Article by Mariana Mazzucato: “The internet giants depend on our data. A new relationship between us and them could deliver real value to society….We should ask how the value of these companies has been created, how that value has been measured, and who benefits from it. If we go by national accounts, the contribution of internet platforms to national income (as measured, for example, by GDP) is represented by the advertisement-related services they sell. But does that make sense? It’s not clear that ads really contribute to the national product, let alone to social well-being—which should be the aim of economic activity. Measuring the value of a company like Google or Facebook by the number of ads it sells is consistent with standard neoclassical economics, which interprets any market-based transaction as signaling the production of some kind of output—in other words, no matter what the thing is, as long as a price is received, it must be valuable. But in the case of these internet companies, that’s misleading: if online giants contribute to social well-being, they do it through the services they provide to users, not through the accompanying advertisements.
This way we have of ascribing value to what the internet giants produce is completely confusing, and it’s generating a paradoxical result: their advertising activities are counted as a net contribution to national income, while the more valuable services they provide to users are not.
Let’s not forget that a large part of the technology and necessary data was created by all of us, and should thus belong to all of us. The underlying infrastructure that all these companies rely on was created collectively (via the tax dollars that built the internet), and it also feeds off network effects that are produced collectively. There is indeed no reason why the public’s data should not be owned by a public repository that sells the data to the tech giants, rather than vice versa. But the key issue here is not just sending a portion of the profits from data back to citizens but also allowing them to shape the digital economy in a way that satisfies public needs. Using big data and AI to improve the services provided by the welfare state—from health care to social housing—is just one example.
Only by thinking about digital platforms as collective creations can we construct a new model that offers something of real value, driven by public purpose. We’re never far from a media story that stirs up a debate about the need to regulate tech companies, which creates a sense that there’s a war between their interests and those of national governments. We need to move beyond this narrative. The digital economy must be subject to the needs of all sides; it’s a partnership of equals where regulators should have the confidence to be market shapers and value creators….(More)”.