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Is Data a Commodity Like Oil?

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Google has an 81% share of search according to data metrics site NetMarketShare. At its height Standard Oil only had a 79% share of the market before anti-trust regulators stepped in.

“When Google and Facebook control 88% of all new internet advertising, the rest of the internet economy including things like online journalism and music are starved for resources.” Jonathan Taplin, Director Emeritus of USC Annenberg Innovation Lab.

A handful of tech giants, Alphabet, Amazon, Apple, Facebook and Microsoft, surpass the size and power of many governments. The clash between nation states and these global, borderless corporations is already happening. Is Data a commodity like oil?

Sofia Olhede and Russell Rodrigues argue that data is not nor should it be thought of as a commodity in the October 2017 Significance Magazine article, “Why data is not a commodity.” “The true value of data analysis arises through acting appropriately upon the insights gleaned.” They go on to make the following arguments:

  1. Data is not a uniform, static raw material like oil. It is a product of several decisions on aggregation, filtering, deletion and recording. This variability makes it challenging to assign consistent values to data like one can assign to barrels of oil or bushels of corn.
  2. The path of a commodity like oil or corn through the economy is well understood and consistent, the same is not true of the route from data to insight.
  3. Many modern sources of data evolve continuously like social media. The value of commodities is generally unaffected by their time of origin.
  4. While the use and abuse of natural resources raises broad ethical issues pertaining to sustainability and stewardship, the leakage or inappropriate use of personal data can cause irreversible harm to an individual.

There is a lesson to be learned from the powering of the Industrial Revolution by fossil fuels. The impacts the technology revolution can have on us today through the rush to embrace easy solutions to the use and storage of data and the implementation of algorithms can be as damaging or worse than oil leaks and climate change.

Interested in a career in this evolving world of data? Contact the Data Science and Analytics recruiters at Smith Hanley Associates.

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