Promoting data markets globally

In recent years, a data economy has developed that primarily collects personal data: Sales platforms, smart home appliances, fitness trackers or navigation apps generate valuable user profiles. So far, mostly only big tech companies can access and trade with the data. Countries in the Global South are thus only able to benefit from the data economy to a limited extent, although data value creation, especially in development cooperation, can provide various actors with an information basis for making better decisions and ensuring better access to healthcare, education, goods, services, food, and energy.  Although the Global South cannot match the rapid growth of the digital economy in Europe and the United States, Africa is showing positive signs. On the continent, the number of tech startups grew tenfold between 2014 and 2019. The key growth driver of the digital economy is the ability to collect and analyze large amounts of data. Thus, in recent years, a data economy has emerged whose dynamics are mainly shaped by holders of large amounts of data (Big Data holders) and their interests. 

Promoting data markets in Africa 

In Africa, the economic benefits of data have so far mostly been in the hands of few gigantic tech companies: be it in terms of skills and workforce, data protection, economic value-creation, taxation and other regulations, foreign tech companies currently hold the monopolies of digital economies, while African countries are only able to benefit from it to a limited extent. In the future, however, political self-determination and further economic development potential will increasingly depend on the ability to understand the value of data and set up the relevant data infrastructure and data-driven services, to enable local value creation, promote innovation ecosystems and support local entrepreneurs and investors. In addition to the expertise to use local infrastructures (such as data centres) for processing and storage of data, this requires above all solidly introduced and harmonized laws for data protection across countries. 

In 2021, the EU-AU Data Flagship political framework was developed by the European Commission, the African Union Commission, the Smart Africa Alliance and BMZ with two main objectives: unlock the economic and societal potential of data for citizens and protect citizens from misuse of their data by businesses or government public entities. As a component of the EU-AU Data Flagship, the BMZ-funded political initiative “Data Economy” was created in 2020.

Our approach and goal 

The Data Economy initiative promotes the development of a fair and inclusive data-driven economy by advancing the implementation of data regulations, testing data sharing to drive local innovation, and supporting local value creation. We strive to create the conditions for citizens, in particular marginalized groups, women, and youth, to have equal access, competences, and opportunities to engage and profit from the digital economies. Currently, we work on the African continent in collaboration with, amongst others, the Smart Africa Secretariat, the Network of African Data Protection Authorities, national regulators, and private sector and civil society actors, to achieve three main objectives: 

To support harmonized and interoperable regulations and allow data to create cross-border, regional and continental value in Africa, the Data Economy initiative has contributed to the development of the first African Union (AU) Data Policy Framework, through the BMZ-funded DataCipation project. The Framework provides a set of policy recommendations around data economies in Africa and addresses topics such as:

• enabled data flows
• data protection and digital rights
• data capabilities of African citizens and stakeholders
• data-driven businesses and entrepreneurship
• data sharing and cybersecurity

The AU Data Policy Framework will serve as political orientation for AU Member States, Regional Economic Communities (RECs) and African stakeholders to implement and enforce harmonized data policies, promote cross-border data flows following a standard regulatory foundation, as well as design national strategies in line with the African Union continental approach.

Additionally, climate action and sustainability are important aspects in our global activities. A considerable volume of the world’s data is stored, managed and circulated by data centres, and the amount of data centres is estimated to grow exponentially as data traffic and storage capacity increase. However, data centres consume large amounts of energy, contributing to GHG emissions and use large amounts of water, both directly for liquid cooling and indirectly to produce electricity. Therefore, Data Economy partners with the World Bank through the Digital Development Partnership (DDP), which brings public and private sector partners together to enhance support to countries in the Global South in the articulation and implementation of digital development strategies. Our partnership focuses on green and secure data infrastructure (data centres): with our partners, we are currently developing a practitioner’s guide that explores how the public sector, particularly in Low- and Middle-Income Countries, can invest in green public data infrastructure and foster an enabling environment for green data solutions.