Shanghai Data Exchange: Can it create history like Amsterdam Stock Exchange in 1602?
The real value of data will be determined by such data exchanges.
AgenciesWhenever I think about ‘Data’, the anatomically fully functional android of Star Trek crops up in my head. Data is self-aware, sapient, sentient, and had striven for his own humanity. Be that the case or not, the ever-expanding universe of data in today’s world is already big, and people aspire to use data in every bit of human life and lifestyle.
History was created this November 26, when the Shanghai branch of the Industrial and Commercial Bank of China struck a deal to use data from the State Grid’s Shanghai Municipal Electric Power Company to help improve its financial products. A new Shanghai Express has started its journey with the newly inaugurated Shanghai Data Exchange. So, is data worth enough to be traded like stocks in exchanges? Does the emergence of an efficient market in data have as profound implications as the establishment of the Amsterdam Stock Exchange in 1602?
The Shanghai Data Exchange is a part of China’s ‘fintech infrastructure’ that will focus on the cultivation of a data transactions market to unleash the value of data as a ‘factor of production’, an idea now embraced by the Chinese Communist Party (CCP) and included in China’s 14th Five-Year Plan (2021-25). The term ‘data factors’ now refers to data with economic values.
In 2006, mathematician and entrepreneur Clive Humby coined the phrase, ‘Data is the new oil.’ The domain of data, however, kept on expanding. In 2009, European Consumer Commissioner Meglena Kuneva termed personal data as ‘the new oil of the internet and the new currency of the digital world’. As the January 2011 World Economic Forum (WEF) report, ‘ Personal Data: The Emergence of a New Asset Class’, states: ‘[Personal data] will emerge as a new asset class, touching all aspects of society.’
While the world has been mostly concentrating on data protection, data safety and data localisation, China is also mulling over the idea of treating data as an asset class in the true sense of the term. A proposal of implementing a ‘data tax’ recently emerged. And data marketplaces, counter to traditional siloed data-sharing and coupled with emerging technologies such as blockchain and privacy-enhancing techniques, also are now constructed.
The new Shanghai Data Exchange focuses on common problems such as data rights, pricing, mutual trust, admission and supervision. Like a hypermarket, data exchanges aim to sell raw data like fresh food, classified data products like processed food, and also tailored data services to satisfy a variety of trading demands from different customers. For any data transaction, the purchaser needs to explain the exact scenario in which the data will be used.
On the very day of its establishment, the Shanghai Data Exchange accepted and listed about 100 data products. These comprised eight categories including companies such as China Eastern Airlines, Co-Effort Law Firm, Zhong Lun, PricewaterhouseCoopers (PwC), Deloitte, Transwarp Technology, UCloud and Dongguan Fushu.
A January 2021 paper, ‘ Data as Asset? The Measurement, Governance and Valuation of Digital Personal Data by Big Tech’ published in Big Data & Society, showed that big tech firms turn ‘users’ and ‘user engagement’ into assets through the performative measurement, governance and valuation of user metrics (e.g., user numbers, user engagement), rather than extending ownership and control rights over personal data per se.
Well, China’s initiative is the world’s first attempt to trade data under established regulations with transparent transactions. This, however, isn’t China’s first attempt towards this direction. The Guiyang Big Data Exchange, the first data exchange that was established in 2015, failed to garner sufficient trade. About 30 big data trading platforms, including one in Beijing, were established in China thereafter.
It’s widely perceived that if artificial intelligence (AI) is the engine of the Fourth Industrial Revolution, data is its fuel. In fact, our every footstep is generating tonnes of data. We really don’t understand that until and unless some massive event such as Cambridge Analytica breaks. However, big-data analytics is still in its infancy, and we are incapable of leveraging most of the data that we collect. But when you need to pay for data, you would judge its usefulness more carefully.
