Events & Netzwerk

Data is not "the new oil" by Thomas Böhm (KONUX) (EN)

Data is often referred to as "the new oil" or "the new gold," but this analogy misses the mark. In fact, data is a durable and reusable resource that becomes more valuable when used or shared. As technology advances, data is becoming increasingly available and valuable, and businesses should focus on building shared data infrastructures to make data more valuable, reduce costs, and power innovation. This is the message conveyed in a technical paper published by Thomas Böhm, Head of Product at KONUX, a leading AI scale-up and RAILTALKS. Partner.
Vanessa Westermann

You hear this over and over again "data is the new gold!" or "data is the new oil". It is a common line at digitalisation conferences aimed to echo the rise of AI and the data-centric organisation. Ironically, it completely misses the point. In fact, I believe it is corrosive to the industry-wide transformation we all crave. We need to change the way in which we collectively think about data, so that it is not a new oil, but rather an entirely new kind of resource.

Infinite and inexpensive

Describing data as "the new oil" creates a picture of it being a limited, non-renewable resource. But data, if not renewable, is definitely a durable and reusable resource. And a resource that, when gathered together, refined and transformed, can become even more valuable and inadvertently fuel growth and prosperity.

As the world’s oil supplies are diminishing, extracting it has become increasingly difficult and expensive. Conversely, data is becoming increasingly available and valuable as technology advances. Data, in the vast quantities in which it is available today, can be seen as an entirely new commodity. A commodity of exponential growth, almost-unlimited value and ultimately deeper insights.

It is key to remember though that data per se is not the value, value needs to be created from data. It is this value that we actually compete over and work to protect.

Actual value

The value of oil, once combusted, is destroyed. Data, on the other hand, becomes more valuable when used or shared. Thanks to the internet and cheap digital storage, we can access, use, and share the same data, over and over again. In fact, Techjury has found that by 2024 the ratio between unique and replicated data will be 1:10.

Data can also be replicated infinitely, so one's usage of the data does not prevent others from doing the same. Often the value of data increases as more people access it. "But wouldn't that destroy a company's competitive advantage?" you may ask. Perhaps, but not quite. If the core of a business is to simply collect and display data, free access to that same data may jeopardise the business's ability to generate revenues. But it is the wrong angle to look at it because data is more like a basic product. The data provider and consumer essentially enter into a symbiotic alliance that allows both to grow. This means that both parties acknowledge their importance to one another.

As data becomes a commodity, more value is generated further down the data value chain. However, as with almost all value chains, the fundamental input (IE commodity) needs to be of high quality. The same can be said of the data value chain. Importantly, the supply of data at the start of the chain must have value, that is be of high quality, as this value is then not only transferred but also increased further up the subsequent levels. Without this supply the chain would not exist.

The same starting data can be used in a multitude of ways creating value and allowing to build on top. For example in railway infrastructure, the vibration data at the sleeper (bearer) from a passing train can be transformed into a health indicator of the trackbed, or it can provide insights on the surface condition of the track. It can even generate a unique footprint of the type of train that caused it and its speed. It can be aggregated to show the impact of maintenance actions or provide an overview of how traffic is changing. And all of that from a single data source.

Adding more data sources opens a world of possibilities and unlocks efficiencies previously unimaginable. Being able to identify the types of problems worth tackling and having the analytical skill to derive meaningful insights is a much more sustainable long-term strategic advantage than simply collecting and holding onto the data - locking it away.

Moving forward

The more societies digitise, the bigger their data footprint becomes. As a result, data volume and complexity are growing exponentially. Statista estimates that the world will generate 181 zettabytes of data by 2025.

The focus on protecting and competing over data is not only futile but also corrosive. It slows down the overall progress in our industries and distracts companies from focusing on higher value-add activities.

Many businesses now recognise the importance of building shared data infrastructures. Realizing that the focus should be on helping data flow effortlessly both inside and outside a business. Therefore, making data more valuable, by making supply chains more effective, reducing costs, and powering innovation.

Written by

Thomas Böhm, Head of Product @KONUX


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