What is “free” vs. “expensive” data collected by corporations? In this Wall Street Journal article we remove our illusions of personal privacy. What privacy? No such thing any more… advocate for MIT Media Lab’s Alex “Sandy” Pentland’s New Deal on Data (but that’s a different article).
In this article, the authors, Thomas H. Davenport and Thomas Redman, discuss the difference between “free data” and “expensive data”, also known as Proprietary Data (PD).
PD is owned and controlled by the organization and used for their own purposes. Although collection & management of PD is expensive, as in the development of useful and working algorithms, it can give companies that know how to use it a competitive advantage from ad targeting to more efficient supply chain management.
So much room for innovation, disruptors and new leaders as many corporations lag with only 1% actively harnessing. The ones that do lean heavily on “infrastructure” data which has quickly become available to all and thus loses its competitive advantage. Proprietary data, on the other hand, once put into unique processes and procedures, avails itself to be used in creative ways which benefit the company. Can also be protected for longer (e.g. patents).
Example organizations include Google Inc (structure of internet), Uber (where people want to pay for rides to), and the American Banker’s Association CUSIP (means of identifying securities in order to process trades efficiently).