Data insight to deliver £20bn economic boost
THE adoption of data analytics and better use of data across Scotland could deliver £20 billion worth of productivity benefits for the economy over the next five years, it has been claimed.
This comes as it is revealed companies in the data innovation and analytics sector in Scotland have generated more than £1bn in revenue for the first time.
Data analytics, with complex algorithms and perceptions of privacy invasion, has proved a difficult industry to promote, but 2018 is set to see enormous forward momentum among Scotland’s globally competitive industry.
David Smith, senior director of digital technology at Scottish Enterprise, said: “We have a range of technology here in Scotland which gathers data, and the software and analytics capabilities that makes sense of that data and drive value from it.”
And Scottish Enterprise has upped its commitment to data accordingly. The government agency is working with a spread of partners and overseeing increased foreign direct investment (FDI) in the data sector.
Mr Smith said data was integral to Scotland’s economic growth. “Scotland is taking great strides in building strong global reputation as a data innovation community,” he said.
“This is expected to attract significant new jobs through inward investment and data driven innovation has the potential to deliver big productivity benefits over the next five years.”
In addition to companies developing data platforms, big businesses such as Skyscanner – which was sold last year in a £1.6 billion deal – have effectively made their name by using computer software to analyse data, in this case flight information, and make it easy for consumers to digest.
Mr Smith works with business owners and academics to help deliver tools and services through data platforms, and support busi- nesses in how they can integrate data in their technologies.
“There are a good cluster of companies, we’ve identified more than 150 operating in the field of data innovation and data analytics, which based on our estimates now have a combined [revenue] of more than £1bn,” he said.
“And we estimate over the next five years in terms of overall potential, the adoption of data analytics and better use of data across Scotland could deliver £20bn worth of productivity benefits for the economy as a whole.”
Mr Smith said Scotland’s capabilities in data was one reason the country is the most attractive part of the UK outside of London for FDI.
“Last year we identified more than 300 jobs from inward investment data projects alone and we expect that to increase very substantially over the next few years,” he said.
Datalab, one of the Scotland’s eight innovation centres, was created to drive forward the data science industry.
Much of its work is with Edinburgh University’s School of Informatics, which has propelled Scotland onto the data world stage – and the country can now boats the largest proportion of all data science post-graduate courses in the UK.
Larger businesses are also beginning to appoint chief data officers, who report directly to the board. Previously data managers would report to the head of information technology. “The pace of change is sometimes quite breath-taking,” said Mr Smith.
A major change to the way data is held and managed will become law in May when the European Union’s General Data Protection Regulations (GDPR) come into force.
This gives people much more control over how their data is used – and the sector hopes this will help improve perceptions of data.
Mr Smith said: “It’s important to understand that people will continue to be educated about making sure they are clear about how to control their data and how much control or access they want to give in return for the benefits they are getting.”
Data firms in Scotland generated more than £1 billion last year.