Data: ‘The New Oil’

Now that data-driven business decision-science is under full bloom, there has been broad acknowledgement that ‘he who has the data to mine has a powerful (predictive) edge on his competitors who do not’. Google/Alphabet, Facebook, Amazon, LinkedIn, Twitter, and even Netflix have been endowed by their own business models with massive troves of data on the preferences, tendencies, as well as the politics and beliefs of the citizens of many countries. And the selective censorship now being applied by Facebook shows its willingness to leverage its ability to know peoples’ personal viewpoints in order to either promote or suppress them.

Since general business competitiveness is becoming more dependent upon access to rich stores of data to mine, any company’s lack of access may mean its exclusion from the ability to become a competitive player. This could lead to even a more centralized oligopolistic marketplace than the ‘FAANG’ companies above already comprise. The result will be loss of competitiveness in pricing and levels of service, as well as a greater potential for these companies to use their heft to further shape society and the free exchange of ideas according to their own world views. That is something fundamentally un-American.

It may be beneficial to legally compel such companies to make their data available to others after some point. Obviously they would never amass data if it did not give them a proprietary edge, so they should be allowed to. However, after some point, it may make sense to require them to make it available to others, perhaps for a fee. This would still preserve much of the incentive for them to collect the data, but preclude their ability to become act in an oligarchical manner with it. The point where the company must start to share its data store could depend on several factors. For example, after the data history has grown 10 years long, once the company has captured a certain level of market share of its industry, or some combination of such criteria. These would still enable the company to leverage its data collection to grow itself to a well-established, greatly-profitable enterprise, thus maintaining its incentive to do so.

In the past, new companies sought to compete within their industry by out-innovating to deliver greater quality and efficiency. When ‘cornering’ the supply of some essential base material for production occurred, the government often intervened to prevent the excluded companies from being extinguished. Once the economic production became industrialized it became reliant upon energy resources, primarily coal and oil, to drive it. Oil became a resource that, if monopolized, could pressure the entire economy rather than just a single industrial sector. As such, it took its place as a resource of national strategic importance, and much of American government policy and foreign relations adapted to ensure it would continue generating the energy to run the industrial production of the country.

Material production will always remain fundamental and necessary, but now after the first rounds of the ‘information age’, it is no longer the cutting edge of economic development and expansion. In marketing, politics, strategic business planning, business process efficiency, and other areas, intelligent decision-making, guided by the trends that machines can detect by mining warehoused data, is forming the new ‘informational-based-intelligence’ age. And the prime resource driving it is data – the ‘new oil’. It is of strategic importance for the country to adapt law and policy so that it is, over time, [societally demographic] data gathered by private entities becomes a shared societal resource rather than one sequestered for the sole use of a few industry titans, or of government. For the USA to continue to function as a pluralistic democracy, everyone with a good idea and work ethic must continue to have equal opportunity to compete in the marketplace, and government must not have the ability to manipulate consent and outlook among the population. The founders of the country split up and divided the power of government among three branches, and made it accountable to the people because they knew that centralized power leads to abuse. Data, and the insight and power potential that mining it affords, is a potent new form of power.