by Angela Guess
Several articles – including one on our site – have emerged in the last few days regarding the findings of a recent McKinsey Global Institute report, “Big data: The next frontier for innovation, competition, and productivity.” Currently, the full report is available for download from the McKinsey website. No registration or fee is required to download either the executive summary or the full report.
According to the abstract, “Analyzing large data sets—so called big data—will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus as long as the right policies and enablers are in place. Research by MGI and McKinsey’s Business Technology Office examines the state of digital data and documents the significant value that can potentially be unlocked.”
It continues, “For example, a retailer using big data to the full could increase its operating margin by more than 60 percent. Harnessing big data in the public sector has enormous potential, too. If US health care were to use big data creatively and effectively to drive efficiency and quality, the sector could create more than $300 billion in value every year. Two-thirds of that would be in the form of reducing US health care expenditure by about 8 percent. In the developed economies of Europe, government administrators could save more than €100 billion ($149 billion) in operational efficiency improvements alone by using big data, not including using big data to reduce fraud and errors and boost the collection of tax revenues. And users of services enabled by personal location data could capture $600 billion in consumer surplus.”