Data is to oil as value is to money, an analogy to emphasize the importance of data in the modern-day era. Data has become a driving factor to success in the global economy. In its absence, we struggle to discern what competitors are up to, what the latest market trends are, and most important, what is it that customers want and are willing to pay for.
Though the analogy between data and oil may be up for debate, the value of having the right data at the right time may be just as valuable as finding oil was back in the day.
Catching Up to the Present
In 2017, Bangladesh ranked 188 out of 235 countries in terms of GDP per capita (PPP, current international dollars) and 136 in the global human development index – two powerful indicators of the countries’ standing in the world. However, this isn’t to discount the fact that it is also one of the fastest growing economies, targeting double digit GDP growth in the coming years. As much as we may be guilty in comparing the country to its emerging superpower neighbor, India, their economic models for growth are very much different. And if Bangladesh is to catch up with the rest of the world, it needs to understand the unique strengths and opportunities it can capitalize on in the global market. Put simply, one of the ways we can do this is by measuring the extent of automation and digitization, two inevitable developments in the world.
Automation and digitization, done correctly, can increase productivity and profitability, making best use of resources on hand. In the United States, the digital sector, which includes industries such as tech, telecom, entertainment, financial services, and professional services represents 30 percent of private sector output and 25 percent of private sector employment. On the other hand, primarily the non-digital sector, which includes industries such as manufacturing, construction, transportation, healthcare, education, and retail, represents 70 percent of private sector output and 75 percent of private sector employment. Moreover, digital sector in the US has a much higher productivity growth than the physical sector. Done correctly, automation and digitization can bring Bangladesh closer to the present state of developed countries, but for those already at the forefront, the two are consolidating, with developed economies bracing themselves for a new age, the age of experience.
Opportunities Replaced with More
In spite of the concern that increasing use of technology – the Digital Revolution is bringing – will eventually lead to greater unemployment due to the effects of automation, the digital sector is creating more job opportunities in different fields. In other words, it’s transforming the traditional nature of jobs and shifting skill sets in demand in the market.
Although digitization and automation in physical sector is making some jobs irrelevant, it is also creating new positions in the market, as they both lead to greater productivity, and requiring more specialization for employees that demands better pay. An interesting example in the history of this phenomenon would be the industrial revolution that mademany labor intensive craftsmen and tradesmen irrelevant with the inflow of mass production. Automation and digitization is in comparison very similar to the events of that time, just now, it’s on a different scale.
With the number of new type of jobs that are being created, the need for a specialized skilled workforce is now becoming pressing. This brings challenges to the traditional methods of training and education, questioning its effectiveness. As the pace of innovation accelerates, it is also important to train older workers to learn new skills in order to remain productive and employable. Though specialization is the future of human workforce, this brings more time, money and resources to consider.
The problem can only be addressed when data and the digital platform will be used in tandem to provide more personalized education and make it more accessible, affordable and relevant to the custom needs of each individual with the ability to cater to the mass.
Adaptation is a Must to Stay Relevant
The diversity and complexity of today’s economy is creating new markets and making existing ones more fragmented as technology is easing up barriers. Innovation is impacting markets and constantly changing. For companies to stay competitive and relevant, the adoption of data analytics to produce consumer insights and better understand customers is no more a luxury but a necessity.
Digital platforms, with the ability to record and analyze even the smallest interactions of consumers, has made it easier, and less expensive to provide personalized experiences to customers building the perceived value of brands, and eventually driving sales of existing market offerings. Data generated from the activities can be used to further introduce new innovations and improve business models.
Leveling the Playing Field
Data and its accessibility have made it easier for new business to be introduced to the market. One of the biggest barriers blocking small and medium enterprises (SMEs) from getting into international trade is a lack of knowledge about opportunities. Cross-border data flow has opened up new opportunities for SMEs to trade overseas, enabling in locating customers easily and building supply chains across national borders.
Data is non-rival. In other words, it can be duplicated and shared at a relatively low cost. That being said, government and public research organizations who have greater access to household information of an economy, also need to open up and share their data to more analysts, so that it can be taken full advantage of.
Data Needs to be Analyzed and Understood, Not Just Stored
While data can be a powerful tool to drive the modern economy, unprocessed data by itself has little to no value. For example, governments and nonprofits often have access to large amounts of unprocessed data, but limited capabilities to analyze and utilize it. Up to 73 percent of company data goes unutilized for analytics. Without the application of data that creates economic value, valuable insights for making critical decisions will remain undiscovered.
This sheds light on the need for data analytics in Bangladesh and a stable ecosystem to support it. We need systems that not only capture data, but also makes it accessible to people who can analyze it and make informed decisions for their businesses. This requires initiatives from public and private sectors and collaborative work to develop a system that is accessible, efficient, and open to drive economic growth.
With a score of 39.8 out of 100, Bangladesh has outperformed most of its South Asian neighbors in adopting ICT in the World Economic Forum’s Global Competitiveness Index 2018. Number of internet users has grown rapidly over the last two decades reaching almost 65 million users in the country. The government is investing highly in ICT ($205.4 million in 2016), which was only $25.6 million in 2008. To attract investors further, the government has also incentivized the sector with favorable policies such as 0% VAT on e-commerce, tax exemption for IT companies, and 100% foreign ownership profit repatriation. For further development of the ecosystem, the government has planned to launch 16 hi-tech parks, 7 software technology parks and 10 IT Training, Incubation & Business Centers.
Recognizing the growing potential in opening up public data for researchers, ICT Division of Bangladesh Government in partner with LightCastle Partners introduced the first open data platform in 2016. Based on the learning and experience from the project, we have launched a private initiative – DATABD.CO – a data platform that brings business and industry data of Bangladesh in one single platform in an effort to aid the business community of Bangladesh promote data-driven decisions.
While all this sounds promising, Bangladesh ranks 102 out 140 in ICT adoption in Global Competitiveness Index, which indicates our automation and digitization effort is still far beyond the global competition. Besides, data or digital ecosystem needs more private investments and room for improvement.
Finally, while preparing the workforce for ICT adoption, the government should focus on creating skilled labors for the modern data based jobs; putting emphasis on curriculum that facilitate in the creation of more data scientists and analysts to remain competitive in the global labor market.
1. The world’s most valuable resource is no longer oil but data, The Economist
2. The Coming Productivity Boom, Technology CEO Council
3. World Development Indicators – DataBank, The World Bank
4. Bangladesh and India Pursue Different Economic Models for Growth, Bloomberg
5. Education 4.0, Peter Fisk
6. Misusing data could be costing your business heres how, Inc
7. The Global Competitiveness Report 2018, World Economic Forum
8. Internet users in Bangladesh have increased 800x since 2000, Dhaka Tribune