i3-MARKET builds Data Pricing Tool
The Athens University of Economics and Business has created a new tool for SMEs to help them determine how they can put a price on their data and datasets, based upon a range of paraments that can evaluate the value of the data. This tool has been developed by Dr. Vasiliki Koniakou and PhD candidate MSc Timoleon Farmakis and will be integrated into the i3-MARKET Backplane to help companies set a fair price for their data when selling it via the Backplane, demystifying the process of putting a price tag on their datasets.
Why is it difficult to value data?
SMEs often have difficulty when evaluating the value of a dataset, for several reasons. Firstly, the constant growth of data sources and datasets means that the availability and demand for a particular set of data is changeable, leading to differing values for different consumers. Secondly, as demand grows and companies increase their reliance on data, the value of data increases as well. However, it is difficult to anticipate by how much demand will rise or fall, thereby making it difficult alter the price accordingly. Moreover, it is often difficult to assess how much value the dataset will create for the buyer, to estimate what would be a reasonable price.
Thirdly, infrastructure to collect, store and trade data are regularly being developed and updated and the cost of use is evolving over time, leading to variable overhead costs for companies that are looking to buy and sell data.
However, these issues for SMEs are also compounded by the fact that the data economy also features many large players, who have pricing and selling/buying strategies that are predetermined and to a large extent non-negotiable (and when they are negotiable, it is a very asymmetric transaction), which means that SMEs are often faced with take it or leave it offers, for a price which they can struggle to verify as presenting fair value.
For these reasons, the i3-MARKET project will be integrating a pricing tool into the Backplane, so that SMEs can use this system to assign a value to data they may be selling and estimate a fair value for data that they may be interested in purchasing. Simultaneously, the tool hopes to make the process of pricing data more accessible and transparent, premised on specific metrics instead of discretion and abuse of market power.
How does the tool work?
The tool arrives at the value of the dataset through the use of several parameters that are used to evaluate the quality, scarcity, accuracy and completeness of the dataset, as well as estimate the overhead costs of producing/storing the data and the value to the buyer to arrive at a value for the dataset.
These parameters have been refined through study groups and interviews with SMEs in workshops and will be further refined as the tool is developed, to understand the weight that each factor should contribute to the final value.
How can you use the tool?
Information on how the tool can be used will be released shortly!
A first step, with a long road ahead
Pricing intangible goods, and most prominently information, is notoriously difficult, and although the price recommendation tool wishing to offer some guidance, clearly there is a long road ahead. The further development of the tool requires rigorous testing beyond the sandbox of a European funded research project. The weights may need to be further calibration and adjustment based on the needs of specific sectors and industries, and/or following the market. Additionally, the metrics and the specific parameters may need to be adjusted to better reflect the specificities of particular sectors.
Yet, an easy to use tool, that requires no previous knowledge, and is designed to cover the needs of less tech-savvy users is a first step towards opening up the data trading economy to larger audiences, and assisting SMEs in overcoming some of the barriers that do not allow them to enjoy the benefits of the data trading market.