The Data Dilemma

There are many reasons for this:

1. Legal concerns: 58% of companies are reluctant to share data due to legal uncertainties.
2. Technical hurdles: For 33%, incompatible systems are an obstacle.
3. Protection of trade secrets: 21% are afraid of disclosing sensitive information.

These figures show: there is not a lack of data, but a lack of trust and suitable tools for exchange.

However, even when companies, research institutes, associations or public authorities share data with third parties today, they face considerable challenges. A key reason for their hesitation is the lack of standardized and legally secure concepts that make data sharing practicable even for those organizations that do not have an IT department.  

Let’s assume a company wants to exchange data with ten partners in its supply chain. This means ten separate contracts in which system requirements, data formats, usage types, and access rights must be defined in detail. Added to this is the programming and maintenance of possibly proprietary interfaces at each end point of the data exchange. It’s as if you have to invent and learn a new language for each new business relationship.

This complexity has far-reaching consequences:

• It prevents the agility of companies that have to face the digital transformation of their industry and markets.
• It drives up the transaction costs for the emerging data economy – or prevents them from arising altogether.
• It puts small and medium-sized companies in particular at a disadvantage, as they shy away from the bureaucratic and technical requirements.

The result? A vicious circle of reservation and missed opportunities. Companies that shy away from data exchange miss out on innovation opportunities. At the same time, a lack of participation means that there is a lack of critical mass and pressure in the market for more efficient solutions to emerge.

The price of digital reservation

But what is the cost of this restraint? Let’s take a look at the global data economy:

This table shows that Europe, once a pioneer of the industrial revolution, is at risk of being left behind by the USA and Asia when it comes to data value creation in the digital age.

Figures from the UN Conference on Trade and Development paint a similar picture. According to these figures, the United States and China alone account for 90% of the market capitalization of digital platforms, 94% of investor capital for AI start-ups and half of all large cloud data centres.

But why is data exchange so important in the first place?

Collaboration: the key to digital growth

Imagine a puzzle. Every company has a few pieces, but it is only when they are put together that the big picture emerges. It’s the same with data in the digital economy. An example:

> A machine manufacturer wants to supplement its products with digital services in order to make production more efficient and sustainable. This includes services that make better use of machine capacity and plan maintenance work with foresight. To do this, the company needs to combine real-time data from its own production with that of suppliers and customers in a legally compliant manner. This allows downtimes to be identified at an early stage, maintenance intervals to be better coordinated and additional capacity to be planned for external orders. The project EuProGigant  has shown how such data can be securely combined to optimize production processes and protect sensitive information.

This scenario makes it clear: in the networked economy of the 21st century, no company acts in isolation. Success increasingly depends on the ability to exchange and share data.

The urgency of this development is reinforced by two current trends: the boom in artificial intelligence and the explosive growth of the Internet of Things (IoT). Large AI-based language models, which are currently revolutionizing the economy, require enormous amounts of data for training. At the same time, billions of connected IoT devices in industry are generating an unprecedented stream of data. Experts predict that the number of these devices will more than double by 2030.

This development holds immense potential: a study by the European Parliament estimates that intelligent automation and AI could double annual economic growth in developed countries by 2035. But to achieve this, companies must learn to share their data effectively and use it collaboratively.

The path to achieve this is paved with stumbling blocks. How can companies work together securely and confidentially without disclosing sensitive information? How can data from different sources and formats be merged in a meaningful way? And how do we ensure that everyone involved participates fairly in the value creation process?

Answers to these questions will determine the future of the European economy in the digital age. In the next section, we will look at what concrete steps are already being taken to overcome these challenges.

Regulatory pressure is increasing

The European Union has recognized the importance of data exchange and is responding with corresponding laws. The EU Data Act, which will apply starting from September 2025, regulates the access and use of data in certain cases, for example between companies, consumers, and public authorities. It creates a clear framework for the fair use of data and interoperability.

But what does this mean in concrete terms for you as an entrepreneur or manager?

> Let’s assume you produce intelligent household appliances. From September 2025, you must:

• Make usage data from your devices directly available to customers.
• Allow third parties access to this data if the customer agrees.
• Ensure that your data is available in interoperable formats.

At first, these requirements sound like additional work. But they also offer opportunities: imagine how many innovative services could be created if development teams had access to anonymized usage data from millions of household appliances!

The dilemma of digital platforms

Now you may be asking yourself: “Why not just collect all the data on a central cloud platform?” This question leads us to the heart of the European data dilemma.

Large digital platforms, often from the USA or China, have shown how effective centralized data collections can be. But they also pose problems:

1. Data protection concerns: Who controls the collected information?
2. Distortion of competition: Companies that operate platforms can gain unfair advantages.
3. Dependencies: Companies risk becoming dependent on individual providers (“lock-in effect”).

An example illustrates this problem:

> A medium-sized mechanical engineering company analyses production data via the services of a large cloud platform. In order to be able to use its interfaces, it has converted its operating technology to the provider’s proprietary protocol in complex IT projects. However, new data protection regulations, changed production requirements, and a revised pricing model for the platform are putting the company under pressure: costs are rising, new applications cannot be implemented on the existing platform in a legally compliant or efficient manner, and a new technical conversion or a change of cloud provider would require enormous investments.

This scenario shows why many European companies are justifiably hesitant to develop data-based services on centralized platforms.

The way forward: Europe’s alternative

We are facing a dilemma: on the one hand, data exchange drives innovation and competitiveness. On the other hand, centralized platforms create dependencies and jeopardize data protection and fair competition.

What could a European solution look like, that:

• promotes the exchange of data,
• legally safeguards data protection,
• leaves control with the data owners,
• and minimizes dependencies on technology providers?

The answer to this question could shape the future of the European digital economy. In the next chapter, we showcase how the concept of “data spaces” meets this challenge and why it could be Europe’s key to the data age.

What do you think? What experiences have you had with data exchange in your company?