In today’s digital era, information is as valuable as money or energy. Every innovation — from smartphones to artificial intelligence — depends on how effectively we collect, store, and use information.
Understanding the value of information means realizing how raw data becomes something meaningful — leading to knowledge, decisions, and ultimately wisdom.
This chapter explores how information powers communication, supports business decisions, and drives emerging technologies that shape our world.
Data, Information, Knowledge, and Wisdom
Information doesn’t start as information — it begins as data. Let’s break down how this transformation occurs.
| Stage | Description | Example |
|---|---|---|
| Data | Raw, unprocessed facts or symbols. | “90°F” or “15 students.” |
| Information | Data that has been processed and given meaning. | “Today’s temperature is 90°F in Delhi.” |
| Knowledge | Applying information to make a decision or take action. | “It’s too hot; classes should move indoors.” |
| Wisdom | Using knowledge for the greater good or long-term benefit. | “Plant more trees to reduce heat in the city.” |
This progression forms the Data–Information–Knowledge–Wisdom (DIKW) hierarchy — a cycle that helps people and systems learn, adapt, and make better decisions.
- Data → provides input.
- Information → gives meaning.
- Knowledge → guides decisions.
- Wisdom → inspires responsible action.
Information Technology (IT) vs Information Systems (IS)
Both IT and IS are fundamental to managing information, but they have distinct roles.
Information Technology (IT):Refers to the hardware, software, and media used to store, retrieve, organize, and communicate data.
Example: Computers, cloud servers, and databases.
A broader concept that includes technology, people, data, and processes working together to collect, analyze, and distribute information.
Example: A hospital management system combining patient data, staff, and medical tools.
In essence, IT provides the tools, while IS provides the framework for how those tools are used to achieve goals.
The Information Hierarchy and Its Cycle
The hierarchy helps us think about different kinds of systems and how they evolve over time.
As we move upward in the DIKW hierarchy:
- Data elements get connected, forming information.
- Information gains context and meaning, becoming knowledge.
- Knowledge is interpreted and applied, producing wisdom.
- Wisdom, in turn, often reveals the need for more data — restarting the cycle.
This cyclical relationship is how modern organizations continuously learn and adapt.
Information Literacy
Information literacy is the ability to recognize when information is needed and to locate, evaluate, and use it effectively.
It’s not just about finding data online — it’s about understanding how to think critically about it.
For example, when you search the web for “best careers after graduation,” information literacy helps you:
- Identify trustworthy sources.
- Evaluate whether data is up-to-date.
- Interpret information to make a wise choice.
In a world flooded with content, this skill is essential for students, researchers, and professionals alike.
Uses of Information
Every business and organization, regardless of size, depends on information for three major purposes: communication, business processes, and decision-making.
1. Communication
Communication is the process of exchanging information between individuals through symbols, language, or behavior.
In organizations, communication supports:
- Sharing of ideas and knowledge
- Coordinating teamwork and activities
- Reporting progress to stakeholders
Without effective communication, even the most advanced systems fail because data remains isolated instead of shared.
Example: A teacher shares test performance data with students — turning scores into meaningful feedback that encourages improvement.
2. Business Processes
A business process is a coordinated set of activities that lead to a specific outcome or goal.
Information plays a key role at every stage of these processes — from planning and production to sales and feedback.
Example: In an online retail company, order processing involves:
- Collecting customer details (data)
- Confirming payment (information)
- Managing inventory (knowledge)
- Improving service through analytics (wisdom)
Without accurate information, these processes can’t function smoothly.
3. Decision-Making
Every important decision depends on reliable information.
Decision-making involves choosing among alternative courses of action, guided by data and insights.
Whether it’s a student selecting a course or a business investing in a new project — decisions can’t be made without information.
Example: A school decides to add more science sections after analyzing student enrollment data.
Thus, information transforms uncertainty into confidence.
Emerging Technologies that Add Value to Information
Technology continues to evolve, reshaping how information is processed and used.
Here are some of the most transformative innovations:
1. 5G – The Fifth-Generation Cellular Network
5G technology represents a major leap in data transmission — offering faster speeds, broader coverage, and near-instant communication.
- 5G can handle massive amounts of data better than 4G.
- It enables new possibilities like autonomous vehicles, telemedicine, and smart cities.
- Its power lies in the ability to send and receive information rapidly, improving efficiency across sectors.
2. Internet of Things (IoT)
The Internet of Things connects everyday devices — sensors, appliances, and systems — through the internet.
These devices collect data from their surroundings, process it, and send it to computers or cloud systems for analysis.
Example: Smart home devices automatically adjust lighting and temperature using IoT sensors.
IoT helps businesses and individuals make real-time, data-driven decisions — such as monitoring energy use or predicting equipment failures.
3. Artificial Intelligence (AI)
AI refers to technologies that replicate human cognitive abilities such as learning, reasoning, and problem-solving.
AI can analyze huge datasets far faster than humans and uncover hidden patterns.
- In healthcare, AI assists in diagnosing diseases.
- In education, it personalizes learning experiences.
- In business, it automates decision-making.
However, while AI can outperform humans in specific areas, it still struggles with tasks requiring empathy or creativity.
4. Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR)
Virtual Reality (VR): Creates a computer-generated 3D environment that simulates real experiences.Example: Medical students practicing surgeries in a virtual lab.
Example: AR apps that show historical details when you scan monuments.
These technologies, powered by 5G, IoT, and AI, redefine how we experience information — turning data into immersive learning and problem-solving tools.
The Value of Information in Modern Society
Information is now one of the most valuable assets for individuals and organizations.
Here’s why:
- It drives innovation — helping industries design smarter products.
- It reduces uncertainty — enabling better decisions through data insights.
- It builds competitive advantage — companies that use data well outperform others.
From social media algorithms to weather forecasting, every modern achievement is built on the intelligent use of information.
The Two Pillars: Privacy and Openness
While using information, two principles must always be balanced — privacy and openness.
Privacy: Protects individuals’ data and activities during every information transaction.Example: Banking apps use encryption to safeguard user accounts.*
Example: Open-source research allows scientists worldwide to collaborate and innovate faster.*
Balancing these ensures both progress and protection in the information age.
Summary
- Information transforms raw data into knowledge and ultimately wisdom.
- Information literacy empowers us to locate, evaluate, and use data wisely.
- Businesses rely on information for communication, processes, and decision-making.
- Emerging technologies like 5G, IoT, AI, VR, and AR revolutionize how we create and share information.
- Privacy and openness ensure responsible and ethical information use.
FAQs About the Value of Information
1. What is the value of information?
It’s the importance and usefulness of data when transformed into meaningful insights that guide actions and decisions.
2. What is the difference between data and information?
Data are raw facts; information is processed data with context and meaning.
3. What is the DIKW hierarchy?
It’s the model showing how data becomes information, knowledge, and wisdom through interpretation and application.
4. What is information literacy?
The ability to identify when information is needed and use it effectively and ethically.
5. How is information used in business?
It supports communication, guides decision-making, and connects processes for better efficiency.
6. What are emerging technologies related to information?
5G, IoT, AI, VR, and AR — all of which rely on information to function intelligently.
7. Why are privacy and openness both important?
Privacy protects personal information; openness allows knowledge-sharing and innovation.
8. How do AI and IoT add value to data?
They transform raw data into actionable insights, automate decisions, and improve human productivity.
