlight the need for robust
data protection regulations and informed user consent.
• User Autonomy Dilemma: The issue of user autonomy arises as data giants
leverage personalized content to influence user decisions. Tailored algorithms
can lead users into filter bubbles, restricting their exposure to diverse perspectives
and information. This manipulation of user experiences poses ethical concerns
about digital autonomy.
• A Diverse Data Ecosystem: Navigating Beyond Oligopoly
Despite the dominance of Google and Facebook, the data economy remains
diverse and dynamic. Other industry giants like Amazon, Microsoft, and Apple
continue to compete for market share. Furthermore, the landscape is receptive to inno-
vative start-ups and emerging players. Open-source initiatives, data democratization
efforts, and evolving regulations allow new entrants to establish a presence.
The rise of Google and Facebook as data oligopolies underscore data’s central
role in shaping modern economies and societies. While their dominance prompts
concerns regarding competition, innovation, data privacy, and user autonomy, the
data economy remains inclusive. Regulatory frameworks, transparent data practices,
and encouraging healthy competition are imperative to ensure a thriving ecosystem.
46 3 Data Monetization

By nurturing a landscape that accommodates diverse players, the data economy can
continue to innovate and evolve, fostering a balanced coexistence of established
giants and promising upstarts.

3.5 Sectors of Data Monetization

Generating money out of data assets is known as data monetization. Data must be
turned into an asset that can be purchased, sold, or utilized to launch new businesses
to be valuable enough to be extracted. Data monetization [19] is a practice that
is frequently used in several industries. Figure 3.3 shows few sectors that have a
significant role in data monetization.

3.5.1 Data Storage

Data storage [20] is typically not a direct way to make money from data. Data storage
refers to the methods and facilities needed to handle and archive data. However,
simply holding data does not result in revenue. Data storage, however, can indirectly
support data monetization in several ways:
• Cloud Storage and Hosting Services: Companies such as Amazon, Google, and
Microsoft provide cloud storage and hosting services. Such organizations help
individuals and companies store their data. Although the storage itself may not be
monetized, some providers charge fees for using their data transfer, storage infras-
tructure, and related services. These businesses—Amazon Web Services (AWS),
Microsoft Azure, and Google Cloud—earn money by offering their customers
dependable, convenient, safe, and scalable storage alternatives.
• Data Marketplaces and Exchanges: Many platforms serve as marketplaces to
enable both the purchase and sale of data. Although the marketplaces put little
emphasis on storage, these platforms need a secure storage infrastructure to handle

Fig. 3.3 Sectors of data monetization within data economy

3.5 Sectors of Data Monetization 47

and archive traded data assets. In this situation, facilitating data transactions,
linking data sellers and purchasers, and assuring the confidentiality and safety of
the data produce revenue.
• Data-as-a-Service (DaaS): DaaS providers offer access to data sets through APIs
or other means. These providers may need to store the data in secure storage
systems and offer their customers data retrieval and delivery services. Storage
and related services are essential for efficiently delivering data to clients, even
though providing data access is the primary source of revenue.
It is essential to remember that not only storage determines the data’s worth and
potential for monetization. Instead, the usefulness, accuracy, and findings are what
matter most. Although data storage is a crucial part of the framework supporting data
monetization, it is not the primary source of income.

3.5.2 Data Management

Data management is vital for the effective execution of data revenue generation
methods. Effective data management [19] practices assist organizations in maxi-
mizing the worth of their data assets, enhancing data quality and accessibility, and
ensuring that privacy requirements are adhered to. The following are some ways that
data management can help with data monetization:
• Data Integration: By combining data from many sources, businesses can generate
an integrated picture of their data, enabling improved decision-making and anal-
ysis. Data integration combines data from many applications, systems, or outside
sources while guaranteeing correctness and uniformity. An integrated set of data
offers thorough insights that have the potential to be commercialized through
business intelligence solutions, sophisticated analytics, or data-based services.
• Data Governance: Setting up a solid Data Governance Framework (DGF) aids
in ensuring reliable, safe, and uniform data management across the entire organi-
zation. Incorporating data safety, metadata management, and data quality defines
rules, norms, and procedures for managing data. Organizations can boost the
worth of their data assets and their potential for revenue generation by keeping
accurate data.
• Data Cleansing and Enrichment: Data cleaning entails locating and eliminating
any errors, duplicates, or anomalies in the data. By cleansing and enhancing
the data they possess. Organizations can improve the accuracy, dependability,
and usability of their data. High-quality data raises the worth of data goods or
services supplied for generating revenue, enables improved decision-making, and
enhances the precision of analytics models.
• Data Privacy and Security: Establishing strong data privacy and security [21, 22]
measures is essential for winning over customers and ensuring that laws such as the
General Data Protection Regulation (GDPR) or the California Consumer Privacy
Act of 2018 (CCPA) are followed. Prioritizing data privacy and security illustrates
48 3 Data Monetization

a company’s commitment to preserving patron information, strengthening the

worth of the company’s data assets, and welcoming clients and collaborators.
• Data Cataloging and Metadata Management: Creating a central data catalog
and using metadata management techniques enable appropriate data asset identi-
fication, comprehension, and utilization. Data cataloging makes locating relevant
data rapidly easier for organization employees and prospective customers. Meta-
data management can ensure the accurate description, tagging, and segmentation
of data assets, making it easier to identify and monetize significant data.
• Data Analytics and Insights: Data management procedures give data analytics
projects a strong foundation. Effective data integration, cleansing, and enrichment
produce insights suitable for monetization, making accurate and reliable analysis
possible. Businesses and individuals can generate revenue by providing data-
driven consulting services, using predictive modeling, or building data sets that
provide clients with insightful information.
Finally, data management is a critical component of data monetization plans.
Organizations may increase their data assets’ worth, quality, and usability and make
it simpler to earn a profit by putting good data governance, integration, cleansing,
and security practices in place.

3.5.3 Data Sharing

Sharing data [23] is a crucial component of data monetization plans, as it enables

businesses to open new revenue sources, promote cooperation, and offer value-added
services. In the context of data monetization, the following are some essential factors
and strategies for data sharing:
• Data Partnerships and Collaborations: Companies could partner to exchange
data. It may entail pooling resources, merging complementary data sets, or using
mutual domain knowledge to develop novel products and services. Collaborations
allowing for data exchange may result in collaborative ventures, profit-sharing
arrangements, or innovative data-driven products and services with a broader
market reach.
• Data Exchange Platforms: Platforms for data exchange serve as middlemen,
enabling safe and monitored data transfer between numerous parties. These plat-
forms offer businesses a marketplace to sell or trade their data assets. Data
purchasers can find and acquire pertinent data sets, allowing data suppliers and
users to gain profit.
• Data Licensing and Sales: Businesses can profit from their data assets by selling
or granting licenses to other companies or people. It may entail giving users access
to raw data sets, delivering data extracts or subsets, or selling goods using the data.
Organizations can monetize their data assets by structuring licensing agreements
based on usage rights, duration, geographic constraints, or specific data properties.
3.5 Sectors of Data Monetization 49

• Data Monetization APIs: To facilitate sharing and monetization, organizations

could share their data assets through Application Programming Interfaces (APIs).
Organizations provide well-documented APIs, enabling programmers, collabo-
rators, or clients to obtain and use their data in their apps, products, or services.
API-based data monetization can be achieved via subscription fees, usage-based
pricing, or revenue-sharing agreements.
• Data Cooperative Models: This is another way of sharing data. A data coop-
erative is a collection of businesses or groups of individuals pooling their data
for mutual gain. Cooperatives can produce more thorough insights and value
by combining data from many sources. By establishing governance frame-
works to guarantee data privacy, security, and equitable sharing agreements, data
cooperative models enable participants to monetize their combined data assets
jointly.
• Data Sponsorship and Advertising: Organizations occasionally offer data access
and sharing in exchange for sponsorship or advertising opportunities. Data
providers can make their data assets available to other companies or platforms,
enabling them to use the data for market research, marketing initiatives, or the
creation of insights. This strategy can assist in passively monetizing data through
advertising revenue or strategic alliances.
Organizations should ensure they have the correct data usage contracts in line with
privacy laws and the right data governance structures before sharing data for financial
gain. A significant focus must be on securing sensitive and personally identifiable
information (PII). The data exchange must occur safely and be regulated with the
appropriate data aggregation and anonymization methods. In general, exchanging
data can be a helpful method for monetizing data, allowing businesses to grow,
develop novel sources of revenue, and take advantage of the combined strength of
data partnerships.

3.5.4 Revenue Generation from Data Analytics

and Recommendations

Organizations may profit from valuable services such as data analytics and recom-
mendations. Businesses may generate income and provide value by using advanced
analytics to derive insights from their data assets and deliver relevant consumer
recommendations. Data analytics and recommendations can be monetized in the
following ways:
• Analytics Consulting Services: Organizations can provide analytics consulting
solutions with the help of their skills in data analysis and niche expertise. They can
bill for these services on a project-by-project basis or through ongoing collabora-
tions by helping clients obtain insights from their data, identify trends, patterns,
50 3 Data Monetization

and correlations, and offer recommendations for improving business processes,

optimizing operations, or strengthening customer experiences.
• Predictive Modeling and Forecasting: Organizations can use previous data to
create predictive models and use forecasting skills to make predictions and projec-
tions about the future. Businesses can provide clients with priceless insights for
strategic decision-making, resource planning, or handling risks by generating
revenue from these predictive analytics services.
• Personalized Recommendations: Businesses can offer targeted product recom-
mendations, content suggestions, or customized offers by investigating customer
behavior, choices, and previous data. These suggestions can boost engagement,
conversion rates, and revenue through improved sales or customer loyalty.
• Data-driven Product Development: Data analytics can guide the creation of
data-driven services or solutions that offer clients insightful information or sugges-
tions. Organizations can generate revenue from these products by subscribing
to them, providing customers with licenses, or assessing charges based on the
usefulness of their insights and recommendations.
• Data Visualization and Reporting: Organizations can profit from their expertise
in data visualization by offering clients specialized dashboards, interactive reports,
or visual analytics solutions. These services can help clients better comprehend
their data, spot unnoticed patterns, and make judicious choices.
• Industry-specific Insights and Benchmarks: Using market dynamics [24],
consumer behavior, and industry trends, organizations can provide customers with
helpful benchmarks and insights that will help them make data-driven decisions,
measure their performance, or find areas for improvement.
• Revenue-sharing Partnerships: Businesses might enter into revenue-sharing
agreements with customers or data suppliers, in which case both parties gain from
the insights and suggestions given. Organizations must ensure good data manage-
ment, quality, and privacy considerations to provide reliable and precise analytics
and recommendations. They must adhere to data privacy laws and manage data
security while possessing the necessary infrastructure, personnel, and procedures
for handling data.

3.5.5 Advertising and Marketing for Data Monetization

With the rise of online marketing and the accessibility of enormous volumes of
client data, marketing, and advertising have become key sectors for data moneti-
zation. Businesses may personalize marketing initiatives, establish targeted adver-
tising campaigns, and earn money using data assets. The marketing and advertising
industries can monetize data in the following ways:
• Targeted Advertising, Customer Segmentation, and Profiling: Businesses can
make money out of data by offering advertising space and other services to
companies attempting to attract particular customer segments with data-driven
3.5 Sectors of Data Monetization 51

advertising, which enables them to do so based on characteristics such as demo-

graphics, interests, and past purchasing patterns. Organizations can develop audi-
ence profiles that influence marketing strategies by analyzing consumer data. With
this information, advertisers can better target specific consumer categories through
their messages, advertisements, and product offerings, increasing their adver-
tising efficiency and return on investment. Organizations can provide personalized
information, recommendations, and offers for particular customers by observing
consumer preferences, surfing habits, or previous interactions.
• Performance Analytics, Attribution, and Market Research: Organizations can
evaluate the effectiveness of their marketing operations, attribute conversions
to specific platforms or campaigns, and provide insights into the journeys and
engagements of their customers by looking at campaign data. Advertisers can
make informed decisions and maximize their advertising budgets by using these
facts. Organizations can provide insightful data that guide marketing strategy,
product development, and market entry decisions by researching market trends,
customer behavior, and competitive environments.
Organizations working in the marketing and advertising industries should follow
data privacy laws and best practices to secure consumer data and preserve consumer
trust. They must establish proper data governance and security mechanisms to protect
client data and preserve data integrity through revenue generation.

3.5.6 E-commerce for Data Monetization

E-commerce presents significant prospects for data monetization, particularly for

companies involved in online trade. The customer data generated through e-
commerce platforms, consisting of purchase records, surfing patterns, shopping pref-
erences, and location details, hold vast value in bringing insights for data monetiza-
tion. The following are various avenues through which e-commerce can be used for
data monetization:
• Customer Segmentation and Targeted Marketing: E-commerce data can
generate revenue in many ways. These e-commerce platforms can analyze
customer data to segment their customer base and create targeted marketing
campaigns, increasing the effectiveness of their efforts. Companies can mone-
tize these data by offering targeted advertisements for brands looking to reach
specific customer segments. Customers can be segmented as frequent users,
window shoppers, high spenders, etc.
• Personalized Product Recommendations: One of the widely used services
offered by e-commerce platforms is personalized product recommendations.
They utilize customer data to provide personalized product recommendations,
enhancing the shopping experience and generating revenue through upselling or
cross-selling. The companies recommend cross-selling products such as turtle
food with essential oils for a healthy shell.
52 3 Data Monetization

• Customer Retention and Loyalty Programs: Customer attrition is businesses’

main problem in online commerce. These platforms can create client retention
programs that promote recurring purchases by rewarding or providing discounts
to returning consumers. By boosting repeat business and client lifetime value
improves customer loyalty. For instance, if clients purchase pet food monthly,
they can receive a discount and a reminder to do so.
• Marketplace and Third-Party Data Services: Many industries need customer
data for targeted marketing and to improve their businesses. E-commerce plat-
forms can monetize their data by providing data services to third parties. They
can access anonymized and aggregated client data for insight and targeting. These
platforms provide dynamic pricing of data and products based on demand and
personalized pricing to maximize business profit. For instance, the seller can use
e-commerce product feedback to improve the product’s quality.

3.5.7 Financial Data for Data Monetization

Financial data are a valuable asset for monetization, as they provide insights into
investment trends, financial markets, consumer behavior, and risk. The financial
sector has several avenues for data monetization. These are some strategies for using
financial data for data monetization:
• Credit Scoring and Risk Assessment: Finance data can be used to create models
for credit scoring and risk assessment tools that financial institutions, lenders, or
credit rating firms can use to gain profit. They also identify the risks associated
with partners before lending money.
• Market Research and Insights: Investors want to know the profit and risk before
investing in the financial market. Financial organizations and data providers can
use the market study findings and observations produced by statistical analysis of
financial data to create revenue by selling them to clients or other stakeholders in
the market. For instance, market research data about a firm might assist a potential
investor in making an informed judgment before deciding to buy company shares.
• Fraud Detection and Security: Financial institutions, payment gateways, or
online retailers may be given access to financial data as a service or under license
for security and fraud detection purposes. An example of fraud detection using
financial data could be credit card providers, who use machine learning (ML)
algorithms to find anomalies and changes in transaction data to identify fraudulent
activity.
• Personal Finance Management and Advisory Services: One can utilize finan-
cial data to provide individualized financial management and consulting services
that can be paid via subscription fees, consulting fees, or revenue-sharing agree-
ments with financial institutions. For instance, Credit Karma is a service that
provides users with customized advice for credit cards and loans based on their
credit histories, as well as personalized credit score and credit report tracking
services.
3.5 Sectors of Data Monetization 53

When monetizing finance data, organizations must adhere to all applicable finan-
cial regulations, data protection legislation, and industry standards. When handling
sensitive financial information, it is crucial to maintain consumer confidence, data
integrity, and security. To maximize the value and monetizing prospects of financial
data, organizations should ensure the correctness, timely completion, and quality of
the data they supply to customers or collaborators.

3.5.8 Monetization of Healthcare Data

Due to digitization in healthcare sectors, the data are readily available to healthcare
service providers. It is sensitive data about individual health records. Medical data
are a sensitive and crucial asset that can drive innovation, enhance patients’ experi-
ences, and open up new commercial prospects. There are numerous options for using
medical information for data monetization:
• Research and Development: Clinical information can be utilized for innova-
tion and research. Examples include electronic health records (EHRs), medical
imaging, genetics, and clinical trial results. Organizations could gain from these
data by partnering with research institutions, pharmaceutical corporations, and
biotechnology enterprises, granting access to anonymous data sets for clinical
research, drug discovery, and scientific study.
• Health Analytics and Insights: Healthcare data analysis can yield useful infor-
mation and insights. Organizations can obtain essential information about disease
trends, treatment results, and public health statistics by integrating and analyzing
patient data. These insights can be monetized by selling data-driven reports,
consulting services, and predictive analysis to healthcare providers, policymakers,
or pharmaceutical companies.
• Personalized Medicine and Precision Health: Healthcare data, including genetic
data, medical records, or lifestyle data, can be utilized to develop personalized
and precise health solutions. Organizations can provide individualized treatment
recommendations, disease prevention techniques, and lifestyle interventions by
evaluating individual health data. Direct-to-consumer services, joint ventures
with healthcare organizations, or collaborations with insurance firms can all be
profitable.
• Telemedicine and Remote Patient Monitoring: The villages lack good health-
care facilities. Healthcare information, when paired with telemedicine services,
can boost patient care in remote places. Organizations can provide remote moni-
toring, consultations, and predictive healthcare services by analyzing real-time
patient data. In this context, monetization can include subscription fees, usage-
based charges, joint ventures with healthcare organizations, and collaborations
with telemedicine platforms.
54 3 Data Monetization

• Health Insurance and Risk Assessment: Health insurance and risk assessment
can benefit by leveraging healthcare data. By monitoring patient data, demo-
graphics, and health practices, organizations can evaluate insurance risks, create
policies, and create customized insurance solutions. Partnering with insurance
providers, providing risk assessment services, or creating cutting-edge insurance
models based on observations from health data are ways to monetize.
• Health Data Marketplaces and Data Exchanges: Pharmacies, researchers, and
healthcare practitioners can access and share health data through marketplaces or
data exchange platforms provided by healthcare organizations. These platforms
can support data sharing, team research, or data-driven innovation, and they may
generate revenue by charging users for data access, granting licenses, or providing
data analytics services.
• Clinical Decision Support Systems: Clinical decision support systems that use
healthcare data can improve the decision-making capabilities of healthcare prac-
titioners [23]. These systems can provide real-time recommendations, treatment
guidance, and diagnostic support using patient data, medical advice, and evidence.
Software licensing, subscription fees, and joint ventures with healthcare providers
are some ways to monetize.
When monetizing healthcare data, it is critical to maintain compliance with health-
care regulations, patient privacy legislation (such as HIPAA in the United States),
and ethical issues. To ensure patients’ confidentiality and privacy, organizations
should prioritize anonymizing and securing individual data and obtain the required
consent and approvals. Successful and ethical medical record monetization depends
on establishing trust and upholding data integrity.

