The Value of Data in The Digital Age

For the last century, the world’s most valuable resource was oil. However, now that we’re well rooted in the digital age, the value of data is soaring. It’s a little too simplistic however, to claim, “Data is the new oil!” Oil is a commodity, whereas data is an asset. But what’s the difference? Well, a commodity is an asset whereby each unit has the same value as another, such as oil, cocoa, coffee, gold or any other resource. But not all assets are commodities. Some examples of an asset are a house or a used car. The value of assets is not uniform i.e. two used cars are not necessarily worth the same amount of money.

Data is an asset which grows in value as it is used. To that end, one person’s data is of very little value, but the data of thousands of people is worth a fortune in the modern age because of how it can be used to improve services. For example, a company like Amazon, which wants to connect with customers or suppliers on demand, utilizes user data to match the customer with ideal products. Even YouTube works in this way: your homepage is tailored exactly to your tastes because of the video content you’ve watched before. An e-commerce company like Amazon or Alibaba can also interpret the data of its users to gain insight on market trends, users’ shopping habits, popular products and popular sales times.

Plenty of companies do sell data of course, to other companies that wish to improve their own services. But the important thing to note is that data is more than just a saleable asset; it’s at the core of an organisation’s performance. The data that companies like Amazon and Alibaba have is of course incredibly valuable to third parties, but it’s even more valuable to the company itself! Much like selling your car might be a mistake as it will leave you without a car, it’s counterintuitive for these companies to sell all their data, as it’s much more valuable in the company’s possession than in the possession of another.