Big Data = Big Gold

A special report on managing information – The Econmist

Information has gone from scarce to superabundant and it’s transforming traditional businesses

Facebook, a social-networking website, is home to 40 billion photos. And decoding the human genome involves analysing 3 billion base pairs—which took ten years the first time it was done, in 2003, but can now be achieved in one week.

Scientists and computer engineers have coined a new term for the phenomenon: “big data”. In a world of big data the correlations surface almost by themselves.

The business of information management is estimated to be worth more than $100 billion and growing at almost 10% a year, roughly twice as fast as the software business as a whole.

A new kind of professional has emerged, the data scientist, who combines the skills of software programmer, statistician and storyteller/artist to extract the nuggets of gold hidden under mountains of data.

  • There are 4.6 billion mobile-phone subscriptions worldwide
  • The amount of digital information increases tenfold every five years.

Data exhaust”—the trail of clicks that internet users leave behind from which value can be extracted—is becoming a mainstay of the internet economy.

  • The recent financial crisis was the first crisis to be sparked by big data—and there will be more.

In the age of big data, computers will be monitoring more things, making more decisions and even automatically improving their own processes—and man will be left with the same challenges he has always faced. As T.S. Eliot asked: “Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?”

Nearly two-thirds of the film selections by Netflix’s customer come from the referrals made by computer.
Google exploits information that is a by-product of user interactions, or data exhaust, which is automatically recycled to improve the service or create an entirely new product. The design of the feedback loop is critical. ‘Understanding’ turns out to be overrated, and statistical analysis goes a lot of the way.’

These new companies have built a culture, and the processes and the technology to deal with large amounts of data, that traditional companies simply don’t have

In an initiative called “Data Liberation Front” that quietly began last September, Google is planning to rejig all its services so that users can discontinue them very easily and take their data with them. In an industry built on locking in the customer, the company says it wants to reduce the “barriers to exit”. That should help save its engineers from complacency, the curse of many a tech champion.

pdf_icon View the electronic version of ‘Marketer’s guide to digital advertising‘.

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