UK data legislation: a double opportunity

New UK data and digital market legislation is set to deliver businesses a double opportunity: to create efficiencies and increase revenues.

The new legislation is its own double act of opening up and closing down. Enabling personal data portability will open up growth across the economy. Closing down anti-competitive business practices and market asymmetries will further open up opportunities for growth. Together, these will support individuals with their lives and increase trust in markets.

The legislation

Over the past decade, two core challenges have emerged from the fast and furious growth of digital markets. We lack safe and easy ways to access and use our data, and data asymmetries have concentrated value in a small number of organisations.

Together, these two challenges constrain market and economic growth. Like others around the world, the UK Government is looking to address these challenges and open opportunities for economic growth. To support this there are two key pieces of legislation.

The Data Protection and Digital Information Bill (DPDI) focuses on two market growth enabling capabilities:

• Data portability: Enabling safer and easier sharing of our data across our lives by designing the governing structures, standards and certification of new digital infrastructure – Digital Verification Services (Digital Identities) and Data Holder Services (Digital Wallets and Personal Data Stores).
• Data access: Enabling our data, which is locked in data silos in organisations across market sectors, to be made safely and easily available in the Smart Data Programme.

The CMA’s Digital Markets, Competition and Consumer Bill (DMCC) focuses on opening markets:

• The DMCC creates the Digital Markets Unit (DMU) which has the powers to address business practices that may create market concentrations and constrain growth.
• This work will initially focus on organisations with Special Market Status – those with substantially entrenched market power and a position of strategic significance.

Both of these Bills are anticipated to gain Royal Assent in the Spring of 2024. DPDI is set to enable a data portability market worth an estimated £27.8bn[1] to the UK economy. DMCC is set to address multiple market issues an example being those identified in the CMA Online Platforms and Digital Advertising report of 2020[2], which offers potential benefits for individuals in pricing and choice, and for businesses through fairer markets.

And the UK is ahead of many countries as UK Open Banking has already developed many of the capabilities to safely transmit and distribute our banking data. These new legislations offer the opportunity to leverage that position and to gain even greater value from our data creating economic growth.

It seems the starting gun is being readied.

Learning from the electricity market

To help identifying, prioritise and target opportunities in the digital and digital data market, this paper uses the electricity market as an example to help create a framework for thinking.

The electricity market provides a reasonable analogy for our digital data market. The infrastructure that safely generates and transports electricity creates value in its own right. The safe and easy use of that electricity creates value for individuals, businesses and society.

The infrastructure of electricity falls into three main components – each standardised, governed and certified – which guarantees the availability and safety of the end-to-end system:

1. Where the electricity is produced. The global power generation market was valued at $1.67 trillion in 2022 and is projected to reach $2.48 trillion by 2030[3].
2. Transmission and distribution. The transport of electricity. In 2022 the poles and pylons market alone was valued at $44bn.
3. Localised use. Where the electricity is transformed for local use, safety equipment and plugs and sockets are used. The global plugs and sockets market was estimates to be worth $12bn in 2022 with growth anticipated to reach $20.59bn by 2032[4].

While these market values do not show the whole picture, they serve as an illustration of the value created by each infrastructure component.

This electricity infrastructure enables the value:

• For individuals. In our homes, lighting, heating, washing machines, cookers, dishwashers, hoovers and hairdryers have freed millions from hours of household chores, enabling everyone to be more productive and healthier. The size of the global home appliance industry in 2022 was $680bn[5].
• For businesses. Electricity has enabled more productive factory lines and workplaces, new production methods, the expansion of service industries and manufacturing, reduced cost in logistics, and let’s not forget computing and digital services.
• For society. Electricity enabled new transport systems and infrastructure supporting the mobilisation of the work force and communication between individuals, improved education and job creation, improved health care services, fostered civic engagement and supported democratic processes.

None of this value could have been achieved without safe and easy to use infrastructure – with governance and standards enabling the infrastructure to scale while supporting trust in its use.

The data market opportunity

It is in this safe and easy use of our data that the UK digital and digital data legislation is primarily focused. Using the electricity market as analogy, we can draw similarities (where digital data plays the role of electricity).

Each of the digital data infrastructure components is available, though in some instances not yet deployed at scale or needing new governance structures to scale. Like electricity, each data infrastructure component offers potential value and economic growth opportunities.

This paper primarily looks at the infrastructure, which is where the UK digital and data legislation focuses, but let’s ground that in a glimpse of the value that data portability can create.

For individuals, use of our data will help us make better, data informed decisions and manage our lives more effectively. New digital data products and services will help us choose education and skills that help us on the career path that we want, find our best travel options, make tailored and personalised health and wellbeing decisions, and more. Our data can also help us be more efficient in our everyday lives, guiding and smoothing our online journeys and experiences, or creating efficiencies in complex activities such as home buying.

For businesses, cross-sector data can reduce costs of customer acquisition, hyper-personalise customer journeys and experiences, automate business processes and reduce costs.

For society, like businesses, use of our cross-sector data offers benefits for public services across efficiency and service delivery, enhanced interoperability enhancing effectiveness, improved data-driven decision making, better policy making and international collaboration.

You can find more insights into the value potential in other Ctrl-Shift reports.

How the legislation enables

Now we have a taste of the potential value from a well-governed data infrastructure enabling data portability, let’s look at the infrastructure components using the electricity markets as a ‘thinking framework’.

