We’ve all heard it before: “Data is the new oil.” Regardless of whether you agree with the merits of this analogy, the fact is that data (just like oil and precious metals) is a valuable asset. It has been the fuel advancing new technologies from artificial intelligence and analytics to biomedicine and advertising. Data is also transforming our way of life and the economy as a whole.
The rate at which our economy has grown more information intensive illustrates that we are in the midst of a data renaissance—the World Bank estimates that over 90% of the data that exists today was created in the last two years. Other subject-matter experts predict that people will produce as much data over the next 24 months as we have throughout our entire history.
The rise of intangibles
One side effect of the data revolution has been a switch in our traditional economic undertakings. These activities are driven less by tangible assets (e.g., manufacturing and equipment) and more by intangible assets (e.g., services, software, and trademarks). Morgan Stanley Capital International (MSCI) estimates that more than 80% of the enterprise value of the S&P 500 today is in intangible assets, compared to about 15% in the mid-1970s.
Given the prominent role data has taken up in the economy, there’s no question that it’s a strategic asset. And as both the amount of information we generate and the computing power to process it continues to expand, we can only expect that data will become a global axe of power. No wonder the titans of the digital era (e.g., Facebook, Amazon, Apple, and Google) are among the largest corporations and brands worldwide—the use of data, for all of them, is essential in their operations. The message for organizations is clear, then: make use of data and exploit its value or get left behind.
Moving forward: a call for balance
The future of data is still unfolding, however. Now that the world is starting to awaken to its transformational powers, corporations should take care to manage data and information responsibly, effectively, and in ways that add value and contribute to progress for humankind—not just profit.
Similarly, government leaders need to strike a balance when addressing the data revolution, particularly now that public policy and legal responses surrounding data protection and international data flows are under intense debate at the national, regional, and multilateral levels. While overly stringent data legislation can unduly restrict businesses and limit economic growth, weak policies can diminish consumer confidence and produce negative market sentiments.
U.Group has vast expertise in advising the public and private sector on the use of data sciences and technology, and our data experts work tirelessly to keep up with the rapid pace at which data trends evolve. We look forward to continuing to help our customers identify the most productive and efficient way forward to account for, complement, and excel in the new data driven economy.
This is part of an ongoing blog series on the value of data and data science—sign up for our newsletter to get the latest content delivered to your inbox.