The dominance of the oil barons has come to an end. For nearly a century the black oil was at the centre stage of global events: war, technological advancement - it was the fuel for the world economy and partially still is. - looking at the S&P 500, it still fluctuates hand in hand with the oil price.
So why is oil slowly losing importance. One could argue that it is the emergence of renewable energies, which certainly has its part in oil’s demise. They have slowly been eroding oil’s dominance in the energy sector, and government restrictions targeted against fossil fuels have accelerated this process. Yet the larger factor, as I will argue, is money. Let us have a look at the top five most valuable companies as of 2018: Apple, Amazon, Alphabet, Microsoft and Facebook. It becomes clear that data-driven corporations have conquered the top spot and it is their access to huge amount of data that enables this, to be precise: big data.
Big data is a term that has been thrown around a lot in recent years, but what exactly is it? Big data is nothing more than an enormous amount of data stored together. Big data by itself is pretty much useless. The more data, the more difficult it becomes to read and analyse. Hence, what we need is a mechanism to make use of all of this data. The answer to this AI. Artificial intelligence is capable of what we humans are not. Through feeding AI with big data, it is capable to make analysis of the data which becomes in turn becomes useful to us.
We all know it from our day to day experiences. Remember the last time you shopped on Amazon and after you put something into your basket Amazon recommended you items that buyers have also bought? Even though you feel suspicious of the recommendation because how would Amazon know that these were the items you were thinking of buying as well, you toss them into your basket as well. This is no coincidence: through the analysis of huge amounts of data by AI from everyone shopping at Amazon, they will be able to predict what you might want to buy as well. Another example would be the Uber fare increasing once demand for Uber’s increases in a specific area. While most of the time AI analytics of big data becomes useful to us, we realise that the companies owning the data know more about us than we might know about ourselves.
Consequently, these vast amount of data become extremely valuable – the more data someone can effectively analyse the more he knows about his clients and customers. According to the Economist Facebook and Google account for nearly all revenue growth in digital advertising in America – no wonder considering they have the most data on potential customers.
Now that we all agree that data is definitely valuable, we have to ask whether it can be described as a commodity. Business & technology advisor Bernard Marr states that big data is not a commodity in the traditional sense. Data is infinite, it can be transported at the speed of light, and it becomes more useful once it is used. Unlike oil which can be processed to plastic and simply turns one resource into another, data is a lot more flexible. Once data is used through machine learning the same piece of data can give us so much more information.
Data may not be a traditional commodity as we know it, but it certainly is the driver of the future. We should start thinking about how data can be distributed fairly among society, as the few tech giants seem to be untouchable and the longer we wait the more powerful they get.