Unlocking the value of big data could add €27 billion to Irish economy by 2017

The report commissioned by SAS Ireland and conducted by The Centre for Economics and Business Research (Cebr) reveals that, despite Irish businesses facing challenging conditions over the next 12 months, the opportunity over the next five years from harnessing the large volume, velocity and variety of data could have profound benefits to the economy. Furthermore, coupling the big data opportunity with the structural reforms carried out under the terms of the EU and IMF financial packages have provided the foundations for enhanced performance, greater innovation and higher profitability within a very competitive environment.

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. ‘Data equity’ can be unlocked from analytics. Scanners, sensors, mobile phones, loyalty cards, smart meters, the web and social media platforms generate vast amounts of structured and unstructured data. Within all this information lie many potentially profitable insights regarding customer behaviours, market trends and supply chain processes. By applying big data analytics organisations will release the data equity by revealing these insights, allowing for businesses to capitalise on the resulting opportunities.

John Farrelly, General Manager of SAS Ireland, said: “Many Irish firms are already realising the benefits of big data analytics. For example, in the area of risk management the XL Group, a global insurance and reinsurance company headquartered in Ireland, is using SAS Visual Analytics services to support its underwriters’ risk selection and strategic decision-making. A further example of the benefits of big data analytics is to be found in fraud detection. The CSO reported 5,578 incidents of fraud offences between Q2 2010 and Q2 2012, estimated to have cost €6.9bn. In 2011, electronic reporting was responsible for detecting 25 per cent of all detected fraud in Ireland.

“The current difficult economic conditions provide a further impetus for businesses to streamline their operations and seek cost reductions through innovation. Recent trends in ICT have seen exploding data volumes, along with ever-cheaper costs associated with accumulating and storing it. These developments have given rise to many businesses ‘warehousing’ huge quantities of data, without necessarily forming strategies to leverage value from them. As analytics technology develops and platforms capable of processing big data become more economical, increasing numbers of firms will find it viable to reap useable insights from their hoarded data, and this will assist new business creation,”

There are three main ways that the emergence of big data is expected to benefit the Irish economy, resulting in a net increase of 61,000 Irish jobs over the next five years:
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 €4.7 billion by 2017.

Efficiency - efficiency gains could contribute a cumulative benefit of €14.7 billion by 2017 with better customer intelligence delivering €6.7 billion and supply chain improvements contributing €4.3 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 €7.3 billion to the Irish economy by 2017.

On top of the requisite high-performance IT infrastructure, data specialists will also be needed by businesses seeking to reap the benefits of big data. Businesses therefore have to be in a position to recruit from a pool of highly-skilled, data-savvy workers. Cebr expect a total of 61,000 new jobs to be created in Ireland between 2012 and 2017 as a result of new ‘big data’ businesses being created through business creation, efficiency and innovation. SAS expects to see the emergence of the Chief Data Officer alongside data scientists as organisations look to capitalise on their ‘Data Equity’. SAS Ireland 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.

Shehan Mohamed, Cebr, said: “As data volumes grow exponentially and advances in technology enable greater insights to be extracted, we expect more firms to place a financial value on their data through their balance sheets. Furthermore, the efficiency and innovation gains generated from data-driven technologies can play a vital role in ensuring the competiveness of Ireland’s goods and services on the global stage. Many of the previous obstacles to undertaking big data analytics, such as the cost of storage, security and analysis, are reducing. As technological innovations continue and the amount of data that can be captured, stored and managed escalates, we can expect ever-increasing financial opportunities.”

Recent research has shown that one in five large companies in the UK are already assigning a value to their data and including this on their balance sheets, with this trend expected to continue.