Data Is the New Oil. So Why Are You Giving Yours Away for Free?

There's a phrase I've heard in more conference keynotes than I can count. Someone walks out, clicks to a slide with a dramatic oil derrick on it, and says it like it's a revelation: "Data is the new oil."

The room nods. Somebody tweets it. And almost nobody asks the follow-up question I can't stop asking.

If data is the new oil, why are most of us giving ours away for free?

Who actually said it

The line is usually credited to Clive Humby, a British mathematician who co-founded the data science company dunnhumby and helped build the Tesco Clubcard, one of the first mass loyalty programs (Wikipedia). He's credited with coining it in 2006. The UK Information Commissioner's Office describes it as the title of a speech he gave at an Association of National Advertisers conference that year (ICO), and the University of Sheffield, where he holds an honorary role, credits him with it too (University of Sheffield).

Think about where he was coming from. A loyalty card is a machine for turning what you buy into data about you. The man who popularized "data is the new oil" knew exactly where the oil came from. It came from shoppers.

What he actually meant

Here's the part that usually gets cut from the slide. The full idea, as it's been quoted for years, goes like this: data is "valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value" (The Atlantic, TED Ideas).

That's a point about refining, and honestly, it's the truest thing in the whole slogan. Raw data is crude. A spreadsheet full of typos, duplicates and three different spellings of the same city is worth close to nothing. Clean, connected, well-understood data is worth a fortune. That's my whole job, and it's the whole reason I keep telling organizations to build a data house before they buy AI.

As the writer James Bridle put it, that emphasis on the work of making information useful "has been lost over the years" (TED Ideas). The refinery dropped out of the metaphor. Only the gusher stayed.

Then The Economist made it official

In May 2017, The Economist ran a cover story with a headline that turned the slogan into conventional wisdom: "The world's most valuable resource is no longer oil, but data" (The Economist). It pointed out that Alphabet, Amazon, Apple, Facebook and Microsoft had become the five most valuable listed companies in the world, and that many of their services were free because, in its words, users "pay, in effect, by handing over yet more data" (The Economist, via MAGNiTT).

Read that again. Users pay by handing over data. That's the deal. It's just rarely said that plainly.

Where the metaphor gets it right

• It's where the money is. The most valuable companies of this era are built on data, the way the most valuable companies of the last century were built on oil.
• It needs refining. Raw data has to be cleaned and analyzed before it's worth anything. That part was Humby's real insight.
• Whoever controls the supply has power. The Economist's whole argument was about antitrust, the same fight people had with Standard Oil a century ago.

Where it gets it badly wrong

This is where I part ways with the keynote slide.

Oil gets used up. Data doesn't. Burn a gallon of gas and it's gone. Use a dataset and it's still there. It can be sold to ten companies at once, and every one of them gets the whole thing.

Data gets more valuable when you combine it. Your location alone is a dot on a map. Your location plus your purchases plus your search history is a profile that can predict your next move. That's exactly how data brokers make money.

Oil doesn't have feelings. A barrel of crude doesn't get harassed, discriminated against or scammed. Data about people can be used to do all three. A leak of oil is an environmental disaster. A leak of data is a disaster for every person in it, and it never really gets cleaned up.

And here's the big one: oil has an owner who gets paid. When someone drills on your land, you get a royalty check. When a company collects your data, you usually get a free app.

So why are we giving it away for free?

Because the deal is designed that way. Free search, free email, free maps, free social media, free loyalty points. Each one is a fair-seeming trade until you add up what's going out the other side: where you go, what you buy, who you know, what you're worried about at 2 a.m.

I don't think the answer is to throw your phone in Lake Washington. I use these tools every day. The answer is to stop pretending the trade is free, and to take back the parts you can:

• Opt out of people-search sites. It's free, and my step-by-step data broker guide has the direct links.
• Turn off what you don't need. Ad personalization, location history and "while using" location permissions for apps that don't need it.
• Read the parts of privacy policies that matter. You don't need all forty pages. I showed how to do it in five minutes.
• Know your rights. If you're in Washington, the My Health My Data Act gives you real power over health data, and you can sue under it.
• Push for better rules. Washington still doesn't have a comprehensive privacy law. I wrote about that gap and why it matters here more than almost anywhere.

The version I'd put on a slide

If I got to rewrite the slogan, it would be two lines.

Data is the new oil. So why are you giving yours away for free?

I liked it enough that I put it on a shirt. It's in the Hot Takes collection in our shop, front and back, along with a few other things everyone in data is thinking and almost nobody says out loud. Wear it to the next keynote and see who asks you about the back.