Big Data to Add US$343 Billion to the UK Economy and 58,000 New Jobs by 2017
Harnessing big data could contribute £216 billion (US$343 billion) to the UK economy and stimulate 58,000 new jobs between 2012 and 2017 according to a new study by The Centre for Economics and Business Research (Cebr) and business analytics software vendor, SAS.
he study validates current industry thinking that big data will herald the next phase of technology-led business innovation, productivity and competition.
As the amount of data continues to grow, compounded by the internet, social media, cloud computing and mobile devices, it poses both a challenge and an opportunity for businesses -- how to manage, analyse and make use of the ever-increasing amount of data being generated. As a result, organisations are turning to big data analytics solutions such as high-performance analytics to unlock the value of data and reveal previously unseen patterns, sentiments and customer intelligence. As an example of the power of big data analytics, a large telecommunications provider has cut the analysis of its customer base from 11 hours to 10 seconds using SAS High-Performance Analytics.
The report has calculated that big data contributed an estimated £25.1 billion to the UK economy in 2011 but, as the adoption of analytics increases, it is forecasted to reach £40.7 billion by 2017. The report suggests that at the same time big data analytics adoption will raise from 34 per cent in 2011 to 54 per cent by 2017. This represents a cumulative benefit of £216 billion through 2012-2017 which is equivalent to 22 per cent of the UK net debt (c. £1 trillion) or more than the 2011/12 defence, NHS and education budgets combined.
There are three main ways that the emergence of big data is expected to benefit the UK economy:
- Business creation -- more precise strategising, better customer insight and reduced uncertainty through big data analytics is expected stimulate the creation of new small and medium sized businesses, contributing £42.4 billion by 2017 and resulting in a net increase of 58,000 UK jobs over the next five years.
- Efficiency -- efficiency gains could contribute a cumulative benefit of £149.5 billion by 2017 with better customer intelligence delivering £73.8 billion and supply chain improvements contributing £45.9 billion to the overall figure.
- Innovation -- applying big data analytics to research and development (R&D) is predicted to help drive new products and services as well as the potential creation of new markets contributing £24.1 billion to the UK economy by 2017.
Industry benefits from big data
The Cebr study investigated the big data opportunity by industry, revealing economic benefits for every sector from the adoption of big data analytics including:
- Financial services -- The cumulative economic benefit between 2012 and 2017 is expected to be £16.3 billion with retail banking contributing £6.4 billion, investment banking £5.3 billion and insurance £4.6 billion.
- Public sector -- The government could save £2.0 billion in fraud detection and generate £3.6 billion through better performance management by 2017.
- Retail -- The introduction of new consumer products in retail is predicted to induce a £3.1 billion rise in output over the forecast period.
- Manufacturing -- The manufacturing sector is forecast to see the largest innovation gain from the propagation of big data analytics. Use of high-performance analytics in the development of new products could produce £8.1 billion in increased output by 2017.
Andy Cutler, director of high-performance analytics at SAS UK & Ireland, said, "Tapping into the dizzying amount of big data could be the stimulus the UK economy has been searching for. Big data 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."
The emergence of Data Equity, the chief data officer and data scientists
SAS believes that in the future 'Data Equity' -- a term coined to describe the economic value of data -- will be as important to organisations as brand equity. Consequently, there will be an increasing demand for people to work with data as more businesses demand 'data scientists' -- specialists working with data to derive business insights. SAS expects to see the emergence of the Chief Data Officer alongside data scientists as organisations look to capitalise on their 'Data Equity'. However, demand will outstrip supply as the UK faces a major skills gap particularly around STEM skills (science, technology, engineering and mathematics). SAS UK is actively involved in encouraging school and university students -- through programmes such as SAS Curriculum Pathways -- to recognise the exciting and financially well rewarded career that working with data and analytics presents as more organisations look to unlock the value of their big data.
Oliver Hogan, Cebr Head of Microeconomics comments, "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 competiveness of the UK's goods and services on the global stage, and can thus generate a wider economic benefit beyond the value of this significant asset to its owner."
"Whilst we expect the ICT sector to be a star performer in the years to come, financial services and governments are expected to be a drag on employment" says Shehan Mohamed, Cebr Economist and main author of the report. "This emphasises the need to teach high quality STEM skills at school and university in order to prepare the next generation of graduates for the big wide world of data."