Blog: New Ways to Exploit Raw Data May Bring Surge of Innovation, a Study Says

New Ways to Exploit Raw Data May Bring Surge of Innovation, a Study Says
New York Times (05/13/11) Steve Lohr

Mining and analyzing large datasets will lead to a new wave of innovation, according to a new report from the McKinsey Global Institute. The report, "Big Data: The Next Frontier for Innovation, Competition and Productivity," estimates the potential benefits of using data-harvesting technologies and skills. For example, it says the technology could be worth $300 billion annually to the U.S.'s health care system, while retailers could use it to boost profits by 60 percent. However, the study also identifies challenges to managing big data, such as a talent and skills gap. The report estimates that the United States will need at least 140,000 more experts in statistical methods and data-analysis technologies, as well as 1.5 million more data-literate managers. "Every manager will really have to understand something about statistics and experimental design going forward," says McKinsey's Michael Chui. The use of personal location data could save consumers more than $600 billion worldwide by 2020, according to the report. Consumers will benefit the most from time and fuel savings gained from location-based services that can monitor traffic and weather data to help drivers avoid congestion and suggest alternative routes, the report says. "It's clear that data is an important factor of production now," says McKinsey's James Manyika.

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