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EuDEco Report Summary

Project ID: 645244
Funded under: H2020-EU.

Periodic Reporting for period 1 - EuDEco (Modelling the European data economy)

Reporting period: 2015-02-01 to 2016-01-31

Summary of the context and overall objectives of the project

Data volumes are exploding and a slowdown is out of sight. Companies, government bodies, academic institutions and citizens have access to more data today than anyone would have imagined one or two decades ago. Traditional data sources such as company databases and applications are now complemented by non-traditional sources such as social media or sensors embedded in physical world devices including mobile devices, smart meters, cars and industrial machines.
At the same time, an entirely new market of big data technologies and services has emerged over half a decade to help organizations capture and extract value from data. The revenue from big data technologies and services, however, is small compared to the value that is expected to result in sectors such as trade, manufacturing, finance and insurance, public administration, and health and social care that now have the tools at their disposal to make innovative use of data to drive high-value business and societal outcomes. Data and technology are simply enablers. It is how society puts data and technology to work that will drive value creation and define the data economy.
The data economy is the currently emerging economy in which participants succeed or fail based on their ability to leverage data and analytics to improve operational efficiencies, to make better tactical and strategic decisions, and to create innovative products and services that meet and exceed customer expectations. Additionally, the data economy is also a connected economy in which partners and competitors alike, share data and integrate business processes where the expected benefits for the participants and their customers outweigh the risks of such collaboration. The data economy has already begun to take shape. Companies from the Web sector such as Google, Amazon and Facebook were among the first to understand the potential benefits of harnessing big data technology and services but business leaders across sectors are finally buying into the transformative power of the connected and intelligent organization.
However, to realise the full potential inherent in the data economy, independent use cases and applications of big data must be part of a larger whole. Some expect that entire sectors will operate and markets function all through the intelligent use and sharing of data and that eventually companies in various sectors will orchestrate multiple applications to work intelligently together with the goal of optimizing entire operational environments. Without doubt, the data economy is not developing uniformly across the developed world. The development opportunities as well as the pace of progress are determined by the framework conditions given in a country or a region and the behaviour of the actors. In several respects, the US data economy seems to have already reached a higher level of development than, for instance, the European one.
Solid knowledge about the data economy and its development across the globe is limited. To be able to realize the economic potential of the data economy in a socially acceptable way, research and innovation must be complemented by a constructive dialog between companies, government bodies, academic institutions and citizens. The EuDEco project aims to contribute to the understanding of the European data economy and to facilitate such a stakeholder dialog. The overall objective is to help Europe establish a self-sustaining data market and thereby increase Europe’s global competitiveness.
More specifically, the EuDEco project focuses on the:
(1) Analysis of the framework conditions for data reuse and a self-sustaining data market in Europe, their interrelations and implications from the technical, socio-economic and legal point of view;
(2) Establishment of a User Expert Group, consisting of experts from related projects, and an Advisory Board, aimed at integrating external knowledge and perspectives;
(3) Development of a model of the European data economy based on a cross-disciplinary understanding of the date economy;
(4) Validation of the model and especially the underlying use cases and business models by tests with selected projects and discussions with experts;
(5) Identification of legal, economic, societal and technical barriers for the further emergence of use cases and business models for data reuse;
(6) Derivation of recommendations for the legal and contractual framework, the required technological infrastructure and capabilities and economic structures enabling the uptake of data reuse;
(7) Development of an observatory aimed at tracking the development of data markets and data reuse and its impact in Europe;
(8) Dissemination of the results among all the relevant stakeholders in Europe.
The EuDEco model of the European data economy will not only provide the basis for the development of an observatory but also for the development of practical solutions and recommendations to deal with key barriers and challenges faced in the context of the data economy. Emphasis is put on the analysis of aspects including legal possibility, social acceptability, economic viability and technical feasibility of use cases, business models and value networks. Thereby, EuDEco aims to provide useful insights and instruments for both policy makers, who set the framework conditions for the European data economy, and leaders of companies, government bodies and academic institutions participating in the data economy.
Within the scope of EuDEco, the Center for Law and Digital Technologies at Leiden University and Rooter Analysis SL focus on legal aspects. Sigma Orionis SA deals primarily with socio-economic and Ascora GmbH with technological aspects, both supported by the CSA’s coordinator, which is the Fraunhofer Institute for Systems and Innovation Research ISI. EuDEco sees the European data economy as a complex adaptive system and strives intensively for the involvement of external stakeholders and experts in its activities.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

