David Lyford-Smith considers how best to value the UK’s data economy, assessing the key issues and challenges which arise when valuing data.
Last year I had the pleasure of attending a meeting hosted by the Royal Academy of Engineers (RAEng), discussing the challenges of valuing the UK’s data economy. The meeting followed on from the Academy’s publication of Connecting data – Driving productivity and innovation, jointly created with the Institute of Engineering and Technology, and was attended by key thinkers from the fields of engineering, technology, government, accounting practice and academia. While it’s been a while since that meeting, with discussions over the role of data in the economy continuing in light of the Digital Economy Bill and more, there are some important lessons from that event to consider.
In short, the argument of the RAEng is that data assets are an essential element of the value of UK companies and, with the growth of big data and the internet of things, this is only likely to increase. But currently these assets are not readily recognisable in corporate reporting, nor are they considered in government statistics around GDP. Valuation of these assets in internal management accounting is also rare, and overall the RAEng argues that the current state of affairs undersells UK productivity, doesn’t appropriately encourage the use of open and structured datasets, and under-promotes the need for security around data. By bringing data valuation techniques to the fore, the RAEng argues, the economy and society could benefit.
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