Why Data Matters

The final frontier of the human race is proving to be less intergalactic than Star Trek would suggest and much closer to home.  Advances in the physical sciences have taught us great and marvelous things about the world we live in and about worlds beyond our own.  In the place where science and business collide, a new “space” has emerged that has already begun to revolutionize the way we work, play, stay healthy and safe, and innovate in science and technology. 

            The idea of “Big Data”, which is the up and coming game changer, will seem foreign without looking at what data is on a small scale and why it matters.  Data is collected and organized bits of attributes for the subject being studied.  People collect data about where, how fast, and how far they walk when they wear a GPS pedometer.  One of my friends keeps a log of the money he spends on gas, etc.  All these data collections are good, but are not the end to themselves.  Here’s what I mean.  If I said that the average tariff rate for a given product in a given country in a given year is 5%, that would be an interesting fact to know, but would probably be a useless fact unless you were in the habit of learning tariff data for countries.  Data, when correctly used, can be used to create information.  Take tariff data for this country over the course of time and you can make a trend line to support your informative claim that “tariffs in Indonesia have been falling for the past several decades”.  If you pool that information with other information learned from other places, you can arrive at the end goal of data: insight.  We’ve established that tariffs have been falling, and say that we learned from other data that exports have been on the rise.  Then we can turn the information into insight when we compare them and find through analysis that tariff rates and export levels are inversely correlated or when we apply that information and suggest that a country should lower its tariffs if it wants to encourage international business in a given industry.

            So data is a precious commodity because it turns to information and information turns into insight.  It has the potential to change the way we live and work and, as I said, has started to do so already.  Retail businesses have been using data to track inventories and shipments for decades, but now a new level of insight has been made possible through the advent of Big Data science.  Companies can now track a particular customer’s purchases and then send targeted marketing materials that are relevant to them.  Some might find this invasive, but whether it is or is for the sophists to decide.  The advantages of a business knowing itself and its customers are inestimably and undeniably valuable.

            Sun Tzu famously said in his book, The Art of War, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.  If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.  If you know neither the enemy nor yourself, you will succumb in every battle.”  Data and its interpretation unlock the potential for knowing yourself on a business level and a personal level. 

            Let me use an example that is close to home.  This year, I started a used clothing store with some friends.  We have a database that records each item that is taken, where the customer is from, and other attributes.  At the end of the day, we can look back and know what items are popular, women’s shirts for example, that we’ve served people from nearly 30 states and countries all over the world.  We get comments and suggestions for improvements that we can take into account for future operation.  Now imagine that we have a massive customer base, huge resources, and are a multinational corporation.  Say we’re Target or Wal Mart with access to talented people in all industries.  I can attest to the benefit data has had for our operation, small as it is.  So I can imagine how it must be driving business elsewhere.  Business is not the other place where the Data revolution has been happening.  Medical research has grown by leaps and strides with the invention of new data collection technologies and the advent of distributed computing/crowdsourcing has allowed for dramatic cuts in processing time and costs.  The benefits of these new technologies have helped in counterterrorism operations and other law enforcement and more sectors than one could even name.

            Exabytes of new data are made at an increasingly growing rate and the full potential has yet to be seen.  But I suspect that as humanity explorers this new frontier, our newly gained level of self-knowledge gained will allow us to win victories in efficiency and quality of life that are an important par of building a better future.