Perhaps in the past few years, you have heard the adage “Data is the New Oil”! Given the exponential growth opportunities that are possible with Data, I can see why so many people have embraced this phrase. However, in a few respects, this could not be further from the truth.
Why the Phrase works
The phrase was first coined by Clive Humby in 2006. Michael Palmer expanded upon the quote to say that like Oil, Data is “valuable, but if unrefined, it cannot really be used”.
I grew up in the ’80s in Houston, TX, and from my earliest years, I was the biggest Houston Oiler fan (“Luv Ya Blue”), and at that time and in that city, you could see how Oil was King. Oil was lucrative, and fortunes could be made if one had the means to extract it, refine it, and find use cases for it (i.e., gas, plastics, chemicals).
Similarly, over the past decade, fortunes have been made by those savvy enough to do the same with Data. Today, the list of Fortune 500 companies continues to be disrupted by these businesses – Google, Amazon, Facebook, etc. So it is understandable why many continue to use the analogy.
Where the Phrase breaks down – Availability and Reusability
Oil is not available to just anyone. Companies with deep pockets have to scour the earth for it, and if you happen to live in a place that dinosaurs tended to frequent – well, then you are in luck. But if dinosaurs would not be caught dead in your neck of the woods (see what I did there), well, sorry no fortune for you.
Data does not have the same challenges. Data is everywhere and available to anyone that has the forethought and means to capture it. Individuals, Communities, and Organizations of all sizes have the potential to begin acquiring and leverage this valuable resource. Needless to say, collecting it is not always easy, and refining it does take a unique set of skills. However, Data is available across all geographies like Oil could never be.
The other challenge with Oil is that it is a non-renewable resource. You use it once, then “poof” it’s gone. Sure, you could look for ways to increase the efficiency of its use, but it cannot be reused.
Data is not only reusable; the value that you can extract grows the more you use it!
The same datasets can be used across various functions, analyses, and predictive models. Combine one dataset with another, and you now have new insights that could not be leveraged before –> 1 + 1 = 3. With the proliferation of Artificial Intelligence, your ability to reuse the Data is imperative to identify patterns and learn from historical events.
Overall, I understand why people continue to use the phrase “Data is the new Oil.” But because of its Availability and Reusability, Data can be much more lucrative to many more organizations, communities, and people than Oil alone could ever be.
Unfortunately, I do not see a future where Houston will rename their NFL football team the Houston “Data.” Perhaps the Houston “QuantJocks”?