Data Sharing: Potential Untapped by Firms
Research
21.05.2024
ZEW Surveys 1,400 Firms on Data Sharing Practices
Data sharing among firms, involving the provision and mutual use of data, holds significant potential for the economy. Benefits of data sharing include optimising collaborative workflows, developing new business models, or selling collected data on the market. However, German firms have yet to leverage the opportunities of shared data usage. This could be changed: Technically and legally secure frameworks, reciprocity-based data sharing models, and financial compensation for provided data could incentivise firms to share their data. These are the results of a representative ZEW survey of approximately 1,400 firms in Germany’s information economy and manufacturing industry.
The value of the European data market was recently estimated at nearly 82 billion euros, underscoring its considerable significance for the economy. “However, current conditions inhibit data sharing between firms, which often perceive legal barriers that hinder the joint use of data. Additionally, many firms are uncertain about the benefits they could derive from data sharing,” comments Dr. Daniel Erdsiek, co-author of the study and researcher in ZEW’s “Digital Economy” Unit.
Incentives for sharing data
Based on the representative survey, the ZEW study identifies three factors that provide an incentive for firms to initiate or intensify the sharing of their own data. These include a legally secure and operational framework that is easily accessible and guarantees data security, copyright, and data protection.
Further incentives are provided by reciprocity-based data sharing models. In this case, firms can access data offered by other firms at a reduced rate or even for free in exchange for sharing their own data.
Moreover, financial compensation for the provided data has a positive influence on firms’ data sharing plans. This compensation could be provided, for example, through subsidies, tax incentives, or direct payments from the firms using the shared data.
Few firms plan to start data sharing in the future
Firms already active as data providers, are relatively likely, on average, to intensify data sharing in the next two years. This likelihood averages 55 per cent in the information economy and 41 per cent in manufacturing. However, among firms that have not yet shared their data with other firms, the likelihood of future data sharing activities is at only eight per cent on average. Around 70 per cent of these firms completely rule out starting to share their own data in the next two years.
“Overall, firms are more open to data sharing if they already store many types of data digitally or if data is more important to their business model. Additionally, larger firms are somewhat more likely to plan to share their own data with other firms in the future,” says Erdsiek.
Data sharing
Data sharing refers to the provision of data by firms to other firms. For example, firms can share their own data with suppliers or subcontractors along their value chain to optimise production processes based on data, thereby realising efficiency gains. On the other hand, revenue can be generated directly from the data provided.
About the study
In January 2023, approximately 1,400 firms from the manufacturing industry and the information economy, consisting of the ICT sector, media service providers, and knowledge-intensive service providers, participated in the ZEW survey.
