data policy

Repost: Data is NOT Oil

Repost: Data is NOT Oil

Last night, I participated in another webinar on data. Multiple speakers used the term “data is the new oil.” It is not. I thought it might be useful to republish this piece from April 2019 on why data should not be compared to anything, because faulty analogies lead to flawed policy responses. Data is data. Not oil. Not, as the piece states, avocados or pears, not oxygen or fuel.…[Reposted content] He was specifically referring to a saying that “data is the new oil.” Such a description has become commonplace, especially among government officials. There is a reason why this description resonates. Oil helps lubricate the economy. Data, in a digital world, does something similar. Oil needs to be processed. On its own, oil has little utility. Data, in form of raw bits and pieces of information, has limited use. But as Søndergaard suggested, data is not like oil. For one thing, oil doesn’t go anywhere. It sits in the ground until it is brought up and used. It can be used all at once or just some at a time while the rest remains waiting. Oil can be stored forever (or at least for a very long time) without significant problems. Data, by contrast, is like an avocado. It has a clearly defined shelf-life. Data collected and used too early is pointless. Data harvested too late is often of no use at all.

Data is the New Avocado?

Data is the New Avocado?

But as Søndergaard suggested, data is not like oil.  For one thing, oil doesn’t go anywhere.  It sits in the ground until it is brought up and used.  It can be used all at once or just some at a time while the rest remains waiting. Oil can be stored forever (or at least for a very long time) without significant problems.  Data, by contrast, is like an avocado.  It has a clearly defined shelf-life.  Data collected and used too early is pointless.  Data harvested too late is often of no use at all. Søndergaard’s company runs what is billed as the world’s largest online wine marketplace.  In his business, it does no good at all to rate a wine that does not exist as all the stock is gone or to recommend a wine to a customer that has already purchased something to drink for dinner.  What matters is knowing what is needed in the moment when the information is “ripe.”

Why Policy Matters to Me: The Example of Cross-Border Data Flows

In another APRU presentation, presidents noted the increasing integration of the cyber and physical worlds.  Using artificial intelligence to innovate for the future sounds nice, but if not communicated to policymakers, it will not work as anticipated.  Why not? Governments can shut down data flows.  They can do so and they will do so. Government can do so by a variety of regulations that will make it difficult, complicated, expensive or even impossible to move information.  Government will do so in many markets because many officials do not understand the needs of academics or companies. They do not understand the issues because the stakeholders in the system do not see that policy matters. Until and unless these exchanges take place better, we will not get the policies that make sense for everyone.  Policy frameworks are not just the province of someone else—created by governments and driven by ideas drafted from somewhere else.  Policy is supposed to be created for the benefit of stakeholders.  But it requires that stakeholders actually participate in crafting policy.