Conclusions of the Everis study for the European Commission
This is a decisive step for the European Union and its ambitions for the "free flow of data". Dawex had the privilege of participating in the Everis study as an expert in data sharing.
Why did the European Commission fund this study?
Since 2014, the European Union has wanted to build a “European data economy” open to all companies, regardless of their size or level of development. After identifying the sectors with the highest potential for exchanging data, the EU wanted to work further on the “free flow of data.”
In order to better understand the current status of the data market, the European body commissioned Everis to carry out a study to measure and expose the economic value of data. The goal is to begin shaping a regulatory framework that would enable European companies to share, exchange, and re-use data.
The lessons learned from the Everis study will contribute to a “Data Package” (orientations related to EU data strategy), in which one of the main ideas is to prevent the addition of new legislation for data exchange and monetization practices. Rather, the idea is to share advice on good practices to create a trusted environment conducive to the flow of data.
The study focuses on 14 Member States: Belgium, Bulgaria, Denmark, Estonia, France, Germany, Hungary, Italy, Luxembourg, the Netherlands, Poland, Portugal, Romania, and the United Kingdom.
129 were interviewed about their use of data (32 large companies, 35 mid-sized companies, 27 small companies, and 35 micro-companies). These companies are involved with 5 main business sectors:
- Data-generating driving (i.e. data collected while driving)
- Smart agriculture
- Smart manufacturing
- Smart living environments
- Smart grids
Conclusions of the Everis study
Data figures in Europe
First, the study highlights figures relating to the European data market. The figures are already high and are expected to grow significantly into 2020.
The European data market was estimated to represent 59.6 billion euros in 2016 and is expected to reach 106.6 billion euros in 2020. The European data economy, which includes the direct and indirect impact of data on the overall economy, was estimated at 300 billion euros in 2016, with 793 billion euros expected for 2020.
Lastly, the impact of the data economy on GDP in the European Union is estimated at 4% for 2020.
Major market trends for data in Europe
16 real-world cases were analyzed, highlighting 5 major trends relating to the context of sharing B2B data:
“Data Monetization”: either by generating revenue directly by selling data, or by monetizing analyses based on data.
“Data Marketplace”: Dawex was mentioned as an example of a "trusted intermediary" for data transactions, an entity ensuring the proper conditions to carry out transactions (trust, security, compliance) and bringing providers and acquirers together in a single space.
“Industrial Data Platforms”: these platforms correspond to private data exchange spaces created by small groups of companies. Data exchange in this case is free, even though fees may be charged by the company making the environment available to the group. Furthermore, these environments remain limited to the particular business activities of the companies involved.
“Technical enablers”: providing the technical solutions necessary for exchanging data. These entities earn their revenue by selling their solutions or making them available to others.
“Open Data Policy”: these companies make their data available via an Open Data policy, in particular to encourage innovation in their field.
Why do companies use their data?
The Everis study also revealed the main objectives sought by European companies involved in sharing B2B data.
First, it is clear that the development of new business models and revenue generation encourages companies to monetize their data.
Second, the other main objective is to buy data to develop new Data Driven products and services.
How do companies use and perceive data?
Another major conclusion of the Everis report is that company practices regarding data vary greatly depending on the business sector and company type. In addition, there is still some mistrust with respect to privacy and security for B2B data exchanges.
40% of the interviewed companies share and re-use data. It is the main business activity for 20% of them. Most data is exchanged using APIs (64%). 12% of the data is acquired via industrial data platforms, compared to 10% via data brokers.
Data providers and acquirers tend to share and re-use data within their own business sector. Data exchange between organizations across different business sectors increases on a European-wide level. In fact, that practice represents an interesting opportunity for companies to create added value from their data.
