Derek Eaton is Senior Director of Public Policy Research and Outreach at the Smart Prosperity Institute at the University of Ottawa, Canada. His global experience ranges across energy, agriculture, food, water, trade, investment, finance and innovation. Through previous positions with the Global Footprint Network, the Graduate Institute Geneva and the United Nations Environment Programme, he has played a leading role in the development of the international agenda on biodiversity, climate change and the green economy. Derek worked at UNEP in the years prior to Rio 1992 when the CBD was developed. He also contributed several background studies on monetary and non-monetary benefit-sharing related to the International Treaty on Plant Genetic Resources for Food and Agriculture. He has collaborated with partners and farmers in many countries of Africa, Asia and Latin America. He has a PhD in Economics from Wageningen University, the Netherlands, an MSc in Environmental Economics from University College London and a BSc in Economics from the University of Toronto.

1. Thinking through the economic
implications of policy options for the
exchange of DSI
2 Nov 2022
Derek Eaton (PhD), Michael Twigg & Harshini Ramesh
Smart Prosperity Institute, University of Ottawa
Canada
derek@smartprosperity.ca
Supported by:

2. Objectives
• Original intent was to conduct analysis of cost and benefits (CBA) of alternative
options but this was not possible as there is insufficient detail on the
modalities of these options.
• Revised objective is to develop a framework to identify and assess risks (costs)
and opportunities (benefits) in DSI marketplaces and apply to proposed policy
options for DSI

3. Towards a framework for the DSI Economy
Rationale DSI is not a traditional, physical good or
material
Easily (costlessly) replicated and shared
Exists as 01011001… -> information / data
Implications Consider economics of DSI similar to
economics of information
-> DSI is part of Digitalized Economy
So Key Messages (KM)…

4. DSI within the digitalized economy
-> digitization of existing research and production sectors
(health, pharmaceutical, agriculture…)
DSI falls within the broad scope of the digital economy.
Broad scope extends beyond narrow scope of digital
economy and popular consumer-facing platforms (Netflix,
iQiyi, etc.)
DSI
KM1: DSI is part of the Digital Economy
DSI
Reproduced in UNCTAD, 2019 and OECD, 2020

5. KM2: Importance of Platforms
Insights of Digital Economy Framework:
Importance of platforms to facilitate flow and use of DSI.
● DSI needs innovation platforms.
● These are distinct from transaction platforms (subscription-based services eg. Netflix)
● Innovation platforms provide ways for sharing common designs, archetypes, and for
interactions across a sector

6. KM3: Frictionless exchange
Policies that promote frictionless exchange have potential to
provide greatest economic value
Principles:
● Free, open, and interoperable exchanges
● Fair and equitable flows of information
● Privacy protections for individuals and sector actors
● Economic growth and innovation

7. KM4: Decouple exchange from revenue generation
● Decoupling of individual flow and transactions from revenue
generating mechanisms for generating benefits
● Decoupling occurs even with subscription-based services in
the “core digital economy”
● Broad digital economy context of DSI: benefit of decoupling
is even stronger:
○ There are multiple platforms (databases) distributing DSI
○ Comparison and recombining of DSI is additional source
of value generation
○ Importance of reducing transaction costs

8. Conclusion: Implications for policy options
● “Bilateral” options (1, 2.1) - including as “hybrids” - decrease
free and frictionless exchange and will considerably reduce
generation of benefits from DSI - monetary and
non-monetary
● Options with payment for access (3.1) will considerably
decrease cross-platform use and research with DSI and
reduce generation of benefits.
● Options based on other decoupled payments (3.2, 6)
provide best opportunity to maximize benefits from DSI
● Design of revenue-generating mechanism is priority

9. Selected References
● Bukht R and Heeks R (2017). Defining, conceptualising and
measuring the digital economy. GDI Development
Informatics Working Papers, no. 68. University of
Manchester, Manchester.
● Hanna, Nagy K. 2020. “Assessing the Digital Economy:
Aims, Frameworks, Pilots, Results, and Lessons.” Journal of
Innovation and Entrepreneurship 9 (1): 16.
https://doi.org/10.1186/s13731-020-00129-1.
● OECD, 2020, A Roadmap toward a Common Framework for
Measuring the Digital Economy.
● UNCTAD, 2019, Digital Economy Report