3.5.9 Monetization of Education Data

The education sector generates a variety of data, including data on demographics,

academic performance, and student participation. Using these data, the education
sector may benefit from data monetization. Here are some strategies for using data
from the education industry for data monetization:
• Learning Analytics and Assessment: Educational data for academic analytics
and evaluation services can be investigated. Organizations can gain insights
into students’ development, pinpoint learning gaps, or evaluate the efficacy of
educational programs by collecting and analyzing data on student performance.
Offering evaluation instruments, performance reviews, and consulting services to
educational organizations, decision-makers, or curriculum designers can generate
income.
• Personalized Education and Adaptive Learning: Education data can create
personalized learning environments and innovative educational technologies.
Organizations can provide individualized learning experiences, customized
recommendations, and adaptive material by monitoring student performance
3.6 Data Economy Leading to Mergers and Acquisitions 55

data, learning styles, and preferences. Subscription fees, licensing deals with
academic institutions, and partnerships with ed-tech firms are all possible forms
of monetization.
• Education Research and Insights: Educational data can be the source of obser-
vations and academic research. Organizations can produce research reports, policy
suggestions [24], and market insights with the help of compiled information
on the demographics of learners, academic achievement, and market trends.
Selling research reports, offering consultancy services, and forming partnerships
with institutions of higher learning and decision-makers are ways to monetize
education research data.
• Curation and Distribution of Educational Content: The creation and distribu-
tion of educational materials can be determined from learning data. Organizations
can use student learning outcomes, preferences, and engagement data to develop
learning aids, digital textbooks, or online courses that meet student demands.
Content licensing, subscription-based access, or direct sales to educational
institutions, students, or other education stakeholders can generate income.
• Policy and Decision Support in Education: Education data can inform policy
and decision-making processes. Education institutions can offer policy sugges-
tions, performance benchmarking, and predictive modeling to educational poli-
cymakers or government agencies using systematic analysis of education data.
Consulting services, policy reports, and collaborations with governmental orga-
nizations can be monetization sources. When monetizing education sector data, it
is crucial to prioritize data privacy, security, and compliance with student privacy
regulations (e.g., FERPA in the United States). Organizations should ensure that
data are anonymized. Maintaining transparency and trust with all the stake-
holders in education institutions is essential for successful data monetization in
the education sector.

3.6 Data Economy Leading to Mergers and Acquisitions

In the data economy era, businesses increasingly recognize the immense value of data
and its potential to drive growth and innovation. Data monetization has emerged as
a critical strategy for companies leveraging their data assets for revenue generation
and competitive advantage. This section of the chapter introduces various business
world examples where companies have made decisions based on the monetization
potential of the data. The first case study delves into the Google and Fitbit merger,
highlighting how the principles of the data economy played a crucial role in making
this acquisition a reality.
• Background of Google and Fitbit

Google, founded in 1998 by Larry Page and Sergey Brin, quickly became synony-
mous with internet search and online advertising. Over the years, Google expanded its
services to include products such as Gmail, Google Maps, YouTube, and the Android
56 3 Data Monetization

operating system, solidifying its position as one of the world’s leading technology
companies. Google’s core business model relies heavily on advertising revenue, and
its success is attributed to its ability to gather vast amounts of user data to personalize
and target ads effectively.
Fitbit, founded in 2007, emerged as a pioneer in the wearable fitness tracker
market. Its devices, from fitness bands to smartwatches, have gained widespread
popularity among health-conscious consumers. Fitbit’s focus on providing health and
activity-related data empowered users to monitor their fitness goals, sleep patterns,
heart rate, and other health metrics.
Both companies had well-established data economies. Google’s proficiency in
data-driven decision-making stems from its immense data access across various
platforms. Its search engine processes billions of searches daily, providing valuable
insights into user intent and interests. Moreover, Google’s products, such as YouTube
and Google Maps, also gather user data, enabling the company to offer personalized
content and location-based services.
Fitbit’s success was built on accumulating extensive health and fitness data from
its user base. The wearables collected data on users’ physical activities, sleep patterns,
heart rate, and other biometric measurements. These data are valuable for individual
users and hold potential insights for researchers and healthcare professionals in
understanding trends and improving health outcomes.
• Data Monetization Strategies of Google and Fitbit

Google’s data monetization strategy has been primarily centered around its adver-
tising platform, Google Ads. By leveraging its vast data access and analytics capa-
bilities, Google delivers highly targeted ads to users based on their search queries,
online behavior, and interests. Additionally, Google’s cloud services, including the
Google Cloud Platform (GCP), enable businesses to store and analyze their data,
generating substantial revenue from enterprise clients.
Fitbit’s data monetization approach offered users premium subscription plans
and health services. Through paid subscriptions, users gained access to advanced
features, personalized insights, and coaching, leveraging the data collected from
their wearable devices. Fitbit also collaborated with health insurers and employers,
providing wellness programs and incentives to encourage healthier lifestyles among
its users.
• The driving force and consequences of the merger

The acquisition of Fitbit by Google, completed in January 2021, amounted to a deal

worth approximately $2.1 billion. This significant investment showcased Google’s
commitment to expanding its presence in the wearables market and accessing Fitbit’s
valuable health-related data. After the merger, Google used Fitbit’s health and fitness
data to enrich its services. With access to Fitbit’s extensive data set on physical
activities, sleep patterns, and other health metrics, Google was able to offer person-
alized health-related content, including fitness tips, nutrition recommendations, and
targeted advertising related to health and wellness. Furthermore, Google integrated
3.7 Exploring Data Monetization: Individual and Organizational Perspectives 57

Fitbit’s wearable technology expertise into its product development, leading to inno-
vations in Google’s smartwatches and fitness trackers. This integration allowed
Google to compete more effectively with other wearable device manufacturers like
Apple and Samsung.
The merger also strengthened Google’s position in the healthcare domain. When
combined with Google’s technological capabilities and AI-driven analytics, Fitbit’s
health data contributed to developing health-related products and services. It included
features such as heart rate monitoring, sleep tracking, and health insights that
benefited users seeking a more holistic understanding of their well-being.
• Conclusion

The Google and Fitbit merger exemplifies how the data economy was pivotal in
driving a successful acquisition. By leveraging the value of data and understanding
the importance of data monetization, Google capitalized on Fitbit’s health-related
data to enhance its ecosystem and expand its revenue streams. This case study is
a prime example of how data-driven M&A can create new possibilities and drive
business growth in the modern world. As businesses continue to navigate the data
economy, strategic acquisitions will undoubtedly shape the future of industries and
innovation.

3.7 Exploring Data Monetization: Individual

and Organizational Perspectives

Data has become a valuable economic asset in today’s digital age, driving innovation,
and transformation across various sectors. This chapter delves into the multifaceted
landscape of data monetization, focusing on both the positive and negative aspects
while considering the viewpoints of individuals and organizations. It explores data
monetization’s benefits, risks, ethical considerations, and socioeconomic impact.
• Data Monetization for Individuals: Empowering Growth and Privacy
Concerns

Positive Aspects:
Data monetization presents individuals with unique opportunities to capitalize on
their personal information. Freelancers, for instance, can leverage their usage data
to refine and enhance their service offerings. By analyzing the data collected from
various projects, they can identify patterns in their work, leading to more efficient time
management, improved service quality, and ultimately increased client satisfaction.
This data-driven approach empowers individuals to align their services with the
specific needs of their clientele.
A real-world example is a freelance content writer who collects data on the types
of articles that generate the most engagement on various platforms. The writer can
discern which topics resonate most with their audience by analyzing metrics such
58 3 Data Monetization

as click-through rates, social media shares, and reader comments. Armed with this
information, they can tailor their content to meet the preferences of their readers,
resulting in increased readership, client satisfaction, and the potential for repeat
business.
An illustrative example from the fitness industry also demonstrates this concept.
Fitness apps gather user data such as exercise routines, dietary habits, and health
metrics. With this information, they create personalized training plans that cater
to the user’s unique fitness goals. By tapping into the wealth of data individuals
generate, these apps can provide tailored workouts and dietary recommendations
that yield better results, fostering a positive user experience.
Negative Aspects:

• Privacy and Security Risks

However, the journey of data monetization has its challenges. Privacy concerns come
to the forefront as individuals willingly share their personal information. High-profile
incidents such as the Cambridge Analytica scandal underscore the dangers of data
misuse. Millions of Facebook users’ data were harvested without explicit consent and
exploited for political profiling and manipulation. Such breaches infringe on personal
privacy and have broader implications for democracy and individual autonomy.
Another concerning example is identity theft. When personal data falls into the
wrong hands, malicious actors can exploit it to commit fraud, causing financial and
reputational damage to individuals. These risks emphasize the necessity of robust
data protection measures and user consent mechanisms to ensure that individuals
maintain control over their personal information.
• Ethical Considerations and Societal Impact

Ethical considerations emerge as a significant concern as individuals contemplate

the advantages and risks of data monetization. An example highlighting ethical data
sharing is seen in medical research. Many individuals are willing to contribute their
health data to advance medical knowledge, but ethical guidelines must be established
to ensure data privacy and protection. Organizations such as hospitals and research
institutions must develop clear consent processes and transparent data handling
procedures to uphold individuals’ trust and safeguard their sensitive information.
A pertinent case study that underscores ethical data practices involves sharing
genomic data for scientific research. Genomic databases enable researchers to
make breakthroughs in understanding diseases and developing targeted treatments.
However, the responsible use of these data involves striking a balance between
research advancement and respecting individuals’ privacy rights. Implementing data
anonymization techniques and rigorous access controls can help mitigate potential
ethical concerns. The societal impact of data monetization is also noteworthy. It raises
concerns about fairness and equity, mainly when personal data profiles determine
access to financial services. Financial institutions increasingly rely on individuals’
data to assess creditworthiness and make lending decisions. However, this practice
3.7 Exploring Data Monetization: Individual and Organizational Perspectives 59

can perpetuate existing disparities, as marginalized communities may have limited

access to financial services due to biased algorithms relying on historical data.
A salient example illustrating this issue is using algorithms in criminal sentencing.
Studies have shown that certain algorithms exhibit racial bias, leading to dispro-
portionately harsh sentences for individuals from marginalized communities. This
underscores the imperative of transparency and accountability in data-driven
decision-making, ensuring that technology does not amplify societal inequalities.
• Data Monetization for Organizations: Strategies and Implications

Organizations have embraced diverse data monetization models to harness their data
assets. A prominent approach is the subscription-based model. For instance, news
media outlets offer premium content to subscribers, providing access to in-depth
articles, analyses, and exclusive features. Another model revolves around targeted
advertising. Social media platforms leverage user data to deliver personalized ads,
enabling advertisers to connect more effectively with their desired audience.
A compelling real-world example that underscores these strategies is found in
Netflix’s data-driven recommendation system. With a vast user data repository,
Netflix suggests content aligned with individual viewing preferences. It enriches the
user experience and fuels user retention and engagement, contributing significantly
to Netflix’s market dominance.
• Advantages and Challenges for Organizations

Data monetization brings forth a plethora of advantages for organizations, with

revenue generation and business growth at the forefront. E-commerce platforms
adeptly utilize customer data to optimize sales. Amazon, for instance, analyzes users’
purchase history and browsing behavior to recommend products, leading to increased
sales and customer satisfaction.
Amazon’s “Customers Who Bought This Also Bought” feature is an illustrative
case study. Leveraging data-driven insights, Amazon creates a seamless shopping
experience, enticing customers to make additional purchases based on the preferences
of others with similar interests. This strategy not only drives revenue but also fosters
customer loyalty.
However, challenges abound in the data monetization journey. Organizations must
navigate a complex legal landscape, with the General Data Protection Regulation
(GDPR) and the California Consumer Privacy Act (CCPA) serving as prominent
examples of data protection laws. Noncompliance can result in substantial fines,
exemplified by Google’s multibillion-dollar penalty imposed by the European Union
for antitrust violations.
• Ethical obligations and societal responsibility

Ethical considerations in data monetization demand that organizations prioritize

transparency and user consent. Apple stands as a model example of championing
users’ privacy. By introducing privacy features such as app tracking transparency,
60 3 Data Monetization

Apple empowers users to control data sharing across apps, respecting user privacy
and nurturing user trust and loyalty.
Apple’s emphasis on ethical data practices resonates with the broader discourse
on responsible data usage. Organizations are urged to adopt a user-centric approach,
offering individuals precise data collection and usage information. It empowers users
to make informed decisions about their data, fostering a culture of transparency and
accountability.
• Far-reaching Societal Implications

Beyond immediate gains, organizational data monetization carries profound societal

implications. Algorithms integrated into decision-making processes raise concerns
about bias and fairness. A poignant example is the utilization of AI-driven hiring
systems, which inadvertently perpetuate bias in recruitment, resulting in unequal
opportunities for candidates from diverse backgrounds.
This case study underscores the societal responsibility organizations bear when
embracing data-driven technologies. Striving for algorithmic fairness and trans-
parency becomes paramount, safeguarding against bias and a cornerstone for societal
equity.
• Conclusion

The exploration of data monetization through the lenses of individuals and organiza-
tions reveals a multifaceted terrain. Strategies such as subscription-based models and
targeted advertising demonstrate the versatility of data-driven approaches. However,
the journey requires ethical considerations and an acute awareness of societal impli-
cations. As individuals and organizations traverse this intricate path, they collectively
shape the contours of the future data economy.

3.8 Data Monetization Tools

Data monetization involves transforming data into a valuable asset that can be sold,
shared, or utilized internally to gain a competitive edge. Data monetization tools are
pivotal in this process by facilitating data collection, analysis, and packaging.
These tools offer a range of functionalities. First, they streamline data aggregation
from disparate sources, ensuring that the data collected are comprehensive and accu-
rate. Next, robust analytics capabilities delve into these data, uncovering patterns,
trends, and correlations that might otherwise remain hidden. This knowledge fuels
informed decision-making, enabling businesses to enhance customer experiences,
optimize operations, and develop targeted marketing strategies.
Furthermore, data monetization tools aid in data packaging and distribution.
They allow organizations to package their insights into consumable formats, such as
References 61

reports, visualizations, or APIs. This packaged data can be shared or sold to compa-
nies seeking to enrich their operations with external insights—Sect. 3.5 talks in-depth
about how data monetization occurs within major sectors.

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Chapter 4
Comparative Study of the Global Data
Economy

Abstract The evolution of digital and data economies has catalyzed unprecedented
economic transformations across the globe, shaping the trajectories of developed,
developing, and underdeveloped nations in distinctive ways. This chapter delves
into the multifaceted impact of the data economy across these categories, dissecting
their varying priorities, challenges, and accomplishments. In developed nations like
the United States, Japan, and Germany, the data economy thrives on innovation
and technological prowess, though they grapple with balancing innovation and data
privacy. Developing nations in Latin America, Southeast Asia, and Africa prioritize
inclusion through initiatives like Kenya’s M-Pesa, yet disparities in access persist.
Underdeveloped nations focus on digital inclusion and infrastructure despite limited
resources. Across these categories, diverse performances in parameters like tech-
nological infrastructure, digital literacy, and data governance are evident. Innova-
tion ecosystems thrive in the United States and Nigeria, while Haiti’s constraints
highlight challenges. This chapter explores the data economy’s impact on global
economies, showcasing data-driven innovation, the imperative of bridging divides,
and challenges that underscore equitable progress. The chapter unveils a tapestry of
influence, highlighting shared growth potential.

Keywords Data economy · Digital economy · Technological infrastructure ·

Developing nations · Developed nations · Digital inclusion · Underdeveloped
nations · Global impact

4.1 Digital Economy

In exploring the data economy, it is imperative to comprehend its relationship with

the broader concept of the digital economy. Although these terms are frequently
used interchangeably, a nuanced distinction exists that encapsulates their distinct
meanings, underlying attributes, developmental trajectories, and profound societal
implications. The inception of these terms dates back to pivotal junctures in the tech-
nological timeline. The term “digital economy” emerged in the late twentieth century

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 63
S. Shukla et al., Data Economy in the Digital Age, Data-Intensive Research,
https://doi.org/10.1007/978-981-99-7677-5_4
64 4 Comparative Study of the Global Data Economy

as technological advancements ushered in an era of digitization, where information,

transactions, and communication were increasingly conducted in digital formats.
This transformation was particularly evident in the domains of commerce, finance,
and communication.
Conversely, the term “data economy” took center stage as the digital landscape
matured, evolving into an environment where data emerged as a valuable commodity.
The rapid proliferation of digital devices, coupled with the expansion of the internet,
led to the generation, collection, and analysis of vast amounts of data. This marked
the onset of an epoch where data became not only an asset but also a driver of
innovation, efficiency, and economic growth. Although these terms originated at
distinct junctures in technological evolution, they have, over time, become used
interchangeably due to the intricate web of connectivity between them. The digital
economy serves as the overarching framework within which economic activities and
societal functions have increasingly become digitized. It encompasses the digital
transformation of industries, business models, and governance structures, resulting in
efficiencies, global connectivity, and new opportunities. The data economy, however,
represents a specific facet of the digital economy, highlighting the profound impact of
data as a resource and catalyst for change. Data generated from various sources fuel
insights, inform decision-making, and shape innovations. It transcends traditional
physical boundaries, enabling remote collaboration and novel ways of problem-
solving.
While seemingly convenient, this interchangeable usage poses a challenge in
accurately capturing the essence of each concept. Treating them synonymously over-
looks the nuanced roles they play in shaping our world. Although nested within
the digital economy, the data economy garners distinct attention due to its trans-
formative capacity driven by data collection, analysis, and utilization. Blurring
the lines between these terms can obscure critical conversations and dilute the
strategic thinking required to harness the unique potential of each. It can hinder
policymakers, business leaders, and researchers from crafting tailored approaches to
address challenges and leverage opportunities specific to the data-driven landscape.
Thus, understanding the dynamic relationship between the data economy and the
digital economy is pivotal for comprehending the intricate fabric of our modern
world. While the terms are occasionally used interchangeably, they encapsulate
distinct roles, historical contexts, and transformative potentials. Recognizing their
differences empowers individuals to navigate the complex interplay between tech-
nological advancement, economic progress, and societal well-being in an informed
and strategic manner.

