Who is leading the data driven world?
Investments in big data and business analytical software are expanding outside of traditional ICT oriented industries and regions like North America and Europe. As data businesses are increasingly growing and can be transferred internationally, monitoring the data market in the EU alone is not sufficient to assess the potential of its data market. To help with this, we analysed the data markets of the US, Japan and Brazil to evaluate the place of the EU data market in the world.
How mature are these data economies?
The strength of the US data economy is evident as it has a vibrant big-data and business analytics oriented startup scene while maintaining its dominance in the ICT industry as many large (and famous) corporations are based there like Apple, Facebook, IBM and Google. The IDC estimated that in 2014 the US accounted for 45% of total business analytics markets worldwide and is expected to grow to 55%. But what is this data economy worth?
The total value of the US data economy in 2015 was 115 billion EUR which is twice the amount of the European data economy, valued at 54 billion EUR. Japan’s data economy is worth 24 billion EUR while Brazil’s is at 5.2 billion EUR. What is interesting is the variance between the numbers of data companies in each country in comparison to their data market values. While the US data economy is double that of Europe, the number of companies located there is 283 000 which is 13.6% fewer data companies than Europe. Why is this? Europe’s data market is mostly comprised of SMEs versus the larger corporations and companies in the US. What about Japan and Brazil? How many data companies are there?
Japan’s data economy, which is half the size of Europe’s, had 99 001 data companies in 2015. While the number of new data companies in Japan has been slowing, it is projected to have a renewed growth in 2016 and experience windfalls from early adoption of analytics by a substantial number of data enterprises. Brazil has 34 456 companies, while much of the Brazilian data economy is generated through companies based outside of the country, such as infrastructure or basic application providers or by large consulting firms implementing ICT projects. Now that we know how many companies there are, let’s take how many people of the total labour they employ.
In 2015 the data markets accounted for 7% of the labour force in the US versus 3% in Europe. Japan has also a high level of data workers with 3.6 million accounting for 5.6% of labour force. This can be explained through the high adoption of IT in Japanese businesses. Brazil however lags behind, with a million data workers making up 2% of the labour force.
Do developed data markets mean more ICT investment?
A good assessment of data market development is the share of data market value on ICT spending, as the data market is one of the most dynamic components of ICT investments, and it is a good measure of how data markets adopt new innovation trends. In 2015, the US the data market share on ICT spending was 12.3%, following a couple years of incremental growth. In 2015 the share in Japan was 11%, and in Brazil 3.8%. Europe lags behind Japan and the US with ICT spending at 7.6%, however forecasts by the IDC expect that Europe will catch up by 2020 when Europe’s data market value on ICT spending is expected to reach 12%.
It’s all good, but how do data markets contribute to GDP?
By analysing these figures, we can contextualise the impact of the data economy as a percentage of the GDP. The data economy in Europe accounts for 0.35% of the GDP, while in the US 0.71%, in Brazil it’s 0.44% and in Japan 0.65% .
This international assessment reflects the varying maturities and potential of the data economy in Europe and its biggest international partners. These results support an assessment made in the European Data market study that there is a strong potential of the EU data economy, a potential that can produce benefits for Europe if rapid development of the data ecosystem is supported.
Want a deeper look at the data market in the world? Download the report for year on year comparisons of data market indicators: http://bit.ly/dataworld
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About the study:
The European Data Market study aims to define, assess and measure the European data economy , supporting the achievement of the Data Value Chain policy of the European Commission. This strategy is focused on developing a vibrant and innovative data ecosystem of stakeholders driving the growth of this innovative market in Europe. The main results of this study will feed into the annual reviews of the Digital Agenda Scoreboard providing valuable data and information.
If you have any questions about the study, please contact Kasia Jakimowicz, Strategic Stakeholders´ Engagement for the Study, at firstname.lastname@example.org