We are living in a digital world, the era where every business is witnessing DIGITAL EVOLUTION. A new powerful form of currency is radically redefining the way people do business – DATA. A decade ago, Clive Humby the famous UK mathematician coined the phrase “Data is the new oil”. His mention explains how data is a valuable resource and very useful when refined. Data is the driver of growth and change. This new economy of Data Universe has revolutionized the digital trade by analyzing rapid real-time flows of unstructured data.
First, let’s understand the term data. In short, everything is data. The streams of photos, phone calls, videos, mails and messages generated by users of various social network platforms, the places we go, the products and applications we use, educational qualification, blood count, doctors we visit, the flood of information from hundreds of interconnected web devices that send and receive data, the list is nearly endless. In fact, almost everything we do these days creates some sort of data. Simply put all sorts of devices are becoming sources of data. The value of data is becoming more and more apparent as we continue to move towards an information driven economy – info economics.
The flow of data is not restricted to the creation of new infrastructure, new business, new leaders, but has led to the evolution of new currency. For its explanation we need to re look what currency actually means. Currency can be defined as a medium of exchange of goods and services across geography and through time. Gold, bonds, equities and shares have been global currency and has remained so for centuries. In the most basic sense, currency is something that a group of people agree has some value.
Since data fits this analogy, we can conclude that it is the most precious currency of the time we live in. As the internet continues to expand and numbers of connected devices increases, the amount of data collected and made available is growing exponentially.
Companies buy, sell and trade these cluster of bits and bytes generated. Following the exponential expansions in digital universe in the past few years, trading certain data for other data has become much more prevalent. The addition of a new data to database leads to a greater level of information adding to the profit of the firm or organization. With the amount of data we are producing today, we could be sitting on a big pile of prime wealth.
The phenomenon of data as currency is also clearer in world of payment transactions. Payment forms have taken a variety of names from mobile pay, cryptocurrencies, money transfer apps, etc. This payment data combined with other consumer information has become stimulus for business making informed decisions on what to sell, whom to sell it to, where to sell and how. All these data give the companies tremendous power resulting in more profit. The companies are building a comprehensive data foundation for their digital business that is traversing from vendor to customer touchpoints with a common purpose of ‘understanding customer needs’ and taking relevant, timeline action across channels. We as a user would share information or connect our social identities in exchange for promotions, discounts. This creates a new value exchange between brands and consumer, the medium of exchange being Data.
The data has immense value, and companies have been purchasing data for years and use it to generate revenue. The firms convert data into revenue by finding patterns within this data, whether demographic, geographic, or sociological. What makes the data that we generate more valuable is that it is unique, personal, live, and accurate. We as a consumer expect online experience to be tailored to our interests. Technologies such as artificial intelligence turn the unordered data into customized services which is generating new sources of revenue. The data generated is used to target their potential customers more accurately. The more the platforms learn about users, the better targeted ads on news feeds become. The targeted and retargeted ads increase the sales of the product and marginal returns from data may actually go up as applications multiply.
Data is an asset both in terms of how such a company or firm can use the data to increase cash flow by targeting buyers more precisely and how they make money from the data externally for example with advertising or from selling customer data to third-party sources. Data moves like money and it is taking ahead our economy in every sector. For instance, this powerful economic engine is used in health care sector to improve people’s health thereby improving nation’s economy. As an example, medical data collected from patients can help a doctor diagnose and treat individual patients. After that, it can be studied and fed into machine learning systems to generate broader insights that can benefit many more.
Data predominantly is helping us to live the life more easily and sorted in this tangible world. The more the data collected, the smarter the applications become and firms gain increasing revenue. To sum up data is what ultimately drives monetization in today’s world. The bits and bytes are the new gold that backs the value of companies, though it is gold that firms must locate, mine, and refine before turning it into revenue. The confluence of three powerful drivers – exponential data growth, more sophisticated distributed networks and smarter algorithms – has propelled 1s and 0s as a new currency of the world.
-Sindhu Rani (Winner of Second Prize in Article Writing Competition 2020 in the 25-44 Years Age Group)
Picture Credits: freepik.com