Is a Marriage of Big Data and Tech The Answer to Boosting UK Productivity?

Is a Marriage of Big Data and Tech The Answer to Boosting UK Productivity?

The huge volumes of deep user data held by Big Tech has been one of the major themes of 2018 and largely in a negative context. The Facebook/Cambridge Analytica scandal earlier in the year served to highlight how big data can be potentially harnessed to manipulate and be a concern.

Another concern is the growing power ownership of user data is handing to Big Tech, consolidating the dominant position of companies which own it and raising competition fears. However, there have been other developments around big data and personal data, including here in the UK, that demonstrate the potentially hugely positive impact it could also have on the latest technology improving productivity and increasing competition to the benefit of the end consumer.

Perhaps the most well-known example is the Open Banking Act that came into effect this year and obliges banks to, at the request of their customers, allow third parties access to their data and even payment infrastructure. This is enabling a new generation of fintech companies to integrate their own service with their users’ bank accounts. From budgeting apps that can host multiple use account information in one place to more accurate and efficient loan application procedures, Open Banking has already started to improve the competitive landscape of consumer facing financial services.

Another example recently given by Philip Aldrick, economics editor for The Times, highlighted how big data, public access to it and the latest technology in the world could help improve public transport by boosting competition. In 2017, the Bus Services Act forced private public transport operators to release data on the real-time location of vehicles, punctuality and fares. Geo-location data of locals, which mobile phone operators hold, would, as a big data set, highlight travel patterns that could indicate the potential for new, profitable bus routes.

Theoretically, the combination of these two data sets could allow start-up bus companies to cater to those routes. The result, Aldrick believes, would be a better service, greater competition driving up overall standards and more efficient travel infrastructure in a region helping to attract businesses and jobs.

Freeing up access to the big data that until now has contributed towards stifling competition by empowering tech giants, would create rivalries that the economy would benefit from in the shape of increased competition. A recent Treasury paper argues that data still doesn’t have any ‘comprehensive framework to determine ownership’. This provides a unique opportunity for legislation to decide now on a model of data ownership that will drive competition and not strangle it. In the bus network example this is passengers owning their data rather than the companies who have collected it. If other companies provide a strong enough value proposition, these passengers could then choose to make their data available to them.

Different kinds of data can have different legal status and perhaps should. It is fair that companies who invest in collecting user data should be able to charge a fee for then making it available. Research has shown that ‘data-driven’ decisions lead to results 5% more effective than otherwise. Adding 5% to the UK’s productivity by creating a legislative framework that facilitates tech-driven competition would be a phenomenal shot in the arm to the post-Brexit economy.

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