How data are reshaping society: “Datafication” and socioeconomic transformations

With the ever-increasing importance of data, we’re always looking for expert voices that can expand our view of what data and our reliance on data means for software development and society as a whole. More and more of our lives are becoming data-driven. Is that a good thing?

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Credit: Alexandra Francis

In their new book Data Rules: Reinventing the Market Economy (MIT Press, 2024), Cristina Alaimo and Jannis Kallinikos lay out a framework for a new social science focused on the socioeconomic changes driven by data. The following is an excerpt from their book. We also recorded a conversation with Jannis for the Stack Overflow podcast, which you can hear in the coming weeks.

First, a brief overview of the book from the publisher:

Digital data have become the critical frontier where emerging economic practices and organizational forms confront the traditional economic order and its institutions. In Data Rules, Cristina Alaimo and Jannis Kallinikos establish a social science framework for analyzing the unprecedented social and economic restructuring brought about by data. Working at the intersection of information systems and organizational studies, they draw extensively on intellectual currents in sociology, semiotics, cognitive science and technology, and social theory. Making the case for turning “data-making” into an area of inquiry of its own, the authors uncover how data are deeply implicated in rewiring the institutions of the market economy.

The authors associate digital data with the decentering of organizations. As they point out, centered systems make sense only when firms (and formal organizations more broadly) can keep the external world at arm's length and maintain a relative operation independence from it. These patterns no longer hold. Data transform the production of goods and services to an endless series of exchanges and interactions that defeat the functional logics of markets and organizations. The diffusion of platforms and ecosystems is indicative of these broader transformations. Rather than viewing data as simply a force of surveillance and control, the authors place the transformative potential of data at the center of an emerging socioeconomic order that restructures society and its institutions.


Data undoubtedly moved to the forefront of social and economic life thanks to the digital revolution that brought, gradually but inexorably, the rendition of a bewildering array of facts and life situations to data that are possible to manage apart and beyond the contexts in which they are generated. A close inspection of these changes suggests that they are more profound than what is usually acknowledged. The datafication of life and its accompanying socio-technical machinery infrastructure social interaction and relax a variety of constraints that, over the course of modernity, have shaped the prevailing modalities of work and communication and the enterprise forms that commanded the production and consumption of goods. Well established boundaries of modern societies, such as those between work and private life or between the economic and the social spheres, are less clearly demarcated from one another in the data age. The effects of such profound transformations are already in place. The diffusion of digital platforms as organizational arrangements, the erosion of traditional market practices by platform-based business ecosystems, and the transformation of the contemporary workplace are all closely associated with the functions that data perform as semiotic (sense making), epistemic (knowledge making), and communicative means. These developments, we suggest, are instrumental in rehearsing the relationships of individuals to collective entities (e.g., communities, organizations, and the state) and rebuilding economic institutions.

The digital revolution, however, has deeper and more diverse roots. The interlocking of data with socioeconomic institutions has a line of descent that stretches back to venerable commercial and administrative practices of data management and record keeping. The American business historian Alfred Chandler traces the emergence of modern corporations in the first half of the twentieth century to the systematic generation of a variety of internal records (e.g., operations, sales, accounting, and financial data) through which management came to monitor and assess corporate performance across functions, production sites, and periods. Chandler’s historical outlook is crucial, as it retraces the links that tie together the production and use of records to the birth of institutions (e.g., corporations), a theme that we feel has been largely overlooked in recent discourses on data. A closer reflection on the structural and eco- nomic transformations in modern times reveals the strong bonds modern institutions have maintained with broader sociocultural shifts in modes of cognition and communication, the diffusion of technologies such as the printing press and the spread of literacy and, later, numeracy. Changes of this sort have marked modern life irreversibly along several frontiers and shaped what prominent scholars recognized as the modern institutional orders.

Awareness of the practices by which data as systematic records have been made a vital element of the modern social and economic fabric helps put current trends into broader perspective. Among other things, it contributes to avoiding a narrow and widespread misperception of data as just technical inputs to standardized computations, reinforced by the diffusion of digital technologies and the recent advance of data science as a scientific field. Approaching data as records conjures up their image as tools of cognition and institutional memory (and thus knowledge) and means of communication. Much as they become digital tokens in a technological world where they are regularly piled up and computed along standard lines, data retain their constitution as diffuse epistemic and semiotic elements and communication media. A “like” on social media is a computational token and a way of communicating approval or agreement that is often read as a mark of preference and profile building. Only as a mark of individual preference can a like become the kernel around which a novel “like economy” operates. Mere clicks do not build complex market exchanges. Clicks make sense only against assumptions, practices, and beliefs in which they are unavoidably inserted and from which they emerge as meaningful pursuits. Similar claims can be made about data generated in manufacturing and service industries, health care, and education.

Their formal and technological makeup notwithstanding, digital data continue to work as instruments of reality marking, as complex artifacts of cognition that encode facts (or what pass as facts), and record and transmit information and knowledge. Therefore, assessing the critical role that data assume in the current, predominantly digital world calls for rediscovering their semiotic and epistemic foudations. It is vital to link these foundations to the new forms of interaction that data promote and the new economic practices and institutions that they establish. We find it a fascinating intellectual challenge to explore whether and how the technological nature of digital data renews, expands, modifies, challenges, or annuls long-established semiotic and knowledge conventions, and also reweaves the institutional fabric in which data qua records have traditionally been embedded.

Learn more about the book or order it now.

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