Why Data Is *Not* the New Oil and Data Marketplaces Have Failed Us
The phrase “data is the new oil” was coined by Clive Humby in 2006 and has been widely parroted since. However, the analogy holds merit in only a few aspects (e.g. the value of both usually increases with refinement) and data’s broader economic impact has been muted outside of a select few tech and finance companies. But the actual differences between oil and data are fundamental.
Most notably, oil is a commodity. Its quality is standardized and measurable, which makes oil from different sources substitutes (in economic terms it is a “homogenous good”). It is ubiquitous and has a well established price. Not least, if you have a barrel of oil, you can’t simply make a copy to produce another — oil is a limited resource that has to be pulled from the ground.
Data, on the other hand, is a heterogeneous good. It comes in unlimited variety and the value of each occurrence cannot be measured objectively. When two parties exchange a good, the seller has to set a price and the buyer has to establish their willingness to pay. This is complicated by two attributes of data:
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