Live Case Study: Dutch Health Records

Thanks to the farsighted Dutch Government and some extraordinary entrepreneurs every citizen of the Netherlands recently got a present from their government: the ability to regain access to and control of their health records at no cost.

Delivered as a Dutch Government funded program citizens can select an accredited Personal Health Environments provider (PHEs or PGO’s in Dutch) which is a consumer facing health record viewer. The viewer consolidates your health records from GPs and Hospitals, providing access and management of a full viewable record of your health data, offering the opportunity to simplify your health and wellbeing management.

Under the Hood

The consumers health record viewer is supported by the 3 Components: 

1. Generation: The data is collected, cleaned, managed, used, secured and encrypted by the GPs and Hospitals. It is made available through standardised APIs by the health care providers.
2. Data Transmission and Distribution: The internationally recognised HL7FHIR standard is used, which defines how healthcare information can be exchanged between different systems. MediMij is the Ecosystem Controller, it sets the governing standards in the Netherlands for the secure exchange of health data between care users and care providers. The Medmij label can be used by apps, websites, or personal health environments (PHE) that demonstrably meet the criteria of MedMij. The label is also used by health care providers and professionals who exchange information through the MedMij network.
3. Localised use:World Data Exchange (WDX) is a Medmij certified provider and uses the Government run Digital Identity service to make sure the data is about the specific individual. WDX localises the data standards for use by the individual, provides consent and consent revocation (think on off switch on a wall socket). WDX enabled new products and services to be built locally, with the individual’s consent to use their health record or parts of the health record.

One such service is digi.me that uses WDX and complies with the required standards. Digi.me is the consumer facing application that creates a Universal Health Record, bringing together an individual’s historic health data across immunisation, procedures, blood pressure, heart rate, allergies, diagnosis and more. It's secure, organised, and easy to track, giving the individual the ability to share their standardised medical history with their healthcare providers, streamlining communication and improving the healthcare experience. It’s compatible with thousands of medical institutions and healthcare providers across the NL. 

For anyone who has tried to manage a chronic health issue and navigate through multiple healthcare providers, or is travelling and facing a health episode, this service empowers individuals to dynamically share their data when and to who they want. 

Alongside Digi.me other certified digital services will be over time able to access and use the WDX localised functionality and data to build and provide services for individuals to help them manage their specific medical conditions, and better inform and manage their health care provision.

One of the unique values of localised use is that services like WDX can also make available other standardised and certified data sources. As our health is influenced by our fitness activities, financial situation, social influences, and community they’re important for a holistic perspective.

Is this the whole answer?

The answer is yes and no.

The portability of our data, managed in a safe environment and standardised for ease of use, overcomes many of the identified constraints on value creation and economic growth. Empowering the individual with the control of their data overcomes trust issues while breaking down silos. It also provides a local transport mechanism that can make the data available to trusted, certified providers in order to create value for the individual and for organisations.

However, our data has two distinct and impactful differences to our electricity comparison:

Data is non-rivalrous. In the carbon-driven electricity market, the raw material is ‘rivalrous’ – once coal is burnt to generate electricity, almost all its value has been converted into electricity and it cannot be used again. In the data economy, the raw material of data is non-rivalrous – it can be used again and again, often by multiple people at the same time, without losing its value. Indeed, sometimes use can increase the value of data.

This creates the potential for far greater benefits from the use of data, and very exciting commercial opportunities, but also offers a greater challenge in its governance. We may well identify the need for further iterations to our data market governance, this is a big step forward and certainly enough for a great deal of value to be created.

Centralised vs decentralised production. For electricity, production is often centralised in large power stations or wind and solar farms, and the users of electricity are primarily different stakeholders. But data production is decentralised, produced by almost everything we do, and gathered and managed by many organisations from small to large. With data, the producer can also be the user of the data.

This has implications for the end-to-end governance of data portability and for the ecosystem – anyone investing in the production and use of data will require a sustainable commercial model to ensure the ecosystem stays healthy. Perhaps we can look at the local / home-based electricity model for some inspiration, with feed-in tariffs for production and localised production standards.

Next steps

The Ctrl-Shift DCMS report in 2020 estimated a £27.8bn[6] uplift for the UK economy from data portability. This included productivity and efficiency, excluded revenue uplifts from innovation, benefits in health, or the international opportunities. Clearly there is a great deal of value available for individuals, businesses and governments from data portability.

The investment that the UK Government is making in Smart Data (drawing upon the capabilities developed for Open Banking) and the creation of the governing structures for the new capabilities of Digital Identities, Wallets and Personal Data Stores will lay the foundations for data portability. As with all early-stage markets there is likely still much to do – hoovers to design, fuse boxes to refine, better safer plugs. But as with all market developments, it is only when the market starts to grow that refinements can be made. In that process, the interplay between the market and government will be critical.

For any business, it is worth investing time to identify the role or roles they want to play in the digital and digital data market and the value they want to generate.

Legislation is often not received by organisations with open arms, and may start off on the desk of compliance or public affairs officer. But large parts of this legislation are market enabling. Once in place, it will be a race to the top for those organisations which make the most of it. A quick first step is to firmly put this new legislation into the hands of your very best innovators. Task them to brief the senior executives on the opportunities available across the organisation.

About Ctrl-Shift

Ctrl-Shift is a strategy and innovation consultancy. Our purpose is to create sustainable growth from the use of personal data. We advise businesses on sustainable value creation to support top and bottom-line growth. We advise governments on the design of data markets to enable economic growth and positive social outcomes by empowering individuals with their data.