Data: The 4th Industrial Revolution
Updated: Apr 9, 2020
We are moving toward the fourth industrial revolution, in which mobile communications, social media and sensors are blurring the boundaries between people, the internet and the physical world.
Data is increasingly building up on who we are, who we know, where we are, where we have been and where we plan to go. Mining and analyzing this data lets us understand and predict how people behave at the individual, group and global level. These swathes of new digital data are as valuable for economies and societies as they are fraught with questions about privacy.
From our bank details to our heart rates
The types, quantity and value of data being collected are vast: from personal profiles on sites like Facebook or Instagram to demographic data, from bank accounts to medical records to employment profiles. Our web searches and sites visited, including our likes and dislikes and purchase histories; our heart rates, food intake, home temperatures, whether our lights are on or off. The list continues to grow.
Firms collect and use this data in order to monetize it by tailoring their services. Governments in turn use data to provide critical public services more efficiently and effectively. Researchers use it to speed up the way they develop new drugs and treatments. And we, the end users, ultimately benefit from free, personalized consumer experiences such as Internet search, social networking, buying recommendations, better health, etc. And that is just the beginning.
Increasing the control that individuals have over the manner in which their data is collected, managed and shared and used will spur a host of new services and applications. Data is emerging as a new asset class touching all aspects of society.
Data and the post-industrial world
At its core, data represents a post-industrial opportunity. Its uses have unprecedented complexity, velocity and global reach. As digital communications become ubiquitous, data will rule in a world where nearly everyone and everything is connected in real time. That will require a highly reliable, secure and available infrastructure at its core, and innovation at the edge. Stakeholders will need to embrace uncertainty, ambiguity and risk.
Most importantly, the fourth industrial revolution will demand a new way of thinking about individuals. Indeed, rethinking the central importance of the individual is fundamental. We may have to accept a trade-off where we sacrifice some aspects of personal privacy – within carefully agreed parameters – in order to benefit from the collective gains of our data.
As digital data increasingly becomes a critical source of innovation and value, business boundaries are being redrawn. Companies that automate and mine the vast amounts of data we continue to generate are getting ahead. However, how much value will ultimately be created, and who will gain from it, is far from certain. The underlying regulatory, business and technological issues are highly complex, interdependent and ever changing. But further advances are at risk.
Tensions about trust
The rapid rate of technological change and commercialisation in using digital data is undermining confidence and trust. Tensions are rising. Concerns about the misuse of digital data continue to grow. Also mounting is a general public unease about what “they” know about us, as confirmed by the Snowden revelations. Fundamental questions about privacy, property, global governance, human rights – essentially around who should benefit from the products and services built upon digital data – are major uncertainties shaping the opportunities.
Yet, we can’t just hit the “pause button” and let these issues sort themselves out. Building the legal, cultural, technological and economic infrastructure to enable the development of a balanced data ecosystem is vitally important. We need to deepen the collective understanding of how a principled, collaborative and balanced data ecosystem can evolve.
The European Court of Justice’s ruling against Safe Harbour, in which American companies have one standard for managing the data of both U.S. and European consumers, shows that we don’t have the right mechanisms in place.
“We are abdicating our responsibility”
In today’s world, where digital transformation affects every industry, it is vital that people trust that their data is being adequately handled and protected. If one works with data, one must be accountable for data entrusted at a global level. The digital industries must embrace the change and go for a higher standard of protection. This will reassure consumers and citizens, benefitting the whole digital economy.
Politicians and business leaders need to work on concluding a set of international standards that allow the transfer and storage of data whilst empowering people to control how their data is used. We are abdicating our responsibility by allowing these matters to be determined in the courts.
The European Union is trying to move their single market into the digital world, yet the rules in place are being decided by judges, risking chaos and confusion that will stifle innovation. The EU and USA have different legal systems so they need to work together constructively to find a solution. And then we need to build upon this to include other states. We need to find solutions that allow different regimes to interoperate and support business and consumers both within and between countries.
The result of this ruling could be a patchwork of different regimes across Europe and different interpretations of how data should be stored and used. Court rulings often leave fragmentation in their wake which could be more damaging for businesses and consumers in the long run. And the spill-over to the rest of the world will add more pressure to the challenges of fragmentation.
Consumers and businesses just want some clear and consistent rules, and so far governments are failing in their responsibility to provide them. We need better, clearer standards on a global level if the fourth industrial revolution is to truly unleash the benefits of digital data.
Let us know in the comments below what you think about data and how this may have huge impact on your business.