Sramana Mitra: I think what made Google happen is their business model innovation.
Radhika Subramanian: It was their business model, but it was also the fact that it was ranked search as opposed to just search. There are some of those parallels here as well. I don’t know how many times we hear this where companies will tell us, “We have this Big Data solution, but it’s manually intensive. The setup is really high.” We often hear, “A lot of these products are software-enabled services. These companies are using software as a way to actually bring you professional services.” The software becomes a way for them to line up 20 to 30 of their people and say, “Well, you’re going to need our people because our people are going to do the data modeling.” That’s not really automation.
As you listen to stories about Big Data solutions, that’s really the hat you need to put on and say, “How hands-free is it really?” The hands-free aspect is what’s going to win. That’s one of the really big trends. At the end of the day, it’s not the data. It’s the use cases. Every sector is emerging with winning use cases.
Sramana Mitra: It’s a combination of application of algorithms to scale business logic. That’s the holy grail of Big Data.
Radhika Subramanian: You’re right. I would probably also add one more thing. If you look at the productivity curves in the United States, we have reached the kind of productivity that is unbelievable. Given a capitalistic society, what is the next thing? The next thing is going to come from innovation from the data. A ton of companies are actually reinventing themselves with what they’re going to do with the data. I’ve seen a manufacturing company that’s changing from a manufacturing company to a data company. I think we’re going to see a ton of data companies. There will be people who will be selling their data, analyzing the data, and distributing data. They see this as a next frontier to compete on. That’s probably another part of the shift. We’ll start a whole new set of productivity curves.
Sramana Mitra: Absolutely. I recently did a story along these lines where this also was part of the discussion. There is a body of research that has come out of MIT’s Sloan School Erik Brynjolfsson and Andrew McAfee. They’re talking about, for the first time in history, productivity and technological innovation is not spurring job growth. It’s a jobless productivity and prosperity gain. It’s displacing the middle class. The more automation and the more algorithmic business decision making becomes, the less labor intensive it becomes as well.
Radhika Subramanian: You’re absolutely right. One of my real passions is to really go back into education and really figure out how to educate our youth to guide them to this new economy. The country is in dire need of that.
Sramana Mitra: It’s going to be a tough next 20 years of technological innovation. Unfortunately, I think it’s not a job creation phase of technological innovation.
Radhika Subramanian: The reason I love manufacturing is its multiplicative index, which is for every dollar you spend, the result in the economy is seven. It is huge. Technology is exactly the opposite. Then you look at Big Data, it’s even less. We are heading in a different direction, which makes you wonder what the kids are going to do.