ICYMI: Antonio Garcia Martinez — No, Data Is Not The New Oil
This morning, ideas contributor for WIRED and author Antonio Garcia Martinez argued that the mantra “data is the new oil” is deceptively simple and does not accurately describe data’s worth to technology companies.
More from Martinez and other leaders below:
While data may be internally valuable, it isn’t a fungible commodity. “Sure, you could maybe sell some of that data… But here’s the key thing: Those interested outside parties are competitors, and the owners of the data would never in a million years sell it.” (Antonio Garcia Martinez, “No, Data Is Not The New Oil,” WIRED, 2/26/18)
‘Data dividends’—programs to pay users for data—are not only implausible, but also problematic. “Where does this leave proposals around a ‘data dividend’? Beyond being implausible, they are problematic for several reasons. For starters, the dividend will likely be paltry, and nowhere near the $1,600-per-person Alaska oil dividend. The annual revenue per user for Facebook globally is about $25. In the US and Canada, it’s about $130. Don’t spend it all in one place.” (Antonio Garcia Martinez, “No, Data Is Not The New Oil,” WIRED, 2/26/18)
Tech companies don’t owe users for content because social media platforms are free to use. “Lastly and more foundationally, why would Facebook or Google owe you anything? It’s not like Zuckerberg the Paparazzo snapped a photo of you and then monetized your image. You willfully used a service and generated data that wouldn’t otherwise exist. What you get in return is Facebook itself, for which you’ve not paid a nickel.” (Antonio Garcia Martinez, “No, Data Is Not The New Oil,” WIRED, 2/26/18)
CCIA’s Jakob Kucharczyk notes: “Unlike oil, which is used once, then burns up in combustion, data is regenerative.” “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.” (Jakob Kucharczyk, “Data Is Not The New Oil,” BlogActiv, 7/19/17)
Economists Anja Lambrecht and Catherine Tucker note, “Big data is not inimitable or rare,” with insight into consumer needs being the most critical component of startup success. “Our analysis suggests that big data is not inimitable or rare, that substitutes exist, and that by itself big data is unlikely to be valuable. There are many alternative sources of data available to firms, reflecting the extent to which customers leave multiple digital footprints on the internet. In order to extract value from big data, firms need to have the right managerial toolkit. The history of the digital economy offers many examples, like Airbnb, Uber and Tinder, where a simple insight into customer needs allowed entry into markets where incumbents already had access to big data. Therefore, to build sustainable competitive advantage in the new data-rich environment, rather than simply amassing big data, firms need to focus on developing both the tools and organizational competence to allow them to use big data to provide value to consumers in previously impossible ways.” (Anja Lambrecht And Catherine Tucker, “Can Big Data Protect A Firm From Competition?” MIT Initiative On The Digital Economy, 12/18/15)