Big Data’s Dangerous New Era of Discrimination; Harvard Business Review, 1/29/14

Michael Schrage, Harvard Business Review; Big Data’s Dangerous New Era of Discrimination:

"But the law, ethics and economics leave unclear where value-added personalization and segmentation end and harmful discrimination begins. Does promotionally privileging gay male customers inherently and unfairly discriminate against their straight counterparts? Is it good business — let alone fair — to withhold special offers from African-American women because, statistically and probabilistically, they are demonstrably less profitable than Asian and Hispanic female customers?

Big Data analytics renders these questions less hypothetical than tactical, practical and strategic. In theory and practice, Big Data digitally transmutes cultural clichés and stereotypes into empirically verifiable data sets. Combine those data with the computational protocols of “Nate Silver-ian” predictive analytics and organizations worldwide have the ability — the obligation? — to innovatively, cost-effectively and profitably segment/discriminate their customers and clients."...

Tomorrow’s Big Data challenge isn’t technical; it’s whether managements have algorithms and analytics that are both fairly transparent and transparently fair. Big Data champions and practitioners had better be discriminating about how discriminating they want to be."