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A new resource has surpassed crude oil

November 17, 2017    |    VPN News    |    Private Tunnel

Data is the world’s most valuable resource

Crude oil: also known as black gold. It is used extensively across the world, but its availability is limited. This scarcity, plus demand, dubbed this resource as ‘black gold’ and also tagged it as the world’s most valuable resource. Until this year.

So, what is the world’s most valuable resource? THE ECONOMIST published an article a few months ago outlining the new reality that data is the world’s most valuable resource: “A new commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow.” They called it “the oil of the digital era.” It’s an interesting comparison, considering:

  • Oil is scarce; data is not.
  • Oil is a limited natural resource; data is a limitless tech resource.
  • Oil comes from organic material; data comes from 1s and 0s.
  • We pay for oil by the barrel; we expect data to be free to start.
  • We use oil across industries, for medicines, fertilizers, plastics, paints, materials and generating power; we use data in every sector.

Over 100 years ago, the Supreme Court “ordered the DISSOLUTION OF STANDARD OIL COMPANY.” John D. Rockefeller, its founder, used the company to amass wealth and power, buying up competitors and being framed by the public and journalists as a ruthless and immoral character. After the court’s decision, the company was forced to break into 34 independent companies. Today, the primary descendants of Standard include ExxonMobil, Chevron and ConocoPhillips.

The NY Times goes on to frame this court decision in relation to the lawsuits and actions taking place today. Just over five years ago, the Justice Department took action against Apple and book publishers in response to claims of price-fixing for e-books. They filed an antitrust lawsuit, which made it to the Supreme Court about a year ago. The outcome: Apple had to pay $450 million. If you recently noticed some refunds in your Amazon account, to THE AMOUNTS OF $6.93 OR $1.57, you received your portion of the payout. There was no public outcry about Apple’s e-book price-fixing, however. In fact, the public thinks rather highly of the five tech titans: Apple, Alphabet (Google), Amazon, Facebook, and Microsoft. Why?

Perhaps one reason is the amount of “free” services they offer. Consumers don’t feel gouged by these wealthy firms. We don’t think about the amount of data we willingly hand over in exchange for the convenience they provide.

However, these giants absolutely own the data economy. Remember our second point above, comparing oil to data? Oil is limited because of the number of natural resources we have for refining. Data, however, is not. In fact, it’s abundant, and data is the most valuable asset.

As we become more and more connected, the amount of data soars. There’s “more raw material for the data distilleries,” as The Economist phrased it, making the comparison with oil. And the distilleries are getting better: they’re extracting more value from the data. This is driven by the improvements and enhancements to artificial intelligence and machine learning.

Check out these great examples of why data is the most valuable asset:

  1. Tesla is worth more than GM, not because of the number of cars sold (just over 80,000 TESLAS in 2016 compared to over 10 MILLION FOR GM), but because of the amount of data the company accumulates from its self-driving cars.
  2. Facebook purchased WhatsApp for $22 billion even though the messaging app reported a loss of $138 million the year before the purchase. However, the value was USER GROWTH: “Over 500 million people use WhatsApp monthly [with] more than 1 million [new] users per day.” Plus, 70% of users are on it daily compared to 62% for Facebook, and 500 million pictures are shared daily, compared to Facebook’s approximately 350 million.
  3. Microsoft purchased LinkedIn for $26.2 billion. Why was the professional social network worth that much? A VOX ARTICLE stated that it “has the world’s largest Rolodex of skilled professionals.” That’s some valuable data, especially for recruiting and hiring services.

PWC estimates that by next year, the revenue from the financial sector commercializing data will hit $300 billion! So yeah, data is a BIG deal! And what’s a small business to do with its own valuable data? Catalog it. Know where it’s stored. Know who can access it. Develop procedures and policies. If it’s one of your most valuable resources — treat it as such!

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