4.1.1 Defining the Digital Economy

The digital economy encompasses the entire range of economic activities facilitated
by digital technologies and networks. It includes the production, distribution, and
consumption of goods and services that are heavily reliant on digital technologies
4.1 Digital Economy 65

Fig. 4.1 Timeline of the digital economy’s evolution

such as the internet, mobile devices, cloud computing, and various forms of software.
This vast landscape covers e-commerce, digital marketing, online platforms, soft-
ware development, and a myriad of other digital interactions that have transformed
traditional business models.
The digital economy’s rapid growth can be attributed to the proliferation of internet
connectivity, the widespread adoption of smartphones, and the increasing availability
of affordable digital tools. This has enabled a global shift in how commerce, commu-
nication, and even social interactions occur. As a result, it has significantly impacted
sectors such as retail, entertainment, finance, and communication. To understand how
the digital economy evolved, tracing back technological advancement and further
correlating it with the digital economy are essential. The timeline in Fig. 4.1 traces
the key milestones that have led us from the early days of computing to the data-driven
era humans now inhabit.

4.1.2 Evolution of Digital Economy

• 1950s–1980s: The Dawn of Computing

The seeds of the digital economy were sown during the mid-twentieth century with
the development of early computing machines. These massive mainframes were the
foundation for automating tasks and processing information. While primarily used
by governments and large corporations, they hinted at the potential of technology to
revolutionize industries.
Although remote from our modern standards, they laid the foundational principles
for computation and hinted at the potential for technology to transform industries.
As these behemoths evolved, they provided a glimpse into a future where the digital
realm would influence not only businesses but also the broader fabric of society.
• 1990s: The Internet Revolution

The 1990s witnessed the birth of the World Wide Web, a breakthrough that laid the
groundwork for the digital economy. Tim Berners-Lee’s invention allowed for the
seamless exchange of information globally. The emergence of websites, email, and
online communication marked the initial steps toward a connected digital landscape.
66 4 Comparative Study of the Global Data Economy

As the internet grew, it became apparent that this new mode of communication
was poised to reshape traditional business models and interpersonal interactions. The
early 1990s witnessed the establishment of commercial internet service providers,
sparking a gradual transformation in the way businesses engaged with customers.
The dawn of e-commerce and the first online transactions laid the foundation for
what was to become a fundamental shift in economic interactions, setting the stage
for the digital economy to thrive.
• Late 1990s–Early 2000s: Rise of E-commerce

The late 1990s and early 2000s witnessed the rise of e-commerce as a defining aspect
of the digital economy. In this period, the internet transformed from a mere commu-
nication tool to a platform for business transactions. Companies such as Amazon
and eBay capitalized on this emerging trend, carving out niches in online retailing
and auctioning, respectively. Amazon, founded in 1994, transformed the way people
shopped, introducing concepts such as online reviews and personalized recommen-
dations. eBay, on the other hand, enabled individuals to engage in virtual auctions,
breaking down geographical barriers and redefining the buying and selling of goods.
These platforms revolutionized consumer behavior and set the precedent for a funda-
mental shift in business operations. As people embraced the convenience of online
shopping and digital transactions, the e-commerce boom marked a significant turning
point in the evolution of the digital economy.
• Mid-2000s: Web 2.0 and User Interaction

The mid-2000s heralded the Web 2.0 era, characterized by user-generated content
and interactive online experiences. Social media platforms such as Facebook,
launched in 2004, facilitated global connections and information sharing. Blogs,
wikis, and forums empowered individuals to contribute and collaborate, reshaping
online engagement. As a result, users became both consumers and creators of digital
content, marking a significant shift from passive online engagement to active partic-
ipation. This era laid the groundwork for a more dynamic and interconnected digital
ecosystem, setting the stage for future innovations and the evolution of the data
economy.
• Late 2000s–Early 2010s: Mobile Revolution

The proliferation of smartphones in the late 2000s transformed the digital landscape.
Apple’s iPhone, introduced in 2007, brought the power of the internet to people’s
pockets. Mobile apps and responsive web design became essential, changing how
individuals accessed information and services.
• 2010s: Cloud Computing and Big Data

The 2010s were marked by the ascendancy of cloud computing. Companies such as
Amazon Web Services (AWS) and Microsoft Azure offered scalable and accessible
computing resources, leveling the playing field for start-ups and large enterprises
4.2 Distinguishing Data Economy from Digital Economy 67

alike. The era also witnessed the explosion of big data, with organizations realizing
the value of collecting and analyzing vast datasets.
• Mid-2010s: Artificial Intelligence and Analytics

Advancements in artificial intelligence (AI) and analytics have gained prominence.

Machine learning algorithms enabled data-driven decision-making and automation:
AI-driven chatbots, recommendation systems, and predictive analytics transformed
customer experiences and business operations.
• Late 2010s–Early 2020s: Data Economy Emergence

The convergence of data analytics, AI, and connectivity paved the way for the data
economy’s emergence. Businesses recognized that data held value beyond its utility,
setting the stage for a new era where data itself became a strategic asset. Industries
from healthcare to finance started leveraging data to innovate and optimize.
• Present and Beyond: The Interplay of Data and Digital

As humans stand on the cusp of the future, the distinction between the digital and data
economies continues to blur. The data economy, an offshoot of the digital economy, is
evolving rapidly as technological breakthroughs reshape our understanding of data’s
potential. As people embrace the era of IoT, edge computing, and blockchain, the
interplay between data and digital will continue to drive innovation and economic
transformation.

4.2 Distinguishing Data Economy from Digital Economy

In the previous section, the evolution of the digital economy was examined, tracing
its progression from early computing to the interconnected digital landscape present
today. In this section, the focus shifts to the distinct attributes of the data economy and
the clarification of its distinctions from the digital economy. By thoroughly analyzing
definitions, fundamental traits, and real-world instances, the intention is to shed light
on the distinctive essence of the data-driven paradigm.

4.2.1 Definitions

To discern the nuances between the digital and data economies, let us examine
prominent definitions of the digital economy. The digital economy is widely
defined as “an economy based on digital technologies, including digital commu-
nication networks, computers, software, and other related information technolo-
gies” [1]. According to the World Economic Forum, the digital economy refers
to “an ecosystem where economic activities are enabled by digital technologies and
68 4 Comparative Study of the Global Data Economy

transactions are conducted through digital platforms” [2]. Additionally, the Orga-
nization for Economic Co-operation and Development (OECD) characterizes the
digital economy as “the economic and social activities fueled by digital technolo-
gies and their associated data” [3]. Another perspective comes from the United
Nations Conference on Trade and Development (UNCTAD), which defines the digital
economy as “economic activities that use digitized information and knowledge as
key factors of production” [4].
While these definitions share common elements, such as the role of digital tech-
nologies and networks in economic activities, there are subtle contradictions that
pave the way for the emergence of the data economy. For instance, the OECD and
UNCTAD definitions highlight the importance of data as a factor of production,
laying the groundwork for the data economy’s significance. Moreover, the World
Economic Forum’s emphasis on transactions conducted through digital platforms
indirectly acknowledges the pivotal role of data in facilitating these transactions [2].
These similarities lay the foundation for incorporating data into the digital economy
framework, creating space for the data economy to flourish. Incorporating data
into the digital economy framework is where the data economy emerges. The data
economy focuses on data as a valuable asset, extending beyond its role in enabling
digital interactions. It involves the collection, analysis, and utilization of data to drive
economic value. The distinction lies in the emphasis on extracting insights and inno-
vation from the data itself, making it the core foundation of economic growth. This
transition represents a fundamental shift from the digital economy’s initial focus
on technology as an enabler to the data economy’s focus on data as the driver of
innovation and decision-making. Incorporating data into the digital economy leads
to the emergence of the data economy. In the digital economy, technologies enable
transactions and interactions, while in the data economy, data becomes the primary
asset, driving insights and value creation.

4.2.2 Fundamental Characteristics of the Digital Economy

In the realm of economic transformation, the digital economy stands as a distinct

departure from conventional paradigms. Imagine an ecosystem where transactions,
interactions, and transactions unfold not within the confines of physical spaces but
rather within the vast expanse of the digital realm. This is the hallmark of the digital
economy, and it is marked by several fundamental traits that delineate its uniqueness.
• Digital Interactions

At the heart of the digital economy is the prevalence of digital interactions, where
transactions, communications, and engagements occur seamlessly in virtual spaces.
An archetype of this trait can be found in the realm of e-commerce, personified
by giants such as Amazon. Through online platforms, consumers traverse a digital
marketplace where they can explore, select, and purchase products without stepping
4.2 Distinguishing Data Economy from Digital Economy 69

into a physical store. This character underscores the digital nature of economic activi-
ties, where the landscape of commerce is shaped by technology, allowing transactions
to unfold with unparalleled convenience and agility.
• Global Reach

E-commerce transcends geographical confines, democratizing access to products and

services. The embodiment of this trait lies in Amazon’s expansive reach, enabling
customers worldwide to partake in a comprehensive selection of offerings. This
virtual global marketplace obliterates traditional barriers, offering consumers access
to products from across the world and extending businesses’ market reach beyond
what was once imaginable.
• Disrupted Business Models

The digital economy’s influence extends beyond convenience—it reshapes entire

business models. Amazon’s online marketplace presents a stark departure from tradi-
tional retail. It disrupts the brick-and-mortar retail paradigm, fundamentally altering
how consumers shop and how businesses operate. This disruption is emblematic
of the digital economy’s power to challenge and transform established norms. The
advent of the digital economy brings forth the profound integration of technology
into economic processes. With digitalization, businesses optimize supply chains,
streamline operations, and enhance efficiency, leading to increased productivity and
reduced costs. Furthermore, this integration fosters new economic opportunities,
from app development to digital marketing, giving rise to innovative revenue streams
and reshaping labor markets. The dynamic shift toward digital integration under-
scores how technology not only enhances traditional practices but also creates novel
economic pathways.
• Enhanced Customer Experience

E-commerce platforms such as Amazon harness the power of data to personalize

user experiences. The recommendation engine, a technological marvel, suggests
products based on browsing history, transforming the act of shopping into a
tailored journey. This characteristic redefines customer interactions, making each
engagement efficient and deeply personalized.
• Data-Driven Insights

E-commerce generates a treasure trove of data—consumer preferences, browsing

patterns, and purchase history—that offers invaluable insights into market trends
and buyer behavior. These data, harnessed adeptly, drive strategic decisions and
foster innovation, exemplifying the data-centric essence of the digital economy.
• Democratization of Information

Transparency is a hallmark of the digital economy. Online reviews and ratings provide
consumers with information, enabling informed purchasing decisions. This redis-
tribution of information alters the traditional power dynamic between buyers and
70 4 Comparative Study of the Global Data Economy

sellers, placing more significant influence in the hands of consumers. The impact
of e-commerce on the digital economy underscores the dynamic interplay between
technology and commerce. This real-life example unveils how technology rede-
fines traditional practices, elevates consumer experiences, and forges novel economic
landscapes.

4.2.3 Data Economy a Difference

In the realm of economic transformation, the digital economy stands as a distinct

departure from conventional paradigms. It is characterized by a set of fundamental
attributes that reshape commerce, redefine interactions, and pave the way for novel
economic landscapes. In contrast, the data economy introduces a new paradigm that
capitalizes on data’s intrinsic value and its potential to revolutionize decision-making,
privacy practices, and collaborative innovation.
• Contrasting Characteristics of the Data Economy

While both economies share technological underpinnings, the data economy intro-
duces distinctive features that set it apart. First, it places a premium on data-
driven decision-making, where businesses utilize insights gleaned from data to tailor
offerings and enhance customer experiences. This approach transcends the digital
economy’s emphasis on transactions, shifting the focus to data as a strategic asset
that informs crucial business choices.
Second, the data economy prioritizes data ownership and privacy concerns. As
the value of data becomes more evident, meticulous management and protection are
essential. The digital economy may have overlooked the intricacies of data ownership,
but the data economy places this concern at the forefront, leading to a reevaluation of
ethical and legal dimensions surrounding data usage. Third, the data economy sparks
new collaborations and partnerships. Data-sharing arrangements become integral
to driving innovation and solving cross-sectoral challenges. In this landscape, data
ceases to be confined within organizational boundaries; it becomes a catalyst for
forging connections across industries, fostering novel synergies that reshape business
models and problem-solving strategies.
To substantiate these differentiations, consider the rise of personalized healthcare.
In the digital economy, telemedicine platforms revolutionized healthcare delivery
through remote consultations. However, the data economy propels healthcare even
further. Harnessing patient data enables predictive health insights and customized
treatment plans. Here, data transforms from a mere facilitator into a dynamic force
that redefines healthcare approaches, ushering in an era of proactive and personalized
medical interventions.
The significance of the data economy is reinforced by the findings of the McKinsey
Global Institute’s report on “The Age of Analytics.” This report projects a substantial
impact, estimating that data-driven value creation could contribute over $13 trillion
4.3 The Data Economy in Developed Countries 71

to the global economy by 2030 [5]. Furthermore, it highlights how organizations

effectively leveraging data insights outperform their peers, underscoring the unique
potential of the data economy to propel economic growth through informed decision-
making.
In conclusion, while the digital economy provides the foundation, the data
economy elevates economic dynamics to new heights by placing data at the forefront.
By delineating their definitions, characteristics, and impacts, a deeper understanding
emerges of how the data economy is reshaping industries and sculpting the economic
landscape of tomorrow.

4.3 The Data Economy in Developed Countries

As the digital age dawned, developed nations stood at the forefront of harnessing the
potential of technology, paving the way for the evolution of both the digital and data
economies. This section delves into the trajectory of the data economy’s emergence
within developed countries, the advantages they enjoyed, and the profound impacts
that both the digital and data economies have had on their economic landscapes as
reflected in Fig. 4.2.

Fig. 4.2 Defining characteristics of a nation’s data economy

72 4 Comparative Study of the Global Data Economy

• The Evolution and Advantages of the Data Economy in Developed Countries

The emergence of the data economy within developed nations can be traced back
to the solid foundation established by the digital economy. The journey of this
transformation was paved by strategic early investments in digital infrastructure,
research, and education. This proactive approach positioned these nations, such as
the United States, Japan, and various European countries, to fully exploit the poten-
tial of emerging technologies. By creating environments conducive to innovation,
supporting start-ups, and fostering collaboration between research institutions and
tech giants, these countries sowed the seeds of progress that would later catalyze the
growth of the data economy.
The digital revolution was the precursor to the data economy’s ascendancy within
developed countries. Consider the example of South Korea—a nation that made
significant strides in embracing the digital economy. Through early investments in
broadband infrastructure and widespread technology adoption, South Korea posi-
tioned itself as a technological powerhouse. This led to a remarkable growth trajec-
tory, with the country’s GDP increasing by an impressive more than 100% between
1980 and 2010, largely driven by advancements in the technology sector. Korea has
continuously increased its R&D spending alongside GDP growth, and in 2006 was
3.2% of GDP, one of the highest levels in the world [6].
Developed countries gained several advantages as they transitioned into the digital
economy, which subsequently catalyzed the data economy’s growth. A key character-
istic of the digital economy’s inception was the development of advanced technolog-
ical infrastructure. Developed nations boasted robust networks, widespread internet
connectivity, and state-of-the-art computing capabilities. These components formed
the bedrock for the seamless exchange of data, creating an ecosystem in which busi-
nesses could harness information for strategic decision-making. The United States,
for instance, invested heavily in its digital infrastructure, fostering an environment
where data could flow seamlessly, enabling the growth of data-driven enterprises
such as Google, Amazon, and Facebook.
The transition into the digital economy was also bolstered by a workforce equipped
with technical expertise and data analytics proficiency. Universities and specialized
training programs played pivotal roles in cultivating talent capable of extracting
valuable insights from complex datasets. In countries such as Japan, renowned for
its excellence in technology education, a skilled workforce emerged as the driving
force behind the country’s data-driven innovations and technological breakthroughs.
Thriving innovation ecosystems provided the fertile ground necessary for the
growth of digital and data economies. Collaborations between academia, research
institutions, start-ups, and established companies created synergies that produced
cutting-edge technologies and solutions. In the European Union, initiatives such as
Horizon 2020 fostered partnerships between researchers, entrepreneurs, and indus-
tries, amplifying Europe’s technological capabilities and competitiveness on the
global stage [7].
4.4 Data Economy in Developing Countries 73

4.3.1 Impacts of the Digital and Data Economy in Developed

Nations

The digital economy’s impact on developed countries was transformative. It led to the
automation of industries, increased efficiency, and new avenues for economic growth.
With the advent of the data economy, the impact on developed nations became even
more pronounced. For instance, the United Kingdom capitalized on its data-driven
strengths to establish itself as a global hub for fintech innovation. Its digital finance
sector grew by 50% between 2015 and 2020, generating substantial economic value
and employment opportunities.
The digital economy brought forth automation and increased efficiency across
various sectors. For example, Germany’s manufacturing prowess was enhanced by
the implementation of Industry 4.0 principles, where interconnected devices and
real-time data analysis optimized production processes. This transformed traditional
manufacturing into smart manufacturing, leading to faster production, reduced down-
time, and improved quality control. Furthermore, developed nations’ healthcare
systems leveraged data to enhance patient care. In Sweden, the collection and analysis
of patient data led to predictive health insights, personalized treatments, and improved
healthcare outcomes. By 2020, Sweden’s data-driven healthcare approach resulted in
a life expectancy of 82.8 years, surpassing the global average of 73.2 years. A major
component of Sweden’s and other nations’ success has been electronic health records
(EHRs), which have improved patient care coordination and enabled researchers to
analyze large datasets for insights into disease patterns and treatment effectiveness
[8]. Telemedicine and remote patient monitoring gained further traction, particularly
during the COVID-19 pandemic, demonstrating the value of data-driven healthcare
solutions.
The data economy’s emergence in developed countries was rooted in their early
adoption of digital technologies. These nations capitalized on advanced infrastruc-
ture, skilled workforces, and innovative ecosystems. The digital and data economies
propelled their economic growth, reshaping industries and empowering them to
achieve new heights of innovation and competitiveness.

