Data as a Contested Economic Resource: Framing the Issues

Abstract

Big data, exploited by ever more powerful AI and machine-learning engines that extract previously unattainable information, is being monetized in various ways and is underpinning the market valuation of today’s most valuable corporations. This has made data-generated rents the principal bone of contention in today’s economy, alongside the negative externalities that the unregulated and undisciplined use of data are creating. In this note, I develop the case that the contest for the rents generated in the emerging data-driven economy will powerfully influence the social order within and international relations externally. Further, I argue that there is no good historical analogue for data as an essential capital asset and thus there is no good historical analogue for a regulatory framework to control the negative externalities to which it gives rise or to equitably share the benefits that it generates. Regulation won’t wait because the issues are pressing urgently on societies as the implicit social contracts that preserve political stability are rapidly eroding, setting the stage for disruptive political change. Hence, we are into a phase of experimenting with regulatory approaches while still working out the guiding principles.

Keywords: data, data-driven economy, digital transformation, digital trade, regulation of data, income distribution, privacy, data ownership, data trusts

JEL Classification: F13, F52, F55, F63, L40, L52, O30, K21, K24