In this AI era, data is the new oil. Isn’t it?
Data is empowering the AI and ML revolution all over the world, just as oil empowered the industrial revolution.
Nowadays data is the source which is bringing numerous opportunities for innovation. It is the very foundation of AI and ML. Without data AI revolution is not possible.
In this blog, we discussed the origin of the term ‘data is the new oil’, why data is referred to as oil, its importance, challenges, and solutions. Let’s start!
Data is the New Oil – Origin
In 2006, Clive Humby, a British mathematician and data science entrepreneur, introduced the phrase “Data is the New Oil”.
In simple words, what he said is that - “Data is the new oil. It is a valuable source. However unrefined data is not useful. It must be converted into valuable entities that drive profit. Therefore, data must be broken down and analyzed to get value out of it.”
After Clive so many other people repeated this term. When the vice-president of Gartner, Peter Sondergaard mentioned this term then this term got lot of attention.
Peter stated that information is the oil of this 21st century. He also continued by stating that analytics is the igniting engine.
Data can be a precious source when it's used efficiently, and safely. If it is mishandled, then it becomes a liability.
For example, if we take the COVID-19 pandemic situation, which brought problems regarding quality of data and confusion created by misleading data, then we can understand importance of data handling in right way.
Why is Data Referred to As the New Oil
Data is referred to as the new oil because both these entities are valuable. Data is a precious source for industries to become successful in their field. Similarly, oil is valuable in industries as it allows them to do production.
Hence, both these terms are valuable for an industry. So, from the perspective of a business person data is the new oil.
In the initial stage, data is in its raw form. To get appropriate knowledge from available data one must analyze it and transform it into useful form. Then industries can use that processed data for their growth and decision making. Similarly, oil is useful after processing, in its raw form it is useless for industries.
Also, data and oil both can be reused, it's one of the reasons why data is called the new oil.
Data is the New Oil – Importance In the AI Era
The buzzword AI is transforming many industries in the last few years and also helping people from all walks of life in their day-to-day life. The secret behind AI’s empowerment is data.
Data is the backbone of AI because it is the foundation for how AI systems learn, improve over time, and make decisions. One must understand that maintaining data quantity as well as high data quality are both important yet necessary.
If we took real life examples such as Netflix's recommendation engine, Tesla's Autopilot, and Amazon's Alexa, they stand as good examples of AI applications which are totally dependent on high-quality and well managed data.
These developments prove the obvious relationship between data and AI, as better data fuels revolutionary advancement. Hence, data is the new oil, and it is playing a crucial role in the AI era.
Data Related Challenges and Solutions
Data bias
Data bias happens because of different factors, and it results in wrong outcomes from AI models. The solutions like oversampling, fairness-aware algorithms, and under sampling can help with this.
Data quality
Poor data quality directly affects the insights and reliability on analysis. The solution for this is establishing the quality checks for the data and carrying out data cleansing.
Data privacy and compliance
Respecting privacy laws is important for data handling procedures because they demand user permission, encryption, and secure storage.
Conclusion
Data is the soul of AI and ML. Understanding its importance is very crucial for anyone in this field or for one who is seeking knowledge. For the success of AI models' high-quality data is necessary. So, data is the new oil in this AI era.
As proper collection and analysis of data is taking place, the opportunities for innovation and advancement are increasing. So, embrace high-quality data and empower your business.
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