Awaiting the second big data revolution

“Big data” has been heralded as the agent of a third industrial revolution–one with raw materials measured in bits, rather than tons of steel or barrels of oil. Yet the industrial revolution transformed not just how firms made things, but the fundamental approach to value creation in industrial economies. To date, big data has not achieved this distinction. Instead, today’s successful big data business models largely use data to scale old modes of value creation, rather than invent new ones altogether. Moreover, today’s big data cannot deliver the promised revolution. In this way, today’s big data landscape resembles the early phases of the first industrial revolution, rather than the culmination of the second a century later. Realizing the second big data revolution will require fundamentally different kinds of data, different innovations, and different business models than those seen to date. That fact has profound consequences for the kinds of investments and innovations firms must seek, and the economic, political, and social consequences that those innovations portend. ∗Copyright 2014 Mark Huberty †Prepared for the 2013 BRIE-ETLA Conference, September 6-7, Claremont California. This paper has benefited from extended discussions with Cathrn Carson, Drew Conway, Chris Diehl, Stu Feldman, David Gutelius, Jonathan Murray, Joseph Reisinger, Sean Taylor, Georg Zachmann, and John Zysman. All errors commmitted, and opinions expressed, remain solely my own.