The Big Data Boom Is the Innovation Story of Our Time

Innovation and Economic Growth

Article Snapshot

Author(s)

Erik Brynjolfsson and Andrew McAfee

Source

The Atlantic, November 21, 2011

Summary

This article provides a lay summary of recent developments in business uses of big data sets.

Policy Relevance

Governments could utilize methods employing large-scale data analysis and experimentation to improve their efficiency and provide better services to constituents.

Main Points

  • Information technology permits businesses to track an immense quantity of customer behavior, cheaply.
    • For example, a web site operated by a business is likely to track click patters, search terms, and purchases.
       
    • Businesses can also track their internal operations; for example, UPS collects information about delivery times and truck routes.
       
  • Large quantities of data enable good prediction, but these data can be exploited further by arranging for experiments.
    • For example, Amazon.com may display different home pages to different groups of visitors, and Google typically runs more than 100 experiments daily across its products.
       
  • The value of experiments is further increased by increasing their scale and breadth.
     

 

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