Article by Digital Realty EMEA managing director Rob Coupland
Few would deny that the prosperity of our economy is driven in part by work coming out of our outstanding universities, such as Oxford or LSE.
But imagine if it was revealed that they were delivering less than two thirds of their potential for economic innovation and productivity. It would be a national scandal.
And yet, we face just such a shortfall in the value we get out of the data in our economy. At Digital Realty, we recently released the Data Economy report, suggesting that British business is extracting just 58 percent of the potential value of the data it holds.
If we exploited our data – often described as the “new oil of the economy” – to its fullest then we would add another £52 billion to UK GDP, which is about the same size of the total GDP of a country such as Sri Lanka. A prize worth fighting for.
So why are we not making the most of our data? It may be, in part, because people don’t really know where the value in data lies. In the wake of the misuse of Facebook data by Cambridge Analytica, people think of data in terms their personal information being sold for profit. But that is a very, very small part of the Data Economy.
Much more important is how data improves business intelligence and decision-making: how supermarkets know exactly what they are running short of, what is popular in one store but may not be needed in another one a few miles away – all this data improving the efficiency of the supply chain and logistics.
Or think of the agriculture sector – which the report shows has grown the value of its data more than any other over the past four years. Here data is enabling driverless tractors to plough fields or apply fertiliser more accurately than if they’d been driven by a human. Costs are cut, waste reduced and efficiency improved.
And, indeed, data will be vital in ensuring the safe use of driverless cars. Other developments in Artificial Intelligence, which open up huge opportunities for the British economy, will be underpinned by vast amounts of data being processed.
There are other issues that are holding us back. Business – in particular small and medium-sized businesses – are not investing at a sufficient rate in systems that will allow them to make the most of the invaluable data they have. Those that have managed to do so operate at a significant competitive advantage.
There is also a greater need to invest in the infrastructure that allows for the most efficient distribution of data.
As we well know, superfast broadband and 4G are not universally available. The advent of 5G may change this over time. But this is also about how best to store your data. For bigger companies, making sure your data is being stored in the same centre as your main customers can give you small but vital improvements in speed, reliability and connectivity.
But perhaps the biggest issue to be addressed is the skills gap. Most businesses have real problems recruiting staff who have the ability to develop and maintain data analytical systems.
It was recently estimated that by 2020 the UK would be short of 150,000 skilled digital workers – and that was before the effects of Brexit were factored in. It is expected that the decision to leave the EU will seriously affect our ability to attract talent in the form of the mathematicians, statisticians and computer scientists who can build and develop the Data Economy.
Nowhere is this more important than in the City of London. According to the report, the financial services sector generates just over 15 per cent of the UK’s digital value – second only to the ICT sector itself. That value has grown by 22 per cent in the last four years; but the report suggests that it could grow at a rate of 55 per cent by 2025 if we can remove constraints on growth. That is a huge opportunity, particularly in a post-Brexit world.
The UK is leading the way in the FinTech revolution; the City leads the way in the provision of financial services. It would be a depressingly wasted opportunity if that competitive advantage was lost by not understanding the value of data, and by failing to exploit 100 per cent of its enormous and edge-giving value.
Digital Realty has provided free access to its Data Economy report that reveals the value of continuing to invest in data, from direct investment in the physical infrastructure of data centres and connections through the broader needs of a skilled workforce.