MARKET ECONOMICS
Is big data a big deal?
‘Big data’ can change the way that capitalism has worked for decades. But it is progress that comes at a price
The ability to capture, process and analyse vast amounts of data has increased exponentially in recent years. "Big data" will not only change how businesses operate in the digital era but will also transform the very nature of capitalism itself. This is the core idea of "Big data" will soon become the yardstick by which we measure the value of goods or services — not price. This is the central thesis of Viktor Mayer-Schönberger, an Oxford University professor, and Thomas Ramge, a technology writer for The Economist magazine, in their new book Reinventing Capitalism in the Age of Big Data. It may sound like gobbledygook, but it’s actually quite a radical shift because, until now, price has been the main mechanism through which the market determines the value of something. In their new book, the writers declare that "data-rich markets" will begin to match buyers and sellers. "Data is the new grease for the wheels of the market," they say.
Mayer-Schönberger and Ramge label this n...
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