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The Future of Data: Adjusting to an Opt-In Economy October 2018

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The Future of Data: Adjusting to an Opt-In Economy October 2018 The Future of Data: Adjusting to an opt-in economy October 2018 Prepared for 2 | Oxford Economics 2018 Contents Executive summary ...................................................................... 4 The dawn of the opt-in era ............................................................ 7 Who are these people and what do they want? ............................. 10 Not all consumers are the same .................................................... 15 The rise of the data economy ........................................................ 16 How industries use data ............................................................... 18 Meet the leaders ............................................................................ 21 Life in the data age ........................................................................ 29 The path forward: Calls to action ................................................... 30 Research methodology ................................................................. 31 Contact us .................................................................................... 32 Oxford Economics 2018 | 3 Executive summary 4 | Oxford Economics 2018 In a world increasingly driven by data, We found that consumers have individual consumers suddenly have a lot contradictory views of the information of power. How they exercise this power, economy. They will share sensitive data and the ways companies respond, will be yet do not trust the companies they share a major story for years to come. with, or fully understand how much is collected and used. They see value from Big changes in regulation and in public data sharing but are concerned about perception of corporate behavior herald the impact of the data economy on daily the arrival of the opt-in era for the data life. And whatever regulators say should economy: from now on, companies must happen in terms of data ownership, allow consumers to take ownership of consumers are unready to take control of their own data and choose where and how this increasingly valuable asset. it is shared. Yet most people, companies, and governments are not prepared for Executives have a more consistent, and what comes next. generally positive, outlook on the data economy: it is good for business, and Oxford Economics worked with NTT DATA they expect that trend to continue. They during the spring of 2018 to survey 500 are confident that benefits will accrue executives and 5,000 consumers in 15 to their customers and broader society countries about their visions for a future as well as their shareholders, and are shaped by data. We also conducted investing in emerging technologies like in-depth interviews with more than a artificial intelligence (AI) to power the next dozen senior executives, officials, and wave of growth. Yet businesses are also academics. playing catch-up in some important areas. They underestimate consumer concerns about data sharing and use, and are not prepared for further regulatory change. Oxford Economics 2018 | 5 This report presents our produce substantial new data flows as findings at a pivotal moment they grow popular. in the development of the data Yet consumer concerns can seem like an economy. We tell the story in afterthought: companies are much better several chapters. at protecting their own data than their customers’. Changing rules could catch many companies flat-footed, as most The dawn of the opt-in era organizations are not effective at preparing for upcoming regulations. Just Consumers, businesses, and regulators 60% are effective or highly effective at are struggling to make sense of a world regulatory compliance in markets beyond where big data and analytics play a critical their home turf. and growing role in daily life—while the rules and expectations keep changing. The path forward Consumers: Who are these We issue several calls to action people and what do they for businesses: harness the new- want? found power of the consumer, create mechanisms to deal with ongoing Consumers are conflicted as the opt-in era This is a regulatory changes, invest in AI and other for the data economy begins. They worry emerging technologies, prioritize talent about privacy, but many do not do enough pivotal development, and focus on the broader to protect it. They doubt that businesses impacts of their data strategies. moment in the and governments are protecting their development data—only one-third of consumers trust Our report includes a look at differing businesses to keep their information visions of the data-driven future and of the data safe—but they expect to share more in its impact on every facet of human coming years. Regulators say consumers experience. Expected benefits include economy. have great power, but most consumers step-changes in productivity, do not yet exercise it in their everyday convenience, wealth, and quality of relationships with companies. life; potential downsides range from the widespread erosion of privacy to The rise of the data economy algorithmic injustices that limit access Businesses are deeply invested in the data to digital services for minority or revolution and are intent upon accelerating disadvantaged communities. Executives its progress. Our survey shows that are more optimistic than consumers about big data and analytics are competitive the future; which view proves true will be differentiators, and that companies determined by the choices made in the proficient at using data grow faster and months and years ahead. perform better financially than their peers. Artificial intelligence is set for explosive growth, and next-generation devices like wearables and connected cars should 6 | Oxford Economics 2018 The dawn of the opt-in era The future of data privacy just arrived, to the regulatory environment around those strategies. and almost nobody is ready for it. This shift began with the revelation that data shared with an innocent-looking quiz app on Facebook was used by Cambridge Analytica in an attempt to influence the Not the thousands of companies around the globe betting 2016 US presidential election. Suddenly the potential big on digital investments and strategy. Not governments impact of even the most innocuous data sharing took or regulatory bodies that are setting the rules in real time. on an unavoidable immediacy for millions of consumers. Definitely not consumers, who were granted ownership of The months that followed were no kinder to data-driven their own personal information but remain unsure about companies, right up to the enormous security breach what that means or what to do next. announced by Facebook in late September. Soon after the Facebook scandal broke, the European Union’s General Data Protection Regulation (GDPR) went 2018 will be remembered as a into effect, requiring companies in EU countries—and those elsewhere doing business with EU citizens—to landmark year in the history of make data collection an explicit consumer choice instead of the default option. The impact was quick and broad, if the data economy. not immediately very deep. Google, Facebook, Microsoft, and Twitter rolled out their Data Transfer Project to help consumers take control of their personal information. Consumers were inundated with emails explaining 2018 will be remembered as a landmark year in the history corporate privacy policies, and the ad-tech industry of the data economy, marked by a dramatic increase in scrambled for survival while traditional businesses of all consumer awareness of the power, scope, and risks of kinds hurried to adjust to the new regime. corporate data strategies, and by sweeping changes Oxford Economics 2018 | 7 Businesses need to take these events very seriously, resides too much with the data collectors. “We need as Facebook investors discovered when the company’s to strike new balances between consumer interests and business needs,” says Zee Kin Yeong, Deputy Commissioner of Singapore’s Personal Data Protection Commission. “New technology has enabled companies to “We need to strike new make use of data in ways that we could not have foreseen five years ago.” balances between consumer The stakes are high as a rapidly digitizing world struggles interests and business needs.” to define the rules of information ownership, where access to data is as important to economic growth in this Zee Kin Yeong, Deputy Commissioner of century as access to petroleum supplies was in the last Singapore’s Personal Data Protection Commission one. Businesses and governments are changing the ways they operate to harness the power of data, a process that is accelerating as supporting technologies such as analytics and artificial intelligence mature. Yet consumers user growth slowed in the second quarter and its stock and executives see the world very differently—everyone suffered the largest-ever one-day decline in value. More agrees it will be good for business, but consumers are regulation is on the way, with California passing its own much warier of the impact on their well-being and that of privacy law and the EU and others considering their next ig. 1: Execs see great days ahead society in general. steps.Q: AroundDo you think changes the resultingworld, from therebig data/analytics is a willsense be mostly that for good power or ill? “Better” and “Much better” responses — Executives and consumers Fig. 1: Execs see great days ahead Q: Do you think changes resulting from big data/analytics will be mostly for good or ill? “Better” and “Much better” responses — Executives and consumers 5 For businesses 8
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