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Governing data: The ultimate frontier towards Europe’s digital transformation

“Scientia potentia est”. A Latin aphorism that was written for the first time in the 1668 Latin version of Thomas Hobbes’s Leviathan, but that reflects a lesson as old as humanity.

Today, at the brink of the Digital transformation, this aphorism is as valid as ever, with one important caveat, never before in human history has there been so much data available and consequently potential knowledge.

The uniqueness of data is that many actors can use it as many times as they wish and for as many purposes as possible without any loss in quality or quantity.

This feature allows us to compare data with an infrastructure that contributes to greater economic growth and, in general, to a greater well-being of society.

Another very important feature of data is that its value grows exponentially every time it is shared. According to a study published by the MIT Sloan Management Review, the greater the degree of data exchange of companies with customers, suppliers, and even competitors, the greater the innovation.

However, it’s not just about sharing data, it’s about doing it in a new way. Today companies are still reluctant to share because doing so comes with additional cost and risk. Especially when the nature of the data is sensitive (for example , company intellectual property, personal health, financial information). In short, although the volume of data increases exponentially day by day, its reuse is hampered by lack of trust.

In this situation, where is the European Union?

The European Institutions are well aware that today data is a key pillar of the European digital economy and data collaboration within and across Europe’s industries, public administrations and consumers will be key to future innovation and economic growth.

To overcome that data re-use is hampered by low trust in data-sharing, conflicting economic incentives and technological obstacles, one of the first measures announced in the European strategy for data, was the Data Governance Act. Adopted on the 30th of November 2021, its objective: to facilitate voluntary data sharing across the EU and between sectors by strengthening mechanisms that increase data availability and foster trust through one of the main novelties of the proposal; “data intermediaries”.

The regulation formalises the role of data intermediation service providers, a market that is still emerging in the EU, with the notable exceptions of Denmark and Finland, where these services are already advanced. The goal is to set clear rules for intermediaries, which will help to create fair and interoperable markets where players of all sizes have a chance to flourish.

The fundamental principle is that these service providers must remain neutral with respect to the data exchanged between holders and users.

To avoid a conflict of interest, there must be a functional separation between the brokerage service and any other service provided by the broker.

In addition, the regulation introduces and promotes the notion of “data altruism”: facilitating the creation of mechanisms that encourage the donation of data for objectives of general interest, provided that consent is given.

The Regulation also establishes the Data Innovation Board, an advisory body to provide expert input on developing guidelines for European data spaces. Technical issues include the development of common standards and interoperability requirements both at European and international levels.

Needless to say that the we live in a global World and that the EU cannot go about governing data in isolation. For this reason, developing a European Data Space is a journey that we have to undertake without losing sight of our likeminded global partners.

Consequently, we must move up a gear collaboration with those countries and regions that share our democratic and open market values.

Together with the Data Governance Act, the European Data Strategy will be complemented by a Data Act (when writing these lines a proposal has still not been presented by the Commission. It is expected to be published by the end of February).

The scope of the Data Act concerns the actual rights on the access to, and use of, data. The Data Act has the potential to be an absolute game changer: it can create a data-agile ecosystem that enables easy access to an almost infinite amount of high-quality industrial data and consequently boosting the sectors competitiveness and the EUs economic growth.

Clarifying rights on IoT data will be crucial for Europe’s Industry. When industrial data is generated by a machine in a factory, or a farmer using a row crop tractor, who does it belong to? The manufacturer, the factory owner, the farmer? And who may use and share this data with third parties, either to monetize it or to create or use new services? All of these questions are of paramount importance for the EUs competitiveness in an era where data will mainly come from things.

Our global competitiveness, our societal wellbeing and our strategic autonomy require a trustworthy European Data Space. Knowledge is power.