Personal data are everywhere. We volunteer data about ourselves on social networks. Payment providers capture our transactions, and governments record our financial details. Mobile phones can track our location at any given moment. Hospitals capture and store our medical tests and clinical diagnoses digitally. And all of this can be used to make inferences about what we might do next.
When used appropriately, personal data can create new economic value by helping to achieve new efficiencies in business; tailor and personalize products; respond quickly to global challenges; and empower individuals to engage in social, commercial, and political activities more effectively. Personal data play a critical role in the development of the Internet economy—which is expected to reach $4.2 trillion in the G-20 countries by 2016—and have been key in the recent valuations of companies that collect and utilize personal data.
There is real risk, however, that this value will not be realized. High-profile security-data breaches are commonplace. Individuals are increasingly concerned about intrusions into their privacy and the possibility of data being used for purposes of which they do not approve. Companies are unclear about what they can and cannot do with personal data and are either standing on the sidelines or forging ahead with an unclear understanding of liabilities and the potential for negative impact on their reputations and brands. Governments are proposing various laws and regulations to protect privacy while also aiming to encourage innovation and growth.
Rethinking Personal Data: Strengthening Trust, a new World Economic Forum report, produced in collaboration with The Boston Consulting Group, reveals that unlocking this potential value requires the establishment of rules and safeguards that balance the interests of all stakeholders.
The report suggests that personal data are a tradable asset, like water, gold, or oil. And like these assets, they need a set of trading rules to allow for mining, sharing, and utilization. Unlike tangible assets, however, personal data are not consumed when used. Instead, use increases value because new data elements are accumulated, providing greater insights into individuals. This increased insight, coupled with new data mining and “big data” technologies, often leads to new ways to use and create value.
As a consequence, the approach to establishing trading rules—and the rules themselves—have to be different from other asset classes. The rules must be complex enough to encompass the extensive and diverse ways in which data can be used and flexible enough to adapt to the new uses of data that are being invented almost daily. They need to balance the potential value that personal data can unlock with the rights of individuals and societies to determine what are, and are not, legitimate uses of data. And they need adequate safeguards to ensure both compliance with these rules and protection for individuals from the unauthorized access of their data.
The report aims to foster a debate around some of the key questions that need to be resolved to unlock this value. Who owns personal data? How can privacy be protected? What is the role of context in setting permissions? How can organizations be held accountable? What is the role of regulators?
The report outlines concrete steps that stakeholders can take, focusing on three areas: upgrading protection and security, agreeing on rights and responsibilities for using data based on context, and driving accountability and enforcement. It concludes with a call for leaders to work together to achieve a coordinated yet decentralized approach to this global challenge.
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