Orsolya Fodorné Zagyi: PSI in the digital datamarket. Part 1. Measuring the value of digital data and data flows in a macroeconomic approach (IJ, 2023/2. (81.), 15-20. o.)

Introduction

Cloud and edge technologies represent strategic innovation opportunities for the uptake of emerging technologies such as artificial intelligence, IoT and 5G. They provide the infrastructure for innovative use cases. Europe needs to strengthen the position of EU industry in cloud and edge technologies. Cloud data flows can be defined as enterprise data that flows to cloud and edge facilities for the use of cloud services. Network availability, advances in functionality, the proliferation of applications and the continued growth of content on the Internet have played a major role in driving the adoption of digital infrastructure and applications. This includes the growing adoption of cloud computing, which has led to an increase in global data centre traffic.

1. The strategic importance of digital data and data flows

Public sector information is a unique source of data that contributes to the development of the European internal market and to the dissemination of new applications for users and legal entities. Public sector information is an important raw material for products and services with digital content and has become an increasingly important source of content with the development of digital content services. With the development of the use of artificial intelligence, the need to expand the use and reuse of digital data for the economy is becoming more urgent.

The value of cloud data streams is defined as the secondary or incremental benefits derived from the use of cloud services by cloud data streams. An example of a secondary benefit derived from cloud data streams is the improvement in business intelligence and information that a company or organisation can gain by using cloud data analytics services.[1] The European Commission has carried out a study to estimate the economic value of cloud data streams in 2023.[2] Study was an important part of the primary research and raw data collection carried out by IPSOS. Interviews were conducted with 1,200 businesses in six EU27 Member States (Czech Republic, Germany, Greece, Poland, Spain and Sweden) to collect raw data, and to analyse the characteristics of businesses using cloud services, their economic impact, and the impact of cloud data streams. The study estimates that in 2022, the volume of cloud data flows from EU27 companies purchasing cloud services over the internet was 11.2 EX/year. Cloud data flows in the EU27 Member States are expected to grow to 92.1 EX in 2030, a cumulative annual growth rate of 30.1 percent (1 EX = 1,000,000 TB), while the economic value of cloud data flows is estimated at €183 million per 1 EX in 2022.

The development of the digital economy and society is expressed by a complex indicator (DESI), aggregating 30 relevant indicators, grouped into 4 dimensions from 2021. The indicator is described in detail in a study by Molnár, P.[3] Overall, Hungary ranked 22nd out of 27 EU Member States in 2022, but performs well in terms of connectivity and internet usage. Dimensions of the DESI:

- Connectivity (Hungary ranked 13th, with superfast broadband coverage and usage above the EU average)

- Human capital (Hungary 23rd)

- Integration of digital technologies (Hungary 25th)

- Digital public services (Hungary 21st) We follow the analysis of Dr Csáki-Hatalovics for an interpretation of the content.[4]

2. Measuring the value of digital data

In economic research, values and benefits are usually derived from the analysis of economic impacts. These economic impacts usually come from efficiency improvements, quality improvements, and organizational, personal, or societal impacts.

A study by the European Commission[5] defines the economic value of cloud computing as the difference between benefits and costs per 1 EX of data.[6] Five stages are distinguished to determine the value.

1. They examined the habits of 1,200 businesses using cloud services in the study to gain insight into the nature of the benefits they derive from buying cloud services. The direct benefits, the benefits gained directly from using cloud services. (e.g. faster or better data analysis using cloud-based data analysis services) Indirect benefits, the secondary or co-benefits derived from the use of cloud services by cloud data streams (e.g. improved business intelligence and quality of information that the company can obtain)

2. In the second phase of the research, the researchers developed a backhoul model of cloud data flows, which was used to estimate the volume of cloud data flows in the 31 countries studied. The analysis estimated that the total volume of cloud data flows in 2022 was 11.2 EX per year across the 31 countries, which was used as a benchmark to determine the monetary value.

3. The third stage of the analysis is the examination of the distribution of cloud and edge facilities. Cloud-based infrastructure, which refers to the storage and management of data, means the data processing and storage capabilities necessary to provide cloud services. The study considers these as direct effects related to cloud services. They are related to cloud-based data streams, as these capabilities allow businesses to use cloud services offered by cloud providers.

4. The fourth stage of the analysis examines the values, benefits and costs that cloud service providers face when offering cloud services. The primary benefit for cloud service providers is the revenue they receive from the businesses that buy cloud services.

5. The final stage of the analysis is to determine the economic value. Based on the above methodology: Value of cloud data streams = (Willingness to pay for secondary benefits from cloud services)* (Cost of cloud services to businesses buying cloud services) / Volume of cloud data streams.

Since 2014, the European Commission has been working to create a Digital Single Market[7] where individuals and businesses can access and engage in online activities under fair conditions of competition and in line with EU privacy and data protection rules and values.

Another method that data streams use to determine the value of digital data is based on a methodology developed by the OECD.[8] The methodology is based on the value of data linked to macroeconomic indicators. The starting point is the amount of investment in knowledge-based capital (KBC). Knowledge-based capital (KBC) is not an investment in physical assets, but the result of business investments in, for example, R&D, data, software, patents, new business models,

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organisational processes, firm-specific skills and designs.[9] Figure 1 shows the evolution of the value of KBC investments as a percentage of GDP in 2017.

Investment in computer software and databases is the main component of investment in information and communication technologies (ICT), and in most countries, investment in KBC accounts for less than half of total ICT investment. While in Latvia this share is only 23%, in France it is 86%. investment in ICT assets averaged 2.4% of GDP. This stability in a period of ongoing digital transformation can be explained by both a fall in the prices of ICT products and a shift in capital investment towards substitution between the purchase of cloud-based ICT services. Their primary purpose is to enable users to access software, storage, processing and other systems over the Internet without having to purchase ICT assets directly. However, the measurement of investment in computer software and databases is not well suited to take into account the value of the data assets they contain. Recent progress has been made in capturing data in macroeconomic statistics, but there are still few experimental estimates of the value of investment in data assets.