Technology / Dr Simon Ashby: How big data is improving even my musical library
Dr Simon Ashby: How big data is improving even my musical library
10 May 2016
When I was born in 1971 computers were the size of houses and the preserve of large corporations.
As I grew we marvelled at devices like the Sinclair Spectrum and, later, internet-connected PCs. I first encountered these as an economics undergraduate in 1989, and I did not see it catching on. The internet then was slow and mostly seemed to consist of bulletin boards in which American economists argued about healthcare insurance (plus ça change…).
Today the internet is used by almost everyone and contains much that is essential to our daily lives. We all have gigabits of personal information on the internet, from our browsing histories to personal websites and information on purchases, payments, publications and photos. Social media has evolved far beyond small bands of grumpy academics – even my mother has a Facebook account.
All this means that there is much more data about us than before. While a few organisations and close friends/family might have had some personal (hand written and manually indexed) information about us in the 1970s, now personal data is available to anyone bothered to look. As individuals some of us may have concerns about this, but from the perspective of our growing data economy this information provides many opportunities for businesses to generate a profit.
One key growth area is of course cyber-security, an area so important that businesses, such as Apple or Facebook, have resisted even government attempts to bypass security controls. But while cyber-security is now big business it is not where the real innovations for business can be found. What is much more interesting in terms of business opportunities is the world of big data.
While you might not know what big data is, you will probably have seen it in action. Anyone who has bought something from Amazon will find that when they next log in, or periodically via e-mail, Amazon will recommend new products in a manner that is personal to them. I especially like it when Amazon recommends music. I have what can best be described as an alternative taste in music, but Amazon quickly learned what I like and I now regularly buy what they recommend and am rarely disappointed.
Essentially, big data is about using massive amounts of data, from a wide variety of sources to help make more accurate predictions and better informed choices. Moreover, it is not just something for web-based marketers like Amazon; more conventional organisations can use big data in a variety of ways.
For example, many insurance companies use big data to help them assess risk, using tools like social media to predict potential new risks and also to better understand the impacts of existing risks such as flooding/terrorism or motor claims. In life insurance big data can be used to help predict individual life spans much more accurately. I have just bought a Fitbit and there is now talk of using the information collected by such devices to help provide more customised life insurance quotes. Soon it will not just be my wife berating me for not achieving 10,000 steps a day – I could see my life insurance premiums increase also.
More generally businesses in services and manufacturing can use big data to facilitate more accurate stock control, predict new markets/trends or enhance their logistic arrangements. However, at the moment there remains a significant skills gap in this area. While there are many management consultants, like McKinsey, and IT companies, like Google or IBM offering big data services, it is only when this expertise is developed in-house that businesses will be able to take full advantage of the data revolution. Schools and universities take note.