"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." These are the cautionary words of INNOPAY's founding partner, Douwe Lycklama, and CEO Shikko Nijland. But far from being harbingers of inevitable doom, they are bringing forward a positive message of how we can work together to assume a shared responsibility for our digital future. Just as we are collectively focusing on protecting the physical environment, so we also need to develop Digital Sustainability policies to safeguard the future wellbeing of our digital world.
Data pollution is threatening to overwhelm the transactional ecosystem
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. We do it all the time without even thinking. But are we being quietly anaesthetised by the allure of these shiny baubles which apparently come without cost? Douwe and Shikko believe so: "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."
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. And this inevitably leads to a lack of trust because a handful of parties are using this data solely for their financial benefit. Now we must jointly decide on new governance models that will not only protect this data, but also rebalance the data benefits in a fairer way. And critical to that discussion is who should be responsible for the data: what will be the roles for governments, companies and individual citizens?
Shikko continues, "There is a power struggle going on for control of the internet. The balance of power is shifting away from democratically elected governments towards new internet companies which are hoarding our data. And we question whether this is a good thing. For example, consider how Google and Apple are able to dictate whether governments can access their proprietary APIs to create COVID-19 tracing programs. Do we want a limited number of huge organisations to have this level of unchecked power? 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. With the growing amount of data scandals, we need to realign the 'data benefits balance' and put the power back in the hands of the people and organisations that create the data, or we will lose citizens' trust. This 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.
We believe it is now time to wake up to this problem, and collaboratively establish new governance models to safeguard our digital environment.
Digital Sustainability policies are the best way to safeguard tomorrow's digital environment
The clock is ticking but 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 INNOPAY's strategy is the concept of Digital Sustainability: the idea that we 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 will 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'.
"Opening Up 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? We seem to readily accept that with WhatsApp you can only call and message people within WhatsApp, while with regular GSM and SMS we would not accept this. Extending this principle to data will give us the missing soft infrastructures which will rebalance the data level playing field."
Stimulating Digital Sustainability requires impetus from the public and private sectors
The decentralised payments and telecoms sectors are dependent on a healthy symbiotic public/private relationship, and we now need to extend this collaboration into other domains.
"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, and most organisations find it important to demonstrate Digital Corporate Social Responsibility as we move into the next phase of the digital era.
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.
"This is not easy, but that shouldn't stop leaders from standing up and taking action. There will be a real first mover advantage in shaping the next generation digital economy based on Digital Sustainability principles. So we are urging businesses 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."
Douwe agrees: "Our message to business leaders is this: you don't need to wait till tomorrow when everybody is doing it. Start now, take small steps, and get ahead of the game."
Visionary decision-makers are needed to take the leadership role
Digital Sustainability is a core belief within INNOPAY's 'Everything Transaction' philosophy. If we do not start tackling the problems associated with data pollution, we will not only miss out on business opportunities, but we will be responsible for creating a digital world which is every bit as polluted as the physical one.
Douwe concludes, "We are determined to spark a wave of thinking so that people become aware of this threat and can be encouraged to take practical steps to solve the problem. Even the idea that it's possible to evolve our current digital economy is something which is still undervalued. The challenges of today’s digital economy are more and more understood, but there are not many solutions in sight.
"We believe there will be a small group of visionary leaders who will take up this challenge, both because they're uneasy about the way things are heading, 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.
"Show all your stakeholders – including your employees and customers – that you really care, and that you see data as the next frontier of sustainability by extending your existing CSR policies into the digital realm."
INNOPAY has extensive experience of developing Digital Sustainability and Digital CSR strategies. To discuss how your organisation can take the first steps to tackling the challenges and opportunities discussed in this article, feel free to contact Douwe Lycklama and Shikko Nijland.