An abundance of information
The world’s most valuable resource is no longer oil, but data¹.
More than 3.6 billion people are using social media platforms worldwide to communicate with others and share content continually². Over 9,000 Tweets are sent on average every second³ - new information that may be useful to local or even global communities, such as great acts of kindness, natural disasters or accidents, financial events or political affairs.
The amount of data in the world has reached 59 Zettabytes in 2020 and is growing exponentially . Just think about it: one Zettabyte amounts to roughly a billion times your personal computer's storage capacity. But it does not stop here: experts forecasted that by the end of 2021, there would be approximately 75 Zettabytes of data throughout the World Wide Web⁴.
With the global pandemic, people are generating even more data and utilising different ways to communicate and share information. This has made it increasingly difficult for individuals to digest all the information generated on any particular subject, in order to gain insight or competitive edge. Therefore, there is increasing reliance on using technology to gather, process and distil content in bite-sized chunks.
Automating information consumption
Think about how much data your organisation consumes and generates. How would you make your decisions if you were able to gain insight into all your data and the public data at a touch of a button?
The solution is Artificial intelligence (AI) - the overarching science of enabling computers to make decisions by themselves. The field has seen an exponential growth of applications in the past decade, becoming one of the leading technological tools capable of automatically analysing user-generated content and compressing it into more condensed representations that humans can explore for various purposes.
Web scrapers, such as Webscraper.io or Data-Miner.io, are just one example of technology used for web data extraction and harvesting. Through a personal computer or professional Cloud services, these tools enable anyone to automatically extract data from various sources over the Internet and convert it into a format that can be used for analysis. But this still leaves us with a great deal of data to process: what about asking the computer to come up with comprehensive answers to our questions, instead of just printing 42 as in Douglas Adams' portrayal of AI⁵?
For decades, AI researchers have been working tirelessly on the challenges posed by building machines that can learn to read, interpret and understand natural language, especially in the form of text⁶. An important aim for this technology is to crunch vast amounts of data to solve complex tasks with minimal human intervention. Machine Learning (ML) is the sub-field of AI that deals with designing algorithms that learn to automatically organise data into meaningful groups (i.e. clustering), assign categories or labels to data (i.e. classification), predict future values or events (i.e. regression), or even find strategies to solve specific tasks (i.e. reinforcement learning).
After extracting information from websites, social media or news headlines using tools like web scrapers, the resulting data can then be used in combination with ML to extract useful knowledge, draw conclusions or make predictions⁷. For example, train a ML model to predict whether a tweet is written positively or negatively (and identify irony), and you can tell whether people are for or against a topic just by monitoring their social media activity automatically. Teach the ML algorithm to detect references to stocks and companies, and you can extract investment trends or hypes. While the training process is standard procedure in ML, gathering enough data and being able to obtain accurate results in the real world is no easy feat as this requires the collective effort of teams of researchers and engineers to enable these models to scale up to the task. These tools allow the system to automatically trigger alerts if it detects anomalies that can affect your investments, giving you more control over your business strategy and decision-making.
Anticipating market swings
To understand why timely information is essential, let's look at what happened with GameStop⁴. Using social media communications on Reddit, Twitter, and other platforms, a community of thousands of amateur traders focused their investments on a number of stocks affected by destructive short-selling practices. The decentralised coalition produced a visible impact on the stock market in a matter of hours, the like of which has never been seen before.
Being part of a specific community gives members direct access to strategic data. Still, it is much more challenging for third-parties to obtain the information as it unravels, which can lead to losses due to reacting too late to a situation. Technologies that automate information extraction can play a crucial role in such scenarios where reaction time is essential. Could this have been anticipated right from the beginning? Possibly, but not without the help of technology.
The impact on your business
Relying on such tools give companies a competitive advantage - enabling them to harness information from a vast number of sources to improve their client experience or enhance the technology they are developing. Fast information gathering plays a vital role in decision-making, and the financial markets are but one example of fast-changing dynamics.
Technologies that automate information consumption can play a crucial role in such scenarios where reaction time is essential - among others, Bloomberg or Dataminr have turned this into a business model. But the data generated by your own organisation can also hold important information that can lead to better business decisions.
Investing in technological R&D gives businesses the ability to be one step ahead of their competition by making faster, well-informed decisions, building better products and nurturing both their clients and employees. From a different angle, as AI is becoming more pervasive in the business sector, competition will act as a catalyst for its adoption. Companies that do not invest in R&D will find it increasingly difficult to outperform competitors who are investing in technological advances. Not only is R&D becoming a necessity, but your hard work can be rewarded through tax credits and refunds.
Are you using your own data to its fullest potential?
How BDO can help
We understand how important it is to leverage and improve existing technological advancements in order to enhance profitability and drive economic growth in our clients’ businesses. Our Innovation & Technology team has a wide range of expertise that ensures concise communication and the ability to understand and identify ambitious research and development projects and the potential for tax relief for R&D investments.
References:
[1] Economist.com - The World's most valuable resource is no longer oil but data
[2] Statista.com - Number of social network users worldwide from 2017 to 2025
[4] Statista.com - World wide data created
[5] ADAMS, D. (1979). The Hitchhiker's guide to the galaxy
[6] HASAN, M., ORGUN, M. A. AND SCHWITTER, R. (2018) ‘A Survey on real-time event detection from the Twitter Data stream', Journal of Information Science, 44(4), PP. 443–463. DOI: 10.1177/0165551517698564.
[7] OTTER, D.W., MEDINA, J.R. AND KALITA, J.K., 2020. A Survey of the usages of deep learning for natural language processing, IEEE Transaction on Neural networks and learnign systems.
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