Capital matters. Not only does it provide us with financial security (through the income that comes from wealth), it also has the power to transform mindsets and foster active citizenship. Indeed, we know that people who own property are more likely to volunteer, vote and start a business. In short, capital is the essential ingredient that enables people to be the authors of their own lives.
The problem is that capital ownership – whether in the form of housing, savings or stocks – is heavily concentrated in the hands of a small proportion of the population. The latest government data indicates that the wealthiest 10 per cent of households in the UK own 44 per cent of total household wealth. Moreover, these inequalities are worsening – in part because of a housing boom that favours the already wealthy.
While discussions grow around how to boost capital ownership through conventional measures such as taxation (think Piketty's idea of a global wealth tax), there is clearly a need for fresh thinking in this debate. One area that is ripe for exploration is that of data ownership and monetisation. From browsing history, to retail transactions to medical and financial information, each of us produces a wealth of data that has the potential to be used to generate income.
The World Economic Forum goes as far as to call data ‘a new asset class touching all aspects of society’. And such sentiments are only likely to grow as the volume of data we generate increases. The amount of data stored on the Internet is predicted to be 44 times larger in 2020 than it was in 2009, in part due to more internet-connected devices emerging on the market.
Several leading thinkers have called for the monetisation of personal data, including Jaron Lanier, who has argued that people should be ‘compensated’ for the value they add to the global pool of online information. Yet until very recently these proposals were largely seen as idealistic and unworkable. As a result of the increasing sophistication of online technologies and the advent of cloud computing, we are now seeing new apps emerge that are geared towards turning data into capital.
Datacoup, for example, is a new start-up that aims to sell people’s personal data to retailers and advertisers on their behalf. Another platform is Glome, which helps people to control their online data and choose what to share with businesses in exchange for money.
These examples are part of a growing set of Personal Information Management Systems (PIMS) that put individuals in control of their personal data. According to the World Economic Forum, more than one new personal data service was launched a week in 2013. Nesta’s research indicates that PIMs could be worth more than £16.5 billion to the UK economy.
These are only nascent developments, however, and several questions regarding the potential for data to be monetised remain unanswered. How much income could people realistically derive from their personal data? What would people forgo if they were to charge businesses for using their data? Would ‘free’ access to social media and other services be at risk? Is there sufficient public awareness of the potential value of data? And, perhaps most importantly, would the global tech firms whose business models depend on this data be willing to release their grip over it?
The RSA is keen to help answer these questions over the coming months. Get in touch if you have any thoughts.
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