Proven methodDe Bondt explains: ‘We’ve tried to look at the value of data from the widest possible perspective, with much focus on definitions and qualifications. What exactly are data? And how do you put a price tag on them?’ As he points out, this is a tricky subject: ‘For example, we’ve looked at the way companies incorporate the value of data into their annual account and balance sheet. But that is where we rarely find a value attached to data. So we’ve devised a workaround, inspired by how this subject has been approached by the Canadian statistical office.’ CBS estimates the value of data present at companies based on the expenses being made in acquiring such data. ‘This is a proven method,’ De Bondt explains. ‘It involves listing various different occupations and determining what percentage of the wage bill is spent on data in these occupations. The next step is to add other costs and a percentage for profit in order to arrive at the estimate.’
Significance in the Dutch economyAs part of this research, CBS uses existing sources such as the Labour Force Survey (LFS) and administrative data such as tax records. De Bondt indicates that the outcome is an estimate: ‘We’ve calculated a high and a low scenario, the actual value should fall somewhere in that range.’ CBS has compiled a time series from 2001 up to 2017. It gives a clear indication of how the value of data has evolved in the Netherlands. ‘That is interesting information, for example for the Ministry of Economic Affairs and Climate Policy, as it enables them to assess the importance of data for the Dutch economy. A discussion has been going on for some time at CBS’ National Accounts department on whether the value of data can justifiably be left out of the national balance sheet. After all, large technology companies are generating so much of their revenue from data. Our study contributes to that discussion by at least starting to assess their value.’
The Economic Ministry sees the newly completed study as exploratory with potential for a follow-up
Increasing value of dataThe CBS study suggests that, measured in annual expenditure, the value of data in the Netherlands ranged between 15.6 and 20 billion euros in 2017 and increases every year. Especially the category data science has seen strong growth. On the other hand, not much value has been found in database management in the Netherlands, De Bondt says. ‘That is often outsourced to organisations around Asia, for instance.’ For this study, the public sector - CBS included - as well as the education sector were taken out of the equation: ‘We did not include these sectors since they do not ‘own’ the data. Then again, ownership is a tricky subject when it comes to data, especially where it concerns personally identifiable information.’
Leverage data flows to speed up innovationThe study on the value of data was commissioned by the Ministry of Economic Affairs and Climate Policy. At the Ministry, Rogier de Boer agrees that assessing the value of data is not an easy task: ‘It’s not an intrinsic value, but a value which is created from the moment you start doing something with the data. At the same time, we are aware that the top companies in the world by market valuation are in fact data companies.’ De Boer observes that data sharing between companies in the Netherlands, is not as self-evident as one might think and is not always being established in the most efficient way: ‘It tends to be done in an analogous way on a case-by-case basis, which is rather costly and time-consuming. What is interesting about data is that it can be infinitely recycled and that its value goes up once it’s made available to a large number of parties. In addition, I believe we can make much better use of certain data flows in order to speed up innovation.’
Data issues are high on the agendaAccording to De Boer, the newly completed CBS study is an initial exploration and it offers potential for follow-up studies. ‘Knowing what data are worth is important as it helps underpin arguments why certain regulations are necessary and why the government supports certain initiatives.’
Issues around data are moving up the political agenda, both in the Netherlands and in the EU, with attention being paid to both the risks and the opportunities that arise from the growing use of data. De Boer: ‘As a Ministry, we base our policies on data, but we can only do so with proper data. The outcome of this research demonstrates the huge value that is generated by data, and particularly interesting are the differences between the various economic sectors. For example, in the Netherlands, there appears to be a much heavier focus on data science than on data storage. At the Ministry we would like to seek explanations for this.’
The 'Adequate measuring of the economy’ project - what is it about?
The importance of adequate measurement of the economy is growing due to different kinds of developments including globalisation, the service society and digitisation. It is for this reason that, in 2018, CBS introduced a new research programme entitled 'Adequate measuring of the economy’ (AME). Together with a large number of partners including ministries, universities and other knowledge institutes, CBS shares expertise in this area and opens up new data sources in order to improve the measurement of economic indicators even further in the future. The various studies that have been published by CBS in this area can all be found on the CBS website.