Big, little, open, closed, structured or unstructured… however you refer to it – there is no denying that data is becoming an inherent part of our lives.
These exponentially growing collections of information now more than ever, give us the ability to make informed decisions where we may have previously relied on gut instinct alone.
Using data to drive innovation is all about harnessing the data around us to solve problems, create efficiencies, and invent new products.
Our new report, released in conjunction with Google Australia, ‘Deciding with data: How data-driven innovation is fuelling Australia’s economic growth’, reveals how Australian businesses could potentially unlock tens of billions of dollars in value using data-driven innovation and identifies it as an essential tool to driving our prosperity.
The report estimates that data-driven innovation contributed $67 billion to Australia’s economy in 2013, or 4.4 percent of GDP; equivalent to the size of the retail sector. From predicting weather patterns for agriculture, to improving patient diagnosis and treatment in the health industry, to enhancing the management of remote infrastructure in mining – every sector is using data to grow.
However, Australia has substantial room to improve and left an estimated $48 billion on the table in potential value from data-driven innovation in 2013. The report suggests that if Australian businesses were to lift their rate of data-driven innovation to the level of economically and demographically similar countries such as Canada, a further $48 billion dividend could be seized.
Strong pulse for data-driven innovation in health
PwC’s new Data Innovation Index, identified that the health industry stands to benefit most from data-driven innovation based on its size, international competitiveness, and assets including technical skill, talent, and volume of data. However these benefits run deeper than just the bottom line – data-driven innovation in this industry will also have a huge impact on society.
The MindSpot Clinic is already using data-driven innovation to improve mental health conditions by providing an online service that offers free virtual assessment and treatment for Australians with anxiety and depression. The clinic uses a combination of data, protocols and algorithms during the course of treatment to ensure that patients are achieving sound progress and that therapists are providing quality and consistency of care. Since its launch in December 2012, MindSpot has helped almost 20,000 Australians.
But this is not just a solution that has community benefits – improving mental health conditions for employees could help businesses save at least $10.9 billion each year in productivity, participation, and compensation costs.
The Data Innovation Index shows that there is also enormous potential for other industries to examine and improve their ability to create and capture value from data-driven innovation.
Seizing the data-driven innovation opportunity
While data-driven innovation offers a sustainable source of economic growth in Australia, the report outlines four recommendations to help extract its full economic and societal value:
The fundamental role of government
Government data has the potential to enable innovation in service delivery models across a number of industry sectors for example, data relating to spatial characteristics of Australia’s geography.
This type of government-held data requires a different decision framework when considering whether it should be released. The potential economic value derived from this data should be a key element of this framework. One of the recommendations of the report is that government needs to prioritise the provision of open data as a key input for the Australian economy and provide senior political leadership to ‘get on with it’ in order to support wider innovation by other players.
Social licence to operate
There is no escaping the data debate, which has the potential to reduce the uptake of data-driven innovation and ultimately diminish the nation’s opportunity to prosper both through economic productivity and enjoy the broader societal benefits of it.
A balance between enabling data-driven innovation while ensuring that data is managed carefully and respectfully for the benefit of society as a whole, needs to be achieved. The report suggests that as a community we need to engage in an informed debate about the use of data that fully addresses the net impact of its use on the welfare of our society and acknowledges its value.*
A new architecture mantra: ‘Go open’
Agility is always at the crux of having a first-mover advantage for many businesses. In the context of data-driven innovation the ‘agility challenge’ for both the public and private sector lies in identifying, developing, absorbing and/or realising the value of the products and services created by data-driven innovation. The report has two recommendations for organisations on overcoming this:
- A move to implementing a digital operating model that is flexible enough to enable innovation
- Adopting a ‘go open’ mantra, to enable the notion of the ‘permeable enterprise’
In essence these recommendations will make it easier to share data with others in the business ecosystem in a controlled way (through the use of solutions such as APIs), and facilitate the growth of co-creation environments – often uncovering and realising the value of latent assets and capabilities.
It’s all about STEM
“… Employers from across the economy believe STEM skill shortages are limiting their business and ability to innovate. This must change.”
As pointed out by Australia’s Chief Scientist, Professor Ian Chubb in a media release, the role of Science, Technology, Engineering and Mathematics (STEM) in propelling both digital and data-driven innovation cannot be ignored.
The report highlights that by boosting education and training across STEM courses will ensure Australia has an adequate pool of talented people who can generate insights from data.
* Lateral Economics (2014), Open for business: how open data can help achieve the G20 growth target, commissioned by Omidyar Network, June 2014
Note: All images within the body of the article originate from the ‘Deciding with data: How data-driven innovation is fuelling Australia’s economic growth’ report or PwC Digital Innovation website.