Data Science Institute searches for rising star who understands digital economy

Professor Yi-Ki Guo

The hunt is on for a student who can decipher the complexities of the digital economy so that its value can be measured, says an Imperial expert.

Professor Yi-Ke Guo, Director of Data Science Institute at Imperial, is passionate about finding a way to properly measure the value of data, which he believes could unleash the real potential of the data economy,. Today, the DSI is advertising for a PhD studentship in data capital who can carry out research in this emerging field, so that we can understand more about the data economy.

But what is the data economy and data capital? Colin Smith caught up with Professor Guo to learn more this emerging and important field of research.

What is the data economy?

The advent of new technologies such as high performance computers, sensors and smart phones are generating vast swathes of data. Many companies are using this information to develop new business concepts. Well-known examples of companies in this new data economy are Google and Facebook.

The data economy is also opening up new opportunities for trading data and making money. For instance, the development of cloud computing and the widespread use of the internet means that data can be traded like a commercial product, which has never been possible before.

What is the shared economy and how is the data economy driving it?

The shared economy is a social and economic system built around the sharing of human, physical and intellectual resources. The taxi company Uber is a great example of a new business in the shared economy. The company doesn’t own a fleet of cabs like traditional taxi companies. Instead, it uses the data services – via the internet and satellite communication – to remotely coordinate cars, owned by individuals around the world. In the future, the company could do away with drivers and use automated vehicles as the basis of their service.

What is data capital and why is it an important term in the data and sharing economy?

We use this term to describe data as an asset, which can be owned and traded by individuals and companies to generate value. Many data scientists and economists are talking about data as the new oil - a major new asset that can also generate value.  

What is the challenge for governments and economies trying to understand data capital?

Let me give you an example. Deep Mind is a research company that has developed a form of artificial intelligence (AI) product. It only has 60 staff members and its economic value is based on the algorithms it creates. However, parts of the data can be accessed for free as open source by the public, which by any traditional economic measurements would devalue the company. If you were to gauge its worth using traditional measurements - such as the size of its workforce, the materials the company uses and the buildings it owns -  it shouldn’t be valued as highly as it is. However, the company was sold to Google recently for £400 million. In the new digital economy, traditional economic considerations are irrelevant.

So why should we care if we can’t effectively value data capital?

Governments are finding it difficult to measure the value and true impact of the data economy.

In March this year, the UK Government published an independent review that stated that the calculations of the country’s Gross Domestic Product – the monetary measurement of the market value of all goods and services produced - should be revised. This is because they realised that data capital could not be easily measured in monetary terms, using traditional methods.

In short, we don’t have an effective economic framework for measuring the data economy and data capital and its impact on our lives. This lack of understanding could mean that we are not truly maximising the economic and social benefits that the digital economy could bring.

How is the Data Science Institute (DSI) addressing this challenge?

The DSI is on the hunt for a new recruit. We are offering a PhD studentship in data capital in association with our collaborators in Australia at the Commonwealth Scientific and Industrial Research Organisation and Worley Parsons, which is a resources and energy company. We need an incredibly intelligent person who can help us to develop the methodology for defining the dynamics of ownership, so that we can measure the value of data, and learn more about the mechanisms behind data product transactions. We hope this research could be used by policymakers around the world to develop a new framework for the data economy. Data capital research aims to establish a solid foundation for this new concept.