Trusted Applications Of Personal Data Could Boost Innovation And Growth In The European Economy
The effective and trusted deployment of personal data could be a boon to
consumers and a source of massive growth in the European economy, but
only if public- and private-sector organizations ensure that consumers
The effective and trusted deployment of personal data could be a boon to consumers and a source of massive growth in the European economy, but only if public- and private-sector organizations ensure that consumers are aware of the benefits while assuring adequate privacy controls, according to a new study, "The Value of Our Digital Identity," conducted by The Boston Consulting Group (BCG) and sponsored by Liberty Global, Inc, (NASDAQ: LBTYA, LBTYB, LBTYK), which included a poll of 3,000 European consumers. The report quantifies for the first time the current and potential economic value of a person's "digital identity" or the sum of all digitally available information about an individual—everything from what consumers reveal about themselves on social media to data produced by online transactions and other sources. Economic value The economic value of applications built on the use of digital identity for both public- and private-sector organizations is expected to reach €330 billion in Europe by 2020, according to the report. BCG estimates that the consumer benefit will be more than double the organizational value—€670 billion annually by 2020—mainly stemming from reduced prices through data-driven cost synergies, time savings through self-service transactions, and the high value individuals place on free online services and mobile apps, supported at least in part by the sharing of their personal data. Two thirds of potential value generation, €440 billion in 2020, is nevertheless at risk if stakeholders fail to establish a trusted flow of data. "The opportunities presented by the responsible sharing of a person's digital identity are enormous, but can only be gained if digital identity is handled in a safe and transparent way," says Manuel Kohnstamm, Senior Vice President and Chief Policy Officer of Liberty Global, Inc. "It is critical that industry takes the lead to establish a trusted platform for the flow of personal data, otherwise, significant value for consumers and industry alike will be lost." John Rose, Senior Partner at BCG and co-author of the report, adds: "Leveraging personal data and digital identity can be a key growth driver in an overall stagnant European economy—potentially worth up to 8% of GDP by 2020. Yet our research shows that two-thirds of this value is at risk given current consumer concerns about privacy and lack of control. Our survey also suggests that it will be critical for companies, governments, and non-profit organizations to establish and execute personal data applications against crystal-clear, transparent principles of use and easy-to-use controls that are tailored to the context in which the data will be used, and for industry and regulators to collaborate on solutions that balance adequate levels of protection with practical approaches that allow for the greatest social and economic value creation."