The real value of data will, thus, be determined by such data exchanges. While personal data represents untold opportunities for economic growth and societal good, according to the 2011 WEF report, it’s ‘an ecosystem of unprecedented complexity, velocity and global scale… it demands a new way of thinking about the central importance of the individual’. Star Trek’s Data tends to be more human-like with an ‘emotion chip’ attached to him. Even as data’s journey to find human value and worth continues.
History was created this November 26, when the Shanghai branch of the Industrial and Commercial Bank of China struck a deal to use data from the State Grid’s Shanghai Municipal Electric Power Company to help improve its financial products. A new Shanghai Express has started its journey with the newly inaugurated Shanghai Data Exchange. So, is data worth enough to be traded like stocks in exchanges? Does the emergence of an efficient market in data have as profound implications as the establishment of the Amsterdam Stock Exchange in 1602?
The Shanghai Data Exchange is a part of China’s ‘fintech infrastructure’ that will focus on the cultivation of a data transactions market to unleash the value of data as a ‘factor of production’, an idea now embraced by the Chinese Communist Party (CCP) and included in China’s 14th Five-Year Plan (2021-25). The term ‘data factors’ now refers to data with economic values.
In 2006, mathematician and entrepreneur Clive Humby coined the phrase, ‘Data is the new oil.’ The domain of data, however, kept on expanding. In 2009, European Consumer Commissioner Meglena Kuneva termed personal data as ‘the new oil of the internet and the new currency of the digital world’. As the January 2011 World Economic Forum (WEF) report, ‘ Personal Data: The Emergence of a New Asset Class’, states: ‘[Personal data] will emerge as a new asset class, touching all aspects of society.’
While the world has been mostly concentrating on data protection, data safety and data localisation, China is also mulling over the idea of treating data as an asset class in the true sense of the term. A proposal of implementing a ‘data tax’ recently emerged. And data marketplaces, counter to traditional siloed data-sharing and coupled with emerging technologies such as blockchain and privacy-enhancing techniques, also are now constructed.
The new Shanghai Data Exchange focuses on common problems such as data rights, pricing, mutual trust, admission and supervision. Like a hypermarket, data exchanges aim to sell raw data like fresh food, classified data products like processed food, and also tailored data services to satisfy a variety of trading demands from different customers. For any data transaction, the purchaser needs to explain the exact scenario in which the data will be used.
On the very day of its establishment, the Shanghai Data Exchange accepted and listed about 100 data products. These comprised eight categories including companies such as China Eastern Airlines, Co-Effort Law Firm, Zhong Lun, PricewaterhouseCoopers (PwC), Deloitte, Transwarp Technology, UCloud and Dongguan Fushu.
A January 2021 paper, ‘ Data as Asset? The Measurement, Governance and Valuation of Digital Personal Data by Big Tech’ published in Big Data & Society, showed that big tech firms turn ‘users’ and ‘user engagement’ into assets through the performative measurement, governance and valuation of user metrics (e.g., user numbers, user engagement), rather than extending ownership and control rights over personal data per se.
Well, China’s initiative is the world’s first attempt to trade data under established regulations with transparent transactions. This, however, isn’t China’s first attempt towards this direction. The Guiyang Big Data Exchange, the first data exchange that was established in 2015, failed to garner sufficient trade. About 30 big data trading platforms, including one in Beijing, were established in China thereafter.
It’s widely perceived that if artificial intelligence (AI) is the engine of the Fourth Industrial Revolution, data is its fuel. In fact, our every footstep is generating tonnes of data. We really don’t understand that until and unless some massive event such as Cambridge Analytica breaks. However, big-data analytics is still in its infancy, and we are incapable of leveraging most of the data that we collect. But when you need to pay for data, you would judge its usefulness more carefully.
The real value of data will, thus, be determined by such data exchanges. While personal data represents untold opportunities for economic growth and societal good, according to the 2011 WEF report, it’s ‘an ecosystem of unprecedented complexity, velocity and global scale… it demands a new way of thinking about the central importance of the individual’. Star Trek’s Data tends to be more human-like with an ‘emotion chip’ attached to him. Even as data’s journey to find human value and worth continues.
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