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Big Data: The Next Big Thing in Economic Development?

October 10, 2012

In 2012, Big Data has become one of the hottest topics in the news and the minds of both government and business leaders. Big Data is the collection and analysis of data that is too big, growing too fast or is too complex for existing information technology systems to handle. Proponents believe that Big Data provides business, government and other organizations (e.g., nonprofit and social enterprises) the potential to generate high quality insight that enable better decision making, increase productivity, reduce inefficiencies, create new products and services and spur economic growth. In an OPED for informationweek.com, Jonathan Feldman contends existing Big Data projects already are creating social and economic value for business firms and regions, including now-ubiquitous projects such as Google Maps.

Deloitte predicts the Big Data industry likely will experience accelerating growth and market penetration through the rest of 2012 due to government and private investments in R&D pilot projects. Although still its infancy as an industry, mostly dominated by publicly-and-privately-supported pilot projects, Big Data has come a long way over the last couple years according to the Deloitte white paper. In 2009, there were only a handful of publicly-and-privately-supported Big Data projects. However, Deloitte predicts by the end of 2012 approximately 90 percent of Fortune500 companies will have at least some initiative underway. Over the last year, the Obama administration also increased funding for Big Data R&D pilot projects including $15 million in October for new Big Data research projects at universities across the country, and the unveiling of the $200 Million Big Data Initiative to help solve some the nation's most pressing challenges, create a highly skilled S&T workforce and spur economic growth. Many state and local governments, such as the state of Massachusetts, also view Big Data as a potential answer to pressing social issues and a tool to spur development.

A report from the McKinsey Global Institute confirms the potential impact of Big Data on the national economy including:

  • The creation of up to $300 billion per year in U.S. Healthcare sector alone;
  • The increase of retailers operating margins by up to 60 percent; and,
  • The reduction of manufacturing's product development and assembly costs by up to 50 percent.

However, the McKinsey researcher predicts the U.S. will need up to 190,000 skilled Big Data professionals with the proper education, training and analytical skills by 2018 to address the demand from business firms, government entities and other organizations to take advantage of the potential benefits of Big Data.

TechAmerica.org recently released a report outlining a roadmap and providing policy recommendations for federal, state and local agencies to establish Big Data initiatives and build the workforce necessary to accommodate the potential demands of industry and government including to:

  • Augment current IT investments — rather than build entirely new enterprise-scale systems for a low-risk approach;
  • Double Down on Collaboration — promote data sharing and monetization of Big Data solutions across agencies;
  • Invest in R&D — continue research and development of advanced computing technologies that can effectively process not only the vast amounts of data being continually generated but also the various types; and,
  • Focus on Skills — Strengthen and expand public-private partnerships to invest in skills-building initiatives for the federal workforce in the area of Big Data.

The authors also call for the government to work with institutions of higher education to establish formal career tracks for IT managers, an IT Leadership Academy to provide Big Data, training and certification, data-intensive degree programs and scholarships to prepare a new generation of data scientists.

Massachusettsbig data, policy recommendations, economic impact report, ssti features