The story is similar in fields as varied as science and sports, advertising and public health — a drift toward data-driven discovery and decision-making. “It’s a revolution,” says Gary King, director of Harvard’s Institute for Quantitative Social Science. “We’re really just getting under way. But the march of quantification, made possible by enormous new sources of data, will sweep through academia, business and government. There is no area that is going to be untouched.” Welcome to the Age of Big Data. The new megarich of Silicon Valley, first at Google and now Facebook, are masters at harnessing the data of the Web — online searches, posts and messages — with Internet advertising. At the World Economic Forum last month in Davos, Switzerland, Big Data was a marquee topic. A report by the forum, “Big Data, Big Impact,” declared data a new class of economic asset, like currency or gold. Research by Professor Brynjolfsson and two other colleagues, published last year, suggests that data-guided management is spreading across corporate America and starting to pay off. They studied 179 large companies and found that those adopting “data-driven decision making” achieved productivity gains that were 5 percent to 6 percent higher than other factors could explain. Global Pulse, a new initiative by the United Nations, wants to leverage Big Data for global development. The group will conduct so-called sentiment analysis of messages in social networks and text messages — using natural-language deciphering software — to help predict job losses, spending reductions or disease outbreaks in a given region. The goal is to use digital early-warning signals to guide assistance programs in advance to, for example, prevent a region from slipping back into poverty. In economic forecasting, research has shown that trends in increasing or decreasing volumes of housing-related search queries in Google are a more accurate predictor of house sales in the next quarter than the forecasts of real estate economists. The Federal Reserve, among others, has taken notice. In July, the National Bureau of Economic Research is holding a workshop on “Opportunities in Big Data” and its implications for the economics profession.But data offers perils too,
Big Data also supplies more raw material for statistical shenanigans and biased fact-finding excursions. It offers a high-tech twist on an old trick: I know the facts, now let’s find ’em. That is, says Rebecca Goldin, a mathematician at George Mason University, “one of the most pernicious uses of data.” Veteran data analysts tell of friends who were long bored by discussions of their work but now are suddenly curious. “Moneyball” helped, they say, but things have gone way beyond that. “The culture has changed,” says Andrew Gelman, a statistician and political scientist at Columbia University. “There is this idea that numbers and statistics are interesting and fun. It’s cool now.”Everyone is talking about data.