Data as The New Oil Is Not Enough: Four Principles For Avoiding Data Fires (2024)

FAQs

Why is data not the new oil? ›

Data no longer flows around your organisation like oil does in engines. It has many ports of entry and flows in and out and around customers, employees, endpoints, homes, suppliers, and regulators.

By Jon Suarez-Davis, Chief strategy officer

When British mathematician Clive Humby declared in 2006 that “data is the new oil,” he meant that data, like oil, isn't useful in its raw state. It needs to be refined, processed and turned into something useful; its value lies in its potential.

"Data is the new oil!" was the title of a talk given by data scientist Clive Humby in 2006 at an Association of National Advertisers conference.

In 2006, British mathematician Clive Humby declared, “Data is the new oil.” In saying this, Humby implied that data – not oil – would be the primary resource to drive the economy forward over the coming decades. While there is definitely truth to this statement, data – just like oil – is useless in its raw form.

However, data is not a naturally occurring commodity like oil; it's a by-product of human activity. Oil is a scarce resource, whereas data is abundant and continually proliferating. As data powers applications like self-driving cars, wearables, and satellites, it simultaneously generates even more data.

Data is now the new oil! As oil/petroleum was and is the cornerstone of energy and symbolic to economic development, richness of data has become an indicator for better development outcomes.

Oil has reigned for centuries as one of society's most valuable resources. Throughout history, those who have controlled oil, have controlled the economy. However, in today's “data economy,” it can be argued that data, due to the insight and knowledge that can be extracted from it, is potentially more valuable.

In this digital economy, data is the new oil, underpinning the vast empire of Artificial Intelligence (AI) that shapes how businesses innovate and compete.

The phrase 'data is the new oil' was originally coined by Clive Humby, a British mathematician and data science entrepreneur. And then several others repeated the phrase.

Generally credited to mathematician Clive Humby: Data is the new oil. Like oil, data is valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity.

Who said big data is the new oil? ›

In 2006, British mathematician Clive Humby is said to have coined the phrase “data is the new oil” but over the interceding 17 years, what he actually meant by that has got rather lost. “Like oil, data is valuable,” he said. “But if unrefined it cannot really be used.

Data creates significant revenue flows for entirely new industries, just as oil did; Data is only valuable once it's been processed (analytics). Similarly, oil is only valuable once extracted and processed.

The idea that “data is the new oil” has to do with the similarities in how the two resources become valuable. Just like oil, raw data isn't valuable in and of itself; rather, the value is created when it is gathered quickly, completely, and accurately, and connected to other relevant data.

By analogy, personal data is like oil – it is the most valuable but also the most vulnerable resource to an organisation and it can spill, leak and cause damage to that organisation and the data subjects to whom it belongs.

In today's digital age, we often hear the saying, “Data is the new gold.” While gold has long been considered a valuable asset, it is becoming increasingly clear that data holds an even greater significance in our modern world.

Oil has reigned for centuries as one of society's most valuable resources. Throughout history, those who have controlled oil, have controlled the economy. However, in today's “data economy,” it can be argued that data, due to the insight and knowledge that can be extracted from it, is potentially more valuable.

In this digital economy, data is the new oil, underpinning the vast empire of Artificial Intelligence (AI) that shapes how businesses innovate and compete. A sound data strategy has become pivotal for organizations in Silicon Valley and beyond, aiming to harness AI to drive growth and transformation effectively.

The analogy between oil and data elucidates profound parallels in their lifecycles, from extraction to refinement, distribution, and sustainability. Recognizing these parallels provides valuable insights into the challenges and opportunities associated with managing these critical resources in the digital age.