Singaporeans, like many others, are concerned that emerging technologies could lead to widespread unemployment and social unrest as humans are replaced in the workforce by automation, artificial intelligence and robots.
Whilst not entirely misplaced, such anxieties have sparked discussions about alternative economic models, for example concepts like a Universal Basic Income. Another possibility is a new economic model built around data, or more precisely, a data economy based on an ‘algorithmic data exchange’ akin to a stock market that creates value through the exchange of data assets.
If established correctly such a Data Exchange could help address economic inequality, a concern that has gained prominence since Thomas Piketty published Capital in the Twenty-First Century (2013).
The basic Data Exchange concept has been around for a while. A web search returns various instances, and in its simplest form, it is a system for trading datasets. However this algorithmic Data Exchange model is different, it is a data stock exchange where everybody on Earth owns a share of the market. It hinges on the concept of a Personal Data Locker (PDL), which is an application that allows everyone to aggregate, control and own copies of their personal data.
Tim Berners-Lee wrote that protection of personal data is the number one problem for the internet now. Berners-Lee raised the idea of personal ‘data pods’, which sounds really similar to the concept of PDL. There are other similar concepts, such as the University of Warwick’s HATS (Hub of All Things), but this PDL concept differs in its relationship to an overarching economic model - specifically an algorithmic Data Exchange where entities and individuals trade their data.
A practical example of Data Exchange is to sell details of your smart home’s monthly electricity consumption to the highest bidder in return for a monthly credit into your PDL. A distributed ledger system potentially based on blockchain could manage the Data Exchange smart contracts and micro-payments. Credit could accumulate as crypto-currency. Assuming the algorithms are written to do so, wealth would be redistributed such that inequality is addressed. This represents a new fiscal model as it helps to distribute wealth between owners of personal data and commercial and public entities that benefit from the use of that data.
Whilst many believe that the exchange of their personal data in return for free services - like Facebook, WhatsApp, Gmail or YouTube - is a fair deal, once it’s properly understood what is at stake when you give away your data in exchange for free services, there may be a backlash. Yuval Noah Harari in his 2016 best-seller Homo Deus, A Brief History of Tomorrow, predicts that economies will require fewer people as productive labour because of artificial intelligence, automation and robotics - which reinforces anxieties about technology taking our jobs.
According to Harari, the masses will become redundant, and the only value that they will have left is their data-generating capabilities - the very thing of value that many if not most people are currently giving away in exchange for free services. If governments fail to regulate the trade in personal data, the risk of social upheaval may increase.
Singapore is the ideal place to pilot this Data Exchange concept and could conceivably establish a regulatory framework to do so. The Monetary Authority of Singapore recently created a temporary regulatory sandbox for the Fintech industry, and has regulated to accommodate disruptive businesses like Grab and Uber, in line with other broader government initiatives for developing a digital economy.
These moves signal a growing interest that could support development of the Data Exchange concept, and possibly the Singapore Government might consider this but as Harari tells us, “Nationalism cannot solve global problems”. We should also support international instruments, such as the stalled Trans-Pacific Partnership, to ensure that digital economy legal frameworks are globalised so that trade in data assets can economically benefit all people, and not just a few companies.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Gregory Cornelius is the founder of Singapore's Modn Media.