Consumer capital: The new reality of 21st century data exchange

Consumers are beginning a counter-offensive against the monopoly that industry has enjoyed over the spoils of big data

There are early signs of a fundamental shift in the dynamics of data exchange between business and consumers.

Twenty years ago we witnessed the dawn of big data, where the rapid growth in our online activities facilitated an explosion of consumer intelligence. Intelligence which businesses collected, analysed and then utilised to maximise their commercial dealings.   

In this, what we might call the first era of big data, consumers were relegated to the role of passive bystanders, with little capacity to control the flow of their personal data. 

Yet, it now seems that this narrative is shifting.

Indeed, current trends suggest we are fast approaching a future where consumer data no longer exists solely for the benefit of industry, but instead becomes a commodity which consumers can store, safeguard and exchange for their advantage. 

In this scenario, personal data is transformed into a source of consumer capital to be utilised for our commercial benefit. 

The consumer counter-offensive

This is a story of a consumer re-armament, a consumer counter-offensive, against the monopoly that industry has enjoyed over the spoils of big data.

But what is driving this counter-offensive? Well, we contend that there are four primary trends that will drive consumer re-armament over the next decade or so.

The first will be the growing ubiquity of legislative consumer protection. In Brussels, sweeping new data protection regulations are currently under consideration. These new regulations would introduce the concept of “explicit consumer consent”, requiring companies to obtain unambiguous agreement from consumers before they can collect any personal data.  

Such proposals, if ratified, will radically alter the current ecosystem of data exchange in Europe, with brands being forced to incentivise the sharing of data.

Privacy Bill of Rights

But it is not only in Europe that consumers can expect new protections. In February, the White House published a proposed Privacy Bill of Rights which calls for a new legal framework offering consumers more protection and control over the sharing of their online information.

New safeguards are also under consideration in numerous developing nations. For example, an Internet Bill of Rights is due to be reviewed by the Brazilian Congress following its municipal elections.

Alongside these emerging regulatory safeguards, various industry initiatives are also handing consumers more control over the information they share with companies

In fact, just recently industry tensions hit the headlines over Microsoft’s bold announcement that Internet Explorer 10 will have a “do not track” option as the default setting.    

Shifting consumer attitudes

But perhaps even more significant than these regulatory and industry developments is the observable and game-changing shift in consumer attitudes towards the nature of their personal data.

Already, 90% of UK citizens want to hold their personal information and exchange it for services when they choose. Even more striking, 40% view their personal information as an asset that can be used to negotiate better prices and offers.

Moreover, as consumer appetite for recording personal intelligence grows, so will the demand for new technologies that facilitate the collection of this data. 

We are already seeing a wave of new innovations that are enabling consumers to deposit personal data. For example, an app called Eragy allows users to save money by recording their energy consumption via both online and mobile channels. Another exciting example is Nike’s Fuel Band, capable of tracking users’ every physical activity.

The second era of big data

And if we bring together these four trends of greater legislative protection, new industry initiatives, increased consumer appreciation of the value of data and expanding data collection technologies – then we are left with some dramatic conclusion of what is to come.

Most significant will be the shifting balance of data ownership, from an industry monopoly to a scenario where consumers can themselves start to enjoy the spoils of big data.

Indeed, if the first decade of the 21st century was the era of industry exploiting big data, then the 2010s is set to be the decade in which we witness the greatest realignment of power between businesses and consumers. This will be the new reality of 21st century data exchange; this will be the second era of big data.

Josh McBain(pictured) is a senior analyst at the Future Foundation.

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