Article: Single market for data, a driver for the economy

Are data the new black gold? Although many people believe so, not all data are as precious as oil. The only data that truly hold up to the comparison are those that provide valuable information and improve decision-making. Considering that each person on Earth generates an estimated 1.7 MB of data per day, it stands to reason that only certain data are likely to create wealth – whether it be economic, scientific, demoscopic, or of another nature – contributing to the development of the so-called “data economy”.

By now, every media outlet, business, and political figure has at some point spoken on the advantages and potential risks of artificial intelligence. Everyday people, too, have at least heard of it. They may even know that this intelligence, much like human intelligence, works with data, albeit in huge volumes that are unmanageable for the human brain (hence the term “big data”) and are previously processed, qualified, harmonized, anonymized, and analyzed by data scientists. The more knowledgeable bunch might have an idea of how they work, that is, with instructions and algorithms that dictate predetermined behaviors for data handling.

When combined, data and artificial intelligence can boost national economies, increasing the activity of current businesses and stimulating the creation of new ones. In fact, the data economy is expected to account for as much as 4.9% of European GDP by 2025. Mindful of this, the European Union (EU) is committed to building a European data economy within its Digital Single Market.

Data constitute a major asset for companies because, when properly processed, they can offer competitive advantages in decision-making and the development of new products and services. This is no different for public administrations, which generate huge amounts of data. Harnessing these data can lead to better and faster decision-making, greater productivity and efficiency, and cost savings. They can also be used to promote transparency policies that increase public trust, detect possible cases of fraud or misuse of public resources, and strengthen cybersecurity.

Artificial intelligence absolutely devours data, and in some cases even those of an entire country are unable to satiate its appetite. Reluctance to share data in the public and private sectors, especially data from various countries, stems from mistrust when there is no framework of guarantees in place once the data leave their home territory. In order to remedy this issue, the EU is also promoting a single market for data in which data can flow freely across Union borders and sectors for the benefit of companies, researchers, and public administrations, while upholding the European values of sovereignty, privacy, transparency, security, and fair competition.

This single market is being promoted in strategic economic sectors of public interest, such as those related to manufacturing, sustainable energy, mobility, health, finance, energy, agriculture, and public administration. The EU is also endorsing certain initiatives that GMV is involved in, such as Gaia-X, which aims to develop an open, federated, interoperable cloud-based data infrastructure, and the International Data Spaces Association (IDSA), which advocates an architectural model that can be used as a blueprint for developing data spaces.

Developments in Spain

According to Spain’s Chief Data Officer, Alberto Palomo, the EU’s data strategy regards the data economy and digital value chains as key areas for its transformation, for which the Digital Single Market is a driving force. This market rests on three essential pillars: easier access to online services and resources, removing barriers between states and ensuring consumer protection; momentum towards an ecosystem of digital networks deployed on modern, efficient, and secure infrastructures; and citizen empowerment for digital inclusion and the general use of these advances.

The Spanish government, Palomo explained, is currently developing a legal, political, and resource-structuring environment that will be more conducive to the deployment and establishment of this incipient and sovereign new data economy. The aim is to seize the opportunity offered by the NextGenEU funds through various initiatives, namely those referred to in the Digital Spain 2026 Strategy, which are being deployed under the National Artificial Intelligence Strategy, the Public Administration Digitalization Plan, the National Digital Skills Plan, the SME Digitalization Plan, the Plan for Connectivity and Digital Infrastructures, and the Strategy for the Promotion of 5G Technology.

These priorities, organized financially and policy-wise throughout the Recovery, Transformation and Resilience Plan, are also supported by new organizational structures, whose task is to develop and deploy a strategic vision. Against this backdrop, the Spanish government’s Data Office was set up in 2020 under the State Secretariat for Digitalization and Artificial Intelligence. This unit plays a facilitating and coordinating role, focusing on the strategic and conceptual development of new data and information infrastructures, and drawing on methodologies that are easy to transfer and deploy across different sectors. The office combines an outward-looking vision centered on promoting and supporting industrial sectors and an inward-looking perspective aimed at bolstering the digital transformation of the Administration, said Palomo.

