Technological Big Data—the analytical study of huge

Technological change is driven by four forces. First, mobility: an
explosion in the number of points of contact with the internet. The ease of
connectivity multiplies in the “cloud”

And
the weave of connections, interactions, and information brings forth vast
amounts of data in an unstructured form. This information lets us find out what
consumers want, what they buy, what they do. There’s a lot we can learn about
how to improve our performance, provide services, and interact with users. This
is the world of Big Data—the analytical study of huge amounts of information so
as to improve the way we live.

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When
we view these four elements in combination, what we see is not just a connected
or “hyper-connected” world: we also find that increased connection enhances
interaction. The information we share exponentially drives up “digital
density.”1 As the creators of the concept would have it, “digital density”
requires both an increase in the number of connections among agents, and a rise
in the degree of interaction and the volume of information they share. When
these elements come together, “digital density” grows, setting off the
potential for change. The impact of digital density encompasses all sectors of
activity. Yet that impact can be dampened by the specific regulatory
environment. The fewer the regulatory constraints on the network of
connections, the higher the impact. Increased digital density opens the door to
innovation in business models. This is an emerging battleground in a
competitive world.

The Business Model (2)

Let’s
start from the beginning. What is a “business model,” and why has it become
more important nowadays? Every enterprise has a business model, and always has.
A business model is the logic of the enterprise, the way in which it creates
and captures value for its stakeholders.3 So business models have always
existed and always will.

An
example drawn from a bygone era may help us understand this concept—the
underlying logic by which an enterprise “makes money.” Think of the early days
of photography, and, specifically, the Kodak company. At one time photography
was in the hands of professionals who created black-and-white images on a glass
surface. In 1883 George Eastman invented a new process which, he believed, was
revolutionary: transferring the complex chemical process of photography to a
less delicate, more easily handled medium: roll film, first made of paper and
soon to be made of plastic. This marked the emergence of the photographic film
reel as we knew it until the digital revolution. But Eastman’s invention, great
though it was, failed to take off. The quality was not quite as good as that
obtained by the conventional method, so professionals gave the new technology a
miss.

But
Eastman persevered. He realized that, while his innovation was of little use to
established photographers, it might be of interest to a different, so far
unheeded category of consumers. Many households would be keen, he thought, to
memorialize family events by their own hand, easily and cheaply; recourse to a
professional photographer would become the exception. But selling this idea to
the public demanded a different business model. First, Eastman had to make
available a cheap, easy-to-use camera that used the new reel-based technology.
This was something he proved able to develop. Secondly, there had to be a chain
of stores where people could buy the camera and photographic reels, and get
their photographs developed. To put these ideas into practice, in 1888 Eastman
founded Kodak, and created a wide-reaching service chain which over the years
spread around the world. Film reels and development services became available
all over the planet.

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