Digital data is a resource, but it’s unnatural because it’s not directly from nature but is created and used by computer technology. It is comprised of the facts, logs and sensor readings recorded by digital circuitry, which increasingly imbues the fabric of modern life (e.g. our phones, tablets, computers, cars, fitness trackers, weather, shipping and transportation etc.).
Digital data is now so vast and diverse, its size is beyond comprehension.
We as humans don’t perceive digital data (as it flows through a circuit board or rests on a hard drive) unless it is interfaced to match our senses.
We need ways to perceive data through visual, auditory or tactile ways. When we can sense the data, we gain a better understanding of the information hidden within.
We are used to thinking of natural resources as those which come from nature such as “sunlight, atmosphere, water, land (includes all minerals) along with all vegetation and animal life…” And in various ways, those resources are inputs to the processes affecting how we live; agriculture being a great example.
But is it possible to also think of digital data as a resource, albeit an unnatural one?
It helps if we view the question through an economic lens. Land, labor and capital have long been considered the basic inputs for economic productivity. But a study by Capgemini and The Economist Intelligence unit in 2012 suggested that data could now be considered the fourth factor of production. In other words, data can now be considered an input (along with the others) to create productive output.
Consider the following image from agriculture. The grayed-out portion is like a data echo of the activities, which in turn can be listened to improve operations. It is easy to see how land (the farmer’s field), labor (the person driving the tractor) and capital (the tractor) can be combined to create value. But modern agriculture generates digital data, which in turn serves as inputs for optimizing the operations.
Digital data has also been characterized by many as the “new oil”; oil being a type of resource. In other words, like oil, digital data can be explored, discovered, extracted, processed, packaged, distributed and consumed by end-customers. There is an interesting and helpful depiction of this comparison by one of Linkedin’s data scientists. The image below illustrates the use of data in just one step of the vast oil and gas value chain.
Digital data today is not broadly viewed as a resource. Consequently, it’s not commonly integrated in discourse about the development of natural resources. Yes, there’s considerable talk about Big Data and related subjects (like the Internet of Things), but these concepts are often technical and not easily accessible by the layperson.
If we can view digital data as a resource, analogous to that of a natural resource, we can frame it as an economic stimulator. Aspects of data management and data analytics are common across the spectrum of society. When analyzed and transformed into information and insight, data can help us find and prioritize opportunities.
Digital data then requires broader awareness (e.g. using real examples and accessible concepts), specific education (e.g. from grade school through post-secondary), investment (e.g. to spur innovation) and governance (e.g. to ensure its effective use).
But how does one begin? The value derived from digital data occurs within the context of how it is used. To start with, try to use data to understand what is going on in one’s area of interest (i.e. the description). Then use data to ask, why is that happening? (i.e. the diagnoses). And then ask, how are we going to respond to that problem or opportunity? If you get good at the above, you can begin to predict what might happen.