Measuring the economic value of data

As the amount and variety of data collected by companies has increased in recent decades, data have become an essential resource. This column sets out a framework for understanding how businesses monetise data – distinguishing between data-enabled businesses that would not exist without access to large amounts of data and analytics, and data-enhanced businesses that exploit data to coordinate pre-existing business operations better. Allowing the increasing use of data to act as an unmeasured input in production handicaps key economic statistics – from output to productivity and beyond. 

The process of collecting, aggregating, and analysing data for the purpose of successful operation is nothing new for companies. However, the amount and variety of data that companies use has increased dramatically in recent years. Crucially, an increasing use of data as an (unmeasured) input in production could render key economic statistics, such as output and productivity, seriously flawed (OECD 2020).

Covid-19 is accelerating the digital transformation of our private and professional lives (Coyle and Nguyen 2020), pushing digital business models into even the last corners of the economy. This also means that more and more data are being produced and used to create new products and services. The role of the value of data has been widely discussed both from a data governance perspective (Savona 2020, Aaronson 2020) and from the data ownership and privacy regulation angle (Bergemann et al. 2020, Jones and Tonetti 2020). These are important and pressing issues that contribute to a better understanding of the economic value of data and to the development of future-proof economic statistics.

In a recent paper (Nguyen and Paczos 2020), we engage with some of these issues in more detail. We develop a framework based on how businesses monetise data, and propose a taxonomy of data types and characteristics associated with the economic value of data. Drawing on real-world examples, we discuss strategies used by businesses to monetise data, and distinguish four main types:

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