Data is king: Generating prosperity through a data-driven economy
Data is now the engine of business growth, which has transformed traditional operational processes across industries.
In the world we live in today, data is like oil, which brings prosperity and wealth to any country that finds it. Data is now the engine of business growth, which has transformed traditional operational processes across industries. It has become a capital asset to what is termed as “Data-driven Economy – DDE”.
What is DDE and how does it benefit economic prosperity?
Perhaps many of us expect DDE to be purely data trading. This issue is much discussed in our country where private data is sold illegally despite the Personal Data Protection Act (PDPA) 2010.
But DDE is actually an economy driven by how people leverage the data they get to advance their business or career. For example, how a fisherman is able to get more seafood by making use of weather data, or sea current data or sea depth data and so on. Or how a batik trader utilizes the data he obtains to produce more innovative designs, which will generate more income. The data may be the latest trend data, or market tendency data or consumer purchasing power data at that time.
Among the characteristics and benefits of DDE are expanding economies of scale, economies of scope (saving product production costs), expanding external networks in many sectors, and pervasive information asymmetry.
Former Japanese Prime Minister Shinzo Abe referred to the data-driven economy in his 2019 speech at Davos, noting that “we have yet to catch up to the new reality, where data drives everything.”
The challenge for us now is how we can popularize data so that the entire community in this country has access to data that can bring change to their lives. In this regard, we strongly agree with the statement of YB Rafizi Ramli, Minister of Economy that the Government will continue to ensure that the people can freely refer to the official data of various agencies which are not even classified as secret and can be accessed easily.
In Malaysia, the Sarawak Region seems to be ahead. Its premier, Datuk Patinggi Tan Sri Abang Johari Tun Openg said, Sarawak will shift to a new economic sector driven by digital technology, data and innovation in order to remain competitive in a dynamic and uncertain global business environment.
At the global level, we can see how China, which entered the knowledge-based economy 30 years ago, lagging behind the United States, is now at the forefront of DDE, due to the market size factor and the advantage in terms of the amount of data it can handle. acquired. In 2019 for example, the digital economy was one third of China’s GDP, surpassing the figure of RMB 36 trillion. The time has come for us to accept the importance of data in planning the future of the country.
DDE will continue to grow in line with the popularity of the online retail industry and also the wave of digital transformation, making data the King (Data is King).
This raises the question of how industries can use data to develop their core businesses. Introducing data-driven solutions, integrated with advanced technologies such as artificial intelligence (AI), may be the answer. It allows enterprises to increase production visibility, optimize their operations and improve the quality of products and services. Based on the data, they can identify new customer clusters and derive their actual demand to study trends. This not only helps them adjust their direction more immediately, but also allows them to monitor operational risks to prepare for possible disruptions in advance.
For example also in the manufacturing industry, traditional factories may have to close their production lines and bear financial losses due to machine and equipment breakdowns. The solution to this issue is data. Data allows modern factories to monitor abnormalities and predict potential failures, so weaknesses can be detected early. With the help of data analysis, factories can then carry out preventive maintenance to maintain supply chain stability and business continuity
Whereas in-depth Big Data applications, proactively analyzing large amounts of data with extraordinary capabilities, will help enterprises to optimize their supply chain, in line with the market, while at the same time improving their competitiveness.
Data-based companies and digital platforms have established themselves as new intermediaries in the information product market that is monopolized by only a few slivers of the world’s largest companies. The changes we observe in the digital economy involve a progressive shift in market power along the value chain, from product and content producers to service providers and distributors.
The business value of data is built on the ability to extract knowledge, rather than through its mere acquisition and storage. What is not emphasized enough in the big data paradigm is that “data alone, often of low value” (Rubinfeld and Gal, 2017); what is needed is not only technological or analytical capabilities, but a diversity of skills and, most importantly, a new approach to continuous innovation, extracting maximum value from the data produced and reused, either to support important societal goals or as a trigger for innovation in productive activities.
This is ‘The New Realities’, just quoting Peter Drucker’s book, which we must champion, for the sake of the prosperity of our People and Country.
adapt from – Datuk Dr. Ahmad Ramzi Mohamad Zubir
