Fact box 5.6 - Sharing data creates greater value for society than for a single company

Value creation from data sharing will normally be greater for society than for a single company or production licence.

That reflects four key properties of data.

– Digital data can be used and reused in a number of applications, such as different algorithms and programmes, without its value for other users being diminished (a public good).

– Producing digital data could influence a third party positively without the investor in/producer of the data taking account of the effect of its decisions on the third party (a positive external effect).

– Processing digital data provides economies of scale, since it could be more efficient to process and analyse large quantities of information than to process each dataset separately.

– Using digital data offers economies of scope, since merging complementary datasets can provide more insight than keeping them separate.

Coordination problems and reluctance to share data could prevent the full value potential of such sharing being realised. The government therefore plays an active role in ensuring that this happens.