4.4 Data Economy in Developing Countries

In the intricate tapestry of the data economy, developing countries contribute a distinct
and captivating chapter. These nations stand in stark proximity to their developed
counterparts, not only in terms of their economic and technological landscapes but
also in their navigation through the epoch of data-driven transformation.
Commonly referred to as emerging economies or low- and middle-income coun-
tries, developing nations possess defining characteristics. Their per capita income
levels are often lower, access to advanced technologies is limited, and infrastructure
might lag behind that of their developed peers. However, these countries frequently
74 4 Comparative Study of the Global Data Economy

possess a wealth of human capital and signify significant growth prospects due to
their sizable and youthful populations.
The data economy holds profound implications for developing countries. It illumi-
nates a route to economic advancement, innovation, and heightened living standards.
Embracing digital technologies and data-centric approaches can expedite progress in
crucial domains such as healthcare, education, agriculture, and governance. Further-
more, this paradigm can bolster global competitiveness and become foreign invest-
ment in their shores. In stark contrast to their developed counterparts, the data
economy takes on a vastly different guise in developing nations. While the devel-
oped world leveraged its preexisting technological infrastructure and skilled labor
force, developing nations embarked on a journey marked by distinct challenges.
These hurdles encompass limited technology access, disparities in infrastructure,
regulatory complexities, and, at times, political instability.
Within this section, the authors voyage into the narrative of how the data economy
has unfurled within developing countries. The following section delves into the
unique challenges they encountered and the ingenious strategies they devised to seize
the latent potential within digital technologies and data as mentioned in Fig. 4.2 too.
• Navigating Challenges in Developing Countries

For developing countries, embracing the data economy posed distinct challenges.
Limited access to advanced technological infrastructure, unequal digital literacy
rates, and economic disparities presented formidable obstacles. These nations grap-
pled with the digital divide, a stark contrast to the developed world’s digital readi-
ness. The absence of robust digital infrastructure hindered seamless data exchange
and impeded the potential for widespread digital innovation. In sub-Saharan Africa,
for instance, the digital divide was particularly pronounced. Limited access to reli-
able electricity and internet connectivity made it challenging for rural communities
to participate in the digital ecosystem. As a result, the potential benefits of the data
economy, such as access to online education, e-commerce opportunities, and digital
healthcare services, were often out of reach for a significant portion of the population.
• Innovation Amid Constraints

Despite these challenges, developing countries have demonstrated remarkable

resilience and adaptability. Recognizing the potential of digital technologies and data,
these nations adopted innovative strategies to leapfrog traditional barriers. Mobile
technology played a pivotal role in providing access to digital services even in areas
with limited internet connectivity.
In sub-Saharan Africa, mobile money platforms emerged as a transformative
solution. These platforms revolutionized financial services by allowing citizens to
access banking services and transact using basic mobile phones. Kenya’s M-Pesa, for
instance, enabled individuals to send and receive money, pay bills, and access other
financial services through simple text messages. This innovation not only empow-
ered individuals in underserved communities to participate in the formal economy
but also paved the way for new business models and opportunities.
4.4 Data Economy in Developing Countries 75

• Seizing New Opportunities

Developing countries leveraged their unique circumstances to identify new growth

opportunities. One prime example is India’s digital transformation journey. With
its large population and expanding internet penetration, India harnessed the power
of data to drive financial inclusion, streamline government services through digital
platforms, and cultivate a thriving e-commerce ecosystem.
In India, the Aadhaar system—an ambitious biometric identification initiative—
facilitated financial inclusion by providing millions of citizens with a unique digital
identity linked to their bank accounts. This initiative enabled direct transfers of
government benefits and subsidies, reducing leakages and ensuring better-targeted
welfare programs. Additionally, the rise of e-commerce platforms such as Flip-
kart and Amazon India brought a plethora of goods and services within reach
of consumers, even in remote areas, contributing to a more inclusive economic
landscape.

4.4.1 The Data Economy’s Role in Development

The data economy’s role in development is multifaceted, extending across sectors

and domains. Developing countries recognize that harnessing data can lead to trans-
formative socioeconomic outcomes. Data-driven insights can inform more efficient
resource allocation, better decision-making, and innovative solutions to longstanding
challenges. Strategies for harnessing the data economy in development encompass
various sectors. In agriculture, data-driven approaches can optimize planting and irri-
gation, leading to increased yields and reduced waste. In Nigeria, the Babban Gona
program utilizes data to provide smallholder farmers with access to credit, training,
and market linkages, boosting agricultural productivity and income [9, 10].
In healthcare, data-driven insights can enhance disease surveillance, resource allo-
cation, and treatment strategies, leading to better outcomes for underserved popu-
lations. In Ghana, the “mPedigree” platform uses mobile technology to verify the
authenticity of pharmaceutical products, safeguarding public health by preventing
the circulation of counterfeit drugs [11].
Improved public service delivery involves using data analytics to enhance citizen
services and resource allocation, ensuring efficient and equitable service provision.
In Colombia, the “Bogotá Cómo Vamos” initiative leverages data to monitor and
evaluate urban development indicators, facilitating evidence-based policy decisions
that benefit the city’s residents.
Developing countries have been progressively adopting data-driven approaches
over the past decade. With increased access to technology and growing digital literacy,
these strategies are gaining momentum, transforming development trajectories in
real-time. These strategies are being implemented across a range of developing
countries, spanning continents, and diverse economic contexts. From sub-Saharan
76 4 Comparative Study of the Global Data Economy

Africa to South Asia and Latin America, governments, NGOs, and private sectors
are collaborating to leverage data for development.
In summary, developing countries embarked on a data economy journey marked
by challenges and innovation. Despite limited resources and technological disparities,
these nations showcased resilience and creativity in adapting digital technologies to
their unique contexts. As they harness the potential of the data economy, developing
countries hold the promise of driving both economic growth and social transformation
on their own terms.

4.5 Data Economy in Third World

The expansion of the data economy has left an indelible mark on countries worldwide.
Yet, its impact on third-world nations is uniquely characterized by a convergence
of challenges, innovations, and opportunities. As the data economy continues to
rise, its resonance within these nations takes on a distinctive cadence—a symphony
composed of challenges that are met with innovative solutions and the promise of
advancement. Referred to as developing or low-income nations, third-world countries
present a diverse tapestry of economies and societies. These nations confront an array
of obstacles, including poverty, limited access to essential services such as education
and healthcare, and underdeveloped infrastructure. Despite these challenges, they
emanate a spirit of resourcefulness, boasting vibrant cultures and a reservoir of
untapped human potential.
In this context, the data economy assumes profound importance for third-world
nations. It emerges as a catalyst for progress, illuminating a path toward socioeco-
nomic betterment. By embracing data-driven technologies, these countries have the
opportunity to revolutionize critical sectors spanning healthcare, agriculture, educa-
tion, and governance. This transformative shift holds the potential to propel them past
traditional developmental stages, guiding them toward heightened living standards
and a newfound global competitive edge.
The data economy’s trajectory in third-world countries varies significantly
between developed and developing nations. While developed countries boast mature
technological infrastructures and skilled workforces and developing nations straddle
an intermediary position, third-world countries grapple with foundational challenges.
These encompass issues such as the digital divide, limited connectivity, and resource
scarcity. In response, they must employ innovative strategies and adaptive approaches
to unlock the latent benefits inherent in the data economy.
Within this section, a comprehensive exploration commences—an exploration
into the intricate narrative that unfolds as third-world nations navigate the multi-
faceted landscape of digital transformation. Through this journey, they tap into the
untapped potential of data, shaping their economic and social landscapes in ways
that are uniquely their own and exceptionally inspiring as mentioned in Fig. 4.2.
4.5 Data Economy in Third World 77

• Navigating Digital Transformation Challenges

For third-world countries, embracing the data economy is a multifaceted endeavor

with challenges stemming from various socioeconomic factors. The limited access
to basic infrastructure, including electricity and reliable internet connectivity, poses
formidable barriers. Many rural communities are left on the fringes of digital access,
depriving them of the benefits of the data economy. The digital divide, starkly evident
in these regions, underscores the disparities between the digital readiness of more
developed nations and the challenges faced by third-world countries.
An illustrative example can be found in Malawi, where only approximately 22%
of the population has access to the internet. Limited digital access hampers the
dissemination of information, constraints economic opportunities, and inhibits the
integration of these countries into the global digital landscape. The absence of infras-
tructure exacerbates existing inequalities, leaving marginalized communities further
marginalized in the data-driven world.
• Innovation Strategies in Resource-Constrained Environments

Despite the challenges, third-world countries have showcased remarkable resilience

and ingenuity in their pursuit of digital transformation. Recognizing the potential
of digital technologies and data, these nations have adopted innovative strategies to
overcome resource constraints. Mobile technology, a prevalent tool in these regions,
has emerged as a beacon of hope in bridging digital gaps.
Consider the case of Uganda, where the CHAI employs mobile technology to
track and manage child vaccinations. Through text messages, parents are reminded
of vaccination schedules and locations, ensuring that children receive essential immu-
nizations. This innovative use of data-driven technology not only improves health
outcomes but also demonstrates the potential of digital solutions to address critical
challenges.
• The Power of Data for Socioeconomic Transformation

The role of data in driving socioeconomic transformation in third-world countries is

pivotal. The recognition that data can inform decision-making and spur development
has propelled these nations to explore avenues to harness their power. While chal-
lenges persist, data-driven strategies offer promise across various sectors. In the agri-
culture field, data-driven approaches hold immense potential to optimize resource
allocation and enhance crop yields. In Kenya, the “Agriculture Value Chain App,
WeFarm” offers smallholder farmers’ real-time information about market prices,
weather forecasts, and best practices [12]. This enables farmers to make informed
decisions, reduce postharvest losses, and increase their income.
In healthcare, data-driven insights can revolutionize disease surveillance and
resource allocation in resource-constrained settings. The “RapidSMS” platform in
Rwanda allows community health workers to report disease outbreaks and health
data through text messages, enabling swift response and informed decision-making.
78 4 Comparative Study of the Global Data Economy

• Overcoming Development Disparities: Harnessing Data for Equitable

Growth
The data economy presents a unique and promising opportunity for third-world
countries to address development disparities and foster inclusive growth. Despite
formidable challenges, these nations are harnessing the power of data to drive
efficiency, empower decision-making, and catalyze innovation across various sectors.
A compelling example of data-driven empowerment can be observed in Pakistan’s
“Ehsaas Emergency Cash Program.” This initiative utilizes data analytics to identify
vulnerable households during times of crisis, such as the COVID-19 pandemic [13].
By leveraging data, the program ensures targeted relief distribution to those most
in need, mitigating the impact of economic shocks on marginalized communities.
This data-driven approach not only demonstrates the potential of data for equitable
resource allocation but also underscores its role in safeguarding the welfare of the
most vulnerable populations.

4.5.1 Role of the Data Economy in the Third World:

Pioneering Innovation Amid Challenges

The journey toward the data economy in third-world countries is marked by tenacity,
adaptability, and an unwavering commitment to transformation. As these nations
confront enduring challenges, they are not only embracing digital transformation but
also pioneering inventive solutions tailored to their distinctive circumstances.
A paramount role that the data economy undertakes in third-world countries is
the ardent pursuit of bridging the digital divide. Recognizing that equitable access
to technology is a cornerstone of economic progress, these nations are determined
to level the playing field [6]. In sub-Saharan African nations, where internet pene-
tration remains comparatively low, initiatives like Google’s “Google Station” and
Facebook’s “Express Wi-Fi” have emerged as beacons of hope. By offering free
or affordable internet access in public spaces and rural communities, these initia-
tives lower entry barriers and cultivate digital inclusion, empowering individuals to
harness the potential of the data economy [14].
The “Connect a School, Connect a Community” initiative, championed by the
International Telecommunication Union (ITU), serves as an illustration of this
commitment. Across multiple third-world nations, schools in remote areas are
equipped with internet connectivity. This endeavor extends the benefits of the data
economy to students and communities that have been marginalized, transforming
education and fostering newfound opportunities. Third-world countries are investing
proactively in community-based digital centers, which act as crucibles for learning
and innovation. These nations are fostering grassroots innovation through commu-
nity hubs, a concept epitomized by the “Telecenter Movement” observed in various
African countries. These telecenters, often established in rural regions, offer digital
literacy training, access to information, and communication services. By nurturing
4.5 Data Economy in Third World 79

local talent and stimulating innovation, these hubs empower individuals to devise
impactful solutions tailored to their specific challenges.
Even within developing nations, such as India, initiatives such as the Common
Services Centers (CSCs) project epitomize this grassroots approach. India’s commit-
ment to inclusivity has led to the creating target of the establishment of around
520,000 digital centers in rural areas. These centers provide a spectrum of services,
from digital literacy training to government e-services, effectively rendering tech-
nology an accessible tool for participation in the data economy. Strategic collabo-
rations with technology companies stand as a cornerstone of third-world countries’
data economy strategies. The use of technology in farming in segments of Latin
America exemplifies this. Governments, telecommunications providers, and agri-
cultural experts collaborate to offer farmers real-time market information, weather
updates, and farming techniques through mobile platforms. These collaborative
endeavors harness data to uplift agricultural communities, enhancing food security
and livelihoods.
The data economy’s transformative potential hinges on access to devices and
digital tools. Innovative financing models play a pivotal role in this dimension. In
parts of Southeast Asia, microfinance institutions have introduced credit programs
for digital devices. This approach empowers small business owners and individuals
to acquire smartphones and access data services, thereby bridging technological gaps
and enabling active participation in the data-driven economy.
In summation, the resonance of the data economy within third-world nations is
marked by innovation and inclusivity—a force that redefines societies while navi-
gating formidable challenges. By traversing the digital divide, nurturing grassroots
ingenuity, fostering cross-sector alliances, and facilitating access through inventive
financing, the data economy becomes a harbinger of progress that empowers individ-
uals and communities to steer their own destinies. Conclusively, the emergence of the
data economy within third-world countries paints a compelling narrative of resilience,
innovation, and untapped potential. These nations navigate intricate terrains as they
wield data as a catalyst for development, driven by determination and ingenuity.
While confronting challenges such as limited infrastructure, digital literacy dispari-
ties, and economic divides, their indomitable spirit propels them toward innovative
solutions.
The convergence of challenges and inventive solutions in the data economy’s realm
presents an opportunity for these countries to reshape their trajectories. Through data
harnessing, they forge economic opportunities and address societal disparities. The
road ahead may be arduous, yet it gleams with the promise of a future where the data
economy plays a pivotal role in shaping the destinies of third-world countries. As
these nations continue to embrace digital transformation and cultivate innovation,
they carve a path toward a more inclusive, prosperous, and digitally empowered
future.
80 4 Comparative Study of the Global Data Economy

4.6 Data Economy’s Current State Comparison Across

World

The influence of the data economy exhibits remarkable variation across different
global contexts: developed, developing, and third-world countries. Each category
confronts distinct challenges and priorities shaped by their technological readiness,
socioeconomic landscape, and aspirations. The following section embarks on an
exploration of the distinctive focal points and hurdles encountered by each category
as they navigate the intricate landscape of the data economy.
• Developed Countries: Prioritizing Innovation and Data Privacy

Developed nations, characterized by their sophisticated technological infrastructure

and skilled workforce, spearhead data-driven innovation. These countries leverage
their capabilities to pioneer technology and drive economic progress. Eminent global
tech giants such as the United States, Japan, and Germany foster environments
conducive to research and innovation, giving rise to trailblazing enterprises such
as Apple, Sony, and Siemens. In these nations, innovation extends beyond the corpo-
rate realm and into academia, where research institutions collaborate with industries
to catalyze breakthroughs. Stanford University’s collaboration with Silicon Valley
firms exemplifies this dynamic, propelling innovations such as Google and PayPal
[15].
However, in the evolving data economy, these nations grapple with a vital
dilemma—balancing innovative frontiers with data privacy. Escalating data breaches
and privacy apprehensions necessitate stringent regulations to protect individuals’
personal information. The European General Data Protection Regulation (GDPR)
serves as a global standard for data privacy, epitomizing the intricate equilibrium
that developed nations must uphold between propelling innovation and safeguarding
sensitive data.
• Developing Countries: Prioritizing Inclusion and Capacity Building

Within the realm of developing countries, the data economy assumes the mantle of
a potent instrument for social inclusion and capacity enhancement. These nations
view data as a conduit to uplift marginalized communities and stimulate economic
growth. Regions encompassing Latin America, Southeast Asia, and Africa pioneer
innovative strategies to bridge digital divides. Kenya’s M-Pesa stands as a prime
testament, revolutionizing mobile money accessibility via basic mobile phones. The
initiative has empowered small businesses, enabled remote communities to access
financial services, and even facilitated the distribution of humanitarian aid [16].
Developing nations acknowledge that empowering their populace with digital literacy
and technological prowess is pivotal to unlocking the data economy’s potential.
Educational initiatives and training programs are harnessed to cultivate a tech-
savvy workforce poised to steer the digital transformation agenda. The African
Digital Schools Initiative, supported by UNESCO, extends digital literacy training
to schools across sub-Saharan Africa. This initiative not only imparts technical skills
4.6 Data Economy’s Current State Comparison Across World 81

but also cultivates critical thinking, equipping students with the tools to navigate
the data-driven landscape. However, the challenge persists in fostering an inclusive
environment where digital transformation enriches all segments of society, averting
the emergence of new disparities.
• Third-World Countries: Focusing on Digital Inclusion and Infrastructure

Within the ambit of third-world countries, the data economy assumes a pivotal role
in addressing digital exclusion and nurturing essential infrastructure. These nations
encounter limited technological resources and economic disparities as they endeavor
to embrace digital transformation. The nucleus of their efforts is rooted in establishing
foundational digital infrastructure facilitating access to data resources. Initiatives
such as community-based digital centers and partnerships with tech corporations
constitute linchpins in this pursuit.
Rwanda’s Smart Villages Project exemplifies this aspiration, striving to extend
digital services to rural enclaves through solar-powered kiosks. This initiative has
enabled rural communities to access information and government services and even
connect with distant relatives through digital means. Additionally, Bangladesh’s
Access to Information (a2i) program showcases the integration of data in governance
(Bangladesh is a low-income country but not precisely a third-world nation) [17].
By digitizing government services and promoting e-governance, this program has
transformed public service delivery and empowered citizens with access to crucial
information.
Challenges encompass securing funding for infrastructure development and
bridging urban–rural digital divides. However, their unwavering resolve to surmount
these barriers underscores their commitment to participation in the global data
economy.
In summation, the impact of the data economy reverberates differently across
diverse world categories, each grappling with unique challenges and priorities. Devel-
oped nations champion innovation and data privacy, developing nations emphasize
inclusion and capacity building, and third-world nations pivot toward digital inclu-
sion and infrastructure development. As each category navigates its distinctive set of
challenges, their collective pursuit of harnessing the potential of the data economy
underlines its pivotal role in sculpting the trajectories of global economies.
• Comparison Over Key Parameters

The performance of the data economy is closely linked to a series of crucial param-
eters that underlie its function and impact. Each parameter acts as a vital perspective
through which one can evaluate how nations navigate the intricate terrain of data-
driven activities. By examining these parameters, valuable insights emerge, revealing
the differences, difficulties, and prospects that emerge in various global settings. This
section focuses on the six key parameters within the data economy and assesses their
performance across nations in different categories. Real-world examples of nations
will be employed to illustrate each category’s position.
82 4 Comparative Study of the Global Data Economy

