As we connect more devices, share our opinions on more social platforms and attach more sensors to our bodies, we are generating slivers of economic value that only become worth something in aggregate. This is both the privacy and economic challenge of the internet of things. But as a story about big data and farming from the Wall Street Journal shows, the value of this data is currently accruing more to big firms than the people offering it up.
The story in the Journal discusses how the agricultural industry is using data gleaned by farmers about their fields and crops to then offer prescriptive plantings. As we covered when Monsanto purchased Climate Corp. last year, or in a chat at our Structure Connect (formerly Mobilize) conference connectivity and data are changing the agricultural landscape. But the challenge can be summed up by this quote from a soybean farmer:
Jerry Demmer, a 61-year-old corn and soybean farmer near Albert Lea, Minn., is thinking about trying a data-analysis service but has “tossed and turned” over who will control the information. “It’s our data,” Mr. Demmer says, but “I’m not sure how we’re going to protect that.”
I worry about this too, when I’m thinking about sharing my fitness data or connecting my home. The problem is that alone, that information has little value. It takes additional data or a well-developed set of algorithms to go from “Stacey turns on her A/C every day at 5 p.m.” to building a demand-response system that can help reduce power consumption. In farming, data about one person’s fields or crop performance is just another point in a constellation of information that will lead to insights that can improve planting schedules across a geographic region.
So Demmer’s concerns are valid, and any industry that wants to use data to build a service should focus on them — attempting to offer incentives for the individual’s data and also letting the individual control their data should they feel like the value they are getting from the service decreases. In farming, the idea is that farmers make more money via efficient planting, although in a commodity business greater efficiencies tend to lower prices over time. Farmers must also trust the companies they are sharing this information with. Trust that the information-sharing benefits them and won’t be used against them later on.
The future of innovation and economic growth may very well be tied up in broader data-sharing efforts, but if a few players skim off those gains without spreading the benefits around, the incentive to share that data will dry up. We’ll have to work on getting the economic incentives right, and they will likely shift over time. Connecting things and data analytics is hard, but the economics may be harder.
We’ll talk about this and other relevant issues around using data in your business at our Structure Data conference March 19 and 20 in New York.