An Analogy for Data



Data Analogies

Data is intangible and as a result people often resort to analogies to describe what data is, or how it can be used. For example, you may have heard the saying that ‘data is the new oil’ - let’s take a minute to walk through this analogy.

Essentially this analogy argues that data is to the 21st Century what oil was to the 20th Century - a strategic asset and a key driver of the economy. It has even been claimed that “the world’s most valuable asset is no longer oil, but data.”

For a deeper dive on this topic you can check out these articles:

Without a doubt, huge quantities of data are being generated and handled by governments, companies and other organizations across the economy. Nowhere is that more true than in the case of the big technology platform companies - Alphabet (Google’s parent company), Amazon, Facebook, Apple, and Microsoft. 


But is data really the new oil, or that similar to oil? 

Oil is a finite and consumable resource while data can be easily copied.

Oil is costly to extract from subsurface reservoirs. While data collection is also a costly activity, data may be obtained from a huge range of sources, including people and their activities. Data can have a human element to it that makes the notion of extraction less palatable.

Oil and data are valuable commodities but only in a refined state. The real value of data only emerges when it has been refined to derive insights and make decisions.  

So as you can see, simple analogies can be useful tools to understand complex topics like data, but it’s essential to recognize their limitations.  

If you’d like to read more critiques of the ‘data is the new oil’ analogy, check out these articles:




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