Strive to get higher on the Data -> Wisdom Continuum — another key tenet
According to information theory and knowledge theory, there are five levels in the information hierarchy. The levels are arranged in increasing order of understanding and abstraction. We will use examples from an online movie rental company. Here are the 5 levels:
Data are individual facts, statistics, or items of information. They are raw and without some transformation they are of limited use. Typically, these items have not yet been associated with a higher-level data-type.
Examples:
1. 54000
2. “A beautiful mind”
3. “Gladiator”
4. “Julie”
5. 1/22/2006
Information is data that has been given meaning by way of one or more relational connection. Typically, the data is cast to a higher-level data type such as address, phone number… and some connections with other pieces of information are made.
Examples:
1. $54,000 is Julie’s bank balance (there are 3 relationships here — currency, bank balance and the relation that it is Julie’s bank balance)
2. “A beautiful mind” is the name of a movie.
3. “Gladiator” is the name of a movie.
4. “Julie” is the name of a customer.
5. 1/22/2006 is the date Julie rented these 2 movies.
Knowledge is a collection of information that is arranged in a useful manner. By understanding patterns in information, we can attain knowledge. Knowledge differs from data or information in that new knowledge may be created from existing knowledge using logical inference (Kepler’s law can be derived from Newton’s Laws of Gravitation).
Examples:
1. Julie’s bank balance of $54,000 is a lot more than she expected.
2. Maybe, Julie likes Russell Crowe?
3. Movie Rentals spike in Jan/Feb but movie sales don’t spike (we get this from looking at broader information or deeper information).
4. A set of 200 movies seem to stand out. Most users are going for movies in this set.
Understanding is a process by which one discerns the reasons for the existence of patterns. The difference between understanding and knowledge is the difference between “learning” and “memorizing”.
Examples:
1. Julie looks into her bank transactions and notices that there is a deposit for $49,000 from someone she does not know. This is why her bank balance is so high.
2. Oscar Awards are given out in Feb. The nominations are made public is Jan. The wide publicity given to Oscars is the reason why there is an interest in a set of movies (which are either nominated or contain nominees)
Wisdom is a state of the mind when one grasps the principles that explain the observed effects. Wisdom is usually achieved over a long-time span. Computers can rarely, if ever, attain wisdom. Once one has wisdom, they can apply their learned-principles to other domains.
Examples:
1. It’s wise for Julie not to spend the money that does not belong to her. She now knows the principle “live within your means”.
2. Online movie rental companies should stock up on movie on the Oscar list.
3. Buying rights to potential Oscar movies could be profitable.
4. Other media Sales (like music sales) seem to exhibit similar behavior around Grammy’s. Expand business from movie rentals to music rental/sales?
5. High demand for certain entertainment at certain times could be leveraged to customize content users see.
Wisdom and understanding can typically be applied to the future. Data, Information and Knowledge are mostly past-facing. On a related note, Intelligence is the compassionate use of knowledge and understanding.
References
[1] Data, Information, Knowledge and Wisdom by Gene Bellinger, Durval Castro, Anthony Mills
[2] Data, Information, Knowledge and Wisdom (author unknown)
