“You actually get more value out of what you use oil to do rather than oil itself. But we export our oil and import the fuels, chemicals and the other artifacts that have been created thanks to oil”- JA
At a recent Data Science event, the song on everyone’s lips was that data is the new oil. And of course this aphorism has become quiet popular around the world.
Giving Nigeria’s experience with oil, I felt this was a misnomer. Taking a look at Nigeria and oil it is easy to see where I am coming from. Oil is a commodity that accumulates under the ground over millions of years via natural processes and now inherited by those of us living over that patch of the earth today.
Ownership is serendipitous
Our input into its getting there is absolutely zero. Our claim to ownership is serendipitous. It is a commodity with finite size and our stewardship of the oil and where it is being produced from is patently irresponsible.
The main value from oil comes when it is refined, broken down and recombined in a multitude of ways to provide fuels and chemicals that have been powering industrial and economic growth. You actually get more value out of what you use oil to do rather than oil itself. But we export our oil and import the fuels, chemicals and the other artifacts that have been created thanks to oil.
Data as the new oil is an aphorism that was intended to show that we could make as much money from data as we can from oil. But it seems that, that aphorism is actually a lot closer to the actual way we treat data than being an aspiration for data. As a country and as organizations we have inherited mountains of data just by the mere fact that we are a country or an organization. The government has vast amounts of data about citizens and interactions from years of just being a country.
Refinement of data that provides insights
The data is in some cases locked away in files in archives and sometimes they are digital. But they are there. Our organizations are also sitting on mountains of data some arising directly from the fact that these organizations exist and interact with other entities. These data could also be locked away in file folders or in digital format.
What is not arguable is that just like oil, we are making little or no investment into turning the available data into the fuels and chemicals that spur civilization and economic growth. It is the refinement of data that provides insights, understandings, relationships, trends and other nuggets of information that combine in creative and random ways to generate value creating knowledge and intelligence.
So in a way, data is really the new oil for us. We have it but that’s all there is to it. There will be an almighty revolution if we as a country and as organizations treat data differently.
As a first step, we need to digitize the data. Digitized data has the ability to fit into the 12 inevitable trends as discussed by Kevin Kelly in the book The Inevitable . You can copy it, screen it, filter it, reproduce it, augment it, share it with practically no limits. If you also digitize the process that generates the data then the pace at which the data accumulates grows exponentially.
For any organization that sits in a position to control the capture of data and is a repository for all this data, this data is her real competitive advantage. The knowledge and intelligence that can be generated from this data either by the organization itself or by others who will have the algorithms but not the data is the elixir for perpetual growth.
This becomes a perpetual motion cycle of some sorts with more data coming back to the repository as the intelligence from the existing data is used to generate more interactions and the data from the new interactions are fed back to the repository.
Why tech giants are getting more powerful
And that is why Google or Facebook or Amazon are getting more and more powerful. They are accumulating digital data at a staggering pace and then reforming and refining them for their own use and for third parties.
And that is why banks or telecom network operators have a such a potential to become really more powerful if only they see the data they have already accumulated as their true value. While banks obsess about FinTechs, they neglect to monetize their existing data hoard or even increase their participation in more interactions that increase the data hoard. While Telco’s obsess about OTT, they neglect to monetize their existing data hoard about relationships, interactions, migrations and much more that will generate more interactions and more data.
In this sense, data is really the new oil.
Copyright: The article first appeared on James Agada’s LinkdeIn page. James Agada is the Chief Executive Officer, Computer Warehouse Group.
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