Data is the New Oil!

Last Thursday my team and I attended a short seminar entitled “Data is the New Oil” at my old stomping grounds, Ateneo de Davao. I suspected it was a seminar aimed at students, more breadth than depth, and it turned out I was right: the coverage was practically textbook chapter one with a smattering of marketing rah-rah. But it was only an hour, it was happening during lunch, the speaker was from prestigious Carnegie Mellon, and it was in the good auditorium where the airconditioning was cool, so why not?

In the days leading up to the seminar, though, I was turning the title over in my mind. Data is the New Oil! What a tragic analogy!

Credit for coining the phrase goes to Clive Humby, designer of the loyalty card for Tesco, a UK department store, way back in 2006 (https://www.quora.com/Who-should-get-credit-for-the-quote-data-is-the-new-oil). Since then it has become the mantra of industry analysts, venture capitalists, and marketing specialists.

On the surface, the analogy seems clever. Nowadays we speak of data mining and so, like oil, we have a resource to be mined in data. Like oil, we process and refine data, turning it into a usable and consumable form. Like oil, this refined form powers our information engines, only unlike motion, it leads to decisions.

But adopting this mantra whole cloth also means ignoring the historical baggage associated with oil, specifically petroleum, and really, the analogy works along those lines as well. Oil was always a known resource since ancient times, but it wasn’t until the mid-1800’s that it became an industrially mined fuel sought as a replacement for coal. The large reserves discovered in the Middle East led to the despicable Sykes-Picot agreement, whereby the United Kingdom and France, with the agreement of the Russian Empire, sought to partition the Middle East after the Great War — and all this while the war was still ongoing (https://www.foreignaffairs.com/articles/middle-east/2016-05-17/pipelines-sand)!

Other deals followed — to which I won’t go into anymore, please refer to a decent history book — and all this led to the formation of the Middle Eastern states as we know them, and to the giant oil concessions including The oil industry gave birth to a cartel, counting among them such companies as the Arabian-American Oil Company (ARAMCO), Gulf Oil, and the Royal Dutch/Shell Company.

Following the analogy, who are the cartels of the information age? You know them very well: Facebook, Google, Amazon, Apple, Microsoft…. These are the companies who collect data, process data, and resell data. In terms of sheer size and capability, they are unmatched. And why not? We’ve already surrendered to them all our data — our emails, our pictures, our documents, our relationships, our locations, even our innermost thoughts. Data, data, data, all resources to be mined, and to be fed back to us to tell us what we should be looking at, what we should be interested in, perhaps even what we should think.

There’s no new data company that can even imagine to compete with these companies. The best that most startups can hope for (and perhaps even the reason they came into being at all) is to be bought by these companies in a profitable exit strategy. Where does that leave all the starry-eyed hopefuls who enroll in programs leading to a BS in Data Analytics or BS in Cloud Computing? Just workers in the data fields of Facebook, Google, Amazon, Apple, and Microsoft. See just how far we can stretch the analogy?

Still, we probably shouldn’t complain. After all, the workers in the data fields are paid extremely well (up to $150,000 per year! according to one chart of the speaker from Carnegie Mellon), just like the workers in the oil fields who came before them.