• Technological Infrastructure

Technological infrastructure refers to the foundation of digital connectivity and tools

necessary for the functioning of the data economy. It includes factors such as internet
penetration, reliable connectivity, and advanced IT systems. Understanding this
parameter is crucial because robust infrastructure enables efficient data transmission,
collection, and utilization, forming the backbone of the data economy.
With its high-speed internet and advanced IT systems, South Korea serves as a
model for technological infrastructure. The country’s extensive broadband connec-
tivity supports a thriving digital ecosystem, enabling rapid data exchange and
innovation.
Brazil, a developing nation, is working to improve its technological infrastructure.
Urban areas enjoy relatively good connectivity, and initiatives such as “Internet para
Todos” aim to bridge the rural–urban divide by providing internet access to remote
regions.
In Chad, limited access to technological infrastructure impedes data-driven activ-
ities. The country struggles with low internet penetration and essential technology
services, posing challenges for data utilization and connectivity.
• Digital Literacy and Access

Digital literacy and access refer to the ability of individuals to use digital tools and
technologies effectively. In the data economy, digital literacy enables citizens to
participate actively, access information, and contribute to data-driven initiatives.
Norway’s high levels of digital literacy and widespread internet use empower
citizens to engage confidently in digital activities [18]. The population’s profi-
ciency in digital tools promotes broader data utilization. India is working to improve
digital literacy through initiatives such as Digital India. While access to technology
is increasing, variations in digital literacy levels across different regions persist,
impacting the extent to which data can be harnessed. Underdeveloped nations like
Mali face challenges in digital literacy and access. Limited technological resources
and low digital literacy rates hinder broad participation in the data economy.
• Data Governance and Privacy

Data governance involves regulations, policies, and practices that guide data collec-
tion, management, and use. Privacy considerations are vital to maintaining public
trust and ensuring responsible data utilization. Germany, known for its stringent data
protection laws, including the GDPR, prioritizes individual privacy. These regula-
tions establish a foundation of trust, encouraging data-driven activities and innova-
tion. Kenya is taking steps to establish data protection laws, addressing concerns
related to privacy and data misuse. However, enforcement and awareness challenges
persist, impacting the development of robust data governance frameworks. Sierra
Leone, an underdeveloped nation, faces limited data governance and privacy regula-
tions, leading to concerns about data security and privacy breaches that could hinder
data-driven progress.
4.6 Data Economy’s Current State Comparison Across World 83

• Innovation and Start-ups

Innovation and start-ups play a pivotal role in driving economic growth and tech-
nological advancement. In the data economy, fostering a culture of innovation and
supporting start-ups can lead to novel data-driven solutions.
The United States, home to tech innovation hubs such as Silicon Valley, has a
flourishing startup ecosystem. Pioneering companies like Google and Apple emerged
from this environment, contributing to the global tech landscape. Nigeria’s growing
tech ecosystem, with a surge in start-ups and tech innovation, exemplifies the potential
of fostering innovation in a developing nation. Myanmar’s economic constraints limit
innovation and the emergence of data-driven start-ups, reflecting the challenges faced
by underdeveloped nations.
• Data Utilization in Industries

The integration of data into industries transforms processes, enhances decision-

making, and drives efficiency. Data utilization can drive economic growth and
innovation across sectors.
Japan’s advanced industries extensively integrate data, exemplified by the imple-
mentation of data-driven strategies in manufacturing, healthcare, and more. Mexico’s
agricultural sector benefits from data-driven practices, optimizing crop yield and
resource management through data analytics. Haiti, an underdeveloped country
today, faces limited data integration in industries, constraining opportunities for
data-driven growth in sectors that lack access to digital insights.
• Socioeconomic Impact

The socioeconomic impact of the data economy encompasses economic growth, job
creation, and improved quality of life resulting from data-driven initiatives. Singa-
pore’s data economy significantly contributes to economic growth, generating jobs
and enhancing the quality of life for its citizens. Indonesia’s positive economic growth
and enhanced services reflect the socioeconomic benefits of data-driven initiatives
in a developing context. Zimbabwe’s limited socioeconomic impact from the data
economy is partly due to economic struggles, underscoring the challenges faced by
underdeveloped nations.
• Data Security and Cybersecurity Measures

Data security and cybersecurity are critical aspects of the data economy, ensuring the
protection of sensitive information and digital infrastructure. Robust data security
measures, including encryption and secure data storage, are essential to safeguard
against breaches and cyber threats. Advanced nations like the United Kingdom have
established comprehensive cybersecurity frameworks, fostering trust in digital trans-
actions and promoting data-driven activities. Developing nations such as Nigeria
are increasingly recognizing the significance of cybersecurity in the data economy,
implementing measures to mitigate risks, and building a secure digital environment.
84 4 Comparative Study of the Global Data Economy

However, underdeveloped nations face challenges due to limited resources and exper-
tise, leaving them vulnerable to cyber threats that can impede data utilization and
growth.
• Collaboration and International Data Sharing

Collaboration and international data sharing play a pivotal role in the global data
economy, enabling cross-border insights and innovation. Nations that facilitate open
and secure data sharing create opportunities for collective problem-solving and tech-
nological advancements [19]. The European Union’s General Data Protection Regu-
lation (GDPR) facilitates data sharing within member states while safeguarding indi-
vidual privacy. Initiatives like Open Data initiatives in India promote collaboration
through accessible datasets for public use. However, disparities in data regulations
and privacy laws across developing countries can hinder seamless international data
sharing, affecting the potential for global cooperation and insights. Underdeveloped
nations are faced with infrastructural challenges and have to rely on private partners
to facilitate the collaboration. This in turn hinders the nation’s control mechanisms.
• Digital Inclusion and Accessibility

Digital inclusion and accessibility refer to equitable access to digital technologies

and services across different segments of society. In the data economy, ensuring that
marginalized and disadvantaged groups have the means to participate and benefit
from digital advancements is crucial. Developed nations like Sweden prioritize digital
inclusion, offering training and support to bridge the digital divide. In developing
countries like Brazil, initiatives are underway to provide internet access and digital
literacy programs to underserved communities. However, in underdeveloped nations,
a lack of infrastructure and resources often results in limited access to digital tools,
exacerbating societal inequalities and hindering the full potential of the data economy.
By analyzing these parameters and examining how developed, developing, and
underdeveloped nations perform within each category, one can gain insights into the
complexities of the data economy across the global landscape.

Parameters Developed nations Developing nations Underdeveloped

nations
Technological Well-established, Varied, improving Limited, basic
infrastructure advanced
Digital literacy and High digital literacy, Increasing digital Low access, limited
access widespread literacy literacy
Data governance Stringent regulations, Emerging regulations, Limited regulations,
and privacy privacy concerns concerns
Innovation and Flourishing tech Growing startup Limited innovation,
start-ups innovation hubs ecosystem few start-ups
Data utilization in Deep integration in Emerging data-driven Minimal data
industries industries practices integration
(continued)
References 85

(continued)
Parameters Developed nations Developing nations Underdeveloped
nations
Socioeconomic Significant economic Positive growth, Limited impact,
impact growth, jobs socioeconomic economic struggles
Data security and Advanced Developing measures Vulnerability to
cybersecurity cybersecurity especially in risk cyber-attacks due to
measures frameworks, along mitigation lack in infrastructure
with data protection
laws
Facilitating Advanced frameworks Initiatives for Heavy reliance on
cross-border in place collaboration though private partners
insights they are faced with
privacy challenges
Digital inclusion Prioritizing digital Initiatives for access, Limited access with
and accessibility inclusion, bridging the digital literacy infrastructural scarcity
divide programs

References

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a time of brilliant technologies. W. W. Norton & Company
2. World Economic Forum (2019) Shaping the future of the digital economy and society: a
multistakeholder approach
3. Organization for Economic Co-operation and Development (OECD) (2019) Digital economy
outlook 2019
4. United Nations Conference on Trade and Development (UNCTAD) (2019) Digital economy
report 2019
5. McKinsey Global Institute (2016) The age of analytics: competing in a data-driven world
6. OECD (2021, October 25) A global powerhouse in science and technology. OECD
7. European Commission (2021) Horizon 2020: boosting the impact of research and innovation
in Europe
8. McKinsey Global Institute (2016, June 9) Digitizing healthcare in Sweden
9. Okojie J (2021, July 7) Babban Gona leverages AI, machine learning to increase farmers’
yields. Business Day. https://businessday.ng/agriculture/article/babban-gona-leverages-ai-mac
hine-learning-to-increase-farmers-yields/
10. Skoll Foundation (2017, March 27) Babban Gona|Kola Masha|Skoll Award 2017 [Video].
YouTube. https://www.youtube.com/watch?v=AEKTE8KqhvQ
11. Zedlmayer G (2011) mPedigree: a collective impact case study. Stanford social innovation
review. https://doi.org/10.48558/ZSD3-4248
12. Omulo G, Mensah Kumeh E (2020) Farmer-to-farmer digital network as a strategy to strengthen
agricultural performance in Kenya: a research note on ‘Wefarm’ platform. Technol Forecast
Soc Chang 158:120–120. https://doi.org/10.1016/j.techfore.2020.120120
13. (2020) Ehsaas emergency cash program: leveraging data for inclusive relief distribution.
Ministry of Social Protection and Poverty Alleviation, Government of Pakistan
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Development Programme
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15. Wessner CW, Initiatives NRC (US) C. on C. in the 21st C. B. P. in S. and R. I. (2013). In:
Stanford and silicon valley. National Academies Press (US). www.ncbi.nlm.nih.gov. https://
www.ncbi.nlm.nih.gov/books/NBK158815/
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Kenya. The M-Pesa Case Study
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service delivery in Bangladesh. BRAC
18. OECD (2019) OECD Economic surveys: Norway
19. (2020) Data is a development issue. VoxEU
Chapter 5
The Economy of Data Privacy

Abstract The significance of personal data in markets has attracted economists’

attention due to the growing digitization and technological advancements in data
processing. The economics of privacy aims to examine how people, businesses,
and policymakers interact in marketplaces where personal data is a crucial concern.
Academics face challenges when investigating privacy in these markets due to their
complex nature, which requires them to draw attention to diverse disciplines and
employ research methodologies. This chapter presents the literature and emphasizes
the significance of considering the complex interactions between economic players.
The chapter also highlights specific strategies concerning privacy matters. First, indi-
viduals face a difficult trade-off between sharing their data to access personalized
services and safeguarding their personal information from potential misuse. Second,
industrial organizations and marketing scholars are researching how companies can
integrate personal data into their approaches to propose innovative business models.
Policymakers need help to establish a transparent framework that benefits individuals
and businesses. Finally, it discusses the necessity for further research to dig into the
role of privacy as a discriminating factor for businesses, specifically in building a
strong connection between consumer demand and corporate offerings.

Keywords Personal data · Privacy · Value of data · Data monetization

5.1 Economy of Data Privacy

Due to digitization, various stakeholders in the digital marketplace widely use

personal data for economic benefits. There are numerous schools of thought around
the economy concept in the late 18th and early nineteenth centuries, mainly in Britain,
where the laissez-faire economic [1] idea was promoted. Laissez-faire is a French
word meaning “leave to do”; it supports little or no intervention in financial transac-
tions from the government. This theory empowers business owners. Keynes (1930)
highlights [2] the fact that aggregate demand is the idea that drives the economy. The
economic notion has taken a new dimension of the digital economy [3]. The economy

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 87
S. Shukla et al., Data Economy in the Digital Age, Data-Intensive Research,
https://doi.org/10.1007/978-981-99-7677-5_5
88 5 The Economy of Data Privacy

relies on digital technologies for trade, marketing, and social activities, supported
by computer-based communication and technologies. It profoundly impacts global
business practices such as better connectivity, online marketplace, virtual collabora-
tion, and trade. As discussed in Chap. 3, Sect. 3.4, there are many sectors where the
data economy has had a strong impact. With the rise in the data economy, individual
privacy is one of the main concerns. Figure 5.1 presents various stakeholders in the
economy of data privacy and typical way they interact with each other.

Fig. 5.1 Stakeholders in the economy of data privacy

5.2 Value of Personal Data 89

Many definitions of privacy in the literature grabbed the attention of various

disciplines, such as law, social science, psychology, and economics. For example,
in the law discipline, the right to privacy is acknowledged by several legislative
practices; it enforces the regulation of governmental and personal conduct that harms
the privacy rights of individuals. Warren and Brandeis [4] defined privacy as the
defense of one’s right to privacy and to be left alone. According to Hirshleifer [5],
privacy is the ability of an individual to think and act independently, free of the
interference of other people. In the same way, Westing [6] defines privacy as people’s
autonomy to regulate who has access to and how their data is used. This definition
seems increasingly pertinent in today’s landscape of the internet. Here comes the
ideology of the economy of data privacy.
The economy of data privacy explores how economic benefits, market dynamics,
and challenges affect the administration of safeguarding personal data. It also iden-
tifies the critical connection between commercial enterprises and individual privacy.
Digitization has eased data collection, management, and sharing, essential to many
economic operations. Data have become a valuable asset that supports many facets
of the economy, as digital transactions are ubiquitous. However, privacy concerns are
roadblocks in many economic activities involving personal data, whether in hospitals,
social media, or the government.

5.2 Value of Personal Data

Personal data plays an essential role in companies and individual development. In the
era of the digital economy, personal data [7] is a critical aspect for both individuals
and companies to grow. This section starts with the idea of a private data marketplace.
It also presents how businesses find the worth of personal data and how it can benefit
individuals. In today’s data-driven society, personal data plays a significant role.
It opens up numerous strategic advantages and business opportunities in the
dynamically growing digital economy. A proverb regarding the digital realm says,
“If you are not paying for a product, then you are a product.” Many services people
utilize rely on selling their data to third parties for financial gain. In the virtual world,
avoiding sharing at least some personal information is improbable. Like social media
and mobile app usage, users are forced to accept terms and conditions or approve
cookies where the service provider collects the data, and e-commerce giants are
ready to pay massive amounts to obtain ownership of these data. Personal data has
become an asset rather than a commodity in the digital economy. There are various
dimensions of personal data; here, the section presents the value of an individual’s
data.
90 5 The Economy of Data Privacy

5.2.1 Value of Personal Data for Companies

Personal data is a critical asset for business development. Personal data is kept at
high value in companies, so the ethical and privacy concern in this case is crucial for
the organization. To ensure customer trust, the company must abide by privacy regu-
lations and assure responsible data acquisition, management, and analysis. Personal
data [8, 14] is a broader term that includes personal details and other things, such
as browsing history, mouse pointer movement or clickstream data, shopping habits,
health information, bank information, and travel preferences. These data are a gold-
mine for companies to understand user behavior and post customized recommenda-
tions and targeted advertisements accordingly. It can also increase revenue, create
competitive advantages, and execute operations efficiently.
These days, data has become part of daily routines from morning to night. Indi-
viduals indulge with data online or by sharing with connected devices such as smart-
watches, CCTV cameras, and voice assistants. Companies are investing a great deal
to own these data for targeted advertisement, selective pricing, and building political
opinions. AI developers are interested in these data to train and test their machine
learning models. The tech giant Google generates 90% of its revenue from person-
alized ads built through machine recommendations trained on specific user data
accumulated over time. There are many breakdowns where the individual’s data
can become a monetary advantage for companies, such as customer retention and
loyalty using personal data, target marketing, and advertisements. The e-commerce
service providers also use cross-selling and upselling features to grow the business.
Companies should consider privacy compliance and ethical concerns and balance
data-driven advantages and individual privacy rights.

5.2.2 Value of Personal Data for Individuals

Personal data is helpful for individuals in multiple ways; they can provide advantages,
from monetary benefits to customized experiences. The use of customer data to offer
personalized experiences can lead to an increase in the lifetime of the customer and
reduce customer churn, at the same time building mutual trust. The tailored adver-
tisements based on their preferences provide a satisfying and enjoyable experience
for them. The services recommended based on personal data are time-saving, as
customer preference is the key to guiding them to appropriate products and services.
The value of personal data varies from person to person. One might feel that
information about the disease or income should be highly confidential, but for others,
it might be alright to sell or share. For example, in 2014, Shawn Buckles sold his
data to the highest bidder to use for a one-year subscription. The winning bidder
was allowed to use data for a year; this included personal profile, calendar, location
history, travel records, email and online communications, browsing footprints, etc.
The Next Web bought these data for e350. Shawn Buckles’ aim for conducting this
5.3 Data Handling Costs 91

bid was to create awareness about the commercialization of personal data and its
privacy implications.
Concerning personal data, it is common to encounter the privacy paradox when
people claim to value privacy but do not act that way. This perspective is comple-
mented by disclosing personal data on social media platforms and sharing personal
data for mobile applications and web-based offerings. For example, users share their
data in exchange for services they obtain from mobile and web applications. The
common difference that users make is ordinary personal data and sensitive personal
data. Another challenge related to the behavioral economy field is that users are reluc-
tant to pay for privacy. Extensive digitization leads to data sharing, such as location,
mood, and activities. Unknowingly, they are leaving behind many digital footprints.
These data are essential for marketers to understand user behaviors, choices, and
locations. It can help marketers create personalized advertisements and customized
experiences for consumers. However, personal data offers advantages; individuals
and companies must be careful about privacy risks and ensure the data are utilized
per their expectations. Firms and individuals must proactively safeguard their data
and follow privacy policies. This proactive approach is essential for establishing the
right balance between individual preferences and data protection.

