A Brief History Of Business Information

Introduction

The business information sector is little and poorly known despite being a tool used by most economic agents and playing a significant role in commercial transactions. It is little known because there are not many companies engaged in this activity. As of today, even the most economically developed countries have only two or three agencies. 

In addition to the low visibility of this sector, its lack of definition leads to confusion with other activities. This type of information cannot be compared to industrial espionage, collection services, credit bureaus, private detectives, or rating agencies. Each of these occupations is related to business information, but we have to find a definition for them and find out about their specifications.

First of all, what do we mean by business information? Generally, it could be defined as the information that is useful to make a credit

decision. In other words, to accept a commercial sale transaction or not. 

Secondly, we must differentiate business information from other activities that also handle business data. Industrial espionage consists of illegally obtaining information about a company’s production processes. Debt collection is the activity that allows a company to recover an unfulfilled debt through a third party.

The credit bureau is a company that shares credit information, mainly about individuals and small businesses. Non-contributors cannot access the shared information, which makes it exclusive to its users.  

Rating agencies —also referred to as Credit Rating Agencies (CRA) — rate debts issued by companies. These activities are regulated in Europe(1) since the 2008 financial crisis. The agencies were discredited for their evaluations of structured products during the subprime mortgage crisis and for its alleged speculative role during the Greek debt crisis. 

Commercial information has always had two sides: one, opaque; the other, transparent. The one that is most opaque tends to preserve commercial or industrial exclusivities, including non-legal practices, while transparency boosts credit and brings confidence to transactions. 

Credit—from the Latin term credere, to believe—is based on trust. This requires information-based knowledge. For this reason, the history of business information is intricately linked to that of trade and credit.

Companies and entrepreneurs cannot act without knowledge. Hence, they managed to collect information, whether it was orally, or through writing, personal contacts, family, press or travellers.

However, it was difficult to know about these methods before the 18th century. On the one hand, due to the lack of professionalization of the activity, and on the other hand, because of the lack of documentation in this regard.

The business information activity traces back to ancient times when commerce and credit were born. It developed in the Middle Ages, strengthened during the Renaissance with the evolution of new types of exchanges and, at the end of the 18th century, took a decisive step towards the definition of the profession. The 20th century was the time for the rationalization of the activity and the revolution of work systems as a result of the computerization and the evolution of commercial legislation. 

Credit also evolves as a consequence of the multiplication of trade and, therefore, the diversification of actors. In ancient times, the

number of people who were in contact was relatively small. It increased in the Middle Ages, partly due to the fairs, although it was always in a limited way. The evolution of commerce during the classical period and its great discoveries, along with the Industrial Revolution in the 19th century, encouraged anonymity and the multiplication of transactions. Lastly, the 20th century saw the birth of transactions between companies and individuals who did not know each other; the greatest exponent in this regard might be the Internet.

One might find it curious to observe how the methods used in the past (from the 19th century on) are similar to those developed and used in our time. The collection of reliable data seems to be a long-standing concern, and the methods used—from blacklists to rankings—don’t seem so novel.

It is also interesting to see how the methodology used by information agencies was quickly questioned and criticized. Likewise, commercial offers have not changed so much: for example, fees (subscription system) were already used in the 18th century.

In short, business information has been around for centuries. The developments observed to date resemble a perpetual rethinking of the same situations, as if novelty in the sector arose from adjustments of old elements. However, major crises always lead to disruptions, and it is possible that the sector will change radically in the coming years.

Download here: