Dubai: Data economy, which is still in the early stages in the Gulf Cooperation Council (GCC), is estimated to be worth $4.7 billion – representing 0.3% of regional GDP in 2018. This was revealed in a joint study by the Ideation Center – a think tank for PwC’s Strategy& and leading business school INSEAD.

With the deeper penetration of smartphones and the government’s investment in “smart cities”, the UAE smart homes market is estimated to grow by 14.8 percent annually from 2016 to 2022.

The data consumption in Saudi Arabia is forecast to grow by 28% annually between 2018 and 2022, faster than the expected growth rate of 20 percent in the United Kingdom and 23 percent in the United States. From 2014 to 2018, the consumption of data in Saudi Arabia grew by 35 percent, a higher rate than in the U.S. and the U.K.

Deployment of 5G services is behind the fast acceleration growth of data, added the study.

Meanwhile, shipments of wearables were up 78 percent in the Middle East, Turkey, and Africa for the period 2017 to 2018.

“The economic contribution of the data economy is even greater when considering that it is the main enabler for the proliferation of AI applications. In practice, there is no AI without data. So the more data that devices capture, exchange, and analyze, the greater the value that AI creates. We believe that data-driven technologies and machine learning will radically improve and even transform business processes and decisions,” said Theodoros Evgeniou, Professor of Decision Sciences and Technology Management at INSEAD.

The study suggests that governments can offer incentives to private firms, such as infrastructure, solution providers, or data traders that might consider setting up a business in the local markets.

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“Regional governments could invest in startups that support data democratization such as encryption solution providers; distributed ledger technologies such as blockchain; data marketplaces; cryptocurrencies; and data analysis and classification solution providers,” observed the study.

Highlighting the two-fold value created by data, the report says that companies can use data either to improve internal operations, productivity, and customer experience, or sell the data produced in raw or analyzed form.

Jad Hajj, partner with Strategy& Middle East said: “A move toward data-driven technologies as artificial Intelligence (AI), will further increase the economic value of data.”

In the GCC, telecom operators and large retailers are playing an important role in leveraging customer data, the study highlights. “Operators have improved their sales footprint, ensured proactive maintenance, call center workforce planning, and network planning. Dubai Parks, Dubai Holding, and some GCC banks have also started to use data for internal optimization,” it added.

In addition, Smart Dubai announced the ‘Dubai Data Private Sector Strategy and Policy’ in April 2019. The initiative consists of creating and managing a ‘data trust’ that will serve as a repository for many companies’ anonymized data. The data trust will allow members to receive aggregated and more accurate insights on customer preferences to inform decision making for businesses and policymakers.

According to Strategy& 2018 GCC data sentiment survey, users are aware of the value of their data but are unwilling to share too much. Only 23 percent of GCC respondents would be willing to share more data if they were in control of it. Only 19 percent of respondents would share more data if they were getting paid for it. The same proportion would share more data if they understood better how their data is used.

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Alice Klat, Director of the Ideation Center, concluded, “Governments will need to build a legal and regulatory environment in which companies and individuals will be willing to share data and participate in building the data economy.”