Likewise, to make the Spanish data economy a reality, the country needs technological and organizational instruments that align with the European data strategy. First, acknowledged Palomo, it is necessary to support and stimulate the development of a single market for data in line with the European values of free competition and respect for digital rights using the “federated data ecosystem” model. This model is chosen because it brings together a dynamic market for the supply and demand of data sets and services, as well as the ability to technically interconnect participants and assets that are located in a distributed manner. This distribution is precisely what sets it apart from traditional technology intermediation schemes (the “platform model”), as it prescribes a minimum level of governance between participants to enable their interaction, while allowing them to maintain their autonomy and discretion as to whether or not to take part in data transactions.

This, in turn, entails major interoperability challenges, as technical rules must first be agreed upon to connect the different distributed IT systems and to identify, characterize, and deploy new data repositories that provide data subsets that will shape sector-specific data spaces.

Beyond these technology-related issues, it is necessary to agree on common best practice standards and codes that promote interconnectivity at the business, legal, and organizational levels, thus providing the flexibility needed to ensure that value is properly extracted from the shared data sets.

Data spaces

As the expert pointed out, any strategy for deploying data spaces in Spain must address considerations about the data economy in the nation’s strategic productive sectors, as well as highlighting the value of the data available in public administrations. Similarly, it is essential to think about how to invigorate the community and sector leaders, as well as which models and methodologies to implement to yield quality data.

To this end, Spain has designed a general reference framework which, in the words of the expert, “considers elements that enable the viability and sustainability of data spaces” and “is structured around business development, sufficiency in project management and execution, the strengthening of capabilities within the national technology industry, and the promotion of reusable common resources that echo the voice of the sector.”  This framework encompasses the analysis of market conditions, economic models, the promotion of cooperation and collaborative innovation, the generation of open-source technical solutions, the promotion of demonstration environments and execution infrastructures, and the development of pilots to validate hypotheses, standards, and compliance mechanisms, as well as a characterization of the contractual and regulatory needs of future participants.

The aim is to establish reliable data governance, both in the various data spaces and at the core of those involved in them, focusing efforts on strategic areas to ensure social and territorial cohesion, in which administrations play a leading role, and on the decisive boost to the digital reindustrialization of the Spanish economy. We advocate fostering business and innovation ecosystems from more mature technological scenarios, too, turning technological obsolescence and advancement to our advantage through European initiatives and standards.

Sovereignty and privacy are key determinants of any data space, and the technologies needed to safeguard them are therefore a fundamental part of its design and operation. Thus, as its deployment progresses, we will see mechanisms and tools developed to guarantee decentralized identity management (likely based on distributed ledger blockchain infrastructures), while also adhering to the founding philosophy of the Web 3.0.

Privacy-enhancing technologies such as compute-to-data, synthetic data generation, differential privacy, and secure multi-party computation will also be further developed, as will incipient technologies aimed at remote or unattended regulatory compliance, which is precisely the focus of the Gaia-X initiative, said Palomo.

According to Patricia Tejado, Director of Digital Public Services of GMV’s Secure e-Solutions, the development of data spaces requires an assimilation and awareness phase for all those involved, as well as development in accordance with cybersecurity criteria from the design phase, something that has taken more than a decade to be considered a must in any process or development dealing with new systems.

In her opinion, the definition of use cases and the ecosystem’s ability to highlight the value of these spaces will encourage sharing. This, without forgetting the need for security-enabling and privacy-preserving technologies for data access and use.

On this point, Carlos Alonso Peña, Director of the Data Office Division, referred to the Simpl initiative, which is financed by the European Commission’s Digital Europe Programme. The purpose of this initiative is to implement sector-specific data spaces by developing middleware for building cloud-based data ecosystems and infrastructure services, based on European values and developed under open-source licensing schemes, ensuring knowledge dissemination and community building.

