If we enter any conference room or a lecture, it is not uncommon these days to hear “data is the most valuable resource”
and “data is the new oil”
. I was also party to this analogy. Off late, after working with a lot of organizations with data and solutions to predict the future, our realization is very different from this so-called simple analogy.
Let us look at the fundamental flaw in this analogy and how it can impact the actions we take. Oil is literally a liquid, which has value in its raw form, can be transformed into various value-adding products like petrol, diesel, kerosene, engine oil, sulphur etc. at various stages of extraction. This can further be converted to a room heat anywhere in the world or moving a commuter bus in India. Oil is valuable, marketable, and tradable.
The bits on the other hand, in data, are static. Without significant effort, data is not valuable. Data has a lot more common with soil/land (which may contain an oil deposit) than with oil.
Dangers of Oil Analogy
If one goes with this analogy, amassing data looks like an asset build.