Data 4.0 – Rethinking rules for a data-driven economy: Gartner

Companies will need to institutionalize data at a human level, meet the rise new challenges and must promote a data-driven economy to deliver change for good.

Data 4.0 – Rethinking rules for a data-driven economy: Gartner - CIO&Leader

While much of daily life and economic activities came to a grinding halt at some point during the pandemic, the digital, technological transformation did not stop. Moore’s Law—an oracle of extraordinary technological advances predicting the doubling of transistors on a microchip every two years is being outstripped by even more impressive growth in other digital segments, especially data.

Dealing with the "data paradox"

Recent estimates showed that the world could generate more data in the next three years than over the past 30. The explosive growth of data owes not only to “human” activities, since as much as 40% of internet traffic is being generated by machines, between machines. This trend will likely continue and accelerate in the years ahead, with the number of networked devices in the world projected to reach a staggering 125 billion by 2030.

As citizens, many argue we live in an information, not a knowledge society, echoing Umberto Eco. In the private sector, firms are facing what some consider the “data paradox.” A recent Forrester survey of 4,036 high-level executives showed that 70% of data decision makers are gathering data faster than they can analyze and use it, yet 67% constantly need more data. The massive opportunity brought about by data-driven decisions is being hampered by capacity constraints. Sometimes, this challenge is further amplified by the predominantly “defensive” narrative on data governance and policy, which rightfully places paramount importance on accountability, transparency, and privacy.

Hence, the trillion dollar question: how can firms overcome this demand-capacity mismatch and adopt a more “offensive” strategy to maximize value from data, while ensuring safety and compliance? Our short answer: we need the right people, institutions, and culture to unlock and harness the data opportunity. Importantly, companies cannot do this alone. No more, no less.

How to unlock and harness the current data opportunity

  • Firms need to institutionalize data strategy at a human level

A starting point would be to formalize a Chief Data Officer (CDO) role: a real data scientist and visionary with clearly defined responsibilities. The CDO, with a supporting cast, would be responsible for

(a) designing, implementing, and overseeing a holistic data strategy (from collection to analytics to monetization) that informs business decisions and units;

(b) facilitating the free-flowing of data, data-driven insights, and data-related managerial decisions both internally and with external partners and regulators;

and (c) supporting HR in recruiting or upskilling/reskilling employees.

This centralized CDO role often overlaps with various positions such as the Chief Information Officer or the Chief Privacy Officer, and the Chief Economist and Strategy Officer at present. But it should combine all, in ways that capitalize on data for business and regulatory purposes and reduce efficiency losses and information siloes caused by jurisdiction or capacity problems, while ensuring privacy compliance.

In some cases, the successful creation of a CDO role should be a milestone by itself as, according to the above-mentioned survey, 70% firms have yet to ensure boards’ buy-in on their data and analytics strategies.

  • Institutions need to rise to the challenge

With data as a new strategic asset, present and future economy incentivizes the smart and responsible generation, exchange, and use of high-quality, interoperable data. To this end, institutions—including data-related rules, regulations, agreements, and governing bodies within and across national borders—must be modernized.

  • All stakeholders in the data ecosystems must embrace and promote a truly data-oriented culture

Many countries, currently are not only facing a digital connectivity and investment gap compared to data-savvy countries, but also a data science skills shortage. These countries cannot wait until universities and formal education adapt to changes and offer 3–4-year programmes on the economics of data. They need 3-6 months training programmes on digital and analytical skills now. It's the private sector, along with governments and education institutions, who can deliver that.

Data as a driver of change

Transforming data from a raw material into a genuine factor of production and engine of innovation requires changes at the individual and organizational levels. And we did not get deeper into the different types of data, or the multiple directions it can flow among citizens, businesses and governments.

As 5G, AI, and other technologies reinforce both data supply and demand, this is the time to update our approach to data in a more forward-looking way. With the right people, institutions, and culture, we can build the economies of the future and use data as a driver of change for good.

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