My article in BUSINESS INSIDER published 22nd of December 2018.
Today, the world’s economies increasingly rely on the production of intangible goods. So, what should businesses do to become more competitive in an information-driven world? And, just (if not more) importantly, how can we – consumers, individuals – benefit from the huge data sets about us that businesses increasingly store and utilize?
Not that we aren’t, already, benefiting. I can get anywhere by plane within a few hours. Flight has never been so accessible and affordable. But that’s not just about jet engines and the Bernoulli effect. Think how much data needs to be sent, received and processed to make my journey easy. There are online searches, airline advertisements, price comparisons, flight bookings, ticket purchases, credit card transactions, promotions, transfers, connections, and luggage checking and handling. All that adds up to huge data sets – what we call big data.
We tend to forget about all that data as we go about our lives but hardly anyone would be surprised by IDC’s prediction that the digital universe – as measured by the volume of data created, processed, sent and delivered – will reach 180 zettabytes by 2025. That is 180 followed by 21 zeros. Already, the amount of information that surrounds every one of us every day equals the total volume of information that touched an individual over the entire twentieth century.
What does this mean to us now and how will it affect our lives tomorrow? Will we create standards for data use and sharing that protect our privacy? Will we be able to tell credible information from false? As customers and individuals, will we be able to manage our personal data? Will we be able to profit by it?
Can you sell yourself?
Our digital identity is comprised not only of our date of birth, address, phone number and e-mail address but increasingly information about our work, interests, health and finances. Consider digital wallets. These take a variety of forms, from digital cards to applications on our phones. They store our transactions, accounts and often our habits and shopping preferences. They contain a treasury of knowledge. Who is this data shared with? Commonly, the wallet makers, who aggregate and anonymize and subsequently sell them. Do we, the creators and putative owners of this data benefit in any way? Not much, apart from the bargains we may receive in the form of ubiquitous ads.
But innovative service providers may enable consumers to capitalize on the information that today generates profit only for businesses. Turning the tables could produce interesting results.
One company that has taken this approach to the roles of data selling and buying is Datacoup. According to its website, its mission is to change the current model by empowering users to leverage (and profit from) their own data. Datacoup enables its paying customers to create data profiles on its website. Datacoup then makes the information in the profile available to buyers, mainly banks and insurance companies, which pay the individual for access. A profile’s value rises or falls depending on its content.
Is this the tip of a new spear? For this inverted model to spread, we would have to change our habits and perhaps be less inclined to give our data away for free. Major legislative solutions and the willingness of the corporate world would also be necessary.
Internet of Things, or a data revolution
We are flooded with data, valuable and worthless, fake and real, needed and unnecessary. And now even more terabytes of data will be created independently of us through the Internet of Things. Assembling sensors, vehicles, robots, industrial and home appliances into a single digital organism will trip off an avalanche of new information.
A global network of collaborating devices is something very new. We’ve never seen an intelligent organism grow independently of humans, feeding on the information that it itself generates. How does one control this process? Is it controllable? The Internet of Things may one day challenge legal systems, forcing them to deal with mushrooming information whose owners will be largely anonymous and difficult to identify.
The drive to simplify
What should businesses do to thrive in an environment dominated by huge data sets? First, they must make their employees realize that the ability to process, collect, share, secure and monetize information will increasingly affect an organization’s market position and value. Therefore, modern data management is a key challenge faced not just by IT units but by the business itself. It is equally important to train employees to use data purposefully. For now, “machine learning” and “deep learning” are vague concepts in corporate boardrooms. And yet, it is these technologies that will determine the organization’s ability to function. In today’s business world, modern technologies are the only way companies can tell whether their marketing, product or sales strategy is working, and what to do if it’s not.
A vital criterion for assessing data management efficiency in enterprises is ease of use. Great user experience is a priority, not the whim of a spoiled customer. Data processing in a company should resemble driving a car: fast, safe and comfortable. Today’s consumers look for both instant results and comfort. Business managers should seek the same. There must be no gap dividing consumer electronics into smartphones, car navigation devices and tablets on the one hand and professional workplace applications on the other. The competition for good employees will be won by those who realize the importance of comfort and convenience for the users of systems and devices. The world has forced us to democratize the handling of tools that rely on sophisticated technologies. The rule, therefore, is that simpler is better. The rise of the cloud as a universal data exchange model has propelled the popularity of such applications as Dropbox, Google Drive and WeTransfer. Complicated project management has been simplified by Asana and Trello, while task scheduling and note management has become much more enjoyable thanks to the likes of Evernote. All these tools follow one fundamental principle: the simpler it is, the more efficient it is.
Understanding the information market
Data is bound to be monetized at an ever-faster rate. The push to commercialize data began around 2000 with the bursting of the so-called dotcom bubble. The internet-based companies that survived launched a search for new income streams. This gave birth to the idea of creating demand for a whole new product: data. The idea caught on in the marketing community, which badly needed data to identify customer behaviors and profiles. In fact, everyone needs data today, which is why the companies that offer tools for instant information sorting and retrieval have an interesting future ahead of them. The buying of off-the-shelf algorithms by big business may become a trend, leading in time to the emergence of new technology industries. Against this background, it is difficult to disagree with Hal Varian, Google’s chief economist,who claims that piling data on top of data will not, in itself, add to its value. Instead, value will be gained by the intelligence that goes into designing the algorithms that make sense of it all. Google’s success, he says, “is about recipes, not ingredients.”
The coming algorithm reckoning
By inviting artificial intelligence into our world, we will create many jobs for lawyers. Undoubtedly, a battle will break out between social media owners, insurers and regular citizens. Each of these groups see data and information protection rights in a completely different light, and data has become a very sensitive and controversial commodity. Ever more regulators are aware of just how sensitive it is as they attempt to design laws (such as the EU’s General Data Protection Act that goes into effect May 25) to regulate data trading.
Regulation is not going to be easy. “Machine learning,” for example, is automated to perfects itself as it acquires experience; the more search queries an artificial intelligence processes, the better its responses. The question therefore is whether the algorithms that use this technology will be able to protect our data from undesirable use. While technologically feasible, every business with an interest in acquiring and using as much data as it can get its hands on will see the question from a very different perspective.
Read more in the full article.