No, Data Is Not The New Oil

from Wired

“Data is the new oil” is one of those deceptively simple mantras for the modern world. Whether in The New York Times, The Economist, or WIRED, the wildcatting nature of oil exploration, plus the extractive exploitation of a trapped asset, seems like an apt metaphor for the boom in monetized data.

The metaphor has even assumed political implications. Newly installed California governor Gavin Newsom recently proposed an ambitious “data dividend” plan, whereby companies like Facebook or Google would pay their users a fraction of the revenue derived from the users’ data. Facebook cofounder Chris Hughes laid out a similar idea in a Guardian op-ed, and compared it to the Alaskan Permanent Fund, which doles out annual payments to Alaskans based on the state’s petroleum revenue. As in Alaska, the average Google or Facebook user is conceived as standing on a vast substratum of personal data whose extraction they’re entitled to profit from.

But data isn’t the new oil, in almost any metaphorical sense, and it’s supremely unhelpful to perpetuate the analogy. Oil is literally a liquid, fungible, and transportable commodity. The global market is designed to take a barrel of oil from the Ghawar oil field in Saudi Arabia and, as frictionlessly as possible, turn it into a heated apartment in Boston or a moving commuter bus in New York. With data, by contrast, the abstract bits are functionally static.

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4 Responses to No, Data Is Not The New Oil

  1. Abijah Cole March 18, 2019 at 2:39 pm #

    I see the metaphor “data is the new oil” as a new was for capitalism to thrive. With oil you are forced to always go back to the oil companies and ask for more every week or you run the risk of freezing in your own home or not being able to drive your car. When it comes to data once your phone, computer ect. are out of data you either have to purchase either a new hard drive, or in the case of google and faceboook, buy back storage. If those aren’t options you desire to take you must then lose a portion of the memories you have stored to make room for new installments. With that said both “goods” Are insatiable at the moment but also have possible solutions to them like electric cars or find a way to make unlimited data possible. With that said why make those changes if there is a someone profiting heavily by the insatiability?

  2. Kyle Stephens March 22, 2019 at 11:07 am #

    I agree and disagree with different parts of this article. I disagree that data is not the new oil. Data is absolutely the new oil especially for tech industries. In the events that the author made up where he gets he oil and sells it but doesn’t know what to with the hard drives, I found myself laughing. In my eyes, it wouldn’t be hard to get rid of those hard drives for a pile of cash. Find a competitor of amazon and sell them. These hard drives contain valuable customer tendencies and habits that can influence how a company organizes its website, stocks its inventory, and many other aspects of the company. And, the author just describes this weird. Obviously, it would be easier to offload the oil but it still wouldn’t be much of a task to offload these hard drives, especially if they’re from amazon. However I do agree that these companies aren’t “oil fields.” To make the comparison true the user would be the oil field because we are the ones providing the information to the companies. The companies would rather be the miners of the oil who then use or sell the oil for profit. Next, I agree with the author that we should not be paid by the companies for “giving” them the data. We are all willingly signing up to give our information out every time we go on the internet for shopping, searching, browsing, etc. Plus, I cant imagine that we would be receiving any sort of significant portion of the money because they would have to pay to many people. Think about all the people everyday who go on the internet to search something on Google. The amount is too great to justify these companies giving us a percentage of their revenue. We would be receiving a few dollars at most, and honestly what’s the point of getting a few bucks a month for free. To further this, it also wouldn’t fit into the metaphor. The company mining the oil doesn’t pay the oil. That wouldn’t be logical, not only because oil has no use for it, but also because its free to take. Our information is willingly given when we go on the internet, and we know that. To sum it up, I do believe data is the oil of the future, however I disagree that we should see any compensation for essentially using the internet.

  3. Luke Tyler March 22, 2019 at 8:28 pm #

    Immediately when reading the title my mind cancelled the “not” in “Data is Not the New Oil.” This is most likely because I have seen numerous articles claiming that data will be one of the biggest commodities of the future and when I saw this article refute it, I gained an entirely new perspective on the subject of data mining. The article almost tries to compare data to the California gold rush and that the idea of big data is not the huge consumer catalyst that everyone perceives it to be. In short, data is only of use to specific companies because that information can only be applied in so many ways. Primarily in the case of Amazon, their customer information would not be as relevant to say a social media site like Facebook. However, oil it has use to everybody. It’s used to power buildings and drive cars, but data is so niche and unique it does not have that same effect. Data only benefits users in making accessibility and function work more flawlessly. But, the comparison between corporate use and consumer use for data is worlds apart.
    That brings it to California’s bill on “data dividends” which from my understanding, is the consumer’s way to try and grab a piece of corporate profit. Although user activity does contribute to the data that drives these tech powerhouses, in the end it comes down to analysis and forms that contain certain information that would allow the company to apply data into a practical use that could generate revenue. Also with most of these services being free, why should the company have to provide user money when the product is for free. One thing that rubs me the wrong way about using the term “dividend” assumes that data is a traded commodity like oil which has an intrinsic value. But, data has no price tag and is only sold to third parties when the data is applicable. With data becoming more encrypted with privacy concerns, data will become harder to apply and more hidden. The vast supply of information will slowly begin to thin as companies want to protect the information of consumers in order to retain them for their own profits. As much as I disagree from this new digital hype over data, I can understand that the world is beginning to shift in a very new direction.

  4. Luke C April 11, 2019 at 2:18 pm #

    In a ‘softly viewed’ version, I somewhat agree with the term data is the new oil, but overall I think this article hits the nail on the head. I think that when people say this term, they’re talking about the commercialism and profitability about data nowadays. If you go into any large company across the world, they establish funds to go towards the handling of data as well as data protection. To the same idea, ‘data’ is viewed as the new resource in order for businesses to run. This directly relates to the way people need oil to run machinery in their personal or business lives. Without either of them, it would be harder to operate in certain businesses, hence why I somewhat understand the relation between the two.
    Now for the article’s argument; I believe it is mostly correct. It’s hard to relate oil to data, especially when legal and accounting terms start getting thrown around. Until data starts having actually financial value (disregarding business deals that actually put a price on data), data and oil will always be described as very different entities. All in all, if you’re talking in the literal sense, no, data is not like oil in any way. Business which, I think they are/were both very important in running businesses and making a great profit on deals, but overall the idea that oil and data are treated differently market wise separates the two indefinitely.
    I wouldn’t be surprised to see more rules and regulations about the selling and sharing of data in the future. I don’t exactly know all of the laws about transferring information between companies, but I’m positive there are some implied standards when it comes to how the data is handled. Maybe in the future, data will be taxed and made more easily trackable, but as it stands today, it isn’t. Ultimately, that means that there are bad people doing bad things with data, like phone companies selling numbers or the sharing/ selling of emails from one company to another. As long as data is treated this way, its hard to relate data to oil. Oil is more of a commodity that was valued highly in industries, especially when new machines and oil-based technology were being created. Data is also highly valued in companies today, but it is also given out differently as well as harder to put an actually price on.
    I hope to see manageable, trackable data in the future. I think this will create a more stable market wen it comes to intellectual property, but then again it will be very hard to put into effect. As this article said, data is hard to track, and selling data by the megabyte is a great idea, but there are some issue. What is the first 10 megabytes of data are “valued more” to the customer than the next 40 megabytes. That means each byte would have to be scanned and valued based on the information it stores. We are a long way off from this idea, but over time I do think it is possible.

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