Why digital sustainability is key to combat growing data pollution

16 December 2020 Consultancy.eu

The growing importance of data calls for more focus on data sustainability, say Innopay founding partner Douwe Lycklama and chief executive Shikko Nijland. “We are sleepwalking into a dystopian digital future of data pollution. If we don't act now, we risk creating a digital world which will be unfit for our children.” 

The digital age and the exponential growth in data transactions has delivered untold benefits. Transactions – such as sending someone a message, buying something in a store, booking an airline ticket online or logging on to social media – can be likened to breathing. People do it all the time without even thinking. 

But caution is required, say Douwe and Shikko: “The transactional internet delivers huge benefits but it also comes with some adverse side-effects. We describe this as 'data pollution', and we must begin viewing it through the same lens as environmental pollution. But whereas it took over 100 years to reach a crisis in the physical world, we are approaching the tipping point much faster in the digital sphere.”

Douwe Lycklama, Shikko Nijland - Innopay

The risk of data abuse

Data transactions are growing exponentially but there is a worrying lack of agreed governance to manage and safeguard this data. So the data becomes ‘polluted’ – leaking, fragmented, sometimes inaccurate and, most importantly, outside the control of the people and organisations which create the data and who are it's subjects.

Meanwhile, a handful of parties are using this data solely for their financial benefit, leading to a lack of trust. “It is paramount that we jointly decide on new governance models that will not only protect this data, but also rebalance the data benefits in a fairer way.” 

According to Shikko, the balance of power is shifting towards internet companies which are controlling data. “We question whether this is a good thing. At Innopay, we believe that power should reside with citizens, and this inevitably leads to a more decentralised data paradigm.” 

And this is not just an apocalyptic discussion about societal visions for the future. It also has very practical business implications for the present, Douwe and Shikko point out. “Losing the trust of citizens poses a real risk because a decline in trust signals a worsening relationship between businesses and their customers, as well as between governments and citizens. Less data will be shared, and less data leads to less relevance, fewer customers and diminished business success.” 

Digital sustainability

The duo believe that now is the time to wake up to this problem, and collaboratively establish new governance models to safeguard the digital environment. Douwe is optimistic: “We can still change things if we act now. If we do nothing, then others will decide. But we are very positive that we can create a better society if we work together and put in place governance models which will support a more decentralised data future.”

Central to their vision is the concept of ‘digital sustainability’: the idea that organisations and people should focus more attention on combating the unintended negative effects of the explosion of data transactions. The cornerstone of digital sustainability is the development of ‘Digital CSR’ policies which safeguard the role of the people who generate the data. 

Douwe continues: “The guiding principle of a Digital CSR policy must be to put the user back into the loop again. If you are a business leader or a public policy-maker, then your focus should be to put the person who is concerned with that data in control. This is called Data Sovereignty, and it concerns your customers, suppliers, employees – anyone from whom you have data. You should provide an overview of what data you have, offer them the possibility to manage that data, and to reuse their data somewhere else.” 

Solving this issue requires a deep understanding of the transactional ecosystem, and an openness to considering new ways of doing things. Whilst too many regulators are focusing on the symptoms of the problem (such as trying to fragment organisations like Facebook), Innopay proposes a different philosophy which tackles the root causes.

“We support the Open Up, not Break Up meme. Because data is a two-sided market as well; a fact mostly overlooked in any public debate about data, which mostly centres around symptom relief. Breaking up Big Tech is not the way forward. This works against interoperability, which is essential for Data Sovereignty. In the Data Sovereignty world, you know who has your data and how to re-use it elsewhere. So for example you can decide to join another social media platform without losing your friends.”

On Opening Up, Douwe says: “This means that people are able to control their data. So we need an additional layer to the internet infrastructure – we call this a Trust (or Soft) Infrastructure. This will enable the reuse and movement of data in a secure and manageable way. In many ways the GSM infrastructure is already part of a soft infrastructure. If we change telecoms provider, we can still keep our number. The same holds true for payments and banking. You can switch banks and still be able to shop and pay your bills. So why should it be different with data?”

A joint effort: public and private sector

“Digital sustainability is already on the agenda of public policy-makers,” says Douwe, “and we see strong signals that things are beginning to move. We believe that Europe is going to lead the way in finding this different paradigm for the digital economy and creating new regulations. Europe’s feature is decentralisation and federation; it’s not a bug.” 

Innopay’s latest market research reveals that business decision-makers are also beginning to see future benefits from digital sustainability, with most organisations finding it important to demonstrate Digital CSR. 

Shikko says: “Companies have a great opportunity to stand out if they take responsibility now, and don't wait till it’s enforced. They can show their customers that digital sustainability is important to them. It’s the same as with sustainability in the ‘real’ world: at first no-one did it, but then customers started demanding it. And there is also a responsibility on us as citizens to start pushing companies to develop Digital CSR policies which create a healthier digital world.” 

“It makes sense to start with something manageable. Every company can make small steps to get people thinking about digital sustainability. One simple example would be to make a Digital CSR policy for how you treat internal data, such as enabling employees to take their HR file with them if they move jobs. Or service your ecosystem of customers and suppliers by providing an overview and giving access to the data which you keep about them, and offering improved ways of API connectivity and standardisation.”

Getting things into motion will require “visionary leaders”. These are leaders that currently are at unease with the status quo, and because “they can see the commercial advantages of being the first movers in a world where companies will increasingly compete on the health of their data.”