Explained: How Big Data is Crucial for The Digital Economy?

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The WTO’s World Trade Report 2020 also emphasised the importance of big data for the digital economy, wherein it’s described that Big Data, a key input in digital technology innovation, present public good characteristics.

New Delhi (ABC Live India): The COVID-19 pandemic apart from causing a negative impact on the global economy has able to draw the public attention towards the potential of the digital economy as it kept an essential part of our economy running during the pandemic.

ABC Research team working on digital economy opined that data is a key input of an efficient and reliant digital economy.

The WTO’s World Trade Report 2020 also emphasised the importance of big data for digital economy, wherein it’s described that Big Data, a key input in digital technology innovation, present public good characteristics.

Data as a key input into the digital economy

The digital economy arose out of the extraordinary amounts of detailed machine-readable information that have become available about practically all personal, social and business activities and interactions.

The internet has also allowed a massive amount of information to be carried by modern communication networks and transmitted instantaneously over any distance. The quantity of data flowing globally over the internet has grown exponentially over the past three decades. Global internet traffic, a proxy for data flows, grew from about 100 gigabytes per day in 1992 to more than 45,000 gigabytes per second in 2017.

Today 3.9 billion people, or 51 per cent of the global population, use the internet, and it is predicted that nearly two-thirds of the global population will have internet access by 2023 (Cisco Systems, 2020).

Currently 80 per cent of the processing and analysis of data take place in data centres and centralized computing facilities, and 20 per cent in smart connected objects such as cars, home appliances, manufacturing robots and computing facilities (Gartner, 2018).

In the future, even more data are likely to be generated by smart connected objects and personal computing devices. Not only do digital technologies modify the functionalities of available goods and services, but the range and extent of such functionalities will depend on the quantity of data that can be transmitted. For example, the availability and diversity of data are crucial for training AI systems, which work by combining large amounts of data with fast, iterative algorithms to allow the software to learn automatically from patterns or features.

Although data are becoming evermore ubiquitous, creating value out of data requires complementary assets, individual skills, and data assessment tools, enabling those individuals and firms with the strongest capacities to take full advantage of the data (Guellec and Paunov, 2018).

An entirely new value chain has evolved around firms that support the production of insights from data, including data acquisition, data storage, data modelling and data analysis to generate data intelligence.

This digital value chain runs through every aspect of the economy, enabling the efficient management of supply chains and increasing product diversity and in-depth insights about consumer preferences, In essence, the amount of data and the speed of data transmission enabled by data infrastructure is crucial for the functioning of the digital economy.

Read Full World Trade Report 2020

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