The Next Economic Boom Will Come From Your Data

The Next Economic Boom Will Come From Your Data

Many giant shifts in the global economy and culture can be tied to products that took something already valuable and available, and delivered it to the masses. The printing press for books, the Model T for cars, the Polaroid for cameras, the PC for computing, the iPhone for smartphones, etc.

Many future-watchers are looking to technology like VR, AR, the blockchain, self-driving cars, etc. for the next big thing. Those will all surely shape the world in profound ways, but the next step-change innovation will be a tool, or more likely tools, that allow people to be compensated for the value they create – otherwise known as their personal data.

Right now we're in a "faster horses" situation as people believe that as long as their data is private, things can go back to normal.

The thought of selling our data ourselves is just a leap too far. It's too complicated, it'll never work, I don't care if a company uses my data. We don't know what to ask for because it will be fundamentally different than what we have now.

All groundbreaking products are preceded by an amazing lack of collective imagination. Henry Ford burned investors twice with failed companies before finding success with the Model T. Steve Jobs was fired from Apple before the iPhone. That's the thing with innovation – we don't know who has the magic juju until after the fact.

So let's use our imagination.

The Status Quo

Imagine a world where we don't own our data, and we don't profit from it.

Everyone is still on Facebook, Instagram, or whatever the next thing is. There are more and more patchwork regulations like GDPR. Fines are levied for bad actors. Many are dissuaded from nefarious practices, some are not. Most of your personal data is eventually leaked through general human error or incompetence. The third-party doctrine means that your home, your location in it, and the conversations that happen there now belong to any companies who make devices that you use.

And yet your data is still being sold, just not by you. Companies are targeting ads to you based on a 3D model of your house, which they have because you own a VR headset. They serve these ads to you on the electronic menu of your favorite fast-casual restaurant, which they know you're at right now because you use a cool app the tracks your location to tell you up to the date weather for your microclimate.

They know you're looking at the menu because there's a hidden camera that has scanned your iris or some other distinguishing characteristic. They know what ad to serve you because a health coaching app leaked your heart rate and galvanic skin response, from which any emotional analysis company can deduce that you're sad.

In this imagined world, and our current one, very few people care about their data. Why should they? Hacks, identity theft, creepy advertising, it's all just the cost of using technology. It's not perfect, but what is? 23AndMe partnered with Pfizer to develop new expensive drugs for cancer and Alzheimer's based on its repository of customers' genetic information, so that's good right? If only I could afford them.

It's not dystopia, but it's not great. Also, the economy in this world bottoms out after third parties have all your data. There's only so much value to be squeezed out of manipulating people to buy and use products with maximum efficiency.

Boom Times

Now imagine a world where you own, control, and sell/lease your data. If you have a gene in your DNA that cures cancer, you're entitled to market compensation for its use in drug development. If advertisers want to know the layout of your home, they can make you an offer for how much it's worth to them. If someone has a use for a year of your location data – great, how much is it worth to them? Let's make a deal.

Democratizing the sale of data would have a similar effect as the Model T or iPhone. When more people had cars, that enabled huge new industries to be built. When the iPhone was popular enough, it enabled billion dollar companies to be built around an app.

When people can sell their data, suddenly we're all rowing in the same direction. It's not us against tech products, it's everyone exchanging value efficiently and fairly. Products can be built around consumer data sets ethically and explicitly. Just buy the dataset. Transformative health research can be done in almost an instant by simply paying people for their medical information.

If today you wanted to do a genetic screening of everyone in the U.S. to see if there were any genes that could be therapeutic to any of our most stubborn diseases or bacteria, how would you do that? In a world where everyone owns their data, all you need to do is get enough money together to compensate everyone for their contribution. It wouldn't be cheap, perhaps, but it would be possible.

Another effect would be that all that value that is currently locked up in Facebook and Google gets distributed far more broadly. If Zuckerberg wants to target ads to me based on my demographic information, great, how much will he pay me? He can mark up the cost to advertisers and be compensated for the network and software he's created. I'll take the money for the data.

Even if I'm homeless with no marketable skills, society gains value from the data I create. Cities would be interested in my location to better distribute services, health researchers would be interested in my diet, etc. If they could pay to know these things, and if they had to pay, they would.

No one knows if the amount that you could be compensated would be enough to live on, but I have a hunch that it would be that and more for many people. Because it won't just be the data that we know about today, it will be all the data that it's possible to collect in the future – which will be a lot.

And it will include data that you've already been generating your whole life: Family photos, old emails, public records, etc. We're all sitting on a trove of information that we're entitled to and it's only a matter of time before someone figures out how to derive value from it all. If you're willing to sell your data to the right person on the right terms, there's very little, if anything, that doesn't have value.

Nobody Knows

It wasn't easy or obvious to apply assembly line techniques to automobile manufacturing. Making a smartphone that was well-designed and easy to use but had half the features of competing smartphones seemed like a bad business move to most people. Yet enough people (not just the man-myths we celebrate) saw the opportunity to do these things anyway.

If there is another step-change innovation, it probably won't look like just more of the same. If we are capable of transforming beyond where we are now, something unpredictable and unprecedented will have to happen.

And yes, I'm predicting that it will be the distributed sale of data so maybe that means it won't be. But nobody listens to me anyway. I hope this post ages well :)


Photo by Markus Spiske on Unsplash

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