The Aiven Data Economy series explores the key drivers of the global data economy, featuring insights from leaders in startups, enterprises, investors, and Aiven experts.
Francesco Tisiot
|RSS FeedHead of Developer Experience at Aiven
Subscribe for the latest news and insights on open source, Aiven offerings, and more.
By all accounts, Europe is expected to land a lottery jackpot next year. Indeed, according to the European Commission, the region is tipped to be almost one trillion Euros (EUR 829 billion) better off on account of the growth in the data economy.
At a time when we’re surrounded by uncertainty and conflict, and with the threat of recession stubbornly hanging over the region, it’s also a moment that raises several important questions as we head into 2025.
Not least, are we extracting as much potential from the data economy as possible? Is one trillion Euros enough and, assuming it’s not, what can be done to extract more value in the years to come?
First things first. It’s important to make clear what the data economy is. Definitions vary but according to Miika Huttunen, founder of conversational AI start-up, and one of our Aiven Cluster startup program participants, Realm, it means “collecting and using data to derive benefits at both a company and society level.” Essentially, doing more with data to create better businesses, services, and lives.
The fact that data is playing such an important and increasingly influential role in our lives can be measured by how far and how fast the value of the data economy has grown. Only two years ago it was suggested its value - also by 2025 - would be worth a mere EUR 550 billion. The fact that in only two years we’ve seen the projected value of the data economy increase by a third tells you all you need to know.
If we extrapolate beyond 2025, the figures become potentially mind-boggling. Yet that is the direction of travel.
Capitalizing on the data economy is a major priority for both businesses and governments. There are any number of papers on the internet championing how various nations intend to go about doing this. Most initiatives include; creating a strong data infrastructure, having a high level of regulatory compliance, developing a data-literate workforce, and increasing the number of people with advanced data skills. And, of course, funds and bursaries for data-oriented start-ups entering the economy.
It was a point made clear by Luca Eisenstecken, partner at investment firm, Atomico. In a recent conversation, he said, “The data economy is, at this time, almost a proxy for the whole economy. The vast majority of market participants have either transformed themselves into data driven businesses already or they're thinking about how to do that.”
When you consider the benefits that can be unlocked with data, it’s not hard to see how it is such a valuable economy and why everyone involved is so Hell-bent on pushing it to the maximum. Data is the key to understanding what’s working and what’s not. It informs where to invest, how much and how quickly. It provides a barometer of measurement and progress. And, perhaps most importantly, it's the basis for creating a self-fulfilling cycle of improvement.
It has enabled us to move from ‘trial and error’ to ‘build and evolve’ and we’re all feeling the benefit. Yet a quick glance around your life will just as quickly point to areas where we’ve barely scratched the surface of the potential of data. The UK National Health Service (NHS) is a prime example. The recent Dazi report claimed it is 15 years behind the private sector in its use of technology. If the NHS was fully digitized, that would probably double the value of the UK’s data economy overnight - we can but dream.
The overriding point being that there is so much more to come from the data economy.
But this will not be without challenge. The fact that data is such an abundant resource is both a blessing and a curse. As entrants to the data economy go from single-focus start-ups to enterprise, they risk losing control over their data. This puts data outputs in jeopardy and can lead to increased workloads as work is siloed or repeated.
Solving, or at least preventing, this isn’t quick but it is relatively simple. As easy as it is to be seduced by data and the opportunities it brings, players in the data economy must also put the effort into building the infrastructure around data. This means pipelines, storage and measurement. There’s little point in having a wonderful new kitchen if your house has no walls.
This should be the focus from day one. The more this is retrofitted, the harder it will be. Again, look no further than the NHS.
One trillion Euros feels like the finishing line but it’s not. As far as the data economy is concerned, Europe has barely left the starting blocks. And that’s a good thing because it means there is so much more to come.
As we head into 2025, there is a huge, and mostly untapped, opportunity to exploit data in a privacy-friendly way that makes all our lives better and that is the jackpot we want.
