Data economy and it's implications for the real economy

Abstract

The contribution of data economy as a share of GDP (real economy) of European Union (EU) has increased by 42%, i.e., from 2.1% in 2016 to 3% in 2020+. This is a testimony to the 64 Zettagytes (64 trillion Terabytes)?. As per European Commission? : The "data economy" is characterised by an ecosystem of different types of market players — such as manufacturers, researchers, and infrastructure providers — collaborating to ensure that data is accessible and usable. This enables the market players to extract value from this data, by creating a variety of applications with a great potential to improve daily life (e.g., traffic management, optimisation of harvests or remote health care). Though the definition of data economy is comprehensive, but it is not that easy to classify data as a private, public, common or club good. The reason for the same depends on the context in which the data is being used and the types of data being collected. Example: The geolocation data collected by Aarogya Setu App might be classified as common good, whereas the data collected by Google fit of individual’s daily physical activity can be classified as a private good. In conclusion there is no overarching blanket on data being a private good, per se. Amidst the uncertainties of data access, collection, usage, and monetization across geographies (GDPR* in Europe, CCPA? in the US, Act on the protection of personal information in Japan etc.), it cannot be denied that data economy has started impacting the real economy. The primary reason for the same could be the formation of an extensive data value chain®. Across this value chain there are set of players who are reaping the monetary reward of economizing data with or without appropriate user consent, the conventional mechanical jobs are getting rapidly automated.