In the first year, the main result of the EuDEco project was the development of a heuristic model of the European data economy. The heuristic model represents the first iteration of a model which will be further developed in two more iterations.
To make the development of the heuristic model possible, carrying out significant preparatory work was necessary. First, the research framework was refined to ensure congruence regarding research questions and goals among the partners involved and the three research perspectives taken. Afterwards, existing legal, socio-economic and technological framework conditions relevant for data reuse were identified and analysed, and case studies on existing initiatives and pilots for data reuse performed. At the same time, a User Expert Group, primarily consisting of representatives from related research projects, was established and a first workshop was held. Within the scope of the first workshop, the refined research framework as well as a preliminary set of framework conditions was discussed.
The analysis of legal framework conditions focused on selected areas of public and private law. With respect to public law, data protection law, privacy law, non-discrimination law, other human rights, data retention law, data localisation law, freedom of information and open data – regulation of public sector information, cybersecurity law and national security law were investigated. Intellectual property rights law, contractual law, completion law and consumer protection law were at the centre of attention with respect to private law. The legal analysis led to insights such as that laws and regulations can be both barriers to and enablers to data reuse, that data protection law, privacy law, anti-discrimination law and intellectual property law have the greatest impact on data reuse, and that a general data law seems to be attractive at first sight but may be difficult to implement and enforce.
The socio-economic analysis focused on societal and economic aspects. With respect to societal aspects, perceptions of big data issues, the psychology of mass self-communication, strategies for limiting the analysis of personal data and aspects of the creation of a data culture were addressed. With respect to the economic aspects, the financing of economic activity, the institutional landscape, research and development, the labour market and characteristics of the data market were addressed. The analysis of socio-economic framework conditions led to insights such as that creating a data culture is a key prerequisite for data reuse, that many individuals don’t have the necessary knowledge to estimate the consequences of the digital traces they leave behind, and that the growing venture capital funding gap between the United States and Europe leads to a location disadvantage for Europe.
The technological analysis focused on data collection and delivery, scalability and data management, data transmission and exchange formats, data aggregation, analysis and interpretation, reliability and availability, technological responsibility, and security and privacy. With respect to each of the focus areas challenges and barriers as well as approaches and example cases were discussed. The analysis of technological framework conditions led to insights such as that many organizations rely on de facto standards that are created and maintained by a single actor in the market, that the instability of interfaces, the evolution of data formats and legacy systems are key challenges associated with data collection and delivery, and that transferring responsibility for technology leads to severe challenges related to security and privacy.
The case studies were expected to allow gaining a better understanding of the pitfalls and challenges related to big data and data reuse. Five cases focusing on data aggregation, energy/climate, health/pharmacy, broadcasting and media, respectively, were studied. The main insights obtained from the performance of the case studies are that actors in the data economy tend to be in a perpetual learning phase, closely tied to the research community, interested in the reuse of third-party services, very different in terms of how advantage is taken of data, concerned about security, aware of privacy issues and desperate to find adequate legal/ethical advice.
The results from the analysis of the framework conditions and the case studies were then integrated into a heuristic model of the data economy. The heuristic model consists of legal, socio-economic and technological propositions postulating relationships between selected complex adaptive system model elements with a focus on the effects of framework conditions on the development of the European data economy. The propositions are complemented by a focussed discussion of the key terms used to describe the propositions. Within the scope of a second workshop, where apart from the User Expert Group also the Advisory Boards was involved, the heuristic model was discussed. Towards the end of the first year of the project, the analysis and further development of the model started. The heuristic model is currently analysed from a legal perspective to clarify issues regarding, for instance, privacy, intellectual property rights, contractual relations, from a socio-economic perspective to better understand the social acceptability as well as the economic viability of use cases and business models, and from a technological perspective, where particular attention is paid to requirements. Based on the results of this comprehensive analysis, which will be completed in the second year of the project, a refined model of the European data economy will be developed.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The EuDEco project identifies and analyses opportunities and problems related to the data economy in general and data reuse in particular. A thorough understanding of the opportunities and problems is a prerequisite to be able to support the uptake of big data and open data in Europe. The work carried out by the EuDEco consortium supports the achieving of:
(1) Enhanced access to and value generation from data in Europe.
(2) A robust ecosystem for data reuse in Europe.
(3) Increased deployment of big data solutions by European companies.
In the first year of the project, the framework conditions for data reuse and a self-sustaining data market in Europe were analysed. The analysis did not only concentrate on existing literature but also took the opinions of external experts and stakeholders into account. Extensive discussions with external experts and stakeholders took place at several events. Among them were the 28th Bled eConference, where an open workshop was organized to discuss framework conditions relevant in the context of the data economy, and a BDVA Summit held in Madrid, where the User Expert Group, the Advisory Board as well as interested participants of the umbrella event came together with the EuDEco consortium to discuss relevant framework conditions. Moreover, a series of cases was studied in detail. The cases studied included pilots and initiatives associated with the data economy actors eXelate, EnergyLab Nordhavn, MedWatcher, Tie Kinetix and ZED. Both the analysis of framework conditions and the case studies took a legal, a socio-economic and a technological perspective. Looking at clearly specified aspects of the data economy from different angles and integrating the individual insights into a coherent whole allowed gaining a thorough understanding that goes beyond the state-of-the-art in several respects.
Building upon the results of the analysis of the framework conditions for data reuse and a self-sustaining data market in Europe, a heuristic model of the European data economy was developed. Again, opinions of external experts and stakeholders were taken into account. Among the events that were particularly relevant with respect to the model development was ICT 2015, where the User Expert Group and the Advisory Board came together with the EuDEco consortium to discuss the propositions constituting the heuristic model. Additionally, a Networking Session was organized within the scope of ICT 2015 with the aim to also involve interested participants of the umbrella event in the development of the model. Moreover, a booth at the European Data Forum in Luxembourg turned out to be very useful to get in touch with the big data and open data community. The heuristic model represents only the first of three iterations. Nevertheless, it already is an artefact that facilitates discussions about the data economy in general and data reuse in particular.
As a whole, the work carried out in the first year of the EuDEco project did not only contribute to the understanding of the European data economy and facilitate the dialog between the relevant stakeholders but also helped to raise awareness in the big data and open data community and beyond for the open questions and controversial issues that are currently faced in the context of the European data economy.

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