The next raw material of great value and the inference of probabilities. 

In the future we will witness data becoming a raw material for business, in effect a vital economic input used to create a new form of economic value. Much like copper is now to the Resource companies. 

In a world of “big data” everything of value changes again. The value of data shifts from it’s current and primary use to the potential of it’s future use. The consequences of this are so profound that it is not yet even understood by most. (Google gets it, as does Amazon). 

It will have a huge impact on how companies and businesses value the data they have accumulated and hold and will create a rethink on who then has access to this data. 

It is the big enabler of the future of business and will force companies to change their business models. Investors large and small will begin to factor in “an option value” of the data that a company has accumulated. Share prices may increase for those businesses that have data or are able to easily collect and collate. 

By way of example MasterCard has a division called MasterCard Advisors, which aggregates and analyses 65 billion transactions from 1.5 billion cardholders in 210 countries in order to analyze trends and opportunities. It then sells this information to other parties. 

By way of illustration MasterCard discovered that if people fill up their petrol tanks at around 4 o’clock in the afternoon, they are then likely to spend between $35.00 and $50.00 dollars in the next hour at a grocery store or restaurant. A marketing company can then use these insights to tailor specific offers for nearby supermarkets or other businesses. 

In the US a company called Inrix predicted prior to the recession in the US that because it’s traffic analysis showed that their was less traffic on the road that retail sales would slow and unemployment would increase, this was despite the denials of the Government and Politicians. The company also sells data on traffic patterns around retail outlets and areas in order to predict whether sales are increasing or decreasing, as more traffic in areas would correlate with better sales.

Consider the data generation capabilities of Amazon and Google for example; their competitive advantage would suggest continued success and further support for the share prices of these companies. 

Which Australian companies fit this scenario? Look to accumulate a portfolio of "Data Collectors".

Simon Bond