It’s widely perceived that the Fourth Industrial Revolution, characterised by a fusion of technologies that would blur the boundaries between the physical, digital, and biological spheres, would undoubtedly be driven by ‘data’. The world, however, is in a fix to decide how to regulate the usage, storage, and propriety of ‘data’, and of course how to extract the maximum out of the data whose generation is increasing exponentially.

The digital universe is now expected to be doubled every two years, and by 2025, an estimated 463 exabytes of data — equivalent to 212,765,957 DVDs — will be created each day globally! That’s a pre-pandemic estimate, of course. The massive increase in digital dependence induced by the pandemic might have forced us to re-estimate the immediate future.

The European Union has come up with its General Data Protection Regulation in 2018 and, in India, a Parliamentary panel was looking at the Data Protection Bill.

A 2011 World Economic Forum report titled ‘Personal Data: The Emergence of a New Asset Class’ described “data” as a “new asset class” and argued that a massively increased amount of personal data “is generating a new wave of opportunity for economic and societal value creation.” It seems that China followed the suit.

China’s initiative

In fact, amid the chaotic data management and harvesting in the West, China has now initiated transparent and regulated trading of data through Shanghai’s new Data Exchange that began trading on November 26. Well, when British mathematician Clive Humby termed data as the “new oil” in 2006, not many people could imagine that big data might be traded like crude oil someday, for sure.

The Shanghai Data Exchange is viewed as an important move in accelerating the circulation of data and unleashing digital dividends. Initial data offerings include 20 products from China Eastern Airlines, Ucloud, Cosco Shipping, China Mobile Insight, and other Chinese firms, from an initial batch of 100 enterprises that have signed up as data merchants.

A 2018 research paper titled ‘Can China Lead the Development of Data Trading and Sharing Markets?’ published in ‘Communications of the ACM’, of course, perceived that, with technology advances (blockchain, AI, big data analytics, cloud computing) and maturing policies (privacy, digital ethics), better data sharing and trading ecosystems would help economic transition to a new level of global competitiveness.

Yes, the idea of setting up data exchanges has been nurtured in China for some time now. In 2013, Chinese businessman Wang Sanshou, nicknamed the ‘Data King’, pioneered a new path for data asset operation and successfully activated government data to unlock the value of data. Wang Sanshou proposed to set up a platform to trade the big data owned by local governments and state-owned enterprises.

China’s initial small-scale experiments of data trading, however, failed to reach critical mass. The Guiyang Data Exchange, established in 2015, never saw significant trading volume. Over the past six years, about 30 big data trading platforms have been established by various local government authorities and private enterprises in China, for trading whole datasets, Web crawlers, Application programming interfaces, and analytical results. In December 2017, China’s President Xi Jinping said: “data is a new production factor, a fundamental and strategic resource and an important productive force.”

And in August 2021, the National Bureau of Asian Research wrote: “In 2020 the Chinese Communist Party (CCP) Central Committee and State Council added ‘data’ to land, labour, capital, and technology as a new factor of production in its ‘field-based allocation system and mechanism’.”

The Shanghai Exchange allows companies that collect data to maximise the values of their businesses while permitting purchasers to use the data to raise the productivity of their businesses. The transaction, however, will not be conducted if the data purchaser cannot explain the exact scenario in which the data will be used. If this initiative succeeds, its contribution to economic efficiency may be compared to the creation of well-regulated capital markets in the West, who knows!

I always prefer to draw a parallel of ‘Data’ to the anatomically fully functional android of ‘Star Trek’ who had striven for his own humanity. “He [Data] evolved, he embraced change because he always wanted to be better than he was,” said Jean-Luc Picard, the captain of the starship USS Enterprise in Star Trek. Well, the future of data is still quite uncertain.

The writer is Professor of Statistics, Indian Statistical Institute, Kolkata