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Q&A with Sandy Pentland: Data Cooperatives

February 20, 2019


Is the time ripe for wide-scale data cooperatives? A group of forward-thinking technologists and economics researchers–including four from MIT–not only believe it’s the right time, they say the model already exists in the form of credit unions.

New research by MIT IDE co-lead, Alex “Sandy” Pentland, and his co-authors, claims that we must move “from an individualized, asset-based understanding of data control, to a collective system based on rights and accountability.” The new system will have “legal standards upheld by a new class of representatives who act as fiduciaries for their members” much as credit unions do for their owner-members.

Credit unions, as not-for-profit institutions owned by their members, are already chartered to securely manage their members’ digital data and to represent them in a wide variety of financial transactions,” the researchers say. These transactions include insurance, investments, and benefits. “The question then, is could we apply the same push for citizen power to the area of data rights in the ever-growing digital economy?” And the answer seems to be yes.

The research paper was written by Pentland, who is also founding faculty director of the MIT Connection Science Research Initiative, along with Thomas Hardjono, CTO of MIT Connection Science and Engineering, Brian Ducharme, President and CEO of MIT Federal Credit Union (MITFCU), Lisa Mandel of MITFCU, and Christina Colclough, Director of Platform and Agency Workers, Digitalization and Trade at UNI Global Union.

Clearly, there’s been a growing call for change. “During the last decade, all segments of society have become increasingly alarmed by the amount of data, and resulting power, held by a small number of actors,” according to the paper.

With advanced computing technologies “it is practically possible to automatically record and organize all the data that citizens knowingly or unknowingly give to companies and the government, and to store the data in credit union vaults.” In fact, The MIT Trust Data Consortium has built and demonstrated pilot versions of such systems where “members will gain privacy, transparency, and empowerment as to data use,” for their collective benefit.

IDE Contributing Writer and Content Manager, Paula Klein, asked Pentland more about the project. The following Q&A summarizes the concept and implementation of the research. The full white paper can be found here.

Read the full Q & A on our Medium Publication, here.