The data economy is becoming ever more important. The last year has crowned artificial intelligence (AI) as the key innovation of the decade, the use of algorithms for decision-making and their future applications are topics of debates in every business and policy circle. What is the role of data for strategic applications in organisations and governments?
Making sense of the present
In both private and public sector, organisations are becoming more data-driven, with processes and key decisions getting automated. According to McKinsey “data-driven organisations are 23 times more likely to acquire customers, 6 times as likely to retain customers, and 19 times more likely to be profitable as a result.” As reported by Harvard Business Review, the percentage of Fortune 1000 companies believed to have “created a data-driven organisation” (and “established a data and analytics culture”) doubled from 24% (21%) in 2023 to 48% (43%) in 2024. Becoming data-driven is cultural change issue, with human factors being the key barrier for 78% of the surveyed organisations. This is combined with the increased need to quantify, benchmark and monitor the performance of countries and organisations to make informed decisions. This urgency becomes especially pressing in an increasingly competitive and geopolitical fragmented world, where the importance of data, knowledge and insights are key to thrive.
At Horizon Group, we support our clients by helping them to collect and analyse (big) data, construct and use socioeconomic metrics and composite indicators. The interest of organisations for this type of analytical tools is rising, due to the necessity of making sense of the current risks and opportunities in an increasingly complex world.
Envisioning the future
According to most speakers and crowd at this year’s Annual Meetings of the World Economic Forum, the future of the global economy looks increasingly gloomy, especially due to precarious (or inexistent) geopolitical equilibria. The economist Nouriel Roubini listed some of the current trends and challenges, from widening inequalities to political polarisation and populism, from deglobalisation to climate change and loss of biodiversity … to name a few. Due to the increased frequency of black swans (i.e. rare events such as pandemics) and fat tails1 (e.g. climate disasters), several of these global risks are becoming ever more complicated to predict and hedge against. Moreover, the pace of technological change is faster than ever, with AI reshaping the future of work at an unprecedented pace, but we still do not fully understand the consequences of it. For instance, the Stanford Professor Erik Brynjolfsson claimed that 40-50% of tasks across all occupations will be transformed, but not necessarily automated.
There exist therefore several opportunities to be reaped by envisioning and embracing the future: Horizon Group is a global leader in providing applied foresight services, a key tool to mitigate potential risks and anticipate opportunities, by understanding and analysing global trends, building and comparing future scenarios.
Learning from the past
In this knowledge economy, successful organisations are not just those able to understand the present and envision the future, but also those able to learn from the past, which is instrumental for the other two. And the push for organisations to understand the past is twofold, both internal and external. On the one hand, learning organisations are those that succeed by experimenting and learning from their mistakes. As the psychologist Adam Grant said at Davos, “organisations that are afraid to run experiments are not learning organisations”. Whether it is testing the environmental impact of a new technology, the efficacy of a new policy or the profitability of a new product or market, all organisations need to learn. On the other hand, the stakeholders of all types of organisations, from shareholders and investors to citizens and consumers, are increasingly demanding to show proof of the impact of their actions and policies – not just economic, but also on society and the environment.
Impact evaluation, a core expertise at Horizon Group, is the finest methodology to answer both types of questions, whether from internal or external drivers. Today there is large availability of both resources (large datasets) and tools (statistical methods) needed to run impact evaluations, thereby contributing to foster the development of a learning culture.
Christine Lagarde has warned against the excessive use of theoretical models by economists. This can be a sound advice in a world characterised by increasingly unpredictable “exogenous shocks” (e.g. natural or geopolitical events) and seemingly irrational economic behaviours, as described above. At Horizon Group, we let the data speak and use them to learn insights about the world, both its past, present and (potential) future state. Whether Lagarde is right or wrong about models, it is clear how data is becoming the oil of the future, and we are ready to support organisations to make the most out of it.
