By any measure, Norway is a small country. They are a country of only just over five million inhabitants. Due to luck, a huge wealth of natural resources was discovered within their territory. Through good planning Norway has been able to parley the extreme good fortune of local oil resources into a social system which has benefitted all of their citizens. It’s not surprising that as a result Norway has one of the highest happiness scores in the world.
If you have been to a tech conference recently, you have certainly been exposed to part of the current “holy trinity” of hype: Artificial Intelligence, Internet of Things, and Blockchain. For quite a while now the buzz around these topics has been growing and compounding upon itself, to where they are impossible to avoid. So long as you are addressing one of these technologies, you are proving that you are on top of the current trends. If you manage to address all three, you’ve mastered them.
At these conferences, the speakers—whether they come from small startups, tech giants, industry analysts or old-school corporates—tend to compare data to a natural resource. “Data is the new oil” as a unifying sentiment, whether as first used by Meglena Kuneva as European Consumer Commissioner in 2009 or in the ensuing years, has been oft-repeated and widely accepted as fact. The analogy is simple: As data becomes more and more valuable for businesses, it becomes more and more similar to oil during the age of industrialization. Similarly to how oil was and is used for the production of petrochemicals such as plastics, lubricants, and gasoline, data will be used to make algorithms better, train artificial intelligences, and generate new insights into customers and their requirements, as well as optimize internal processes, save costs, and create new kinds of products and services.
These speakers often cover the near-term impacts and actions. They advise about the important of data generation, collection, analysis, and turning the data into products or services that make or increase profits. Many businesses start to understand and work on the technical impact of these digital processes, but only very few seem to think about the long-term business impacts of this new data economy.
Data will have a much bigger impact than just its technological challenges!
Access to oil and refinery capacity, both historically and contemporary, means that you as a business or a country get to dictate the rules of the economic game. Strong petro-countries had and still have the strongest influence on total economic value creation, and also on the value distribution throughout the global economy. This is why oil has been (and still is!) the source of many global conflicts. While the value generated during the first three phases of the industrial revolution has helped to significantly reduce many problems globally such as hunger and disease, it has also created serious new problems such as climate change and wealth inequality. The overall gap between the wealthiest and those without has only increased, bringing with it more instability into societies and systems.
The discussion about the data economy frequently leaves out some of the most important questions: How do we want to share value amongst the world in the future? Are we satisfied with how we have chosen to distribute it in the last two hundred years? If you belong to the wealthiest 10% of the world (if you’re reading this article, chances are that you do), you might be fairly satisfied with how the global economy has turned out in the recent past. There are however more and more people who believe that we need to do something different.
If data is truly the new oil, then it should be much easier to use technology to enable value creation and distribution to be more balanced and more fair for everyone. Unlike oil, there are no geographic or demographic distinctions to data, and data can be used unlimited times to generate value. From a technical perspective, the data can be used, easily, for as long as we want! Access to oil means access to power—this power, in the hands of the few, will never end well. We must ensure that the knowledge and power generated by data is distributed, limited, and interrogatable.
Our mission should be to ensure that data does not become the new oil.
Especially in the context of the data protection regulation in the EU, and all the discussions around personal data that it has caused, there are many interesting perspectives around the use of data. As the digitalization wave continues to pick up momentum we see the potential for fantastic new technical solutions with the ability to do real good for the world. However, technology itself will not solve the problems we face. It is how we use technology that determines the outcome, and if we use these new developments the same way that we used the old ones, things might become worse instead of better.
So, what can we do? How shall we as a society and as businesses handle data as a resource, and how do we want to build our systems and incentives to generate and distribute value in an equitable way? The answer is still unclear. There are many interesting books, articles, and discussions happening right now, which is a good start. In terms of macroeconomic effects Thomas Ramge and Victor Mayer-Schönberger have outlined some interesting aspects about proactive Data Sharing in their book “Reinventing Capitalism.” What kind of different future scenarios and systems might be possible have been described by Max Tegmark in his book “Life 3.0 - Being human in the age of Artificial Intelligence.” And the Israeli Historian Yuval Noah Harari in his book “Home Deus” and the German Philosopher Richard David Precht in “Hirten, Jäger, Kritiker” have given some inspiring outlook on an AI driven future and the impact it will have on humanity and society.
We at Telefónica NEXT are grappling with exactly these kinds of questions. We are exploring how data can be used to positively impact both society and individuals (https://analytics.telefonica.de/). How humans can be empowered in the digital age, and how privacy can be ensured while at the same time even strengthened through the value creation of data sharing and analytics. We have created a platform for anonymizing data (DAP - https://analytics.telefonica.de/anonymisierungsverfahren.html), ensuring that movement data from mobile phone users can be used to generate insights while respecting the privacy of consumers, and we are building a data sharing platform (DSP) which together with DAP helps to create an environment fostering openness, transparency, and introspection, finally helping to protect democratic principles today as well as tomorrow.
We don’t have all the answers yet. In some ways, we have just begun to scratch the surface. Building and using technology for the benefit of society and economy, starting with the Internet of Things, is our raison d’être. We are inviting like-minded companies to shape this future together as a part of the “Geeny Data Sharing Alliance”, an alliance where businesses empower users to share and control their own data.
Let’s raise new questions and discuss possible answers, together.