Anticipating customers' needs by sussing out patterns of behavior requires sophisticated analytical technology, and that technology requires mountains of customer data to analyze. Where does that data come from? More importantly: To whom does it belong?

The first equation of "The New Age Of Innovation" formula is this: N = 1. It refers to the concept of "co-creating" value with your customers on an individual basis. Authors Prahalad and Krishnan point out that that process of value creation depends on companies proactively researching and analyzing customers, on a micro level, and, on a macro level, consumer and supply chain trends.

Foresight is a result of understanding, through structured and unstructured data, the unfolding of competitive dynamics. There is value in identifying new patterns of relationships, predicting the behavior and evolution of systems, and mitigating risk. In an N = 1 world, the behavior of individual consumers must be understood as well as broad patterns of change.

That requires data -- lots of it. As we've learned over the last few years, the Internet is tailor-made for collecting data. Every path we take, every word we search, every connection we make on the Internet is logged somewhere. Google has made a tremendously successful business out of it already.

Bits, the blog site of the New York Times, has run a couple of blogs recently about a brewing fight over Web users' data ( "The Mother Of All Privacy Battles," "Can An Eavesdropper Protect Your Privacy?") The short version is this: Several companies are attempting to strike deals with Internet Service Providers (ISPs) to place software on their servers to grab Internet user data before anybody else does.

There will be a business fight here. These new companies want to use ISPs to gather data about what users read and what they search for that Web sites and search engines believe that they own.

The Times writer, Saul Hansell, correctly predicts that there will be consumer privacy concerns kicked up over this. But these issues already were moving along the privacy continuum; they've been gaining steam (slowly, ever so slowly) since marketers first started using public data to propagate junk mail, then marketing phone calls, then spam e-mail. Legislators are finally waking up to the increasing anger and frustration of consumers -- and the potential political hay that makes for -- over these accelerating trends.

But that's not the half of it. The business fight over this data is only just beginning. As more companies wake up to the changing business model represented by N = 1, customer data will become coin of the realm, the mother lode companies will be mining for. The battles over that valuable resource will increase, as companies look to wring insights that will lead to innovative products, services, and business models, from as much data as they can lay their hands on about their customers.