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The Numerati

Who is using our data and why?

What will the Numerati learn about us as they turn us into dizzying combinations of numbers? First they need to find us. Say you’re a potential SUV shopper in the northern suburbs of New York, or a churchgoing, anti-abortion Democrat in Albuquerque. Maybe you’re a Java programmer ready to relocate to Hyderabad, or a jazz-loving, Chianti-sipping Sagittarius looking for snuggles by the fireplace in Stockholm. Heaven help us: maybe you’re eager to strap bombs to your waist and climb onto a bus. Whatever you are—and each of us is a lot of things—companies and governments want to identify and locate you. Consider this: Google grew into a multi-billion-dollar sensation by helping us find the right Web page. How much more valuable will it be, in every conceivable industry, to find the right person? That information is worth fortunes, and the personal data we throw off draws countless paths straight to our door. Even if you hold back your name, it’s a cinch to find you. A Carnegie Mellon University study recently showed that simply by disclosing gender, birth date, and postal zip code, 87 percent of people in the United States could be pinpointed by name.

The Numerati also want to alter our behavior. If we’re shopping, they want us to buy more. At the workplace, they’re out to boost our productivity. As patients, they want us healthier and cheaper. As companies such as IBM and Amazon roll out early models of us, they can predict our behavior and experiment with us. They can simulate changes in a store or an office and see how we would likely react. And they can attempt to calculate mathematically how to boost our performance. How would shoppers like me respond to a $100 rebate on top-of-the-line Nikon cameras? How much more productive would you be at the office if you had a $600 course on spreadsheets? How would our colleagues cope if the company eliminated our position or folded it into operations in Bangalore? The Numerati will be placing our models in all kinds of scenarios. They’ll try out different medicines or advertisements on us. They’ll see how we might respond to a new exercise regimen or a job transfer to a distant division. We don’t have to participate or even know that our mathematical ghosts are laboring night and day as lab rats. We’ll receive the results of these studies—the optimum course—as helpful suggestions, prescriptions, or marching orders.

The exploding world of data, as we’ll see, is a giant laboratory of human behavior. It’s a test bed for the social sciences, for economic behavior and psychology. Researchers at companies such as Microsoft and Yahoo are busy hiring scientists from fields as diverse as medicine and linguistics to help them grapple with the bits of our lives that are pouring in. These streams of digital data don’t recognize ancient boundaries. They’re defined by algorithms, not disciplines. They can easily cross-fertilize. This means that psychologists, economists, biologists, and computer scientists can collaborate as never before, all of them sifting for answers through countless details of our lives. Jack Einhorn, the chief scientist at a New York media start-up called Inform Technologies, predicts that the great discoveries of the twenty-first century will come from finding patterns in vast archives of data. “The next Jonas Salk will be a mathematician,” he says. “Not a doctor.”

Excerpted from The Numerati by Stephen Baker, copyright © 2008. Reprinted with permission of the publisher, Houghton Mifflin Harcourt Publishing Company. All rights reserved.