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Data is not the new Oil

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Guest post by Jakob Kucharczyk, Director of Computer & Communications Industry Association (CCIA) Europe

 

It’s not entirely clear who first coined the term “data is the new oil”. But as people scrambled to explain data as the ‘new something’ – the new currency, the new coal, the new gold, and even the new bacon – the phrase stuck.

It’s catchy but the analogy is fundamentally flawed. It risks skewing our understanding of the role data plays in the world, both its value and its risks.

The sentiment behind the original comparison was a broadly positive one. As a resource, oil has fuelled economic growth and development the way data fuels growth and innovation now. But oil has serious negative impacts too — its combustion contributes to global warming so significantly that fossil fuels have now become inextricably linked to an inherently unsustainable future.

The problem with flawed analogies is that they lock us into unhelpful ways of thinking. Data is not like oil and, while it can certainly be misused, it doesn’t pose similar threats.

Comparing data to oil misrepresents the type of resource data is and leads us to think about it as something we must be wary of and contain, as opposed to something we can control and use to our great benefit.

First, oil is a finite resource — one day it will run out. Data is generally ubiquitous, and anyone with a digital connection can create it, use it, share it, and gain value from it. It’s not locked away under the earth or sea, but generated in everything from smartwatches and phones to sensors on bridges, inside malls, cars, clothes, fridges and even probes hurtling through deep space.

Unlike depleting oil reserves, new data is being exponentially generated all the time. In fact, more data is being generated now than at any time in history (and this sentence will hold true next year too).

Second, data can be used for many different purposes. For example, location data helps us keep track of our workouts as much as it might help a car-sharing app eliminate empty rides. Scientists are using shared health data to fight cancer, and public data sets or national statistics often provide the first market-insights for new, aspiring businesses.

Unlike oil, which is used once, then burns up in combustion, data is regenerative, meaning it can be used over and over again. It lives on and gains new life each time it is shared or used in a way that adds value to someone. It builds knowledge, meaning, and value the more it is interlaced with other data. However, data is only valuable if one can derive meaningful insights from it. Large amounts of data is useless if nothing meaningful can be derived from it. That contrasts sharply with oil.

Oil has driven our industrial, pre-digital age. Data is driving our post-industrial, digital age. But if you think of data in terms of oil, you’re drawing a false parallel grounded in the past.

Those who do see data this way often think that while it is increasingly powering our modern world, it also has by-products that risk our digital environment, like privacy concerns. This then leads to the misconceived trade-off between innovation and privacy. The way this supposedly works is: the more data is used for innovation, the less privacy you have, and vice versa.

But it doesn’t have to be this way, and we should not have to choose between economic growth (read, innovation) and privacy.

When people can choose how data adds value to their lives, there is no trade-off. This is the single most important fact we should understand about the development of the data-driven society: We are now uniquely presented with a rare win-win opportunity to build a sustainable data-driven future where there isn’t a trade-off between innovation and privacy, because the frameworks for trust and control of data are being worked out by market forces and consumers themselves.

People will simply not make use of many innovative services if they don’t trust where their data is going, especially in more sensitive areas like, communications, health, and financial services. Today’s online innovators have long understood that and have found innovative ways to give users choice and to safeguard their fundamental rights online. It will be up to policymakers around the globe to make sure this win-win situation will last.

 

 

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