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NOTE: America's Small Business Summit, hosted by the U.S. Chamber of Commerce, started on Monday and included a dive into big data. Businesses should be thinking about how to make the most of big data, while also stewarding the information consumers have entrusted to them. Here’s a closer look.
One look at your smartphone should tell you all you need to know about how big data is changing your world for the good. There’s more information available to you at a faster rate and with more accuracy than ever before. Our world is defined by on-demand computing and constant connectivity.
Big data is not just about large pools of information — increasing in size, speed and accuracy — but the sort of technologies that allow us to use it to solve problems. The vast bulk of the world’s data was created in just the past year or so and will continue to grow at this pace for the foreseeable future.
If this information is growing at an exponential rate, so is its value. Global spending on big data technology will reach $40 billion by the end of this year; its impact is considered to be far larger. And if this matters to you, it matters to your company.
A quarter of the world’s population will be using smartphones by 2016. Thanks to these devices, we’re seeing data flows enable a change in consumption patterns (note Uber) and consumer habits (Facebook, for example). Smartphones are supercomputers in the palms of people’s hands, tethering business and customer alike to vast clouds and social webs housing the world’s information.
Companies are treating the power and ubiquity of computing and data flows today as a steady backbone on which to build new consumer-facing products. “I think we are all underestimating the impact of aggregated big data across many domains of human behavior, surfaced by smartphone apps,” said noted venture capitalist Marc Andreessen.
With big data come enormous benefits — socially and economically — along with questions that feel new to us. Businesses should be thinking about how to make the most of big data, while also stewarding the information consumers have entrusted to them.
Here then are five ways big data is shaping business right now:
- Democratizing information – Information used to be a precious good; now it’s a cheap commodity, and that’s a good thing for consumers and the companies servicing them. Accessibility to data is empowering. The acquisition and spread of knowledge no longer depends on centralized gatekeepers, but on distributed providers.
- Highlighting the customer – Companies can now know what customers think and want -- and how to fulfill that. Larger, cheaper datasets and the tools to analyze them are paying dividends. Consumers in turn are living quantified lives.
- Growing assets – Balance sheets will soon have a new line for data stores, while identifying new uses for once latent assets, such as property. Every company is a data company, whether it knows it or not.
- Overthrowing hardware – Data-driven business models are infinitely scalable through software, with higher margins, and can be delivered online and through connected devices. This is one reason why cars are simply smartphones on wheels.
- Lowering startup and operational costs – Existing companies can do more with less, while lowering the barriers to new entrants.
What should companies do about these trends in big data? Here are a few key action steps:
- Create new job categories – Strategic data managers and data ethicists will become important roles. There’s no substitute for informed good judgment. Big data needs the big insights that humans provide.
- Value a different set of skills – Beyond specific roles, people with the ability to interpret data and make it actionable — who can answer the “why” to big data’s “what” — will be of particular value to employers. They also can’t be replaced by robots.
- Unlock new markets – Identify the opportunities that were previously closed due to a lack of information. Airbnb’s example is telling, since the startup was able to identify a home rental market that had long been stagnant due to a lack of trust, which in turn was the product of scarce information on the product being sold, and find value in spare assets.
- Steward your data – Companies should be aware of their role as trustees of data and identify risks in their data assets. Customers have entrusted their data to those they engage with their business. Absent the abuse of user data or clear harms, there can and should be a large scope for consumer-friendly innovation.
- Make small data a competitive advantage – Just as the Internet of Things breaks connectivity down to its constituent parts, small datasets from smart devices with specific attributes will become increasingly valuable. Democratized information increasingly demands individualized service that large, more centralized datasets are ill-suited to provide.