Nonetheless, European companies are still suspicious when it comes to sharing their data. They generally prefer only to share a very tiny portion of their data. There are several reasons for this mistrust:
- For reasons of confidentiality
- Ensuring that they do not disclose any strategic data
- To be sure they stay in compliance with the various laws governing the use and sharing of data
The Dawex global data marketplace seeks to remove these obstacles with its offering. Indeed, the thousands of companies registered on the platform benefit from a global infrastructure for circulating data, while respecting local regulations regarding data protection and transfer. Dawex's success can be explained, in part, by the trust and transparency factor for data transactions.
Challenges identified by the Everis study
With respect to sharing data in a B2B context, 52% of the interviewed companies indicated that they encountered major obstacles. These obstacles can be grouped into three main categories:
- Technical: a lack of interoperability, security, and trust. Costs of data curation and infrastructure
- Legal: need for assistance with respect to property, usage of the acquired data, and applicable regulations (GDPR).
- Financial: costs related to sharing data.
For practices to be sustainable, it is essential to clarify the conditions for using data. In addition, European companies need to acquire legal and technical skills to fully unleash the potential of data exchange.
Dawex assists member companies on its platform throughout the entire data monetization process. This enables companies to leverage the expertise offered by the Dawex team in order to build value from their data and understand applicable local legal issues. The goal is to avoid taking any legal or financial risks. Companies can use the Dawex platform to buy and sell data with complete confidence.
Lessons learned from the Everis study
The report highlighted many lessons that help explain vectors for making improvements that will help support the generalization of data exchange and sharing in Europe.
Companies need to be able to evaluate the data they wish to acquire before going deeper into the acquisition process. On the other side of the issue, sellers need to be able to understand how their data may be useful for other companies. That is key information, as it helps sellers define the value of their databases.
Other lessons learned:
The need to enable discussion between data providers and acquirers so they can better mutually understand each other's needs.
The need to establish partnerships with trusted intermediaries who possess skills that are complementary to those of companies specialized in data.
Simplifying the solution used to share data will enable companies to generalize their sharing.
The need to create trust between parties to enable exchange over the long-term is a key factor, as is the need for understanding the regulatory context surrounding data sharing. This applies both to the global (GDPR) perspective as well as a sector-oriented perspective (with specific regulations in specific sectors).
Lastly, more specifically relating to vendors, it is necessary to establish clear contract models and to define the conditions for exchanging and re-using data. Those are two important needs that, once met, will help make practices viable in the long-term.
Statistics also confirm the increasing maturity of European companies with respect to data. For example, 20% of the companies say that they have considered making data sharing their main business activity. European companies are expecting data sharing to increase in magnitude in the near future: 46% of the interviewed companies predict that data sharing will become a major economic activity within the next five years.
Future tasks for the European Commission
Given the lessons learned from the interviews, the Everis report highlights topics that the European Commission will need to address in its next efforts in order to encourage the free flow of data in Europe, such as:
- Clarifying the concept of B2B data sharing.
- Taking a regulatory approach (excluding personal data) limited to the greatest extent possible to avoid hindering the data economy.
- Continuing to offer advice and recommendations to help companies.
- Organizing "awareness campaigns" to promote data exchange and further engage companies with the data economy.
- Publishing recommendations regarding current and upcoming legislation as a way to help companies.
- Creating a legal framework for sharing data between companies to define basic concepts, good practices, and the conditions necessary for driving sure and efficient strategy.
- Supporting the development of standards.
Lastly, the report recommends that the European Commission fund companies that offer solutions in these fields to exchange inter-company data, as is the case with Dawex and its global data marketplace.
While forcing private companies to share their data for public interest purposes is a subject still open to debate, other aspects of the Everis study have huge impact on the data market.
The study generally shows that upcoming work for the European Union corresponds closely to the principles that Dawex has been defending since the company was founded:
- Giving companies advanced configuration possibilities to control the contractual conditions governing data monetization and/or acquisition.
- Including conditions for using and re-using data within those contractual elements.
- Providing a matchmaking function between providers and acquirers, and not simply listing a catalog of data.
The Everis report presents a complete and realistic portrait of the data market in Europe. To favor the growth of this fast-expanding and sufficiently regulated market, Dawex recommends against creating further restrictive laws.