The rise of the data economy and policy strategies for digital development

The rapid advancement of digital technology is driving structural economic and technological changes in the world. The result of these changes can be seen in the rise of new modes of production, exchange, and consumption, the emergence of new economic actors, and the growing challenges to the policy landscape regulating the world economy. Data is central to these changes as the ability to collect, move, store, and analyse data is fundamental to new business models and actors. Debates around data and how to govern data have increased in recent years as states work to develop tools to develop their data economies and to limit the potential economic and social negative impact of new modes of production and trade. This paper uses the concept of data value chain to analyse the data economy and to examine the different policies states are following in different stages of the data value chain. We examine how these policies could translate into different pathways to achieve digital development by focusing on different stages within the data value chain. We identify four pathways to digital development: a) active data localisation, b) strategic data sharing, c) opportunities in low income data processes, and d) building sectoral specific application linked to data, and illustrate how different countries and economies could follow different policy pathways.