The world’s most valuable resource is no longer oil, but data
21st Century is like
Oil in the 18th Century: an immensely, untapped valuable asset. Like oil, for
those who see Data’s fundamental value and learn to extract and use it there
will be huge rewards.
We’re in a digital economy where data is more
valuable than ever. It’s the key to the smooth functionality of everything from
the government to local companies. Without it, progress would halt.
Data Infrastructure Should Become a Profit
Center
For many companies, their data infrastructure
is still a cost center nowadays and should become a profit center by using the
data to improve everything, day by day. Companies must begin treating data as
an enterprisewide corporate asset while also managing the data locally within
business units.This enables sharing of data about products and customers –
which provides opportunities to up sell, cross sell, improve customer service
and retention rates. By using internal data in combination with external data,
there is a huge opportunity for every company in the world to create new
products and services across lines of business.
Data Is the New Oil of the Digital Economy
A century ago, the
resource in question was oil. Now similar concerns are being raised by the
giants that deal in data, the oil of the digital era. These titans—Alphabet
(Google’s parent company), Amazon, Apple, Facebook and Microsoft—look
unstoppable. They are the five most valuable listed firms in the world. Their
profits are surging: they collectively racked up over $25bn in net profit in
the first quarter of 2017. Amazon captures half of all dollars spent online in
America. Google and Facebook accounted for almost all the revenue growth in
digital advertising in America last year.
But there is cause
for concern. Internet companies’ control of data gives them enormous power. Old
ways of thinking about competition, devised in the era of oil, look outdated in
what has come to be called the “data economy” . A new approach is needed.
Data are to this
century what oil was to the last one: a driver of growth and change. Flows of
data have created new infrastructure, new businesses, new monopolies, new
politics and—crucially—new economics. Digital information is unlike any
previous resource; it is extracted, refined, valued, bought and sold in
different ways. It changes the rules for markets and it demands new approaches
from regulators. Many a battle will be fought over who should own, and benefit
from, data.
The quality of data
has changed, too. They are no longer mainly stocks of digital
information—databases of names and other well-defined personal data, such as
age, sex and income. The new economy is more about analysing rapid real-time
flows of often unstructured data: the streams of photos and videos generated by
users of social networks, the reams of information produced by commuters on their
way to work, the flood of data from hundreds of sensors in a jet engine.
The world will
bristle with connected sensors, so that people will leave a digital trail
wherever they go, even if they are not connected to the internet.
What has changed?
Smartphones and the internet have made data abundant, ubiquitous and far more
valuable. Whether you are going for a run, watching TV or even just sitting in
traffic, virtually every activity creates a digital trace—more raw material for
the data distilleries. As devices from watches to cars connect to the internet,
the volume is increasing: some estimate that a self-driving car will generate
100 gigabytes per second. Meanwhile, artificial-intelligence (AI) techniques
such as machine learning extract more value from data. Algorithms can predict
when a customer is ready to buy, a jet-engine needs servicing or a person is at
risk of a disease.
DATA
REVOLUTION
The industrial revolution was driven by fossil
fuels, coal gas and above all oil, were becoming highly sought after. Wars were
fought, regimes toppled, and thousands of people died, all in the pursuit of a
little taste of black gold. Countries like Dubai would barely make an impact on
the world, were it not for their vast oil reserves, and throughout the 20th and
21st centuries, oil companies have become most profitable companies in the
history of the planet.
However, oil’s period of global domination is
coming to an end; data is fast becoming the most sought after resource on the
planet, driven by our ever more interconnected society in an age of digital
revolution.
“Data is the new oil — and the question is
who’s going to own it?” – Jackson Bond, Founder of German Start-Up Relayr
RISKY BUSINESS
However, there are also associated risks with
both ventures, data leakage and spillages can have serious repercussions, much
like oil spills. We have already seen the global effects of security
breaches, the DNC
hack caused massive political waves in the United States, Yahoo have
had their reputation besmirched time again because of massive security breaches
that have come to light, and yet companies still fail to take the risks
seriously. But data is far more valuable to a company than oil these days, that
is just a power source, there are plenty of renewable options – look at Google
going 100%
green. Data is power, if you can use and collect the right data you
can understand your
customer base, track purchasing trends, find out what temperature in a store is
most conducive to sales, with the right data almost anything is possible. Every
single day, we as a species
create 2.5 quintillion bytes of data — 90% of the data in the
world today has been created in the last two years alone. Right now most of
that data is underused and some even utterly redundant because not everyone has
the sufficient analytical power to fully process the data.
However, there is a huge problem with treating
data as a natural resource, particularly if we blindly accept that tech giants
are the rightful owners.
THE BIG DATA MACHINE
Then there is
the other side of this explosion of data, big data analytics and machine learning. It can do so
much more for us now than it ever could. Data from every field imaginable is
being tried and tested with machine learning, often with spectacular results.
Much like oil did in the 20th century, data has the potential to transform our
world. Machine learning has proven it can improve medical diagnosis and help
detect diseases like cancer with a significantly higher accuracy than human
doctors.
Shibu Thankachan, Edamulackal
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