Building a Better Data Economy

Tim O’Reilly, the “Oracle of Silicon Valley,” wants to shift the conversation about data value to focus on the harm that tech giants are inflicting against us with our own data. It’s “time to wake up and do a better job,” says publisher Tim O’Reilly—from getting serious about climate change to building a better data economy. And the way a better data economy is built is through data commons—or data as a common resource—not as the giant tech companies are acting now, which is not just keeping data to themselves but profiting from our data and causing us harm in the process. “When companies are using the data they collect for our benefit, it's a great deal,” says O’Reilly, founder and CEO of O’Reilly Media. “When companies are using it to manipulate us, or to direct us in a way that hurts us, or that enhances their market power at the expense of competitors who might provide us better value, then they're harming us with our data.” And that’s the next big thing he’s researching: a specific type of harm that happens when tech companies use data against us to shape what we see, hear, and believe. It’s what O’Reilly calls “algorithmic rents,” which uses data, algorithms, and user interface design as a way of controlling who gets what information and why. Unfortunately, one only has to look at the news to see the rapid spread of misinformation on the internet tied to unrest in countries across the world. Cui bono? We can ask who profits, but perhaps the better question is “who suffers?” According to O’Reilly, “If you build an economy where you're taking more out of the system than you're putting back or that you're creating, then guess what, you're not long for this world.” That really matters because users of this technology need to stop thinking about the worth of individual data and what it means when very few companies control that data, even when it’s more valuable in the open. After all, there are “consequences of not creating enough value for others.” We’re now approaching a different idea: what if it’s actually time to start rethinking capitalism as a whole? “It's a really great time for us to be talking about how do we want to change capitalism, because we change it every 30, 40 years,” O’Reilly says. He clarifies that this is not about abolishing capitalism, but what we have isn’t good enough anymore. “We actually have to do better, and we can do better. And to me better is defined by increasing prosperity for everyone.” In this episode of Business Lab, O’Reilly discusses the evolution of how tech giants like Facebook and Google create value for themselves and harm for others in increasingly walled gardens. He also discusses how crises like covid-19 and climate change are the necessary catalysts that fuel a “collective decision” to “overcome the massive problems of the data economy.” Business Lab is hosted by Laurel Ruma, editorial director of Insights, the custom publishing division of MIT Technology Review. The show is a production of MIT Technology Review, with production help from Collective Next. This podcast episode was produced in partnership with Omidyar Network. Show notes and links “We need more than innovation to build a world that’s prosperous for all,” by Tim O’Reilly, Radar, June 17, 2019 “Why we invested in building an equitable data economy,” by Sushant Kumar, Omidyar Network, August 14, 2020 “Tim O’Reilly - ‘Covid-19 is an opportunity to break the current economic paradigm,’” by Derek du Preez, Diginomica, July 3, 2020 “Fair value? Fixing the data economy,” MIT Technology Review Insights, December 3, 2020