Application of technologies associated with big data in economic activity.

Large number businesses in 21st century started producing huge sets of

data without efficient ways to analyse it. Up until recently one could analyse and
process only small amounts of data. Thanks to the advancements in IT and
introduction of several software solutions to problems with large databases, big
data analysis started to play increasingly large role in our world. The IT sector
pioneered its uses but recently more and more of different companies started to
harness its power.
Big data is a term used to characterize datasets which sizes are greater
than typical databases ability to capture, store and analyse. There are three
fundamental problems with it: volume, velocity and variety. Volume represents
the sheer number of items in the set. Twitter alone creates more than 7
terabytes (1TB is 1000 terabytes or 1012 bytes) of data every day and some firms
generate 1TB of data every hour (Eaton et al 2012, p. 5). Another problem is the
velocity. One could in theory analyse terabytes of data, however, by the time of
completion, the results would already be useless due to the time associated with
the analysis. Variety is also an issue with the data. Big data often comes in
structured, semi-structured and unstructured form. Firms capture data from
emails, documents, sensors and webpages just to name a few. Thanks to
developments in IT and introduction of software such as Hadoop one may now
overcome those problems, and it enables businesses to harness the power of
data to its full potential. Decisions based on a huge amount of data by logic
should always be more precise than those based on small amounts. On a typical
oil drilling platform there are somewhere between 20 000 and 40 000 of sensors.
Some of those sensors are only active in special circumstances but some other
sensors stream data several times per second. Those sensors measure various
parameters such as efficiency or structural integrity just to name a few. From this
whole range of sensors only about 5 to 10 percent are actively used (Eaton et al
2012, p. 31). With big data one could utilize all of those sensors with positive
value added to the operations and almost guaranteed efficiency improvements.
There is a huge possibility of growth with 2011 McKinsey Global Institute report
(p. 7) estimating between 150 and 300 billion euros potential gains in EU public
sector, 60% potential increase in retailers operating margins and $600 billion
consumer surplus. All this potential value can be unlocked with usage of several
big data techniques, and its application to real situations. There are also several
universal methods, which can be applied to just about any corporation, to save
costs or make more informed decisions.
Big data has been successfully used in the past couple of years with great
successes. Not that long ago information about the discovery of the Higgs boson
gained huge publicity. This great scientific success was made possible because of
big data approach. This elementary particle was identified by analysis of huge
sets of data in a distributed network. Big data above all allows improving
efficiency of processes and quality of decisions. Vestas is a Danish company

heavily involved in development, manufacturing, sale and maintenance of wind

farms. Wind turbines are a huge investment of millions of pounds and a 20-30
year old lifespan. It is essential to place them in the exact place where it can be
used most efficiently. The location is determined using several factors and is
considered to be a big data problem. Vestas uses IBMs big data technology to
get the most out of wind turbine location analysis. It is estimated to require 6
petabytes (1 petabyte is equivalent to 1000 TB) of data in its final form (Eaton
2012, p. 32).
Big data gives many opportunities to enhance business performance or
generally performance of any huge organization. Thanks to newfound ways of
making three V problems obsolete (variety, volume and velocity), more and more
companies are investing in enhancing their IT departments, in order to solve
problems like never before. Similarly as sciences and IT firms can use the power
of the data, more traditional firms in the economy can do the same and create
comparative advantage over competitors.

References:
Eaton, C., Zikopoulos, P., deRoos, D., Deutsch, T., Lapis, G. (2012) Understanding
Big Data, 1st edn. McGraw-Hill [Online]. Available at:
http://public.dhe.ibm.com/common/ssi/ecm/en/iml14296usen/IML14296USEN.PD
F [Accessed: 5.02.2014].
McKinsey Global Institute (2011) Big Data: The next frontier for innovation,
competition and productivity [Online] Available at:
http://www.mckinsey.com/insights/business_technology/big_data_the_next_fronti
er_for_innovation [Accessed: 5.02.2014].