5.3 Data Handling Costs

Data handling costs [9] are expenses by individuals, organizations, or any party
involved in storing, managing, processing, and protecting data. It also considers
monetary and nonmonetary expenses such as time and effort. For research data, data
handling ensures that data is stored, cataloged, and disposed of safely and securely
after completion of the research. Data handling policies and procedures must be
created for digitally and manually recorded data. Effective data handling strategies
can also lead to efficient and cost-effective data retention, access, and disposal.
Many components need to be considered while preparing the budget for the data
handling, such as infrastructure costs such as servers, networking devices, and storage
systems required by the data centers. Software costs are needed to store and main-
tain data integration and analysis tools and data security solutions required for the
smooth functioning of the data centers. Data collection and storage fees involve data
collection from various sources, data entry, data collection from IoT devices, and the
cost associated with workforce requirements. Data storage requires cloud services
or physical infrastructure costs, server maintenance, and data backup. Preparing data
for analysis using various cleaning methods also adds a cost factor when dealing
with data. These are other data handling costs, such as data quality maintenance,
data integration, backup and recovery, and archiving and disposal.
Data handling also comes with specific challenges, such as data quality, secu-
rity and compliance, authorized access and data sharing, building the workforce by
training and upskilling, documentation about data management, data disposal, and
data ethics [10].
92 5 The Economy of Data Privacy

5.4 Data Privacy

This section focuses on finding economic rewards and complexities in protecting

personal data privacy from individual, business, and policymaker points of view.
Privacy protection gives control of sharing their personal information in individ-
uals’ hands. Individuals can share their private information with online services in
exchange for discounts or targeted ads (online engagement and commerce). They
can obtain benefits simultaneously and have control over not sharing the data with
websites they do not trust or feel suspicious about. However, the cost would be for
the business to operate with less personal data, making it difficult for them to offer
personalized services, targeted ads, and use data insights to determine customer pref-
erences. People will either unconsciously or consciously consider the pros and cons
of exposing their personal information. They believe the benefits of sharing compared
to the potential drawbacks, such as a breach of privacy [11] or improper use of data.
Privacy choices are influenced by various factors, including personal qualities, confi-
dence in businesses and websites, and the public’s awareness of privacy policies and
settings. Individuals’ perceptions of the trade-offs between their privacy and other
advantages may be influenced by default settings and how options are framed.
On the other hand, businesses want to enhance the efficiency of their ad targeting
by gathering, analyzing, and exchanging customer data among websites and mobile
applications. The goal of creating tailored experiences and making relevant sugges-
tions is to boost customer engagement and sales. Data brokers collect, organize, and
resile client profiling for various marketing and risk evaluation applications. The
business must implement expensive privacy-preserving and privacy-enhancing solu-
tions, which come with their trade-offs between privacy and accuracy or privacy and
performance.
The government’s job is to make policies to protect the privacy of individuals
across domains by creating policies and regulations. Regulations aim to empower
users by granting access and rectification rights to their personal data and establishing
security protections. Regulations [12] may demand breach disclosures and ban the
gathering and preservation of private information. Since data flow occurs across
sovereign lines, enforcement is difficult. Privacy, creativity, and economic progress
are all factors that compliance policies attempt to balance. The government’s job is
to either protect privacy by making regulations, legalize the loss of decay in privacy
wherever applicable, or create businesses that implement opt-in/opt-out mechanisms
for individuals to decide about the privacy of their data.

5.4.1 Data Privacy Regulation

These regulations set rules for appropriate data management to preserve individuals’
rights to privacy. Major regulations include the GDPR in Europe and the CCPA
in California. Consent is a mandatory requirement encompassing the collection,
5.4 Data Privacy 93

utilization, and access to data. In a growing digital environment, regulations aim to

give individuals greater control over their private data so that there is more trust,
which in turn leads to increased economic development. Compliance is complex
for worldwide firms since different rules must be followed. While the government
regulates compliance from a business perspective, business bleeds additional costs for
implementing and maintaining regulation; for example, typical GDPR compliance
tasks such as Data Subject Access Request (DSAR) and On Demand Data Deletion
(OD3) require the business to implement capability for entertaining such request.

5.4.2 Data Privacy Professionals

As data gathering and usage continue to expand rapidly, there is an increasing demand
for data privacy experts. They engage in privacy impact evaluations, audits, building
privacy procedures and safeguards, breach response strategies, vendor or third-party
management, privacy engineering, and training programs to guarantee that organiza-
tions adhere to privacy legislation. Some available roles include chief privacy officers,
data protection officers, privacy analysts, and privacy consultants. Legal compliance
experts require law, analytics, technology, and change in management abilities to
develop a privacy mindset. The development of fundamental skills is facilitated by
privacy accreditation.

5.4.3 Data Privacy Tools

Various tools are available to assist in implementing technological and organiza-

tional privacy safeguards. To detect and prevent the transmission of unauthorized
data, technical methods such as data encryption, access restriction, authentication
systems, masking data and anonymization, privacy monitors, data tracking, and data
loss prevention (DLP) are available. Additional tools comprise data breach simulator
training, vendor risk evaluations, records of processing operations, template poli-
cies, and standardized communication instruments, including privacy notifications
and consent forms. New techniques use artificial intelligence to develop privacy-
enhancing solutions such as differential privacy. However, knowledge is required to
utilize tools efficiently and deal with constantly shifting risks.
94 5 The Economy of Data Privacy

5.4.4 Data Privacy Training

Regular and required data privacy training for everybody in the organization is essen-
tial to develop organizational culture and competence in data privacy. Employees
can better comprehend their confidentiality and safety obligations, outlined in an
employee code of conduct following compliance standards. During training, partici-
pants learn how to react to Data Subject Access Requests (DSAR), incident response
(IR) methods, privacy by design principles, secure management of personal data, and
how long to retain or destroy personal data. Employees can better implement what
they learn when they participate in practical training that includes simulations and
situations based on daily life. Training designed to update participants’ expertise is
called refresher training. The efficacy of training may be determined by monitoring
completion and taking evaluations. Given the human and procedural risks and the
often shifting legislative environments, proper privacy training is vital.

5.5 Data Protection and Privacy Policy

The data protection and privacy policy is a mandate for every business in the digital
world. The section presents the policy to handle the sensitive data gathered from
various stakeholders. The policy ensures that ethical and legal guidelines are followed
during data collection, storage, processing, sharing, and disposal. A few countries,
such as Europe, Brazil, the United States Australia, and India, have data protection
laws. This section presents India’s Digital Personal Data Protection (PDP) Bill, 2023.
The law enables the processing of digital personal data in a way that acknowledges the
rights of individuals to protect their personal information while also considering the
need to process such data for legitimate purposes and related matters. Additionally,
the Bill addresses any incidental aspects of the processing of personal data.
1. The law protects personal digital data by obligating data fiduciaries to process
data. The rights and duties of the individuals. Financial penalties for those
violating the law. The law also boosts the ease of business and functioning and
encourages India’s innovative environment and digital economy.
2. There are seven principles followed by the PDP Bill 2023:
(a) Transparent, consented, and lawful use of personal data.
(b) Data minimization is the collection of the information required for a specific
purpose.
(c) Personal data should be used only for the purpose consented to during data
collection.
(d) Correctness of data (ensure the data is accurate).
(e) Storage of the data should be limited until it is needed.
(f) Accountability in personal data handling.
(g) Security of personal data.
5.6 Balancing Privacy and Economic Benefits 95

3. The Bill has another innovative feature, Simple, Accessible, Rational, Actionable
Law (SARAL).
4. The Bill provides the following privileges to individuals about their personal
data:
(a) The right to access personal processed data.
(b) The right to access, update, and erase data.
(c) The right to recommend a person to exercise right in case of inability or
death.
(d) The right to grievance redressal.
To enforce data rights, a suffering individual can approach data fiduciaries
at first. In case of dissatisfaction, the data principal can complain against
data fiduciaries to the data protection board in a trouble-free manner.
5. There are a few obligations on data fiduciaries by the Bill
(a) Safeguard against data breach.
(b) Immediately inform individuals and the data protection board about the data
breach.
(c) Erase personal data upon consent withdrawal.
(d) Erase data when it is no longer required for the specified purpose.
(e) To have a grievance redressal mechanism and an officer responding to it.
(f) To establish a data protection authority of periodic review, investigate
complaints, propose a plan of action, and enforce penalties in case of any
unlawful activity.
6. The PDP Bill also safeguards the personal data of children and persons with
disabilities.

5.6 Balancing Privacy and Economic Benefits

In this era of digitization, economies depend on data exchange to access online

services. The service providers collect personal data to obtain monetary benefits
through various means, such as targeted marketing, cross-selling, and upselling the
products and services. The main concern of online users is that their data may be used
against their will, sacrificing personal privacy. This section discusses the balance [13]
between privacy concerns and economic gain. The privacy policy implementation
burdens the service provider, leading to costlier services and the closure of small
firms, as they may need help competing with large companies such as Facebook and
Google.
There should be clear guidelines on the responsibilities of data fiduciaries who
store a large amount of personal data. The data loss cost to the data subject is highly
uncertain. The governments are working to reduce this uncertainty; one such initiative
concerning data protection and privacy by the European government was the General
Data Protection Regulation (GDPR). It came into force in May 2018 and applies to
96 5 The Economy of Data Privacy

the European Economic Area (EEA) and European Union (EU). The main objectives
are to strengthen individuals’ authority over their personal data and regulate the data
protection standard in EU member states. Maintaining the balance between privacy
preservation and reaping economic benefits is challenging in the modern era. Personal
data has become an essential commodity. If stakeholders agree on some permissive
policy to protect personal data available digitally, maintaining the balance between
privacy and the economy can be achieved. Attaining optimal equilibrium requires a
reflective examination of personal data and economic gain’s social, ethical, and legal
aspects. Key elements, such as purpose limitations, must be considered to achieve
balance. The data should be confined to the purpose initially agreed upon. It says
personal data should not be used beyond the agreement for other economic benefits.
Transparent, accountability, and informed consent: Being transparent to the data
subjects about the privacy policy, data practices, and data usage brings trust and
helps individuals make informed decisions. Data fiduciaries should be accountable
for data handling practices, and facilitating the avenues for individuals to address their
concerns is necessary. Obtaining informed consent is required before data collection
and usage. In this case, the communication about how the data will be used should be
clear and understandable, with a choice to opt-out or control data. Data minimization
involves collecting and storing only the necessary data for the intended purpose.
Reducing the quantity of data minimizes the privacy risk, minimizing the poten-
tial harm to the data subjects. Anonymization: This mechanism can modify the data
to hide the individual’s identity. Monetary and Nonmonetary Benefits: When data
sharing is practiced, it is appreciated to consider both monetary and nonmonetary
benefits. They provide incentives such as customized discounts or premium services.
Nonmonetary benefits, such as user-specific services and data ethics, employ ethical
data practices that put social welfare and individual rights ahead of economic bene-
fits. The data should be used responsibly to avoid discrimination and harm. Public
Sensitization and Education: Inform people of the importance of their personal data,
the risks of sharing it, and the significant benefits of practicing ethical data practices.
It will enable them to make privacy-conscious decisions by collaborating with the
industry to establish best practices and following the guidelines of data handling
that consider privacy and economic factors within the industry, policymakers, and
consumers.

5.7 Importance, Relevance, and Future Directions

of Economy of Data Privacy

Concerns about personal information are becoming more critical to the functioning
of modern economies and social structures. With the collection and use of ever-
increasing amounts of private information on the web, ensuring the proper manage-
ment of data about people has significant consequences. As personal information is
5.7 Importance, Relevance, and Future Directions of Economy of Data Privacy 97

the foundation of modern business models and methods, controlling its use while
safeguarding people’s rights is very important.
The rise of technologies such as AI, IoT, and individualized digital services indi-
cates an ever-increasing necessity for strict regulation and user approval of collected
data. Concurrently, growing deregulation may jeopardize privacy and trust, vital
to flourishing online engagement. Discussing potential regulatory and technical
advancements will illuminate navigating privacy in the face of innovation. As the
digital economy evolves, it is essential to acknowledge the increased significance
of confidentiality. This section focuses on the importance, relevance, and future of
the economy of data privacy. It also seeks to contribute deliberate considerations to
ongoing privacy discussions among policymakers, businesses, and global citizens.
Importance
Data privacy is of vital importance to the economy through a variety of mechanisms:
• Individual Autonomy and Dignity: Privacy upholds basic human requirements
for authority over private data and constraints on intrusive monitoring. It protects
the fundamental freedoms of a fair society.
• Consumer Confidence and Trust: Maintaining data per privacy requirements
contributes to building trust among individuals, businesses, and governments,
which is an essential requirement for flourishing digital interactions and opera-
tions. An eroding trust harms consumers’ overall well-being and marketplaces.
• Privacy promotes the ethical use of sensitive data, preventing the adverse effects
of negligent practices such as discrimination and micro-targeting. It enables
the impartiality and inclusiveness necessary for unity in society as technology
advances.
• User Empowerment and Control: Effective privacy safeguards place individuals
in charge of utilizing their personal data, enhancing their autonomy, contentment,
and continuing involvement in the evolving digital economy.
• Security and Risk Management: Well-defined privacy enhances cyber defenses,
reducing the financial and reputational hazards associated with data exposures
for all parties involved. Strong security enhances the stability and robustness of
technological systems.
The equilibrium between data access and individual supervision fosters market
competition by designing new applications that respect privacy. It stimulates produc-
tivity by promoting the development of privacy-enhancing technologies. Data privacy
provisions cultivate a climate of trust, ethics, and user empowerment, which is essen-
tial for maximizing the benefits of the expanding digital ecosystem for individuals,
organizations, and markets.
Relevance
The following factors contribute to the growing significance of data privacy:
98 5 The Economy of Data Privacy

• Digital Transformation of Economies: As more commercial and social activities

move online, privacy helps develop crucial confidence in the secure and equitable
use of personal data that powers digital transactions internationally.
• The proliferation of big data and AI necessitates the development of stringent
privacy standards to guarantee that massive datasets and algorithms are generated
and implemented responsibly, hence mitigating the risks associated with opaque
or biased decision-making that makes inappropriate use of sensitive personal
characteristics.
• Data Transfer Across International Borders: It is essential to have harmonized
worldwide privacy frameworks to guarantee consistent protection for personal
data when it moves digitally across countries with different laws. This is because
information crosses borders at speeds never seen before.
• Concerns About Health and Internet of Things Data: Confidential medical
data and information from networked home devices need increased confidentiality
guarantees so that customers may feel safe and enjoy the advantages of technology
that handles vital personal health and lifestyle insights.
• Widespread Adoption of Digital Services: From social networks and e-
commerce platforms to a wide range of online tools in everyday usage, privacy
has become a critical concern for creating and maintaining user trust across varied
digital ecosystems that use personal data in unique ways. This is because privacy
is essential to establishing and sustaining user relationships.
In general, well-established data privacy rules and practices have arisen as a need
for responsible innovation to continue and for people and organizations all over the
globe to utilize the entire economic and social benefits of digitalization safely.
Future Direction:
The economy of data privacy will flourish in the future. The following section
describes the high-level probabilities. More stringent rules as governments confront
the developing privacy challenges that arise in a world that is becoming more
digital and where data insights are the foundation for many services. New privacy-
preserving technologies, such as decentralized IDs, homomorphic encryption, and
zero-knowledge proofs, are coming into existence. These technologies make it
possible to perform valuable data analysis while safeguarding individual information.
Increasing individual empowerment, in which individuals use technology to safely
manage their data, create audit trails, and monetize it by creating new markets or pay
models. Researching ethical guidelines for data exchange that benefit individuals
and organizations through transparent and permission-based models.
Increased emphasis should be placed on making data practices more user-friendly
and increasing the openness of data collection to maintain users’ confidence over
the long run. Take steps toward harmonizing international regulations to simplify
operational requirements for vital data transfers across borders in multinational
companies.
Artificial intelligence governance regulations and the application of data ethics
principles ensure fair, dependable, and transparent control over algorithms that
References 99

directly impact people’s lives. The education sector is going through significant
enhancement, intending to prepare individuals for making informed decisions
regarding data usage in response to escalating technological and legal complexi-
ties. This sector is expected to progress quickly because of collaborative initiatives
encircling privacy technology, business practices, and increased societal awareness
of the growing demands for data protection.
In the future, effectively managing data innovation and privacy interaction requires
careful and detailed thinking. On the one hand, using essential data insights catalyzes
technical advancement and the creation of economic prospects. However, preserving
individuals’ privacy is crucial in ensuring trust and promoting well-being inside
digital networks.
Achieving the optimal balance will prove to be a complex task. Organizations
that exhibit proactive behavior in establishing data governance practices rooted in
ethical principles will be in a favorable position to capitalize on the advantages of
evolving frameworks. The next challenge entails a nuanced equilibrium whereby the
promotion of both organizational prosperity and individual protection is facilitated
by collaborative measures grounded in established norms.
More than merely adhering to regulations and guidelines will be required since
privacy concerns are expected to escalate further. Resilient organizations demonstrate
a proactive approach by actively involving stakeholders to comprehend the changing
sensitivities. They implement transparent procedures that prioritize user dignity and
consent as fundamental principles. Individuals who prioritize holistic guardianship
above limited interests have the potential to establish collaborative relationships
aimed at finding standard solutions, as opposed to resorting to reactive measures at
a later stage.

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Chapter 6
Application of Data Economy

Abstract In an era driven by massive information, the data economy’s utiliza-

tion fuels profound transformation across various sectors. This chapter presents the
application, challenges, and benefits of instituting the Data Economy Framework in
multiple sectors. The healthcare domain has witnessed a remarkable shift as data-
driven insights, diagnosis, and treatment assist in precision medicine characterized
by customized approaches. The finance sector, too, finds its pulse in data, optimizing
investment decisions and risk management while reshaping the way customers expe-
rience financial services. Education experiences a tremendous shift, with person-
alized learning paths and predictive analytics to shape the educational journey,
empowering learners with customized approaches. Data is a powerful streamlining
force in productivity and efficiency, unlocking innovative efficiencies and promoting
optimal resource allocation. Data helps decision-making and threat assessment in the
defense sector, strengthening national security through enhanced data-based aware-
ness. Lastly, the tourism industry embraces the power of data to curate mesmerizing
experiences, customize adventures to individual preferences, and promote sustain-
able destination management practices. A common thread runs through all these
sectors—how the power of data can revolutionize industries, unlocking unexplored
potential and carving a future defined by excellence driven by actionable insights.

