Big data: Opportunities, threats

In the 1990S, it was the personal computer. In the 2000s, it was the Internet. And over the past few years, it was social media. Today, however, the tech industry seems to have found its new buzzwords: big data.

Companies use big data to better craft services for their markets that are more segmented than ever. Local government agencies use big data to find ways to ease the flow of traffic in Metro Manila and to track flood-prone areas during storms.

Prism

Even the US government uses big data. It is spying on its citizens as part of the National Security Agency’s highly controversial “Prism” program.

While the Prism scandal in the United States has raised concerns over rights to privacy and security in that country, research firm McKinsey & Co. said these kinds of issues were far outweighed by the benefits that big data can provide.

“There is strong evidence that big data can play a significant economic role to the benefit not only of private commerce but also of national economies and there citizens,” said a McKinsey & Co. report in 2011.

Productivity

“Our research finds that data can create significant value for the world economy, enhancing the productivity and competitiveness of companies and the public sector, and creating substantial economic surplus for consumers,” it added.

Businesses and consumers have a lot to gain from big data, according to Niño Valmonte, marketing director at a Philippine tech firm, IP Converge Data Centers.

“As far as consumers are concerned, it’s natural to think that this [big data] turns us all into mere statistics. But people can get more personalized service from big data,” Valmonte said, citing efforts by many companies to have a better understanding of their respective markets.

Overseas, big data have changed various industries, allowing companies and governments to save massive amounts of money while still improving the way they serve the public.

Healthcare

In the United States, McKinsey said a California-based health-care firm, Kaiser Permanente, was able to identify adverse effects of certain drugs, which were subsequently pulled out of the market.

This was done after the company, using big data applications, found that a certain portion of its customers who used a certain drug saw their health-care costs increase significantly. These adverse effects never showed up in tests before the drug’s introduction into the market.

McKinsey said big data could also help manufacturers improve profit margins and produce better goods for their target markets.

“For example, big data can help manufacturers reduce product development time by 20 to 50 percent and eliminate defects prior to production through simulation and testing,” the report said.

Reducing defects

“Using real-time data, companies can also manage demand planning across extended enterprises and global supply chains, while reducing defects and rework within production plants,” it added.

Filipino technology executives said the growth in big data’s popularity should also spell good news for the Philippines since it would create opportunities that the country could take advantage of.

For instance, Lope Doromal, IBM Philippines chief technologist, said the “digitization of virtually all kinds of data” could be the solution to various problems that haunt Metro Manila.

In other countries, Doromal said IBM had helped governments track telco networks to understand how people move within certain cities. The logic is simple, he said. The area where most phone calls and text messages were being made and sent had the most people in it.

Mass transport

This has helped local government units more efficiently plan mass transport networks to match the needs of certain cities.

He said this could prove to be useful in Metro Manila, a sprawling metropolis where transport networks were designed in the ’70s and, clearly, are no longer adequate to people’s needs.

“One example I can think of is C5,” Doromal said, referring to one of the metropolis’ major thoroughfares. “There are a lot of people who work along C5 or near C5, yet there are no buses or jeepneys there,” he said.

Traffic navigator
Some government agencies have already made use of big data, or at least some semblance of these, to solve basic Metro Manila issues.

One is the Metro Manila Development Authority, which in 2011 launched a desktop and mobile application called the Traffic Navigator or simply TNAV.

TNAV is a real-time visual representation of the traffic situation on major roads, such as Edsa, C-5 and Commonwealth Avenue.

Crowdsourcing

Information on TNAV is mainly taken from live camera feeds on the roads, but the agency also “crowdsources” part of its information. This means it takes traffic reports from ordinary people to make the TNAV more accurate.

For its part, IBM is currently at the forefront of the roll-out of big data technology and applications in the Philippines. In Davao City, IBM recently opened its Intelligent Operations Center—the first of its kind in the country.

The facility, operated in cooperation with Davao’s local government, uses a network of closed-circuit TV cameras to monitor roads and other major public areas.

Anticipating disturbances

Using algorithms and analytics techniques, the facility, in theory, could help Davao’s government anticipate untoward events, such as car accidents or other public disturbances before they occur.

During the midterm elections in May, IBM played a part in helping ABS-CBN, the country’s largest media conglomerate, improve its election coverage using big data and social media analytics.

Over the span of the election campaign, IBM tried to find which candidates were the most popular among social media users. This was done by compiling all tweets on Twitter.com and posts on Facebook.com about the elections.

IBM’s systems studied each tweet and post, even to the point of recognizing sarcasm that could have skewed the numbers, to come up with its own rankings.

Risa, Nancy, social media

Doromal said IBM’s team found that Risa Hontiveros-Baraquel, one of the few administration senatorial candidates who failed to get into the Magic 12 on Election Day, was the most popular and most highly regarded among social media users.

In contrast, Nancy Binay, one of the few opposition senatorial candidates to win a seat, was the most reviled.

Doromal said the disconnect between IBM’s rankings and actual election results was a result of the Philippines’ low Internet penetration. Only one in three Filipinos has access to the web.

Nonetheless, he said the exercise showed what big data could do.

But IBM’s most significant efforts on big data is its investment in analytics, which is expected to create high-paying jobs for countless Filipinos.

Hub for analytics

IBM wants the Philippines to become its global hub for big data analytics, which despite advancements in technology, is still best left to people, not computers.

Earlier this year, the Commission on Higher Education gave the green light for the introduction of new business analytics electives for college-level business administration and IT students.

Done as a result of prodding from IBM, the introduction of the new subjects is seen as a first step to plug the expected global shortage in graduates versed in analytics.

Demand for jobs

McKinsey projects that demand for deep analytical positions in a big-data world could exceed the current supply by 140,000 to 190,000 positions.

“Furthermore, this type of talent is difficult to produce, taking years of training in the case of someone with intrinsic mathematical abilities,” McKinsey said. “We believe that the constraint on this type of talent will be global, with the caveat that some regions may be able to produce the supply that can fill talent gaps in other regions.”

Big Brother

While big data have the potential to help millions around the world, the issue of security is still a main sticking point for many people who fear the rise of “Big Brother.”

McKinsey said many citizens regard big-data collection “with deep suspicion, seeing the data flood as nothing more than an intrusion to their privacy.”

Where and how data are stored is a particularly huge issue for the financial sector, which keeps information that, if stolen, affects customers right where it hurts most

—their wallets.

Regulations

Ronnie Latinazo, country general manager of multinational IT storage firm EMC, said governments around the world had come out with different kinds of regulations to control how banks handle their databases.

“Some governments are imposing taxes on services that are provided from outside their countries,” Latinazo said. He said while this was not an outright ban on storing data in servers overseas, it was an effective way of forcing companies to keep their business within borders.

“This discussion over privacy is a really tricky one,” Latinazo said.

These kinds of legislation could be a stumbling block to the Philippines’ aspiration of becoming a global hub for data analytics. If governments force businesses to keep their data in their own countries, none of the data will get to the Philippines to be analyzed.

Doromal said big data as a concept was going through what other world-changing technologies had to undergo before gaining mainstream acceptability.

“It goes back to the early days of the Internet and e-commerce. A lot of people were saying we couldn’t do anything with Internet banking,” he said. These sentiments, he added, could and should change in due time.