Consumers and citizens are losing trust in the ability of business and governments to handle their personal data safely, a new report from the World Economic Forum claims.

"High-profile data breaches and missteps involving personal data seem to be reported almost daily by the media," the report, entitled Rethinking Personal Data: Strengthening Trust says. "The result: a decline in trust among all stakeholders.

"Individuals are beginning to lose trust in how organisations and governments are using data about them; organisations are losing trust in their ability to secure data and leverage it to create value, and governments are seeking to strengthen trust to protect an individual’s privacy."

The WEF voiced concerns that a loss of trust from individuals, combined with a lack of transparency, clear rules, and a rapid pace of change, might pull apart the "personal data ecosystem" that exists between government, the private sector and individuals.

The report, which was co-authored by IT advisory the Boston Consulting Group, makes a number of recommendations for restoring that trust. These include inviting individuals to participate in the dialogue surrounding personal data; agreeing shared principles on data handling; developing new governance systems to maintain those principles; and encourage organisation to be more transparent in the way they handle personal data.

It calls for the establishment of "living labs", pilot programmes that share their findings with data subjects and fellow organisations. The report refers to a healthcare project in the United Arab Emirates, called Weqaya, which aims to improve the health of the countries 2.3 million citizens through capturing data about "virtually all" clinical encounters, as well as behavioural data from user’s mobile devices or home computers.

"Learning from such national-scale pilots can reveal how to strike a balance [between privacy and unlocking value] in the personal data ecosystem," the report said. "They can help create a more flexible and adaptable governance model than current top-down systems allow, [and] also provide evidence for the unintended consequences of well-meaning policy actions."

The WEF’s report identifies ‘inferred’ personal data, that is "computationally derived from all the data volunteered and observed", as an area of particular concern.

"Organisations generally see the analytics and insights derived from inferred data as a proprietary asset," it explains.  "They have few incentives to openly share these insights. Although the inferred insights might be direct and intimately tied to an individual (or a group of individuals), individuals’ sense of direct control and awareness often remains limited.

"Inferred data has predictive capabilities that have become concentrated in the hands of a few large companies, the “6,000-foot giants” of personal data, to paraphrase physicist Albert-Lázló Barabasi, giving validity to the concerns of social control and surveillance from a few “really, really big brothers”.