The world today is awash with data. Corporations, governments, and individuals are busy generating petabytes of data on culture, economy, environment, religion, and society. While data has become abundant and ubiquitous, data analysts needed to turn raw data into knowledge are in fact in short supply.
With big data comes big opportunity for the educated middle class in the developing world where an army of data scientists can be trained to support the offshoring of analytics from the western countries where such needs are unlikely to be filled from the locally available talent.
In a 2011 report, McKinsey Global Institute revealed that the United States alone faces a shortage of almost 200,000 data analysts. The American economy requires an additional 1.5 million managers proficient in decision-making based on insights gained from the analysis of large data sets. And even when Hal Varian, Google's famed chief economist, profoundly proclaimed that "the real sexy job in 2010s is to be a statistician," there were not many takers for the opportunity in the West where students pursuing degrees in statistics, engineering, and other empirical fields are small in number and are often visa students from abroad.
A recent report by Statistics Canada revealed that two-thirds of those who graduated with a PhD in engineering from a Canadian University in 2005 spoke neither English nor French as mother tongue. Similarly, four out of 10 PhD graduates in computers, mathematics, and physical sciences did not speak a western language as mother tongue. Also, more than 60 per cent of engineering graduates were visible minorities, suggesting that the supply chain of highly qualified professional talent in Canada, and to a large extent in North America, is already linked to the talent emigrating from China, Egypt, India, Iran, and Pakistan.
The abundance of data and the scarcity of analysts present a unique opportunity for developing countries, which have an abundant supply of highly numerate youth who could be trained and mobilised en masse to write a new chapter in offshoring. This would require a serious rethink for thought leaders in developing countries who have not taxed their imaginations beyond thinking of policies to create sweat shops where youth would undersell their skills and see their potential wilt away while creating undergarments for consumers in the west. The fate of the youth in developing countries need not be restricted to stitching underwear or making cold calls from offshored call-centres in order for them to be part of the global value chains. Instead, they can be trained as skilled number-crunchers who would add value to otherwise worthless data for businesses, big and small.
A multi-billion dollar industry
The past decade has witnessed a major change in the sectorial evolution of some very large manufacturing firms known in the past for mostly hardware engineering and now evolving into firms delivering services, such as business analytics. Take IBM for example, which specialised as a computer hardware company producing servers, desktop computers, laptops, and other supporting infrastructure. That was IBM's past. Today, IBM is focussed on analytics. It is spending hundreds of millions of dollars in advertising, trying to rebrand itself as a leader in business analytics. In fact, it has divested from several hardware initiatives, such as manufacturing laptops, and has instead spent billions in acquisitions to build its analytic credentials. For instance, IBM has acquired SPSS for over a billion dollars to capture the retail side of the Business analytics market. For large commercial ventures, IBM acquired Cognos to offer full service analytics.
In 2011 alone, the business analytics software market was worth over $30 billion. Oracle ($6.1bn), SAP ($4.6 bn), IBM ($4.4 bn), and Microsoft and SAS each with $3.3 bn in sales led the market. It is estimated that the sale of business analytics software alone will hit $50 billion by 2016. Dan Vesset of IDC, a company specialising in watching industry trends, aptly noted that business analytics had "crossed the chasm into the mainstream mass market" and the "demand for business analytics solutions is exposing the previously minor issue of the shortage of highly skilled IT and analytics staff."
In addition to the bundled software and service sales offered by the likes of Oracle and IBM, business analytics services in the consulting domain generated several billion dollars more worldwide. While the large firms command the lion’s share in the analytics market, the billions left at the bottom are still a large enough prize to take the analytics plunge.
Several billion reasons to hop on the analytics bandwagon