New research finds firms with higher data literacy scores may be worth up to US$534 million than counterparts.
New research has found firms with higher data literacy scores may be worth up to US$534 million more than firms that don’t value data. Despite this, too many businesses remain overwhelmed by the potential of new data-based technologies such as AI to add value to their operations.
According to The Data Literacy Index, businesses that exhibit high levels of data literacy are between 3% and 5% more valuable than firms that don’t know how to properly use their data. Data for the index came from 604 business, 200 in the US and Europe and 204 in Asia. The average value of the organisations that took part in the research was US$10.7 billion.
Armstrong Mejilla is regional presales manager for Australia and New Zealand at data analytics business Qlik, one of the parties to the research, which was produced by The Wharton School and data intelligence firm IHS Markit. He says data is the new basis for business growth. “Organisations’ success depends on their employees’ ability to speak the language of AI.”
Nevertheless, Mejilla says many businesses feel overwhelmed about adopting AI in their operations. “Senior managers use AI to deliver insights. But only a few individuals are usually trained in AI. There’s often a reluctance in the business because it’s seen as a black box; people can draw on insights, but they don’t really understand how it works,” he explains.
Mejilla says there’s an opportunity to overcome this by allowing AI to learn from both data and humans. He uses his work in the insurance sector as an example. “Some datasets are not relevant to my analysis and I can flag this and the AI will learn from this.”
However, University of Sydney Business School associate professor Uri Gal maintains businesses are wholeheartedly embracing AI.
“It’s becoming increasingly easy and cheap to collect data internally and externally to enhance the behaviour of the organisation and client and supplier interactions,” says Gal.
“We live in the era of AI, and firms believe algorithms are more objective and rational than humans, and their use can lead to better business performance. So, I don’t subscribe to the view businesses are overwhelmed by AI.”
According to The Data Literacy Index, European companies are the most data literate of all the businesses surveyed, with the UK, Germany and France leading other nations. In total, 72% of European respondents say data is very important, while this figure is just 60% for the Asia–Pacific, indicating countries in this region have some catching up to do.