Germany’s diffidence towards the data economy

Two months ago, the German government set the course with a new strategy to utilise data more effectively, but recent surveys show that the public and businesses are not convinced of the benefits of using personal data. (I think trust is the wrong word- it seems they do not see the benefit? Can you reword this)

A recent survey conducted between September and November on behalf of the Federal Association for the Digital Economy (BVDW) found that 75% of the 2,500 respondents do not see any economic benefit in digital data processing, with only 10% believing personal data contributes to national prosperity.

Moreover, only 14% are convinced that the digital processing of personal data makes their everyday lives easier.

“Everyone is in favour of a digital Germany. However, many do not associate digitalisation with data. This is the result of years of negative debate, which has also fuelled fears that data per se will fall into the wrong hands,” says Dirk Freytag, President of the BVDW.

This mistrust also carries over to digital administrative processes. Most Germans (54%) are not convinced that personal data helps speed up processes.

“If not even every second person recognises the benefits of using data by 2023, it is high time to act,” stressed Carsten Rasner, Managing Director of the BVDW.

Legal concerns

Things are not so different when it comes to German businesses.

According to a survey conducted by the German Economic Institute (IW) in September, only a third of companies in Germany are prepared to store, process and utilise their data efficiently, with data sharing and processing being the most frequent legal concerns amongst businesses. For example, the risk of a data breach is often considered higher than the benefit of data sharing.

“More specifically, companies state in this regard that legal concerns over data protection or copyright and antitrust law as well as uncertainties regarding the benefits or risks of data sharing are a decisive factor,” explained Jan Büchel, Economist for Data Economy at IW, to Euractiv.

Another source of uncertainty and reluctance for businesses is the various pieces of EU legislation currently in force.

“Admittedly, many legal acts are currently being adopted at the EU level that affect the handling of data in companies and are partly interlinked,” says Büchel.

Many companies are confused about the legal requirements they need to comply with when sharing data with other companies. Recently, the EU has adopted the Data Act and Data Governance Act outlining obligations and governance requirements for data sharing.

“Nevertheless, the regulations are important to ensure that the handling and sharing of data within the EU is by European values,” added the IW economist.

Approach to a solution

Policymakers do, however, have the opportunity to minimise concerns.

“This is precisely why it is all the more important that the relevant information on use cases and best practices is increasingly made available to companies by policymakers,” Büchel told Euractiv.

SMEs mainly depend on this support, as they are more limited in their financial and personnel capacities than large companies.

“The main task lies with the companies themselves,” Büchel added.

Firstly, to process data efficiently, companies need to be aware of the availability of their data.

Büchel advises companies to establish what is known as ‘data governance’ for data efficiency. This allows data to be made available at the right time and place in a controlled manner, exclusively for those authorised to access it and in the required data quality.

Companies must also be aware that digitalisation is directly linked to data utilisation.

“If more data is available in digital form, there is also more potential for data utilisation,” the IW economist explained.

Educating the public is another way to make sure that digitalisation is given a voice in Germany.

For Rasner, such a discourse on the data economy is highly relevant because “this is the only way to build data literacy in society and turn the culture into a positive one after more than a decade of misunderstood data utilisation debates,” said the BVDW Managing Director.

[Edited by Kjeld Neubert/Luca Bertuzzi]

Read more with Euractiv

EU Commission's microtargeting ads on controversial law faces fresh complaint

The European Center for Digital Rights, NOYB, launched a complaint on Thursday (16 November) against the EU Commission with the European Data Protection Supervisor for using microtargeting ads on X to promote its regulation on detecting child sexual abuse material online.