The Industrial Revolution has been synonymous with the colossal growth of every functioning economy. Since 1750, the world has not looked back and here we stand as eyewitnesses to the fourth phase of the Industrial Revolution, better known as Industry 4.0.
As 'à la mode' as this term sounds, it realistically breaks through the cutting edge and drastically alters the way we live, work, relate to one another, and transforms our economy in an unprecedented way.
Industry 4.0 is characterized by the use of cyber-physical systems and as stated before, it is transforming the economy of today into a data economy (also called Big Data).
Firstly, what is Data Economy?
One of the most important fuels that has driven economic activities both directly and indirectly has been oil. Oil was the fuel that created bilateral trade agreements, high-end jobs, and influenced enterprises across countries in some way or the other, but now it has a new contender. ‘Data’ is the new ‘oil’ of the digital age. Data is the fuel generating answers for economies distraught with keeping the balance between modernism and traditionalism.
Big Data is a digital ecosystem in which data is accumulated, distributed, and exchanged within networks of enterprises with a motive of creating an efficient supply-demand chain.
The aim of this economy is to expand the ability of individuals, enterprises, and the public sector to innovate by using data more smartly and efficiently. In fact, we have been living with this concept for quite some time now, even if we realize it or not.
Data has become a crucial input for any economic process. The biggest reason for this could be due to the exponential advancement of technology in the past couple of decades.
With due emphasis to its nature of geometric progression, the World Economic Forum claims that there are 40 times more bytes of data than there are stars in the observable universe. Even a common household generates data enough to occupy about 65 iPhones.
New data is generated with every activity you perform nowadays, whether you’re ordering a pair of jeans from Amazon, or you’re cashing in a cheque, every movement you make can be led back to you more easily than before, thanks to the data generating mechanisms put into place. Its uses have unimaginable celerity and potential.
It’s possible that a new world order will emerge from it, along with a new “GDP” — gross data product —that captures an emerging measure of wealth and power of nations.
How do the instruments of an economy use this data?
“You can have data without information but you cannot have information without data.”
- Daniel Moran, American Programmer, and Writer
The different types of data collected are vast. One needs to interpret, assess, and simplify it, and this is a rigorous and skill demanding task, to say the least, but not an impossible one.
Our web searches, including our purchase histories, food intake, activity on social media produce data enough for firms to tailor their services. The theory of a personal FBI assigned to us which we all seem to have accepted is actually a form of an artificially constructed program that urges us to buy that Fire TV-stick we have been wanting to buy for the longest time.
Governments use data to provide methodical and more effective public services and we, the citizens get a chance to review how the government spends money on the country and if or not the ruling party is reliable/trustworthy.
Researchers use data trends to develop new drugs and better equipment and enterprises can form new over-the-top business models.
Is a lifestyle in a data economy as good as it sounds?
There is no doubt that so far data is turning out to be a bridgestone in transforming the economies of today and tomorrow, but analysts at the United Nations predict that the issues of privacy and consent are heavily hampering the reputation of the subject in question.
An example of this can be the fact of how the EU is trying to digitalize its single market but is facing major backlashes over the lack of transparency and private property rights.
Concerns about the misuse of data continue to grow and the fundamental questions about privacy, personal property, and human rights are mounting up. This might be the biggest flaw data economy has, which to this date remains unresolved.
Another instance of inefficiency would be the European Court of Justice’s ruling against Safe Harbour, in which American companies have a single standard for managing the data accumulated from both U.S. and European consumers and this clearly indicates that we don’t have the right mechanisms in place because of the volume, complexity, and inaccessibility of Big Data as Vernor Vinge said, “what we have is a data glut.”
There is a need to deepen the mutual understanding of how a data ecosystem can sustain. Consumers and businesses want clear, consistent rules, and the governments of the largest data economies of the world like the US, Switzerland, and EU need to continue looking forward to accurately setting definitions and protocols if we want Industry 4.0 to truly unleash the benefits of digital data.
Written by Aishanya Gupta