Big data’s big impact

13. February 2012

Date: 12-02-2012
Source: Reuters By Chrystia Freeland

The Internet is, of course, old hat. We are all getting used to social media, too — your grandmother probably has a Facebook account, and every CEO worth his salt, along with all the world’s would-be revolutionaries, is on Twitter. Mobile, once the new thing, is now taken for granted as part of the world’s hardware. In 2010, more than 4 billion people, or 60 percent of the world’s population, were using mobile phones. Twelve percent of them were smartphones, whose presence is increasing more than 20 percent a year.

But don’t get complacent. A new wave of the technology revolution is cresting and, like its predecessors, will again change the way we work and live. This latest transformation is being called “big data” — a term for the vast amount of digital data we now create and have an increasing ability to store and manipulate.

If wonks were fashionistas, big data would be this season’s hot new color. When I interviewed him before a university audience a few weeks ago, Lawrence H. Summers, the Harvard professor and former Treasury secretary, named big data as one of the three ideas he was most excited about (the others were biology and the rise of the emerging markets). The McKinsey Global Institute, the management consultancy’s research arm and the closest the corporate world comes to having an ivory tower, published a 143-page report last year on big data, trumpeting it as “the next frontier for innovation, competition and productivity.”

To understand how much data is now at our fingertips, consider a few striking facts from the McKinsey report. One is that it costs less than $600 to buy a disk drive with the capacity to store all of the world’s music. Another is that in 2010 people around the world collectively stored more than 6 exabytes of new data on devices like PCs and notebook computers; each exabyte contains more than 4,000 times the information stored in the Library of Congress.

McKinsey believes that the transformative power of all of this data will amount to a fifth wave in the technology revolution, building on the first four: the mainframe era; the PC era; the Internet and Web 1.0 era; and most recently, the mobile and Web 2.0 era.

Like the four previous stages of the technology revolution, McKinsey predicts big data will lead to a surge in productivity. In the U.S. retail sector alone, for example, the consultants calculate that big data could increase a retailer’s operating margin more than 60 percent. Read the rest of this entry »