Digital Economy Dispatch #049 -- The Difficulty in Understanding the Value of Personal Data

Digital Economy Dispatch #04915th August 2021

The Difficulty in Understanding the Value of Personal Data

Imagine that one cold winter’s morning you open up your inbox and see a new message vying for your attention.

An organization is requesting access to your personal data. It would like to obtain anonymized data for 1 month from your calendar, Facebook posts, Linkedin activity, and a summary of incoming and outgoing email to see the trends and patterns of your online behaviour. The message tells you that it wants to use this information for research purposes.

What would be your reaction? If I assume that you don’t immediately hit the delete key and move on, then a few interesting questions and concerns may well come to mind. Why do they want my data? What will they do with it? Will it be stored and managed securely? How long with the keep it? Who benefits as a result?

These are important issues. It highlights the challenge we all face in our data-driven, internet-enabled, fully connected digital world: who do we trust with our data? It is a question that appears to be getting much more difficult to answer. There are several reasons why.

The first area to consider is the complexity of our relationship with organizations requesting digital data. Our response to any such request inevitably depends on who is asking, our previous experiences with digital data use, and a whole lot more.

Try this for yourself. Suppose that the request for your data is coming from these 4 different agencies and think about your personal position and response:

1. A health charity using the data to consider the relationship of stress to online digital behaviour to advise people on how to change work habits for better health outcomes.

2. A university research group writing an academic report on the changing trends in online activities in different demographic groups.

3. A local government team gaining insights into community demand for infrastructure services in your region.

4. A well-known large technology company planning a new product release aimed at supporting collaboration among people working online.

For each of these organizations, the same request may well receive different responses based on a variety of issues related to our views and experiences with data sharing in the past. This variation is highlighted in several surveys in which individuals are asked about who they trust with their data.

For example, a substantial study in the USA by the Pew Charitable foundation in 2019 found not only that people were “concerned, confused and feeling a lack of control over their personal information”, but that that trust varied significantly between government institutions and commercial companies. Furthermore, a study by the Open Data Institute (ODI) concluded that trust also varies depending on the type of companies making the request with marketing and advertising organizations at the bottom of the list.

In the Pew study, it is significant that as custodians of personal data, government and commercial organizations were seen quite differently in their aspirations and capabilities. This is summarised in for the percentage of people who expressed concern about the orgaization’s abilities in 4 areas:

• Lack of control – Government: 81%   Companies: 84%

• Risks outweigh benefits – Government: 81%  Companies: 66%

• Concern over data use – Government: 79%   Companies: 64%

• Lack of understanding about data use – Government: 59%  Companies: 78%

The second important area relates directly to the perceived value of our personal data. Marketplaces already exist for some elements of personal data. Calculators such as those provided by the Financial Times offer a detailed view on the price paid by companies such as data brokers, retailers, and advertising groups for access to your personal search and buying habits. They are helpful if you want to see how and why personal data has become a commodity and the reason for the scramble to gain online attention from particular demographic groups. Yet, the broader questions of the value of data are receiving a great deal of attention, and it has been found that there is wide variation in what people think their personal data is worth.

But there is perhaps a more fundamental question we should consider with respect to data value: What do I get in return for providing my data? This is a much more challenging question to address. There appear to be a number of important strands to consider.

In many cases, providing your data is an direct payment for goods and services I receive. Examples abound such as pay-with-a-tweet and cafes where the coffee is free if you provide your personal data. Many more such initiatives will undoubtedly appear.

However, more indirect payment approaches are seen with personal data. It has become a common view recently that if you are not asked for payment for an online service (E.g., a Google search, a gmail account, or a social media post) then you are not the customer, you are the product. In essence, the trade you make is access to the service for the rights to use the information about your use of that service. The data about your use of the service is the payment. It can be used by the company offering the service, or they can sell that data in some form to third parties.

There is also a more constructive view of this payment. In agile product delivery scenarios, a central theme is rapid feedback to ensure products and services can be refined and customized to improve the “product-market fit”.  Online product and service consumers are now accustomed to well-designed, easy user capabilities and in exchange they are happy to overcome misgivings about how organizations use their personal data and previous product experiences. Extensive on-going data gathering is an essential element of this approach and something people appreciate as they interact online. The choice made by anyone operating online is a clear trade off between better services and lower personal data privacy. One that many are willing to make.

The third and most challenging area of data privacy is understanding what we mean when we talk about “trust”. In much of the material I see on digital transformation, words like “trust” and “risk” are widely used but very rarely grounded in a meaningful framework to support the ideas being discussed. Something for which I must also confess some guilt. To address this, I have found it important to go back to the drawing board and review these core concepts to ensure I have a more solid basis for how to consider these core principles. Sometimes it takes a few steps backwards to allow us to move more confidently ahead. I’m glad to see Deloitte, Gartner, PWC and others are also placing more of a focus here.

Even so, it seems clear we’re still in the early stages of understanding the value of personal data. So it’s critical for all of us to take care about who we trust with one of the most important thing we have: Our digital self.

Digital Economy Tidbits

Amazon will pay you $10 in credit for your palm print biometrics. Link.

So, $10 in exchange for your palm print. A good deal?

10 breakthrough technologies for 2021. Link.

An interesting selection of the most important technical breakthroughs for 2021.