This project has a practical focus and seeks to achieve results as quickly as possible. Therefore, in addition to supplying the software, it will provide a testing environment for stakeholders to experiment with it. It will ideally be available before the end of 2024, serving as an example for the national data space initiatives yet to be carried out, depending on their degree of maturity at that time. Simpl will be developed under the guidelines of the Data Spaces Support Centre, so its convergence with the various European initiatives underway to build data spaces (Gaia-X, IDSA, FIWARE, and BDVA) is guaranteed, said Alonso Peña.

Administrations, the great data banks

Administrations must become key players in the planned sector-specific data spaces. As Alonso Peña explained, it is necessary to establish new data-based partnerships between administrations and industry, fostering a culture of open data with which the latter can develop new business models. In the expert’s opinion, actions should be enhanced to make the massive data sets held by administrations, which are of proven value, available to the productive sector. Open data in general, and high-value
data sets (HVDS) in particular, are some of the key building blocks for sector-specific data spaces. In any case, the sector-specific knowledge of public bodies involved in deploying sector-specific data spaces is essential, and these bodies must be present in the public-private collaboration mechanisms that are put in place.

As Alonso Peña pointed out, public administrations are essentially large data banks, gathering vast amounts of data as they perform their duties in service interactions with citizens, as well as in their relations with the private sector and civil society. As a result of the digitalization process underway in public administrations, their procedures and processes need to be reconsidered and reoriented to make them more agile, transparent, and responsive. However, technology cannot be brought in without first carrying out a thorough review of its structures and procedures, as well as the required human resources and training.

Data, understood as a public asset, are a key part of the digital transformation process taking place in public administrations, redefining their relationship with citizens and productive sectors as they unwaveringly seek to promote the common good for society and foster a fair and inclusive economy. Data is a public asset to be preserved and processed for the implementation of quality public services and policies.

Strengthened collaboration within the public sector is embodied in public data spaces. By taking a much more interdisciplinary and interdepartmental approach and by harnessing the latest technologies, the aim is to scale up current information processing methodologies, specifications, and practices, thereby achieving a seamless and continuous exchange of data between administrations, industrial sectors, and citizens. Public sector data spaces should be built around the General State Administration Data Platform provided as a common service by the General Secretariat for Digital Administration, in order to take advantage of its storage capacities, analytical possibilities, and data governance tools.

The importance of tourism

The tourism industry is responsible for over 280 million jobs worldwide, both direct and indirect, and its contribution to global GDP in 2021 exceeded 5.8 trillion dollars, according to the World Travel & Tourism Council (WTTC). Tourism also contributed €159.49 billion to Spain’s GDP in 2022, 1.4% more than in 2019, according to the quarterly report “Tourism Outlook by the Alliance for Excellence in Tourism (Exceltur).”

Data are clearly important in the tourism sector, and tools such as the UNWTO Tourism Data Dashboard provide statistics and analyses on key indicators of inbound and outbound tourism at global, regional, and national levels. Data cover arrivals, export share and contribution to tourism GDP, outbound markets, seasonality, and accommodation (data on number of rooms, guests, and overnight stays).

According to Dolores Ordóñez, Vice-President of Gaia-X Hub Spain, the creation of a tourism data space means a new scenario with numerous possibilities for personalizing the tourist experience. She said: “An obvious example is what is known as seamless travel, where, thanks to data sharing between the various entities that interact during travelers’ journeys from home to destination, travel efficiency is enhanced, traveler satisfaction goes up, and we get to know our visitors better.”

In this sector, Tejado said, the advantages of data sharing and the reluctance to share data between competing organizations are no different from those in other industries. Privacy-enhancing technologies (PETs) offer one possibility for overcoming potential “mistrust,” as they allow secure and private calculations to be performed on distributed data without exposing them or moving them out of organizations. The data economy “is going to be a reality that will boost our GDP sooner rather than later,” she concluded.