Dear Europe, Data Privacy and Big Data doesn’t have to be a choice.
Europe is in a state of data poverty
Europe’s emphasis on data privacy could hinder competitiveness in the information age. Data is by far the most important ingredient for advancing AI capability. Just as oil fueled the industrial age, big data will fuel the AI age. This is China and the United States’ biggest advantage. Their loose concept of privacy allows them to vacuum up people’s private information. The Economist has even called China the “Saudi Arabia of Data.”
As a result, China and the US are competing for AI superpower status. While the US is still ahead, China is rapidly catching up and already uses facial recognition to fine jaywalkers(pictured below) or pay at vending machines.
Europe, conversely, is in a state of data poverty. Despite composing nearly 50% of the OECD population, it produces only 4% of global data. One obvious reason is Europe’s firm commitment to privacy. The General Data Protection Regulation (GDPR) has been praised by many observers as the gold standard of data regulation in the information age. It provides individuals novel rights such as the right to view any of their data or even to delete it. However, despite the praise, most other jurisdictions are taking a wait-and-see approach before following suit. Upwards of 30% of economic activity expected to be AI powered by 2035. Hindering data accessibility in favor of word class privacy therefore seems like an unattractive approach. And unless Europe is prepared to accept a backseat in tomorrow’s economy, it must quickly invent a way to enter the data race.
Big data with European characteristics
The solution could come through a data marketplace, underpinned by radical privacy and blockchain. Blockchain is a technology that underlies cyrpto-currencies such as Bitcoin. It is essentially a database without a central administrator. Instead, it is maintained by many users, or nodes, who store data for a small reward and keep each other in check. Currently the market is rapidly attempting to understand the use-cases for this technology and decentralized data storage is amongst the most promosing.
Storing data on blockchain gives it several properties which would excite even the most ardent European privacy advocates. First, without a prying central administrator like Google, only the data provider is able to access and own their data. Second, nodes keep each other in check through advanced cryptography making data virtually tamper-proof. This attaches integrity and trust to data which is crucial for personal information, such as medical records. Finally, data could be sent to third-parties in an authorized manner, not dissimilar to how we currently send an online payment.
Many projects are already aiming to put personal data on blockchian, Sovrin’s identity project being a notable example. However, even if data ownership remains with the individual, it is still out of reach to data hungry organizations. This could be remedied by creating a vibrant, decentralized data marketplace.
Imagine if your personal data is securely stored on this hypothetical blockchain enabled marketplace composed of verified participants. The types of personal data stored could range from your odometer count to your income. As described above, data could be sent to third parties that could subsequently generate value from it. For instance, a new transport startup determines they need location data of 10% of 18–45 year olds to make a viable CityMapper competitor. They could send a query to the marketplace, incentivizing access to data in exchange for monetary compensation. The data buyer then receives the required data from verified and willing sellers. The startup has quickly sourced the specific data needed while completely protecting the identity of the participants. You could call it big data with European characteristics.
Adam Smith and George Orwell walk into a bar
The above proposal calls for a radical yet necessary rethinking of how data is approached and treated. It would please both Adam Smith and George Orwell, combining market efficiency with cutting-edge privacy technology. Organizations would be able to access any data they need without the invasive tactics employed by Chinese and American firms. Morover, individuals could dictate their own terms and choose the level of privacy they wish to retain. With a population of over 500 million internet users actively producing data, the EU has the resources to build a highly liquid marketplace. Brussels would quickly become known as the Wallstreet of big data in addition to the leader in privacy rights.
For such a marketplace to come to fruition, it still has to cross many technological and political hurdles. For example, the blockchain must have a bullet-proof governance model that ensures no false or unverified inputs are recorded, cheapening data quality. Another noteworthy challenge mentioned by Eric Weyl and Eric Posner in their book Radical Markets is that there is little understanding behind how to price personal data, making the establishment of a marketplace extremely difficult. Nevertheless this has not stopped some companies from actively pursuing this vision, such as Bottos or CPChain. However, it will need the support of the EU, national governments and we, the data producers, if this is to become more than a niche experiment. Time is running out for Europe to take action, and until then, the quest for AI dominance remains just a two-horse race.
Thank you to my friend Carlos Granados for the original artwork.
