How using big data can drive big value… to economic opportunity

How using big data can drive big value… to economic opportunity

Google CEO Eric Schmidt estimates that humans now create as much information every two days as we did from the beginning of civilization up until 2003. With every hour of consumer transactions, Wal-Mart produces the equivalent of 167 times the books in the Library of Congress, 30 billion pieces of content are shared on Facebook every month, and there are over 200 billion Tweets each day.

The sheer existence of this data is not in itself a driver of value.  One critical factor influencing the impact of the information revolution is the sophisticated analytics that are being applied to aggregate, analyze and manipulate the data being collected.  Machine learning technologies enable computers to automatically learn to recognize complex patterns and make intelligent decisions based on data, neural networks provide the capacity for computers to recognize non-linear patters in data, and predictive modeling allows for the creation or selection of mathematical models to best predict the probability of an outcome.

The proliferation of data combined with these sorts of cutting edge analytics has the potential to transform the way all sectors operate and is already driving significant value from productivity growth, innovation and consumer surplus.  A recent study by the McKinsey Global Institute estimates that big data has the potential to drive a 60 percent increase in retailers’ operating margins, cut 50 percent from product development and assembly costs for manufacturers and create more than $300 billion of value annually in the US healthcare sector.

Among others, three broad ways that data can create value include:
  • Improving market efficiency through the provision of transparent, digestible information
  • Unleashing innovation and spurring new business models
  • Enabling new paradigms for private /public sector collaboration

The information revolution also has the potential to drive significant positive change in US systems of economic opportunity. We can learn from existing initiatives that are leveraging data in new ways to improve the education, healthcare and workforce systems.  A few of these are outlined below.

  • Education: The K-12 system has made significant leaps forward in the last decade in moving towards longitudinal student data systems that track information on student outcomes over time.  Now organizations are working to find ways to use this data to drive improvements in student outcomes. For example, the Shared Learning Collaborative, an initiative led by the Gates Foundation and the Carnegie Corporation is providing shared services that will connect disparate student data and learning content that currently exist in different formats and locations and don’t integrate with one another.  Aggregating this data and providing it in usable formats across content providers and states not only has the potential to give teachers and districts more awareness of the learning resources that are the best fit to support individual students, but also drive the market to build more and better academic tools and content to be deployed in the classroom.
  • Healthcare: One of the biggest barriers to successfully using data to have positive social impact is giving access to data collected in usable forms to those who can make full use of that data. The US government’s Health Data Initiative provides a compelling example for how unleashing public data can unlock private sector innovation. HHS made extensive datasets (e.g., data on the health of communities, the quality of health care providers) public in formats that developers could use, while protecting privacy.  Then they worked to educate entrepreneurs about the data that existed.  Todd Park, the Chief Technology Officer for the White House described the value of this effort: “There are a lot of smart of people in HHS, a lot of smart people. There’s just many, many, many, many … more smart people outside HHS. And, so, I think the key there is that if you make data available to everybody else, just by sheer numbers and sheer diversity of who they are and where they are, they will, of course, create many more powerful services and products … than any group of people in any one organization possibly could.”
  • Jobs & Workforce: Well-functioning markets depend on transparent information, but the vitally important job market generally does not provide students, workers, or even employers the information they need to make the best decisions and investments in building skills.  In this age of LinkedIn, Google, and Facebook, there is no longer any excuse for this gap to continue.  Hope Street Group provides an example of an organization working to use a public/private partnership to tackle this problem.  We are bringing together a strong and diverse coalition of employers, community college leaders, technology innovators and others to develop a public data utility and suite of applications that take the best tools of the information revolution – big data analytics, neural analysis, and algorithms – and combine them with an unparalleled dataset on jobs and employment outcomes. Our aim is to draw meaningful insights that empower all players – from young job seekers, to employers, to education institutions – to make better decisions on skills and jobs.

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