As part of this stakeholder outreach activities, recently, TRUSTS organised a World Café* to gain inputs from 25 market participants and domain experts from across Europe, on the current state of data markets. Outputs of the facilitated discussions will further inspire our platform development and go-to-market approach. The summary of these findings is structured along the four perspectives of the World Café workshop:
- Business of data sharing and trading
- Technological capabilities
- Governance and common rules
- Environmental and social impact
Business models for data markets: kick-starters, barriers and data market value proposition
Data exploitation is becoming part and parcel of business models. Accordingly, large companies and SMEs more and more understand that the infrastructure for sharing and trading data is an important pillar of the data economy. Initiatives like TRUSST that research and develop data marketplace ecosystems are therefore very welcome.
In order to make data marketplace business models viable in the long term, a clear added value must be created by such platforms, addressing specific business needs linked to use cases. Many concepts in existence appear to be only partially effective.
TRUSTS should therefore offer a clear business model that addresses the needs of companies and private individuals for trustworthy data exchange and trading. Its focus on data sovereignty and federation is a promising starting point to provide mechanisms addressing the apparent lack of trust of data asset providers towards buyers and the onwards use of data asset.
Yet, to create trust and willingness to invest in the use the data marketplace services, TRUSTS will need to step up its efforts in stakeholder engagement, and credibly demonstrate its potential for business sustainability. Formal creation of a commercial platform operator and the attraction of supported pilot projects were among the top considerations highlighted by the workshop participants.
But how to get started? Promising approaches for the launch of a new data marketplace aspiring to build a comprehensive ecosystem were seen in:
- Focus on nice domains in a specific data space
- Exploration of high growth domains
- Provision of quality-assured public data
- Bootstrapping from existing, industrial peer-to-peer networks
Participants also discussed pertinent challenges and obstacles to launching and operating a data market.
Data marketplaces run the risk of having unclear value propositions and opaque end-user needs. Unlike data aggregators with proven business models, they still have a long way to go in testing and fine-tuning their business models.
Additionally, discussants saw a risk that during the startup phase data marketplaces focus too single-mindedly on providing a sophisticated data exchange and trading infrastructure but may fail to address supply and demand holistically. Bridging the paradigm chasm between “data-as-product”, as seen by potential data asset sellers and “data-as-problem-solution”, as seen by potential data asset buyers is key.
Workshop participants also discussed a number of obstacles to data trading, such as contracting and data asset pricing. Yet, they felt that more often than not it are way less mundane, all-too-human challenges that stifle data trading. For example, it was noted that potential data asset providers often are reluctant to share and trade data, as they experience “fear of missing out” and fear of exposure to risk of unwitting exposure of competitively relevant data. In particular, business-side employees approached for data assets shy away from the personal effort required for internal coordination efforts and bureaucratic approval processes.
Which data market value propositions are now worth to explore?
The participants agreed: When defining its value proposition, a new data market should consider a triple-A model: Availability, Accessibility (efficiency and ease), Analytics. And when we are talking about accessibility: If data marketplaces actively facilitate and partially automate matchmaking, contracting, and price negotiations to avoid lengthy contract negotiations to obtain data sets, they could reduce coordination and search costs for data providers and buyers. In other words, efficiency and speed in obtaining needed data are key. Lastly, as observed in the Data Market Austria (DMA) project, the emergence of a new actor must be taken into account: the data brokers. Data brokers are intermediaries between data providers and data buyers.
Governance and Common Rules
Besides the business side, one of the most important aspects when it comes to data sharing are the rules and regulations. Within the TRUSTS World Café discussions, it became apparent that it is necessary for data markets and related services to provide concrete processes that address data protection issues. These processes should be visible to all users to ensure compliance with data protection regulations, such as GDPR. Part of the talks were also global data marketplace rules – these would enable federation of digital marketplaces and facilitation of each ecosystem.
When it comes to data marketplaces, issues of quality and integrity must also be considered in order to preserve the prerequisite trust in the market and its participants. For this, corresponding processes must be defined and established and offered as an integral part of the service.
Technology: Features and Standardisation
In addition to regulations and economic factors, technical implementation plays a major role. Here it is important to question features important for data marketplaces and standards needed for implementation.
Security and trust are the most important prerequisites for data sharing. To achieve this, first, secure data storage is needed. Next, data exchange must be secured by encryption and protocols. Lastly, mechanisms of collaborative, “trustless” data processing – such as distributed computing and homomorphic encryption are required.
In addition, clearly specified access and usage rights as well as information about the origin and lineage of the data are important factors to ensure trustworthy data exchange.
Besides, technically important is a brokerage and recommender system. Because when acting as a broker between supply and demand (sellers and buyers) it’s necessary to offer a useful range of features and functionalities for this like
- rich metadata that informs the user about the data and its attributes
- high data quality
- potential user ratings, etc. that is used for search and discovery mechanisms
- smart assistantsas recommender that guide users to relevant data available based on their needs and profiles and industry (e.g. in the form of data circles).
Also, such metadata, the data itself and the features (e.g., APIs) shall be based on existing standards where possible, to ensure interoperability with source systems (e.g. in data integration and orchestration by data providers) but also to other data marketplaces and ensure compliance.
Environmental and Social Impacts
The environmental impact of a data markets such as TRUSTS evoked opposing opinions in the World Café. Data markets impose challenges on society when they generate an additional burden for the CO2 footprint of an economy. In the perspective of discutants, the blockchain technology used to record transactions and to digitize legally binding contracts within TRUSTS and the training of machine-learning models consume significant amounts of energy, resulting in the emission of an equivalent amount of CO2.
However, data markets have the potential to alleviate this problem, because they allow the sharing of trained models and provide an environment conducive for transfer learning. Models are trained once, and potentially reused by multiple consumers. Exactly this is an aspect where data markets can help to reduce unnecessary emission of CO2, as they reduce redundancy and duplications.
Overall, workshop participants suggested the creation of new research initiatives or business models aiming to tackle the problem of CO2 emission.
The discussions in the TRUSTS World Café with regards to social aspects showed the relevance of appropriate incentivization schemes for data providers, which need to be combined with a solid legal framework. The benefits of sharing data need to be clear for data providers. Issues such as the Right to be forgotten – a right that intends to ensure that digital information with a personal reference is not permanently available – are especially relevant for de-centralized data markets such as TRUSTS. Appropriate means to enforce these rights should be conceptualized and implemented.
Differences in regulations on national level add another layer of complexity. A concrete suggestion to combat such problems was the introduction of a data trust, i.e. an entity dedicated to adherence and execution to existing law and ethical rules. It is impossible for individuals to find out whether all laws and regulations regarding their data rights have been complied with. Therefore, an entity must take on this task and, for example, ensure that data is removed across nodes when requested by the data owner.
Thank you to all who participated within this World Café. We will keep you updated on our next webinars and workshops via our newsletter and our social media channels. You can also take a look at our event calendar.
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