Move aside oil, step in data? It would seem so, given all the hype surrounding this concept since 2006 when Clive Humby, a British Data Scientist and Mathematician first mooted it.
Oil has been one of the most valuable commodities and has ruled the world’s industrial growth and economy until perhaps the 20th century. Enter the 21st century; oil has been replaced by data; the ubiquitous, and the most valued asset of today, given the rapid rise of technology and the beginning of the digital era. What oil is to the industrial economy, data is to the information economy!
Earlier, the wealthy were those who had the most natural resources such as oil. Now it’s knowledge where knowledge is proportional to the data you have. As Williams Edwards Deming, professor and statistician, once said, “In God, we trust, all others must bring data.”
The advent of computers, the internet revolution, the rise of machine and artificial intelligence, etc are some of the key aspects that have impacted the growth of data, its value, and its importance.
Check out the statistics below which corroborates Humby’s quote. In 2016, Apple’s value was greater than that of any oil companies such as ExxonMobil.
To put things into perspective, lets dive into some trivia. According to Computer world, you can reach the moon twice if you burned all the data created in one day onto DVDs and stacked them! Data is growing exponentially and is rapidly becoming a natural resource for today’s people.
This massive mine of user data is making the tech mammoths feel like ‘The Arabs of data’. The analogy cannot get simpler than this. However, if data is the new oil, sitting on a data pool should give you the Arab feel! However, this is not the case. Data is only useful when refined and information is extracted from it; just like oil. Amazon, Apple, Facebook, Google, and Microsoft are trailblazers in the field and are the most valued firms in the world today. These companies collect massive data from their users daily.
Let’s not forget Alexa overtook Siri because it came up with a way to communicate with computers wirelessly, not because Amazon had more speech data than Apple. Then came Google Home which responds to queries with facts, and is rapidly overtaking Alexa.
So how do companies gather data? It’s all in the simple stuff that we do every day. For example, Google Maps knows your location, Facebook knows what you do on the web, YouTube predicts your video preferences and so on. Data collected is manipulated by companies that collect it such as Google or Apple.
Richard Joyce, Senior Analyst at Forrester, said, “For a typical Fortune 1000 company, just a 10% increase in data accessibility will result in more than $65 million additional net income.” The information about our every move, what we search, share, or buy is monetized by selling it in the form of targeted advertising.
As you can see from the chart below, it’s the growth of big data that’s driving the market trends. Over 2.5 quintillion bytes of data are created every single day and is simply growing.
An advertiser’s job is to reap maximum benefits from every dollar spent on marketing campaigns. Marketing expenses are best optimized when the advertisements reach the target audience. Otherwise, it is just noise.
Remember the Cambridge Analytica scandal? The company thrived on psychological profiling and used up to 87 million Facebook users’ data while claiming that this data helped Donald Trump’s presidential campaign!
Data is therefore very powerful. There are no limits to what one can do with all the generated or available data. With all this data, you can predict customer behavior and zero in on people who are interested in your products.
All this is not a guess; it’s all ably complemented with facts, figures, and behavior analyses. Do these words ring any bell, ‘You might also like this’? They very well know you will like it, because, they know you. You are their product!
The table below will give you an idea of the number of people using the internet and the amount of data that they can generate! With more people going online, there’s more data to mine.
|Country||No. of users (in millions)||Percentage of users w.r.t Population|
Source: WorldAtlas,Census.gov, Countrymeters.info
In India, there are more than 699 million internet users, but just 51.4% of the population has access to the internet. This may change when Jio GigaFiber kicks in. Facebook’s largest user base is India, with 241 million active users! As per The Economic Times, Facebook India’s profit jumped about 40% to Rs 57 crore in FY 2017-18.
What gives these technology giants enormous power is their control over data. Do you know what data points on you were collected? Were you even asked? If you were, then it’s easy to assume you signed a series of legal documents. Unfortunately, that’s not the case. 51.4% of India’s population neither have the time nor the knowledge.
Here are some more points to ponder. Are you reaping any benefits such as shares from the company profits when you put in your profile details? Or are you demanding benefits from all the raw data knowing that this information is traded with companies for massive profits?
This unrestricted mining has posed the greatest threat to democracy (for instance, Trump elections). Regulation could pave the way but that’s still a theory. The power balance saw a shift when GDPR came into existence. Companies now need to articulate it clearly why and what data will be collected. Only the 28 members of the European Union enjoy these benefits.
Isn’t this a call to all the governments to protect their citizens, digitally? If the law enforcement agencies or policy makers get insights into the way people searched, traveled, or behaved, won’t they develop better solutions? This could be possible, but data accessibility is a huge challenge as data is privately held. And, there might be data surveillance issues, if not effectively tackled.
This new digital age calls for new-age solutions; information from data must be extracted ethically, before refining, distributing, and monetizing it. Data, of course, has the potential to rival the oil industry and drive the next wave of growth. However, a set of thoughtful rules must be formulated that is not only democratic, but also can effectively prevent technology giants from unethically, illegally, or inadvertently mining user information.