Data Capitalism: The Extraction and Exploitation of Raw Data in the 21st Century

Introduction

Capitalism, when faced with a crisis, tends to restructure itself. New technologies, organizational forms, modes of exploitation, types of jobs, and markets emerge to create new ways of accumulating capital.

The Rise of the Cognitive Economy

The dominant narrative in advanced capitalist countries has been one of change, particularly focusing on the rise of technology: automation, the sharing economy, and the internet of things. Theorists argue that these changes have led to a cognitive, informational, or knowledge economy.

Data as the New Raw Material

A key argument of this chapter is that in the twenty-first century, advanced capitalism has come to be centered upon extracting and using a particular kind of raw material: data. Data (information that something happened) is distinguished from knowledge (information about why something happened). Most data must be cleaned and organized into standardized formats to be usable.

The Problem for Capitalist Firms

The problem for capitalist firms that continues to the present day is that old business models were not designed to extract and use data. Their method of operating was to produce a good in a factory where most of the information was lost, then sell it, and never learn anything about the customer or how the product was being used.

Advertising Platforms

The elders of this new enterprise form, advertising platforms, are the initial attempts at building a model adequate to the digital age. One aspect of it was that many competitors collapsed, leaving the various areas of the tech industry increasingly under the control of the remaining enterprises. The other important consequence of the bust was that the drying up of VC and equity financing placed new pressure on internet-based companies to generate revenues.

Cloud Platforms

If advertising platforms like Google and Facebook laid the groundwork for extracting and using massive amounts of data, then the emerging cloud platforms are the step that has consolidated the platform as a unique and powerful business model.

Conclusion

Advertising platforms and cloud platforms are currently the most successful of the new platform businesses, with high revenues, significant profits, and a vigorous dynamism.