Keywords Predictive healthcare · Personalized learnings · Fintech data ·

Personalized travel plans · Online polls

6.1 Data Economy in Healthcare

• Background

The evolution of healthcare has undergone a profound transformation over the

years, with technological advancements playing a pivotal role in shaping its trajec-
tory. Before the era of data-driven innovations, healthcare systems often operated
within silos, characterized by fragmented patient records and manual processes.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 101
S. Shukla et al., Data Economy in the Digital Age, Data-Intensive Research,
https://doi.org/10.1007/978-981-99-7677-5_6
102 6 Application of Data Economy

Medical decisions relied on limited information, leading to inefficiencies, compro-

mised patient care, and disjointed treatment approaches [1]. Moreover, the lack of
interconnectedness among healthcare providers hindered timely interventions and
seamless patient management.
The limitations of pre-data-era healthcare were further exacerbated by the absence
of seamless communication platforms among healthcare providers. This dearth
hindered timely interventions, coordination, and the exchange of critical patient
information. Consequently, the continuity of patient care could have been improved,
leading to challenges in maintaining accurate medical records and offering compre-
hensive treatment. These limitations hindered the quality of care and strained the
healthcare system’s ability to respond effectively to rapidly changing patient needs
and medical advancements.
This era marked a critical juncture in the healthcare industry’s evolution, paving
the way for the emergence of data-driven solutions that sought to address these chal-
lenges. As technological innovations gained prominence, healthcare providers began
recognizing the potential of integrated electronic health records (EHRs) to consoli-
date patient information, streamline processes, and facilitate seamless collaboration
among medical professionals. The subsequent shift toward data-driven healthcare
was rooted in recognizing that a unified digital infrastructure could enhance medical
decision-making, improve patient outcomes, and elevate the overall quality of care.
In this evolving landscape, Kaiser Permanente emerged as a pioneer in healthcare
delivery. Founded in 1945 by industrialist Henry J. Kaiser and physician Sidney
Garfield, Kaiser Permanente started as a comprehensive prepaid healthcare system for
construction workers in the Grand Coulee Dam. This innovative approach aimed to
provide accessible and coordinated healthcare services to workers and their families,
regardless of their employment status. This foundation of inclusivity and proactive
care laid the groundwork for Kaiser Permanente’s future innovative endeavors.
Kaiser Permanente’s legacy as a pioneer in utilizing the data economy to trans-
form healthcare is significant. Recognizing the potential of electronic health records
(EHRs) early on, the organization embarked on a journey to digitize and integrate
patient information. This transition from paper-based records to comprehensive
EHRs streamlined communication among medical professionals, ensuring accu-
rate and up-to-date patient data accessible at the point of care [2]. Kaiser Perma-
nente’s commitment to innovation extended to leveraging its vast data repository for
advanced analytics. The organization identified trends, patterns, and potential health
risks by analyzing patient data, allowing for proactive interventions and personalized
care plans [3].
In conclusion, the evolution of healthcare, marked by challenges before the data
economy, culminated in the rise of innovative institutions like Kaiser Permanente.
The organization’s origins as a prepaid healthcare system and its subsequent embrace
of technology-driven approaches have positioned it as a trailblazer in the field.
Using EHRs and data analytics, Kaiser Permanente has demonstrated the power
of data-driven strategies to enhance patient care, streamline operations, and redefine
the healthcare landscape. The organization’s legacy underscores the transformative
6.1 Data Economy in Healthcare 103

potential of the data economy in revolutionizing healthcare delivery for improved

patient outcomes and experiences.
• Challenges

Data Silos: Healthcare institutions grappled with the issue of data silos, where patient
information is fragmented across different departments and systems. This disjointed
approach impeded the creation of comprehensive patient profiles, making it diffi-
cult for medical professionals to have a holistic view of a patient’s medical history,
diagnoses, treatments, and outcomes. Häyrinen et al. [1] highlights the challenges of
fragmented electronic health records (EHRs) and the need for integrated systems.
Treatment Not Optimized: Hospitals sought to harness the power of data to
analyze patient responses to different therapies and interventions. However, with
a unified data-driven approach, the optimization of treatment plans proved easier.
Access to comprehensive patient records helped hospitals’ ability to track and analyze
treatment outcomes.
Resource Allocation: Efficiently distributing resources, like hospital beds, staff
members, and medical equipment, was essential for timely and quality patient care.
However, the absence of real-time data integration hindered hospitals from making
informed resource allocation decisions. This led to overutilizing specific resources,
while others needed more utilized, hampering operational efficiency.
Predictive Healthcare: Healthcare institutions aspired to adopt predictive
approaches to healthcare by leveraging data. However, fragmented data landscapes
made it challenging to implement robust predictive models. The lack of comprehen-
sive patient records and interoperability barriers hindered accurate risk prediction
and preventive interventions.
• Solution Using Data Economy

Kaiser Permanente recognized the importance of overcoming data silos in healthcare.

They embarked on a mission to integrate patient information from various sources
into a centralized electronic health record (EHR) system. By implementing an inte-
grated EHR platform, medical professionals accessed comprehensive patient profiles,
including medical history, diagnoses, treatments, and outcomes. This holistic view
enabled informed medical decisions, streamlined treatment planning, and enhanced
patient care. The integrated EHR system allowed Kaiser Permanente to bridge the
gap between departments, ensuring that critical patient information was easily acces-
sible to authorized personnel across the organization. This approach aligned with [1]
emphasis on integrated systems to address data fragmentation challenges.
Kaiser Permanente leveraged its data-driven approach to optimize treatment plans.
By analyzing patient responses to various therapies and interventions, the organiza-
tion aimed to enhance treatment efficacy. The integrated EHR system facilitated the
tracking and analysis of treatment outcomes systematically. Medical professionals
had access to a wealth of patient data, enabling them to identify patterns in treatment
effectiveness and adjust interventions accordingly. This approach aligned with the
case study example of Mount Sinai Health System, where data analytics and artificial
104 6 Application of Data Economy

intelligence were utilized to tailor treatment plans based on historical data, ultimately
leading to improved patient outcomes.
Kaiser Permanente’s data-driven strategy also extended to resource allocation.
They harnessed real-time patient data and predictive analytics to forecast patient
admissions and discharges. This approach allowed them to allocate hospital beds,
staff members, and medical equipment more effectively. The organization could
proactively adjust resource allocation based on patient needs and hospital capacity,
reducing overutilization and underutilization of resources. This proactive resource
management aligned with the example of Johns Hopkins Hospital, which utilized
real-time patient data and predictive analytics for optimized resource allocation.
In line with the vision of predictive healthcare, Kaiser Permanente aimed to proac-
tively anticipate patient needs and prevent health issues. By integrating patient data
and leveraging advanced analytics, they developed predictive models to identify
patients at risk of specific health conditions. This approach allowed for early inter-
ventions and personalized preventive measures, aligning with the case study example
of the Geisinger Health System. Kaiser Permanente’s data-driven approach enabled
them to overcome the challenges of fragmented data landscapes and implement
accurate risk prediction models.
• The Impact of the Data Economy

In the burgeoning era of the data economy, the healthcare sector has emerged as
a pivotal player, illustrating its transformative impact on the broader data-driven
ecosystem. This impact reverberates across various dimensions, from patient care and
treatment to research, innovation, and policy formulation. As healthcare institutions
increasingly harness the power of data, they contribute valuable insights that catalyze
advancements across industries and drive the evolution of the data economy.
Healthcare’s foray into the data economy has revolutionized patient care. By lever-
aging comprehensive electronic health records (EHRs) [4, 5] and data analytics,
medical professionals can make informed decisions, tailor treatment plans, and
enhance patient outcomes. Predictive modeling enables proactive interventions,
while real-time monitoring ensures timely interventions and improved disease
management. This data-driven, patient-centric approach has not only elevated the
quality of care. Still, it has also paved the way for patient empowerment through
personalized health insights and informed decision-making.
Furthermore, healthcare’s data economy engagement fosters innovation and
research breakthroughs. The immense volume of patient data available for analysis
enables the identification of novel trends, correlations, and potential breakthroughs.
Researchers can tap into this treasure trove to accelerate drug discovery, disease
understanding, and treatment development. Collaboration between healthcare insti-
tutions [6], researchers, and technology experts nurtures a dynamic ecosystem that
encourages innovation and develops cutting-edge medical solutions.
In sum, healthcare’s integration into the data economy amplifies its influence,
transcending the confines of its sector. By harnessing data to enhance patient care,
drive innovation, and inform policy, healthcare institutions play a pivotal role in
6.2 Data Economy in Finance 105

shaping the future of the data-driven landscape. As healthcare embraces data-driven

strategies [7], it transforms its operations. It catalyzes advancements reverberating
throughout the broader ecosystem, underlining the symbiotic relationship between
healthcare and the data economy.

6.2 Data Economy in Finance

• Background

The narrative of fintech’s impact in India and other regions of the Global South
frequently revolves around fostering financial inclusivity and empowerment. This
narrative is supported by data highlighting the presence of an untapped finan-
cial market, predominantly encompassing economically disadvantaged populations.
Major sectors within the Fintech industry include credit scoring, lending, digital
payments, brokerage, and insurance services [8]. An area of significant potential that
is rapidly gaining prominence is credit scoring. This is primarily due to the limited
accessibility of financial services and the government’s proactive stance on financial
inclusion. Numerous fintech business models concentrate on credit scoring, lever-
aging unconventional credit data alongside robust big data analytics to offer various
services. Prominent examples of revolving credit models include unsecured small-
scale loans, customized prepaid plans for individual medical procedures, instanta-
neous point-of-sale credit offerings, micro-insurance with pay-as-you-go options,
and micro-investment opportunities. A cornerstone of the “Digital India” initiative
revolves around leveraging mobile and e-banking technologies to catalyze broader
financial inclusion [9]. These technologies are integral for broader component trans-
formation within the banking sector, as organizations harness technology to deliver
financial services, often through innovative platforms and business models. Credit
assessment involves employing statistical methods on historical information about
applicants to evaluate the potential credit risk they pose [10]. The resulting credit
score condenses an applicant’s financial reliability, providing insights for lending
determinations. These credit evaluation techniques generally consider three factors:
(a) the verification of the applicant’s identity to prevent fraud, (b) the applicant’s
capacity to repay debts, and (c) the applicant’s willingness to meet repayment
obligations.
• Challenges

Fintech companies operating in the credit scoring space encounter several challenges
that stem from the complex nature of financial data, technology, and regulatory
considerations.
Data Availability and Quality: Access to accurate and comprehensive data
is critical for effective credit scoring. Fintech companies might face challenges
obtaining high-quality data, especially when dealing with consumers with limited
credit histories or are part of underserved populations.
106 6 Application of Data Economy

Lack of Historical Data: Fintech start-ups might need historical data to develop
robust credit scoring models, mainly if they are new entrants. This can hinder their
ability to assess creditworthiness accurately.
Scalability: As fintech companies grow, their credit scoring systems must scale to
accommodate a larger volume of users and transactions without sacrificing accuracy
or performance.
Regulatory Compliance: Fintech companies must navigate a complex regulatory
landscape that varies from country to country. Compliance with lending regulations,
consumer protection laws, and anti-money laundering (AML) regulations adds a
layer of complexity to their operations.
• Solution Using Data Economy

With the growing adoption of information and communication technologies, particu-

larly evident in the widespread use of mobile phones, the everyday actions of individ-
uals generate a significantly larger digital trail that can serve as behavioral informa-
tion. This phenomenon of extensive data has also influenced financial establishments,
prompting a stronger inclination to transcend established data sources for tasks like
credit scoring and risk assessment [11]. This shift includes the integration of big data
technologies alongside traditional statistical methods. Big data advocates argue that
it offers lenders a more comprehensive view of consumers, thereby leading to more
precise forecasts of their repayment capabilities. These approaches involve exam-
ining numerous “potential credit factors” in a way that provides valuable insights
into an applicant’s creditworthiness.
The emergence of extensive datasets and increased information conversion into
digital formats has led to the availability of novel data sources like telecommuni-
cations records, utility usage details, retail and wholesale transactions, and govern-
ment records. The subsequent instances highlight alternative data forms and their
application in the computation of credit reliability.
Telecom Data
How data for prepaid usage and recharges is employed can offer an understanding
of an individual’s financial transactions. Patterns in daily call activity and location
information can indicate a person’s consistent employment status. A primary origin
of substitute data concerning earnings and expenditures lies in payment messages and
credit and debit notifications received on the individual’s mobile device. Settlement of
bills, completed purchases, and recurrent money transfers—both sent and received—
are highly valuable in foreseeing an individual’s capability and inclination to fulfill
repayment obligations.
Utility Data
The digitalization of records into digital formats and the adoption of digital payment
methods for settling utility charges render this data accessible for assessment. This
information reveals an individual’s consumption tendencies and reflects their punctu-
ality in bill settlements. Since the payment timelines for utility bills typically follow
6.2 Data Economy in Finance 107

monthly cycles, similar to monthly repayment schedules, they strongly indicate an

individual’s approach to managing their financial responsibilities every month.
Retailers’ Data
Due to the increased utilization of loyalty cards, retail establishments retain infor-
mation about the purchases carried out by their customers. This data can poten-
tially assess an individual’s disposable earnings, household composition, and other
pertinent attributes. For instance, buying specific items implies a health-conscious
attitude, while other purchases indicate a willingness to take risks.
Mobile App Data
The metadata acquired through mobile applications utilized by small lending compa-
nies undergoes analysis to extract valuable customer information. These mobile apps
commonly request different authorizations to reach additional data on the individual’s
mobile device and their login credentials for platforms like Facebook and Google.
Additionally, psychological assessment of how consumers complete online forms
within the app—examining factors like time spent on each question and the frequency
of answer changes—also reflects the individual’s personality traits.
• The Impact of the Data Economy
• More Financial Inclusion
The utilization of alternative data for assessing creditworthiness holds
the potential to expand financial access significantly. Research conducted by
the Omidyar Foundation reveals that in countries like “China, Brazil, India,
Mexico, Indonesia, and Turkey,” incorporating big data into alternative credit
assessment could facilitate credit availability for a substantial 325–580 million
individuals. This has the prospective impact of granting millions of people’s
entry into the official financial system and associated benefits like savings
and insurance provisions. As a result, this could lead to increased options and
prospects, ultimately fostering enhanced dignity and empowerment [12].
• Data-Driven Efficiency
The rationale for using big data-driven credit scoring also highlights the
constrained range of conventional underwriting and lending methods. Advo-
cates suggest that the extensive scope of data collection within big data
can facilitate enhanced evaluations of a consumer’s creditworthiness, given
the broader information landscape. However, opponents of big data express
concerns regarding unverified correlations upon which big data relies and its
reliability in forecasting creditworthiness.
• Ease of Doing Business
The allure of big data-driven credit scoring lies in the potential for expe-
dited loan approvals within hours or days, as opposed to the conventional
weeks. Additionally, numerous competing private sector firms providing such
services enhance its attractiveness. In India, loan applications usually involve
an array of documentation, including identity and residence proofs, account
108 6 Application of Data Economy

statements, salary slips, notarized documents, wet signatures, in-person verifi-

cation, and property inspections. A more efficient procedure that offers relief
from extensive paperwork holds immense value.

6.3 Data Economy in Education

• Background

According to McKinsey’s study, there is a remarkable growth in learners of massive

open online courses (MOOCs) from 300,000 to 220 million between 2011 and 2021.
However, the unusual circumstances brought by the COVID-19 pandemic in 2020
increased this development even further, with an added growth of 92%.
In the virtual world where knowledge flows like a digital river, a name emerges as
a pioneer of online education: Coursera. As per the internet resources, the net worth
of Coursera is $2.55 Billion as of August 27, 2023, with an increase of 36.23%
annually. It is a revolutionary platform that serves as an avenue for online education.
It takes command over innovation to navigate the unexplored paths of online educa-
tion flawlessly using data-driven principles. With the innovative teaching pedagogy,
Coursera [13] built the education economy and reshaped the learning landscape.
This case study delves into Coursera’s journey of harnessing data-driven insights to
provide facilities to learners like personalized learning experiences, Content Opti-
mization, Insights for Educators, etc. With the diverse learners accessing the online
platforms, online EdTech providers utilized the data economy principles to provide
a customized, engaging, and effective learning experience.
The pandemic has increased the number of learners at Coursera tremendously. At
the time of school closures and lockdowns during the COVID-19 pandemic, when
traditional schools were closed, there was a pressing need to support global education.
The visionary leaders of Coursera embraced the winds of change, leveraging its
platform to empower learners, inspire partnerships, and contribute to the broader
social fabric. In this pandemic, Coursera opened the virtual doors to global learners,
offering free access to knowledge. This move not only helped the learners but also
helped universities worldwide access vast learning resources and the government
to upskill the workforce. With this momentous decision of free access, Coursera is
also booming, with continued association with thousands of esteemed universities.
With this tie-up with universities, Coursera is reshaping the education narrative and
extending the learning reach beyond physical boundaries where knowledge has no
borders.
6.3 Data Economy in Education 109

In the post-pandemic landscape, the seeds of generosity and empathy have

flourished as collaboration nurtures the knowledge collectively.
• Challenges

Initially, Coursera encountered numerous challenges as it was a revolutionary, unex-

plored educational path. The challenges tested the commitment and the determination
of the founders and the team. A few challenges faced by Coursera are as follows:
Acceptance and Trust: Traditional education institutions were resistant to
accepting online learning. They needed to be more particular about the credibility of
online education. A persistent effort was required to convince both the learners and
employers and build trust in the online education system.
Infrastructure: A significant challenge was developing a robust technological
infrastructure supporting a massive online learning platform. Coursera [14] had to
invest in creating a scalable and trustworthy system capable of handling a gigantic
user base, ensuring seamless user experiences, and maintaining data security and
privacy.
Quality Content: Upholding high-quality educational content and protecting
the authenticity of the courses was a formidable task for Coursera. They tackle
the challenge by collaborating with reputed education institutions and experts and
establishing a solid peer-review system to carefully examine the course content and
upgrade it to align with ever-changing education standards.
Monetization and Sustainability: Creating a sustainable business model while
offering the services for free is challenging for all start-ups. Initially, Coursera had to
balance affordable free courses and revenue generation to sustain operations. This led
to exploring various monetization strategies, such as attracting investment, building
partnerships, and innovating to offer the best in-demand skills to remain competitive
in the rapidly growing EdTech landscape.
Learner and Instructor Engagement: Maintaining learners’ enthusiasm and
attention during online learning requires self-discipline and motivation compared
to the traditional classroom environment. Keep up the confidence to complete the
course, and the assignment is challenging when learners are geographically scattered
with other commitments. Convincing the expert educator to join the online learning
platform to deliver the system can also be problematic, as they might need clarification
about the course’s effectiveness or the impact of online teaching on their traditional
teaching responsibilities.
Global Reach and Localization: Coursera faced the unsettling task of enlarging
its global presence by serving diverse cultures, languages, and education systems
and creatively tailoring the courses in association with local institutions, considering
the different learners’ needs and backgrounds, and addressing various barriers like
network access, language, and infrastructure requirements.
Regulatory and Accreditation Issues: The education sector has various regu-
latory compliances. It was of utmost importance for Coursera to ensure that the
tailored courses offered on the platform are as per the standard benchmarked by
various educational authorities and accreditation boards.
110 6 Application of Data Economy

Despite these challenges, Coursera’s firm commitment, strategic plan, and contin-
uous transformation have enabled it to overcome the obstacles and emerge as a leader
in online education, transforming how learners access and gain knowledge.
• Solution Using Data Economy

In the age of digitization, data goes beyond its mere informational value and becomes
a valuable currency capable of reshaping industries. Coursera [15], a pioneer in
online education, embarked on a transformative journey, demonstrating how princi-
ples rooted in data-driven approaches could revolutionize the learning process and
foster a vibrant economy powered by knowledge exchange.
Coursera used data-driven principles to build a monetization model for online
learning initiatives to overcome the challenges presented in the previous section.
Data Cultivation: Coursera’s success began with harvesting data that surpassed
clicks and scrolls. They perceived each interaction with the learner as a potential
to share the learning path. For this, they collected behavioral data and delved into
capturing insights into the learning process. They recorded every attempt for the quiz,
video paused, forum discussion, and notes jotted down, nurturing a rich, continuous
learning environment.
Personalization Learning Ecosystem: Coursera’s personalized learning and
recommendation helped learners finish the course and enroll based on the insight
collected from previous learning behavior and specialization. With its data-driven
personalization, Coursera turned this vision into a tangible reality. Utilizing the
wealth of learner data, they harnessed powerful algorithms that revealed individual
learning styles, preferences, and progress. With these insights, they tailored a learning
path that fulfilled the individual learner’s needs. It effectively turned the platform into
a virtual mentor.
Monetizing Learning Data: Coursera understood that the data possesses
immense value beyond enhancing learning experiences. They ventured into a data-
driven economy by offering anonymized, aggregated insights to institutions. These
institutions invested in the goldmine of insights to seek knowledge on shifting skill
requirements, which in turn powered the economic growth of Coursera.
Nano-credentials and Learning Pathways: Coursera revolutionized the land-
scape in this data-infused terrain by introducing nano-credentials, bite-sized certifi-
cations filled with substantial value. Learners now had the means to demonstrate
their newly acquired skills to prospective employers, fortified by data depicting
their learning journey and expertise. Furthermore, leveraging aggregated data
trends, Coursera charted comprehensive learning pathways, directing learners toward
in-demand skills and industries, thereby magnifying their economic prospects.
Continuous Evaluation and Feedback Loop: Imagine a cycle where data is
gathered and flows back into the system to strengthen progress. Coursera mastered
this feedback loop. As users interacted with the site, their data nourished incremental
improvements. The data-driven learning economy was maintained when courses
changed, paths changed, and learning experiences improved.
6.4 Data Economy in Policy Development 111

• Impact of Data Economy

A data-driven, personalized learning strategy has had a positive impact on education.

