Data is widely acknowledged as the essential capital asset of the modern economy, yet its value remains largely invisible in corporate balance sheets and understated in national economic accounts. Dan Ciuriak argues that conventional valuation approaches — particularly those based on the costs of datafication — capture only part of the story.
While expenditures on datafication enter GDP as investment in intangible assets, they do not reflect the substantial economic rents generated by the effective use of data within firms. Drawing on trends in the US economy, Ciuriak estimates that data rents alone account for more than two percent of GDP — representing a layer of value in addition to the investment flows currently captured in GDP — with profound implications for national accounting methodologies, which underestimate the value contribution of data. It also flags risks for economic policy in small open economies that lack the scale to effectively capture data rents, since investing at less than critical scale may not recover costs and may result in negative productivity outcomes.
