How responsible data can help us navigate the economic crisis

Data underpins and powers the ways in which people, businesses and societies interact. By 2025, individuals and companies around the world will produce an estimated 463 exabytes of data each day. The ways in which data is used, stored and governed can have significant impacts for users, communities and our planet. In the past decade, the technology sector has seen a rise in the number of policies, values and initiatives designed to protect people and their data.

Yet, in the context of a looming global recession and resulting tech layoffs, responsible data approaches are threatened, both as the resourcing behind implementing frameworks is depleted and as companies prioritise shorter-term profit gains. As with any change in business, particularly in the technology sectors, lower-income, underserved and marginalised communities stand to be most affected by this. There has therefore never been a greater need to build and integrate responsible data guardrails in the tech sector that can withstand economic shocks and ensure the protection of those that need it most.

Doubling down now on responsible and ethical data policies can help companies navigate the current economic climate by:

Emphasising the importance of responsible and ethical data policies will reinforce and build digital trust. It can also sustain our planet and boost economic activity and job creation. According to a Mastercard survey on data responsibility, despite the importance that customers place on data protection and privacy, very few say companies are doing an adequate job of handling individuals’ data. The establishment of responsible data principles and initiatives like the Data Responsibility Imperative, ranging from security and privacy to accountability, are necessary steps in building and sustaining digital trust, which can prove essential to unlocking the full potential of data for economic growth.

“The Digital Trust Index: the value of digital trust” report has quantified the missed opportunity caused by a lack of digital trust. The report observes that a 5-percentage-point increase in digital trust results in an average increase in GDP per capita of $3,000. Responsible data frameworks, as a vehicle for cementing digital trust, can therefore significantly and positively impact a global economy in crisis.

Another 2021 survey by McKinsey & Co. reveals that a majority of users indicate that they want to know a company’s data and AI policies before buying its products and services. Stakeholders value organizations that don’t cut corners and compromise on responsible data frameworks, and in fact will seek out alternatives to companies that they feel are not protecting their personal data and reinforcing the use of data for the betterment of people and the planet. It is therefore critical for all businesses – from healthcare to the agriculture sector – to ensure that responsible data is put at the centre of products and services.

To achieve this, companies must take steps to invest in data literacy and education, be transparent about data collection and use, and protect sensitive data and user’s privacy, particularly in the use of automatic decision-making systems. Equally important in cementing digital trust is the consideration of the impact of data practices on minority communities and the engagement of these communities, and the broader multistakeholder community, from the outset of product development.

The risk of inaction on responsible data is too high. In a context where business earnings, particularly in the tech sector, are in decline, businesses cannot afford the legal, financial and reputational risks that could come from data breaches, security incidents or ethical misconduct. And while legal compliance and risk is one consideration, when it comes to business resilience, the need for building proactive and sustainable data responsibility guardrails extends well beyond compliance.

Access to critical data and insights has been observed as an integral component of building business resilience in crises situations. Data-driven insights can help companies navigate difficult resourcing and hiring decisions. Equally important as companies look to gain insights from the data they store and collect is how responsible data frameworks are guiding decision making processes. Such frameworks can protect companies from making suboptimal business decisions that threaten to exacerbate existing harms and further bias, particularly when it comes to resourcing.

In a world where technological innovation often outpaces legislation, building responsible data frameworks from the outset and in the design phase of the life cycle of technology can help product teams and engineers ensure that guardrails are engrained in the DNA of new services and products themselves, despite changes to use, customer base or to the technology itself brought about by disruption.

In order to build resilient responsible data frameworks, businesses must go through an iterative review and update of data protection policies and processes. Building in mechanisms for continuous review helps frameworks to keep pace with evolving needs and react more quickly to disruption. Companies can further invest in data infrastructure and technologies, including the development of oversight mechanisms and build contingency plans for risk scenarios, including data breaches.

Overall, a company that can foster a culture of responsibility, keep responsible data frameworks “alive”, and can stay informed of regular developments in the area of data responsibility will emerge more resilient in the face of challenges brought on by geopolitical, economic and climate shocks.

Today, all companies are driven by data. To build business that can withstand the current economic outlook, we need greater multistakeholder collaboration towards building responsible data frameworks. Collaboration can enable the promotion of new possibilities such as open data initiatives, enable greater transparency and new, data-driven services and applications. Responsible data frameworks must be the shared goal of business and government to build resilience, establish digital trust and in turn promote long-term economic growth.