You can't let the data defeat you in this digital world


Justin Thomas
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technology

Justin Thomas

The cursor blinks in a vain attempt to attract my attention; my mind has taken flight, giving wing to the wind of imagination. The laptop screen has become a window; I'm gazing across a digital vastness. This unending cyber universe, like its physical counterpart, is expanding with imperceptible rapidity. Global data growth is currently at 60 per cent per annum.

The rapid proliferation of digital devices, combined with ever greater storage capacity, and increasingly sophisticated data processing techniques have all coalesced to make "big data" super relevant. The implications of big data are widespread, and over the coming decades they will increasingly shape the way we live our lives, operate our businesses, and govern our societies. Just as our ancestors pondered the celestial bodies trying to predict portentous events, so too our own awed contemplation of big data is slowly morphing into innovative applications aimed at predicting and explaining human behaviour.

Social psychologists argue that predicting and explaining other people's behaviour is just something we humans do, both naturally and routinely. Like amateur scientists we look at the observable data in other peoples' actions and start to make all kinds of inferences. Many of us will recall eyeing other people's purchases at the checkout, and watching our thoughts run to speculations about what their lives might be like: Hello magazine, beep, three tins of cat food, beep, a 12 pack of red-bull, beep, low-fat vegetarian lasagna, beep. For decades supermarkets have systematically used electronic point of sale data to understand and predict consumer behaviour. Retail giant Walmart knows that a hurricane forecast will increase the sale of "pop tarts", along with other more obvious survival items such as, flashlights and batteries.

But big data is bigger than a single organisation deriving intelligence from it's own monolithic data sources. According to Google executive Megan Smith, big data is increasingly about "adjacency", the idea that we can now combine previously disparate data sources traversing geographic and temporal boundaries. Such combinations can help us look for predictive patterns and relationships in new ways. Imagine having combined access to Amazon account data, and medical health records. Could we predict mortality and morbidity by book choice? Customers who bought the following books also bought book X, and were 25 per cent more likely to suffer from a mental illness. More realistically you might have an online supermarket that could recommend healthier product options based on the individual's health data. Over the long haul we might identify products or product combinations associated with an elevated prevalence for particular illnesses.

Another major development in big data's rise is the recent advances in unstructured data analysis techniques. Such techniques now make it possible to trawl through unstructured data such as text messages, e-mails and even images, to extract meaning and actionable intelligence. This is probably one of the reasons Google's chief economist, Hal Varian suggests; "The sexy job in the next ten years will be statisticians… The ability to take data—to be able to understand it, to process it, to extract value from it, to visualise it, to communicate it."

We can get a foretaste of big data through some of Google's power-user services like Google trends and zeitgeist. These services allow us to see which search terms people are using most frequently. We can also enter our own random terms and see how frequently they've been searched for. The output is ranked by nation, and the trend data for the last seven years is displayed. For example, if we explore the use of "Abu Dhabi" as a search term, we get a list of nations ranked by frequency of search term use. Number one is of course the UAE, followed by Qatar, India, and then Egypt, all easily explicable. The current number five however, is Ireland, a slightly more insightful surprise. The biggest spike in UAE related search volume happened early in 2010 when the world's largest building was opened, and no prizes for guessing when Qatar experienced its largest ever Google search volume spike. For a short time Qatar was actually as popular as Dubai in terms of search volume.

Like it or not, big data is here to stay. This overly helpful guest may occasionally infringe on your privacy, but he always knows exactly what gifts you would like.

Justin Thomas is an assistant professor at Zayed University in Abu Dhabi

The specs

Engine: 0.8-litre four cylinder

Power: 70bhp

Torque: 66Nm

Transmission: four-speed manual

Price: $1,075 new in 1967, now valued at $40,000

On sale: Models from 1966 to 1970

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UAE currency: the story behind the money in your pockets

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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The specs: 2019 Mercedes-Benz C200 Coupe


Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km

UAE currency: the story behind the money in your pockets
Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

The specs

Engine: 3.9-litre twin-turbo V8

Transmission: seven-speed

Power: 720hp

Torque: 770Nm

Price: Dh1,100,000

On sale: now

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