Big data

The UK economy could gain £216bn through the better management.

As the amount of data continues to grow exponentially, compounded by the internet, social media, cloud computing and mobile devices, it poses both a challenge and an opportunity for organisations – how to manage, analyse and make use of the ever-increasing amount of data being generated.

In an economic study on ‘big data’ by the Centre for Economics and Business Research (Cebr), sponsored by business analytics company SAS UK, we investigated how UK organisations, both public and private, can unlock the economic value of big data through the adoption of analytics.

The results show that ‘Data Equity’ – the economic value of data – has the potential be worth £216bn to the UK economy over the next five years – equivalent to more than the current defence, NHS and education and budgets combined.

The benefits of data equity are expected to manifest themselves in the creation of new jobs – Cebr predict that 58,000 could be created as a result of the entry to markets of new businesses, through which the business creation benefits are derived.

Business creation benefits and could raise employment as the result of new business start-ups and increased demand for data-specific roles. Improvements in market and customer intelligence in every sector will support entrepreneurial activity, allowing for more precise strategising and reduced uncertainty, therefore attracting new business start-ups into these markets.

The main efficiency gain is contributed through improvements to customer intelligence. Data-driven improvements in targeted customer marketing, the more effective meeting of demand and the analytical evaluation of customer behaviour is forecast to produce £74 billion in benefits over the next five years – the majority being driven by UK manufacturing (£45bn) and retail (£32bn).

We expect the manufacturing sector to see the largest innovation gain from the adoption of big data analytics. The utilisation of high-performance analytics could lead to new product development benefits of £8 billion in increased output over the next five years. The retail sector can also experience significant gains through innovation such as new consumer products which are expected to induce a £3 billion rise in output.

There is also much value to be unlocked from supply chain and logistical data. Cebr anticipates £46 billion in gains through using predictive analytics to better forecast demand, replenishment points and optimise stock and resource allocation to reduce costs.

The public sector is another key gainer. Government could save £2 billion in fraud detection and generation £4 billion through better performance management. A further £6 billion in efficiencies could be gained by analysing performance data, with the healthcare system benefiting by £2 billion.

This enhanced information, and ability to react dynamically to changes in the market landscape, will enable smaller businesses to compete more effectively with larger and more established ones, having reduced barriers to entry. Small retailers and manufacturers are anticipated to take significant advantage of this big data opportunity, generating £15 billion of new business.

Job creation is a key aspect of the report and experts agree that data equity has the potential to be as important to organisations as brand equity. As a result there is an increasing demand for ‘data scientists’ – highly skilled statisticians who work with data to derive business insights. We are already seeing the emergence of the Chief Data Officer in the US as organisations look to capitalise on their data equity for a competitive advantage, and it won’t be long until that trend crosses the pond.

But currently demand for data scientists outstrips supply, with the UK facing a particularly acute skills gap when it comes to science, technology, engineering and mathematics (STEM) subjects. This emphasises the need to teach high quality STEM skills at school and university to prepare the next generation of graduates for the big wide world of data.

As the volume of data created exponentially increases and big data’s value is unlocked to greater effect by technological advances, we would expect data to start appearing on the balance sheets of companies that begin to realise its value in financial terms. Furthermore, the efficiency and innovation gains generated from data-driven technologies can play a vital role in ensuring the competitiveness of the UK’s goods and services on the global stage, and thus generate a wider economic benefit beyond the value of the significant asset to its owner.

Tapping into the dizzying amount of big data could be the stimulus the UK economy has been searching for. High performance analytics has the power unlike any other technology to generate growth, reduce debt, create jobs, develop new innovations and deliver greater operational efficiencies. Organisations, large or small, government or commercial, must get to grips with the big data challenge, and use analytics to identify tomorrow’s opportunities.

Big Data: A man inspects a supercomputer in Paris. Credit: Getty

Shehan Mohamed is an economist at the Centre for Economics and Business Research and Andy Cutler is the head of high performance analytics at SAS UK. They co-authored the report Data Equity: unlocking the value of big data.

 

Getty
Show Hide image

How the Lib Dems learned to love all-women shortlists

Yes, the sitting Lib Dem MPs are mostly white, middle-aged middle class men. But the party's not taking any chances. 

I can’t tell you who’ll be the Lib Dem candidate in Southport on 8 June, but I do know one thing about them. As they’re replacing a sitting Lib Dem (John Pugh is retiring) - they’ll be female.

The same is true in many of our top 20 target seats, including places like Lewes (Kelly-Marie Blundell), Yeovil (Daisy Benson), Thornbury and Yate (Clare Young), and Sutton and Cheam (Amna Ahmad). There was air punching in Lib Dem offices all over the country on Tuesday when it was announced Jo Swinson was standing again in East Dunbartonshire.

And while every current Lib Dem constituency MP will get showered with love and attention in the campaign, one will get rather more attention than most - it’s no coincidence that Tim Farron’s first stop of the campaign was in Richmond Park, standing side by side with Sarah Olney.

How so?

Because the party membership took a long look at itself after the 2015 election - and a rather longer look at the eight white, middle-aged middle class men (sorry chaps) who now formed the Parliamentary party and said - "we’ve really got to sort this out".

And so after decades of prevarication, we put a policy in place to deliberately increase the diversity of candidates.

Quietly, over the last two years, the Liberal Democrats have been putting candidates into place in key target constituencies . There were more than 300 in total before this week’s general election call, and many of them have been there for a year or more. And they’ve been selected under new procedures adopted at Lib Dem Spring Conference in 2016, designed to deliberately promote the diversity of candidates in winnable seats

This includes mandating all-women shortlists when selecting candidates who are replacing sitting MPs, similar rules in our strongest electoral regions. In our top 10 per cent of constituencies, there is a requirement that at least two candidates are shortlisted from underrepresented groups on every list. We became the first party to reserve spaces on the shortlists of winnable seats for underrepresented candidates including women, BAME, LGBT+ and disabled candidates

It’s not going to be perfect - the hugely welcome return of Lib Dem grandees like Vince Cable, Ed Davey and Julian Huppert to their old stomping grounds will strengthen the party but not our gender imbalance. But excluding those former MPs coming back to the fray, every top 20 target constituency bar one has to date selected a female candidate.

Equality (together with liberty and community) is one of the three key values framed in the preamble to the Lib Dem constitution. It’s a relief that after this election, the Liberal Democratic party in the Commons will reflect that aspiration rather better than it has done in the past.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

0800 7318496