Four Ways Big Data Helps Local Economies Grow
The digital economy has proliferated in some advanced economies around the globe, whether it is in the United States, Europe, or even in Asia. In Singapore, we see some of the region’s best practices in building startup ecosystems and how governments should invest in technological and business innovation to support local businesses. A new related phenomenon is big data which,, perhaps, is still at a stage of familiarization for some businesses and governments. While the concept of big data itself can conjure up debates around data privacy, corporate sector dominance, and government control, big data may have promising consequences for local economies in Asia. This is especially critical to those economies that seek to expand their digital economy and pave new business growth opportunities for small business enterprises. Big data itself is constantly generated through the interaction of people with various IT systems, and on its own holds little value. However, when analytics are applied, trends, patterns, and other analyses can result in improvements on a number of fronts. These are just four:
Business Intelligence for Small Businesses
Simply put, big data provides businesses both big and small with a competitive advantage. However, it is often smaller businesses that struggle to understand big data and how to use it in making critical business decisions. Big data can be utilized to better understand consumer trends and preferences, and assess markets that small businesses operate in. Through the generation and analysis of big data, businesses are better able to respond to changing consumer demands and opportunities to innovate their products and services. While historically companies and businesses have had to rely on conducting various market surveys to understand these trends, big data in its current form is real-time, meaning that businesses can make decisions at a much more timely and efficient rate. To be able to reap the benefits of big data, small businesses need to have the knowledge and skills to apply various analytics. This is where it becomes crucial for governments in the region to support small to medium enterprises by not only providing access to big data, but by implementing programs that can equip businesses with knowhow and how-to’s.
Improved Digital Infrastructure Security
With the omnipresence of the internet along with the increasing presence of e-commerce and government e-services, cybercrime is an issue that the region’s governments need to tackle effectively, as highlighted during a recent global attack using ransomware. This helps protect local digital economies along with promoting the transition of the traditional small businesses models onto digital platforms. Digital infrastructure security is under constant threat, but with big data, vital information can be captured through the cyberattacks and hacks that take place. Big data allows predictive solutions to be implemented through the systematic aggregation of security threats and attacks. This in turn allows businesses and governments to better understand the behavior of perpetrators and take action to improve their security systems. Part of this “action” also involves tracing attacks to actual individuals or criminal bodies in order to take legal action. Real-time analysis have never been more crucial to cyber security and with the real-time nature of big data, governments and businesses can implement big data structures that can best help them deal with security vulnerabilities.
Transition to the Digital Economy
A lot of reluctance from small businesses to move to digital platforms often entails not understanding how to utilize digital platforms to grow their businesses. Small businesses still struggle to make the best use of big data through digital platforms. However, with access to support in better understanding digital platforms and analytics, small businesses benefit the most from the real-time nature of big data. Especially with startup ecosystems being built in the region, success rates of startup ventures can greatly improve through the use of big data. With big data fueling local digital economies, tech startups can benefit from the vast amounts of user data generated through the systems that they’ve set up. Big data also enables small businesses and startups to transform their business functions into more digitized formats. This can drive costs down in the long run and encourage smaller players who have just entered the scene to adopt best practices that already exist.
Promotion of Innovation
With the amount of meaningful analysis that can be generated through big data, local economies are able to introduce more innovative business models in their respective industries. Perhaps we can see this most clearly in the healthcare sector where big data has made it much easier, quicker, and efficient to provide various healthcare services. Preventive medicine has never been more digitized than it is today with people being able to track their heartrates by just touching their smartphones, or tracking their fitness and health stats through apps available on their mobile devices. The presence of big data translates into industries leveraging data-driven strategies to be more innovative and competitive. While cost can be a limiting factor for smaller players who would like to create more innovative products and services, big data can help drive the cost of innovation down for local economies. However to see this happen, building the right talent to work with big data will need to take place.
Big data can seem quite daunting to small businesses and to some governments who are yet unfamiliar with the positive impacts in can bring to local economies. However, underlying the success of any digital economy is the generation and analysis of big data – a vastly increased amount of information on people’s attitudes, decisions, preferences and behaviour. This access to more and better information is the defining factor for a business’s ability to adapt quickly to changing consumer and market situations and take risks that they wouldn’t have been able to take otherwise. However, this cannot take place without businesses big and small having access to big data and without the proper digital infrastructures in place. Moreover, while businesses are catching up with big data and to use it to grow their businesses, local job markets still lack adequate talent to support this growth. Governments therefore need to support the skill development of various jobs directly and indirectly related to big data in the region. They also need to make a hard choice between their instinctive desire to control the flow of information and the need of the economy of the future to let information flow as fast and freely as possible.