How Data Is (And Isn't) Like Oil
Data has often been compared to another familiar resource: oil. But is it a fair comparison? We look at how data and oil are similar and how they are distinct.
- By George Firican
- April 22, 2019
"Data is the new oil." We first heard this idea back in 2006 when Clive Humby, a mathematician and architect of the Tesco Clubcard (a supermarket rewards program), coined the statement.
Is this comparison fair? Let's explore how data is similar to and different from oil.
Both oil and data can be transformed into different products. From oil you can produce anything from gas and plastics to detergents, toiletries, dyes, and movie film. Data can be converted into information that fuels human and AI decision-making processes, which in turn enable self-driving cars, improve a company's efficiencies, develop speech recognition software, find cures to diseases, and much more.
Both oil and data fuel economies. Data can be seen as the fuel to the information economy and oil to the industrial economy.
The amount of power someone has can be correlated to their control of and access to these resources. In 2017, the president and CEO of Mastercard told an audience in Saudi Arabia, the world's largest producer of oil, that "data could be as effective as oil as a means of generating wealth." Data (and your analysis of that data) is a powerful resource for improving wealth (your enterprise's bottom line).
Both oil and data spills result in costly consequences. We all dread reading reports of oil spills; they affect both the environment itself and the natural resources potentially available in that environment. Similarly, data breaches are a huge privacy and security concern that affect the owners and stewards of that data as well as its consumers.
Both data and oil need proper governance and management in order to gain significant benefits from them.
Oil can only be used once; data can be used over and over again. (Yes, some plastic can be recycled to create a new product and there are technologies for transforming plastic back into oil, but those are rare.) Though oil can only be used by a single process at any one time, data can be accessed by a limitless number of concurrent uses.
Oil is a limited resource. Data is seemingly unlimited (perhaps the way we thought of oil a decade or two ago). Even with the increasing number of data privacy regulations being implemented, there's still plenty of data to mine, and more coming all the time.
Oil can be processed by only a limited number of companies. Data collection and analysis isn't constrained -- any enterprise can do it.
You should never compare apples and oranges, but the storage costs of oil are higher than the storage costs of data, which in contrast is nearly immaterial to your enterprise's budget.
The time it takes to create oil and to create data are vastly different. In the lab, under artificial conditions, it can take from a few hours to days to create a gallon of oil. In nature it can take millions of years. About 70 percent of current oil deposits are derived from the Mesozoic period, which lasted from 252 million to 65 million years ago. In contrast, data can be created as quickly as a millisecond. Over the last two years alone, 90 percent of the data in the world was generated.
What Other Comparisons Have We Missed?
What are your thoughts on these comparisons? Is data more similar to oil than different? Let us know here
George Firican is the director of data governance and business intelligence at the University of British Columbia. His innovative approach to data management received international recognition through award-winning program implementations in the data governance, data quality, and business intelligence fields. As a passionate advocate for the importance of data, he founded www.lightsondata.com, he is a frequent conference speaker, advises organizations about how to treat data as an asset, and shares practical takeaways on social media, industry sites, and in publications.
He can be followed on Twitter (@georgefirican) or reached via email, or on LinkedIn.