The Economy of Data

This article was written by Adinah Brown from Leverate.

Recently I saw a watchmojo playlist on youtube about people who did not make money from their inventions. Laszlo Biro, who invented the ballpoint pen (aka, the biro). Alexey Pajitnov, who invented Tetris. Mikhail Kalashnikov, who invented the Kalashnikov rifle. Daisuke Inoue, who invented karaoke. Even James Cameron rates a mention.

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But guess who is number 1? A gentleman by the name of Tim Berners-Lee, who invented a little thing called the internet. Well, the worldwide web actually. And whilst working at CERN he then developed the web browser. The video asks: “Can you imagine if any of these ideas had been patented?”

Berners-Lee believed that the internet should be free and available to all. In a sense this idea has paved the way for all the next generation activities that we see in our short-term crystal ball as taking over the web. And the one that looms largest over them all is another little thing called data.

Big data

Big data, analytics, AI, IoT, SAAS…. the list of up and coming, take-over-the-financial-world technology in many ways depends on the ability of the technologies to access and use data. It’s data that is the lifeblood of the internet giants, companies like Google, Facebook and Amazon. Google knows what you search for, which helps it continue to improve its algorithms, making searching more accurate and efficient. Facebook sees what you share and tracks your likes to also improve its user experience. Amazon knows what you want to buy, which helps it cater to your potential purchases and offer what you want.

But these also have direct profit impacts – by improving the search accuracy, Google attracts more searchers, who in turn provide more data. Facebook improves its user experience and user numbers, making others more likely to sign up in order to connect. Amazon can identify and scale the products for better purchasing power and better deals, leading to larger margins and more sales.

The increase in users is the profit model that Facebook and Google use to monetize their business. Revenue growth over the last few years for digital advertising has almost exclusively gone to either Google or Facebook. For good reason too, they have the most traffic.

Digital marketing makes its mark

Whilst digital marketing is the obvious manifestation of the use of internet data, since it is a case of the internet data feeding the improvement of internet service, there are other industries that use connectivity to improve their product or service. The automated car industry is almost entirely reliant on the data provided by its cars. Wearables, like Smartwatches and Fitbits, are providing health related data that was a dream only 5 years ago.

Ultimately, this accumulation of knowledge provides us with opportunities beyond simply marketing information and digital advertising. The collection of health data from wearables will give us stronger, real life data about the human body and impact a significant range of medical conditions. Data captured by smart cars will provide real benefits by providing data to help decrease road fatalities. The real revolution that data will bring will be felt in the lives of all of us.

It is this vision that Tim Berners-Lee had the foresight to understand when he decided not to allow the internet to be patented and limited. And with data as the undertow that pushes the waves along, we can hope that his vision will be more than simply how to monetize a user base, but continue to provide improvements that may even justify the intrusion on our privacy.