In commenting on the design of Australia's superannuation system, the Inquiry draws on Chilean experience. Regrettably and perhaps unwittingly, the Inquiry also seems to have drawn on the early 1970s Chilean socialist experiments with Big Data in developing its thoughts and recommendations around access and use of private sector data.
Under President Salvador Allende, Chile embarked on a project to introduce computers and the use of data to socialism. The project, dubbed 'Project Cybersyn' (a name worthy of any modern M&A transaction), was aimed at collecting as much data as possible from state run enterprises and for this data to be fed into statistical modelling software to inform central government planning. Each factory was equipped with a telex machine which would transmit data to Santiago and Governments officials would then gather in the 'Opsroom', sit in chairs closely resembling those on Star Trek, analyse data and the impact of its decisions on the economy and issue directives. The ambitious plan to harness and use data even extended to attempts to track the real-time happiness of citizens (or 'Cyberfolk').
The Inquiry has recommended (Rec 19) that the Productivity Commission commence an inquiry into the costs and benefits of increasing access to and improving use of data. The Inquiry suggests that the PC should consider potential mechanisms to, amongst other things:
- increase private sector, academic and community access to public sector and consumer decision making;
- improve individuals' (or 'Cyberfolk') access to public and private sector data about themselves;
- increase access to private sector data; and
- further standardise the collection and release of public and private sector data and product information.
Better access to data collected by the Government is a good thing. Australia has been relatively slow in granting private access to data sets held by Government and doing more in this area has great potential to fuel innovation in developing new ways of using data (subject to the necessary privacy protections).
Where promoting access to data can cause great challenges is when Governments try to pool data collected by private businesses and distribute it or demand private data to be shared amongst private market participants. This is where we see echoes of Allende's Oppsroom. In our experience, it is competition that drives businesses to collect, manage and be smart with their data. Increasing access to private sector data or standardising its collection has the potential to reduce or remove incentive for private market players to collect and maintain their own data and, may in fact cause more competition problems than it solves.
The Inquiry effectively acknowledges this problem and suggests that businesses may be able to be compensated for sharing their data. However, in our experience, it is incredibly difficult to put a value on a firm's data and therefore we struggle to see how a compensatory system could operate in practice.
We suspect that the ideas floated by the Inquiry may suffer the same fate as Project Cybersyn – death by market forces.