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Why is Data Labeling Necessary and What Does It Entail?

To enable a machine learning model to learn from unlabeled data (such as images, text files, videos, etc.), the field of machine learning relies on a process known as data labelling. For instance, labels might say, if an x-ray shows a tumor or not, which words were spoken in an audio clip, or whether a picture of a bird or an automobile. Data labeling is essential for a number of use cases, including speech recognition, computer vision, and natural language processing.

High precision and quality are characteristics of a good algorithm. The closeness of specific dataset labels to actual locations is referred to as accuracy. A complete dataset’s quality is defined as the level of consistency in accuracy. The training dataset’s quality and any prediction models it is utilized for suffer from errors in data labeling. To counteract this, many organizations adopt a Human-in-the-Loop (HITL) strategy, keeping humans involved in the development and testing of data models at every stage of iterative growth.


What is data labeling used for?

Data labeling is a crucial step in the pre-processing of data for ML, especially for supervised learning, where input and output data are both classified and labeled as outputs to serve as a learning foundation for subsequent data processing. For instance, a system being trained to recognize animals in photographs might be shown a variety of images of various animals so that it can learn the traits that each share in common and accurately recognize the animals in unlabeled images.

Methods of data labeling

A business can categorize and organize its data in a variety of ways. Utilizing internal personnel, crowdsourcing, and data labeling services are all possibilities. Among these choices are the following:

  • Crowdsourcing. An organization can access numerous workers simultaneously using a third-party portal.
  • Contractors. An organization can use temporary independent contractors to process and classify data.
  • Oversaw teams. A managed team can be hired by an organization to process data. A third-party organization trains, assesses, and manages managed teams.
  • Internal personnel. Data processing can be done by an organization using its current workforce.

An efficient machine learning model requires a large quantity of high-quality training data. However, it can be time-consuming, difficult, and costly to collect the training data needed to develop these models. For the vast majority of models developed today, data must be manually labeled by a human in order for the model to develop the ability to make wise decisions. This problem can be solved by utilizing a machine learning model to automatically label data, which will increase the efficiency of labeling.


Why Labeling is Important 

The preparation, cleaning, and labeling of data takes up more than 80% of the time that businesses spend on AI initiatives, according to a new report from an AI research and advisory firm. The most time- and money-consuming option, manual data tagging, may be necessary for critical applications.

To automate decision-making and find new business prospects, more and more companies are implementing AI and machine learning technology. Nonetheless, it’s more complicated than it looks. The data labeling market is anticipated to grow at a tremendous compound annual growth rate (CAGR) of 30% by 2027 to a huge US$5.5 billion in value. Data labeling enables AI and machine learning algorithms to develop an accurate understanding of real-world environments and conditions.


Application stakeholders must understand how confident a model is in its predictions in order to successfully implement AI models in real-world applications. As a result, it is crucial to make sure that employees involved in the labeling process are being evaluated for quality assurance purposes. The root of the problem lies in the labeling of the data.

By following the principle of “garbage in, garbage out,” which states that the quality of the input determines the quality of the output, an AI model has a much higher chance of learning and accomplishing what it is intended to achieve.

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