This is the fifth installment of a series in collaboration with the World Economic Forum’s Centre for the Fourth Industrial Revolution (C4IR) Japan, which will explore how the coronavirus pandemic has revealed the need for a reset of the world’s economic and social systems.

As you read this, it’s likely that information about you is being bought and sold by a technology company. Maybe it’s data on your movements, collected by that jogging app you signed up for. Or it could be information about your finances or your health. The information might identify you — your name, your address — or maybe it has been “anonymized” and mashed together with data on thousands or millions of other people. Either way, your personal information is a commodity, and a potentially valuable one at that.

The idea that the private details of our lives can be bought and sold like oil or cattle futures is unsettling. We’d rather not think about it, even if every precisely targeted advertisement in our social network feeds reminds us that it’s happening.

Some people would like to sharply restrict or even ban the trading of personal information. In a world whose economic and technological life blood is data, that’s probably not realistic. And it would have downsides: data doesn’t just help businesses target online ads, it lets urban planners reduce traffic jams and medical researchers treat diseases.

Instead of stamping out trade in personal data, one idea is to make it more transparent. A lot of today’s data trading takes place without verification or oversight. Who is doing the buying and selling? Was the data obtained legitimately? What will it be used for? Too often, the answer is, “Who knows?”

But what if trading were shifted to open, public exchanges — like stock or bond markets, but for data? Traders could be vetted and audited. Prices would be more transparent, and buyers and sellers better matched. Consent could be more scrupulously monitored: You could decide who, if anyone, could access your personal data, and what they could use it for. If you chose to grant that privilege, you might even see some cash for it.

Jonathan Soble asked Chizuru Suga, head of the World Economic Forum Centre for the Fourth Industrial Revolution Japan, about the challenges and possibilities of data exchanges. Two data-governance specialists from the center — Dr. Takanori Fujita and Fumiko Kudo — joined the conversation.

You think that one day people’s personal information could be bought and sold on open exchanges. So if a drug company, say, wanted access to health records or DNA data to develop a new medicine, it could go on the exchange and bid for it. You think this kind of trading would be good for everyone involved. Why?

CS: The starting point here is that data is able to be copied and shared, and it’s the sharing that creates value. It’s what gives us new businesses, new social services.

Right now, in practice, only a limited group of people and companies has access to most kinds of data. And that leads to missed opportunities.

Who is best able to make best use of a particular set of data? It’s hard to know. It’s hard to determine the data’s true value. Today, most data trading is done privately, often in one-on-one transactions between companies. Not only is that not transparent, it’s inefficient — these transactions might be hugely underpricing the data.

Our argument is that it would be better to have a more open, market-based system. Data exchanges would widen access to information, but also make trade easier to monitor and regulate. Trading data should come with responsibilities. Now, those responsibilities, if they exist, are often only spelled out in individual user agreements — the text people skip over before they click “agree” on a new app. There are no clear, widely agreed standards for who is eligible to buy and sell personal data, or for acceptable uses. There’s little to no external monitoring. If a railway operator, say, wanted to sell the travel and shopping data it collects though your train pass, it probably could.

With a stock exchange, companies that list their shares are audited by third parties. Are their financial reports accurate? Do their directors have criminal records? These things are verified. With the data version, there would be benefits for market participants — just like in the stock market — but also for the digital economy as a whole. It would become more transparent, with fewer unscrupulous actors, fake data and so on.

Are there any data exchanges operating in the real world today?

FK: There are some small experiments and specific, limited markets, including in Japan, but nothing full-scale.

One country that’s looking seriously at data exchanges is India. The idea is to start with an exchange for agricultural data — the locations of fields, their size, soil health, farm details, crop insurance, fertilizer supplies and that sort of thing. Right now that kind of data is held by the government and farm cooperatives. But if it were made available to researchers, entrepreneurs or even artificial intelligence, it could be used to improve decisions about everything from infrastructure investment to what to plant on specific plots. The Centre for the Fourth Industrial Revolution’s India Centre is working with the Indian government to see if this is feasible.

What about criticism that data trading turns personal information, and even privacy itself, into a commodity?

TF: It’s true that many privacy advocates are uncomfortable with the idea of data trading.

Some object to the basic premise that sharing data more widely is a good thing. Good for whom? Individuals? Businesses? Society? Some promoters of data exchanges talk about a collective right to access information, which exists alongside the individual right to privacy. That’s a highly controversial idea. So any trading system for data would need to have clear rules, a robust oversight mechanism and fair distribution of benefits.

The other issue is that consent becomes more complicated. In theory, data exchanges give people more control. You might consent to let your data be accessed for any purpose, for some purposes or not at all. You could opt for a Creative Commons-like approach by which your data could be used by non-profit groups but not by for-profit companies. Regardless, there needs to be a mechanism to manage that.

And there will be grey-zone cases. What happens when the information is about you but isn’t controlled by you — when it’s in the database of a tech company or a healthcare provider, say? The right to make access to that data available would probably depend on a mix of factors. How sensitive is the data? How anonymized is it? What would it be used for, and would that use have broad benefits for society?

CS: That’s an important point. It’s easy to say, “let’s trade data,” but what exactly does that mean? What exactly is being traded? In the stock market, it’s ownership — small slices of companies. But data is able to be infinitely copied, so the idea of exclusive ownership doesn’t mean much. It’s more about the right to access and use the data, maybe with restrictions — for a certain purpose, or for a certain time period. The challenges are similar to copyright management.

Our big focus at the center is purpose. Under what conditions would using a certain piece of data be beneficial, and under what conditions would it be harmful?

Your genomic data could be deadly in the hands of someone who wanted to kill you. But in hands of a rare-disease researcher, it might save your life. Matching data with the people who are in the best position to make use of it is a key function of data exchanges. As an individual, I can’t know which researcher is most likely to use my data to develop a life-saving therapy. In a large or wealthy country, it could be that the government is best qualified to collect and manage certain data — a national cancer-patient registry, for example. But governments in smaller or not-wealthy countries might struggle to fill that role.

In any case, managing data is different from using it to create things and help people. In medicine, that job might best be done by, say, a global pharmaceutical company. The challenge is to create a fair, well-regulated way for it to happen.

Could Japan be an early adopter?

FK: Yes, but it would require a change of mindset in addition to overcoming the technical hurdles.

People often don’t understand that the data they control has value. That’s true of individuals, companies, nonprofits, government agencies, you name it. What’s the incentive for letting others access that data? That has to be made clear.

Another point is building trust in the system. In truth, there is a way of bypassing that: The government or a giant company handles everything, and the individual just follows. But how do we get the same economic and social benefits while still protecting individual autonomy? The answer is in a blend of market mechanisms, technologies and governance. We’ve always used these tools, but now need to use them in new and unfamiliar ways.

CS: And I think Japan is well placed to do that. We actually have a long tradition of innovation in this area. The Dojima Rice Exchange in Osaka was the world’s first commodity futures exchange, founded at the end of the 17th century. No one had thought of that kind of trading before. But the merchants and the government saw the benefits, both for the participants in the market and for the country. Today we’re talking about information, not rice, but the argument is the same.

Chizuru Suga is head of the World Economic Forum’s Centre for the Fourth Industrial Revolution Japan, and leads projects related to health care data policy, next-generation mobility, smart cities and other fields. Previously, Suga was an official at the Ministry of Economy, Trade and Industry. Jonathan Soble is the center’s editorial and communications lead.

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