Why value data?

Effective valuation is necessary to correctly recognise the commercial or social value of data and its potential products and ecosystem. These assessments are a prerequisite to making informed decisions in the public and private sectors, be they government policy decisions, assessments around how to price corporate entities for acquisition or IPO or the pricing of data products.

At present, there is no consistent, recognised methodology to undertake this task. Unlike many non-tangible assets, there is an absence of norms that provide benchmarks for valuing data. What few methods exist miss much of the value of data due to the complex, qualitative and specialised nature of data and its valuation.

Data is not a commodity and is not consistent enough to enable benchmarking to occur. The characteristics used to define and ultimately value other non-tangible assets, such as identifiability, life-span and transferability, either do not apply with data or do not apply in a way that enables existing valuation methodologies to work.

Data’s role in the contemporary economy continues to expand. Effective valuation of data will provide improved techniques for measuring performance, greater oversight of asset utilisation and ultimately improved tools for better management and innovation.