How Companies Can Use the Data They Collect to Further the Public Good
The potential value of the large data sets being amassed by private companies raises new opportunities and challenges for managers making strategic data decisions. While there are plenty of well-publicized examples of data repurposing gone wrong, it would be a shame for companies to decide that the only option is to hoard their data. Before you decide that your data can’t be put to a new use, consider how it might help augment public data sources. For example, recent research explored the potential for Yelp data to measure local economic change and augment the official data, often from the U.S. census. This speaks to the broader potential for data from online platforms to improve our understanding of all of America. Repurposing data can also have benefits for a company far beyond the warm glow of having done some good. As researchers work with the data, new insights about their data and platform design choices may surface. As policy makers rely on the insights from the data, new relationships can form and facilitate valuable collaborations. Public-facing data efforts can also increase awareness of a company’s brand — allowing companies to do well by doing good.
By the end of 2017, Yelp had amassed more than 140 million reviews of local businesses. While the company’s mission focuses on helping people find local businesses more easily, this wealth of data has the potential to serve other purposes. For instance, Yelp data might help restaurants understand which markets they should consider entering, or whether to add a bar. It can help real estate investors understand where gentrification might occur. And it might help private equity firms with an interest in coffee decide whether to invest in Philz or Blue Bottle.
The potential value of the large data sets being amassed by private companies raises new opportunities and challenges for managers making strategic data decisions. While there are plenty of well-publicized examples of data repurposing gone wrong, we think it would be a shame for companies to decide the only option is to hoard their data. Before you decide that your data can’t be put to a new use, consider how it might help augment public data sources.
For example, in a recent paper, we explored the potential for Yelp data to measure local economic change and augment the official data, often from the U.S. census, which has long been the bread and butter of economic analyses. Our motivation was simple: Census data is valuable but can be slow-moving and coarse. Public-facing census data can tell you whether more restaurants are opening in a ZIP code, but only after several years. Yelp data can tell you, almost in real time, not only whether restaurants are opening in a ZIP code but even whether more-affordable restaurants are opening on a specific block. We found that Yelp data can help to meaningfully predict trends in the local economy well before census data becomes available, especially in more urban, more educated, and wealthier parts of the country.
This speaks to the broader potential for data from online platforms to improve our understanding of all of America. Just as Yelp can shed light on local economic changes, Zillow could inform our understanding of housing markets, LinkedIn could provide insight about labor markets, and Glassdoor could teach us about the quality of employment options in an area. Companies increasingly recognize the possibility of repurposing their data in these ways for the public good. But repurposing data can have benefits for a company far beyond the warm glow of having done some good. As researchers work with the data, new insights about their data and platform design choices may surface.