Studies show pupils who use Coursera get superior learning results. The platform’s
reach has expanded to include classrooms worldwide, giving a broad spectrum of
students access to high-quality education.
Using the data economy, Coursera can precisely customize learning experiences
and provide learners with individualized suggestions, adaptive content, and predictive
insights. This data-driven approach fosters innovation, relevance, and excellence in
the quickly changing online education landscape by improving course development,
user engagement, and overall user experience while facilitating strategic partnerships,
effective marketing strategies, and continuous improvement.
The impact of the data economy is comparable to a creative brushstroke that colors
every aspect of learning in the bright content of the education industry. Data-driven
insights have broken traditional barriers, offering a symphony of personalization,
engagement, and effectiveness. Each time students click, take a quiz, or participate
in an interaction, their digital footprints help create a landscape of personalized
experiences where knowledge is organized like a map. At the same time, content is
tailored to fit the needs of the individual.
The way institutions design learning has shifted beyond just the individual student
due to the data economy. The rhythmic flow of data insights now governs the rise
and fall of curriculum and courses. By using predictive analytics to forecast learning
trends, this digital team enables institutions to strategically construct actions that
save students from confusion and lead them to mastery of the subjects.

6.4 Data Economy in Policy Development

• Background

Political polls have long been a cornerstone in the democratic process, offering a
window into public sentiment, shaping campaign strategies, and influencing policy
decisions [16]. These quantitative assessments of public opinions on political candi-
dates, parties, policies, and issues have persevered through time. Yet, they have also
transformed in response to technological advancements, societal shifts, and changes
in the political arena. Defining political polls has been an evolving practice; these
surveys, often executed by polling organizations and research firms, involve system-
atically collecting data from a population subset. This collected data is then employed
to project more considerable opinions and inclinations across the entire electorate.
The insights derived from these polls serve many purposes, including predicting
election outcomes, gaging public support for policy proposals, and detecting shifts
in political sentiments. As Nobel Laureate George Gallup eloquently said, “Opinion
polls are the…pulse of democracy,” underscoring their essential role [17].
112 6 Application of Data Economy

The inception of political polling can be traced back to the nineteenth century when
rudimentary straw polls conducted by newspapers asked readers to cast informal
votes on various issues. This practice laid the foundation for more formalized
approaches that would emerge later. However, in the twentieth century, a trans-
formative shift occurred with the introduction of scientific polling methods. In
the mid-twentieth century, we witnessed the integration of concepts like proba-
bility sampling, randomization, and statistical analysis into polling practices. These
advancements bolstered the accuracy of predictions. Foremost among the proponents
of these methods was George Gallup, whose success in predicting the outcome of
the 1936 U.S. presidential election demonstrated the power of employing scientific
methodologies in gaging public sentiment. In subsequent decades, we have witnessed
the refinement of polling techniques. Furthermore, the advent of telephone surveys
during the 1960s was a groundbreaking development, revolutionizing the speed and
reach of data collection in the century [18].
The significance of political polls has transformed considerably over the years,
influencing various aspects of the democratic process. Polls have expanded their
role from data points to central news coverage elements. They began shaping public
perceptions and, in some instances, even swaying voter opinions, highlighting their
deep-rooted influence on media.
With the increasing credibility of poll predictions, campaigns started to pivot their
strategies based on poll results. These outcomes dictated the allocation of resources,
emphasizing battleground states and issues of critical importance. Moreover, political
polls have fostered a sense of engagement by showing that public opinion holds
weight. Politicians began to leverage votes to understand the concerns of constituents
more effectively.
Political polls have played a crucial role in democratic processes by offering
insights into public sentiment and shaping strategies. Their journey from informal
straw polls to sophisticated scientific methodologies exemplifies their adaptability to
changing times. As the data economy explosion unfolded, political polling underwent
further transformation, confronting novel challenges and opportunities arising from
technological innovations and shifts in data availability.
• Challenges

Accuracy is a critical concern for political polls as their validity depends on the quality
of data collected. Before the data economy, polls faced challenges regarding sample
size, sampling methods, and nonresponse bias, leading to prediction inaccuracies
[16]. The Literary Digest Poll of 1936 serves as an example of accuracy challenges.
The poll predicted Alf Landon would win against Franklin D. Roosevelt, but it proved
highly inaccurate due to biased sampling [19].
As political polls aim to capture public sentiment at a specific moment, it is crucial
to understand that public opinion by behavior changes rapidly, and hence, having
the technical expertise to collect, analyze, and utilize the rapidly changing subtext
becomes a significant obstacle. The 1948 U.S. presidential election between Harry
Truman and Thomas Dewey showcased the recency challenge. Early polls predicted
6.4 Data Economy in Policy Development 113

Dewey’s victory, but Truman’s campaign gained momentum, and Truman ultimately
won [20].
Conducting political polls involves significant expenses, particularly when large
sample sizes are needed for accurate results. The cost factor limited the frequency
of votes and marginalized smaller campaigns with limited resources. The cost chal-
lenge is evident throughout Indian campaigns for municipal elections, where smaller
campaigns faced difficulties conducting frequent polls due to financial constraints,
impacting their ability to track public sentiment accurately.
Most importantly, demographic representation is of crucial importance in polit-
ical polling. The more diverse the demographic, the more the need is for expansive
surveys. Hence, before technological enhancement, political polls relied on phone
or mail surveys, limiting access to specific demographics and potentially leading to
skewed results. The inability to reach particular demographics was demonstrated
in the 1936 Literary Digest Poll, which surveyed its subscribers predominantly,
neglecting a representative sample.
• Solution Using Data Economy

Accuracy
The data economy has addressed accuracy challenges by enabling access to more
extensive and diverse datasets. With the proliferation of online platforms and digital
interactions, polling organizations can collect data from a broader cross-section of the
population, reducing bias and increasing sample size. Online polls and data collection
platforms like SurveyMonkey and Google Forms allow researchers to reach various
respondents.
Recency
The data economy has enabled real-time data collection and analysis, allowing polit-
ical campaigns and researchers to monitor public sentiment as it evolves. Social
media platforms and sentiment analysis tools provide insights into current opinions
and trends. Social media platforms like Twitter, Facebook, and Instagram facili-
tate real-time engagement and discussions about political events. Sentiment anal-
ysis algorithms analyze millions of social media posts to gage public sentiment,
providing instant insights into shifting opinions. For instance, during major political
events, such as debates or elections, sentiment analysis can track changes in public
sentiment within minutes.
Cost
The data economy has democratized access to data collection and analysis tools,
reducing costs and making polling more accessible to various campaigns and orga-
nizations. Cloud computing and open-source software have lowered the barriers to
entry for conducting polls. Cloud-based polling platforms like Qualtrics and Type-
form offer cost-effective solutions for organizations to complete surveys and collect
data. Open-source statistical analysis software like R and Python allows researchers
to analyze data without needing expensive proprietary software licenses.
114 6 Application of Data Economy

Reach
The data economy has eliminated geographical limitations by allowing data collec-
tion from a global audience. Online surveys and social media platforms have made
it possible to engage with diverse demographics regardless of their location. The
widespread adoption of the internet and mobile devices has enabled global connec-
tivity. Online polls and surveys can reach respondents across different regions,
cultures, and socioeconomic backgrounds. This has resulted in the possibility of
representative and inclusive data collection [21].
• Impact of Data Economy

The evolution of the data economy has profoundly transformed the landscape of
political polling, revolutionizing how polls are conducted and perceived. With the
proliferation of digital technologies and online platforms, political polling has tran-
sitioned from traditional methods to sophisticated digital surveys, tapping into a
wealth of data from diverse sources. The accessibility of big data and advanced
analytics has not only improved the accuracy of predictions through more promi-
nent and representative sample sizes but has also democratized the process, enabling
smaller campaigns and organizations to engage in polling activities that were once
constrained by financial limitations. This shift has redefined how political polls are
conducted, emphasizing real-time insights, inclusivity, and a data-driven approach.
The data economy’s influence extends beyond methodology, impacting how the
public and stakeholders perceive political polls. Integrating social media and online
engagement has fostered a sense of immediacy, allowing citizens to engage in polit-
ical discussions and express their opinions in real-time. Consequently, political
polling has become more intertwined with the pulse of public sentiment, enabling
campaigns and policymakers to respond dynamically to emerging trends. However,
the abundance of data and its rapid analysis have also raised concerns about privacy,
data security, and the potential for manipulation. This heightened awareness of data
ethics has led to a more discerning audience that scrutinizes polling methodolo-
gies and the transparency of results, emphasizing the need for rigorous methods and
responsible data practices.
In essence, the data economy has modernized the mechanics of political polling
and transformed its role in shaping public discourse and policy decisions. As data-
driven insights become increasingly integrated into political campaigns and gover-
nance strategies, the credibility and integrity of polling methodologies and the ethical
considerations surrounding data collection and usage have taken center stage in the
public consciousness. This evolution underscores the profound impact of the data
economy on the perception, relevance, and significance of political polling in the
contemporary democratic process.
6.5 Data Economy in Tourism 115

6.5 Data Economy in Tourism

• Background

Expedia is a prominent e-commerce platform that facilitates online reservations for

travel services, including flights, accommodations, car rentals, and other related
amenities. Since its establishment in 1996, the entity above has grown significantly,
attracting a substantial user base of more than 200 million monthly visits. This
achievement has solidified its status as one of the leading travel websites worldwide.
Expedia, now based in Seattle, was first established under Expedia.com but
underwent a rebranding process in 2001. Subsequently, the company has grown by
purchasing more travel businesses, including Hotels.com, Vrbo, Orbitz, and Trave-
locity. In 2023, Expedia’s portfolio includes other leading travel firms such as Trivago
and Wotif.
Being at the forefront of digital travel, Expedia consistently utilizes data-driven
insights to improve the consumer experience. The analysis of a vast amount of data
collected from several visits may be used to customize personalized suggestions
for people. Using aggregated anonymized data also enables Expedia to anticipate
trends that may capture the attention of travelers. Identifying trends from many
transactions also facilitates the detection of probable instances of fraudulent conduct.
Expedia leverages extensive knowledge from its expansive marketplace to enhance
operational efficiencies and provide a smooth travel experience for contemporary
individuals in a dynamic and growing sector.
• Challenges

The business operations of Expedia were significantly affected by the COVID-19

pandemic in 2020. As a consequence of the global epidemic, the firm saw a significant
decline in income, amounting to a remarkable 95%, which can be attributed to the
widespread implementation of travel restrictions and lockdown measures.
Pandemic-Era Travel Disruption: Expedia, a prominent global online travel
agency, relied significantly on travel reservations. The cessation of worldwide move-
ment has had a significant impact. Like other travel and hospitality companies,
Expedia had substantial challenges when the demand for their services abruptly
diminished.
Adjusting to the Travel Paradigm Shift: Nevertheless, the organization recog-
nized that the unprecedented situation provided novel possibilities. It predicted that
travel would have a strong resurgence after the relaxation of limitations in the post-
pandemic period. However, under the current paradigm, the industry must meet the
modified requirements of travelers [22].
Opportunity in Crisis: Expedia has defined several critical targets to restore
consumer trust in response to the situation. These priorities include guaranteeing
safety and sanitary measures, providing flexible alternatives for customers, delivering
customized experiences, and maintaining timely and effective communication. The
116 6 Application of Data Economy

organization recognized the need to implement heightened health measures and opti-
mize services to provide a frictionless travel experience. By analyzing evolving tastes
and attitudes, Expedia was positioned to redesign its benefits, explicitly targeting
discerning visitors who prioritize health-related concerns. The corporation acknowl-
edged that seizing the opportunity to be the first to answer the changing demands of
customers might contribute to a significant resurgence in the travel sector [23].
• Solution Using Data Economy

Expedia implemented a comprehensive strategic approach to effectively address

the challenges posed by the COVID-19 pandemic and position itself for enhanced
resilience and growth.
Data Analytics and Monitoring: Expedia implemented comprehensive data-
driven measures to rekindle people’s desire for exploration while emphasizing safety.
Expedia identified parameters that indicated accommodation partners’ stringent
hygiene standards by utilizing its extensive historical travel archives and current
online trend analysis. The availability of sanitization records, contactless check-ins,
and other features was emphasized. Travelers could now filter listings based on
these standards, allowing them to discover locations that accommodate their health
concerns. Expedia concurrently enrolled partners in continuous monitoring of regis-
tered parameters to ensure compliance. Rating companions based on their conformity.
Using risk-based customer segmentation, Expedia promptly communicated policy
updates to its global clientele as new regulations emerged. Destination entry protocols
were conveyed to travelers via their preferred channels of communication. Simulta-
neously, user sentiments and questions were harvested to enhance communication
and proactively resolve safety concerns. Feedback systems also assisted partners in
resolving issues expeditiously [24].
Data-Driven Insights to Empower Partners: Expedia, in light of the significant
repercussions on its travel supplier network, also implemented specific financial
incentives and assistance to its hotel and airline partners within the period of lock-
downs. This facilitated the maintenance of significant long-term commercial connec-
tions. Data and insights played a pivotal role in comprehending the emergence of
some demand regions. Expedia has developed novel data science techniques and
metrics to provide timely and informative analysis of the ever-changing demand
patterns. The use of features such as the “Rev + Insights API,” which is accessible at
no cost via Partner Central, has proven to be crucial in enhancing the decision-making
capabilities of suppliers.
Digital Transformation: Expedia intensified its commitment to digital transfor-
mation by capitalizing on its substantial investment of $1.6 billion in technology since
2018. The organization underwent a rebranding process with a strategic shift toward
prioritizing mobile platforms and emphasizing innovation in app development.
Personalized Travel Experience: The organization used extensive historical
customer data to analyze evolving travel behaviors. This allowed the development
of novel functionalities such as virtual tours and booking systems that cater to
6.6 Future Research Direction 117

augmented needs, specifically emphasizing contactless services. Expedia imple-

mented a strategy to provide highly tailored messages to users, providing updated
information about destinations and rules via their chosen communication channels.
Customized expert provided a sense of reassurance to clients during periods of
uncertainty [25].
Expedia successfully navigated the crisis and prepared for recovery using a
comprehensive strategy with several dimensions, including technology, partnerships,
customer empathy via analytics, and demand forecasting tools.
• Impact of Data Economy

Implementing a data-centric strategy by Expedia played a significant role in devel-

oping secure and tailored experiences during the global health crisis. Using booking
histories and preferences, Expedia provided recommendations for locations and
lodgings that prioritize consumer safety by implementing robust hygiene measures.
The trip planning tools included the most recent recommendations and recom-
mended places that showed a decrease in hazards, as determined by an analysis
of booking patterns. This catalyzed making more informed and cautious choices
about travel. Segmented push notifications effectively communicated hygiene rules
to consumers about their chosen destinations, enhancing their trust in the ongoing
process of travel recuperation.
Expedia used a review filtering mechanism that utilized profiles to identify
and prioritize comments about crucial factors like hygiene, which had significant
importance during the COVID-19 pandemic. This facilitated the process of making
purchasing judgments. Providing timely information about travel disruptions enabled
consumers to strategically plan alternate routes, avoiding congested pathways and
mitigating the inconveniences of sudden policy changes [26].
Repeat customers derived satisfaction from additional services such as contactless
check-ins, which were facilitated by the retention of their profile information. This
feature effectively minimized the need for direct physical encounters following the
necessary protocols. The use of comprehensive profiles enabled agents to provide
tailored safety assistance that catered to consumers’ individual circumstances within
the ongoing epidemic. Using a data-first approach enabled the provision of person-
alized suggestions, organized travel itineraries, and ensured that consumers were
informed about the ever-changing travel advisories. These features were pivotal in
restoring trust and providing stability in uncertain circumstances.

6.6 Future Research Direction

Future research will lead to an intelligent economy in the data world. The innovative
economy is a complex, interconnected ecosystem crafted by technological advance-
ments and deep insights derived from the data. The power of an intelligent economy
can help industries converge to digital innovation, automation, and a connected world
118 6 Application of Data Economy

to nurture sustainable development. The brilliant economy will revolutionize the

traditional economic models by providing optimal resource utilization of human-
centered designs. Additionally, an innovative economy impacts various sectors, such
as city development and education, emphasizing the power of data and technology
to create a future that is economically strong and socially sustainable [27].
A collection of ideas regulates the rise of smart cities and unveils the arrival of a
more intelligent economy in an era buzzing with the digital revolution. The harmo-
nious interaction of urban infrastructure and technology generates a phenomenon
that surpasses landscapes and redefines the core characteristics of modern living.
The master plan for smart cities [28] that integrate efficiency, sustainability, and
human-centered architecture is being shaped by the intelligent economy, which is
driven by the fusion of data and integration.

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