The New York Times recently wrote an article, “Is Big Data an Economic Big Dud?” Here is part of the article questioning the value of Big Data:
For now, though, he acknowledges that most of the raw data flowing across the Web has limited economic value: far more useful is specialized data in the hands of analysts with a deep understanding of specific industries. “The promises that are made around the ability to manipulate these very large data sets in real time are overselling what they can do today,” Mr. Marks said.
The article also states that the economic benefit (if it exists) of Big Data has not yet shown up in the macro productivity numbers.
This article got a lot of attention on LinkedIn and other business forums. This is not a surprise. A lot of people think Big Data is just a buzzword and a lot of people use it like that. So, an article that questions its value will get a lot of attention. It is worth debating whether Big Data is a buzzword or not.
In any case, I have two main comments on this article.
First, I remember in the early to mid 2000’s, there was a lot of debate about whether the internet was showing up in the macro economic data. These things are very difficult to measure. So, it seems a bit early to declare that Big Data will or won’t have an impact at the macro level.
Second, for managers, this discussion is a bit academic. Since it is true that companies are collecting a lot more data, it is the job of managers to determine whether this data has value to your business and determine how to extract that value. If the data has real value to your firm, it doesn’t matter if the impact shows up in the macro economic data.