As businesses continue to expand their operations globally, the importance of Big Data analytics in emerging economies has become increasingly crucial. For instance, “Urban world: The Global Consumers to watch” by McKinsey Global Institute shows that by 2025, emerging economies will account for almost 50% of the world’s consumption. This presents a huge opportunity for companies to expand their market reach and generate significant revenue growth.
Some experts say that most of the world’s data is going to originate in emerging markets for the coming years. They are the countries to benefit more from the data insights as they get a lot of impact on decision making. It is likely to grow major sectors of the economy. However, it is estimated only slightly over 10% of the data being generated in these economies is being analyzed.
The main obstacle for utilizing Big Data collected from certain regions is poor infrastructure. This includes issues such as unreliable power supply and slow communication speeds, which can disrupt data collection and processing. Additionally, some areas may have limited or no data available, further hindering the use of Big Data.
In rural settings for instance, digital access may be a challenge for data collection. Some of the data collected is stored on paper, and in most cases it will remain on that paper. The cost of generating raw data from the records is not a joke. This presents a huge opportunity for businesses to tap into this unexplored market and use the data to their advantage.
Emerging Economies Driving Demand for Big Data Analytics
Real-life examples of this trend can be seen in countries like India, where the rise of e-commerce has led to a surge in demand for data analytics. E-commerce companies such as Flipkart and Snapdeal are using Big Data analytics to improve their understanding of customer behavior, identify trends, and provide personalized recommendations to their customers. Big Data analytics works by sourcing the customers information, so these companies know their customers, where to find them, future needs, and the advertisement to use.
Another example can be found in Kenya, where mobile money transfer service M-PESA has revolutionized the financial industry. M-PESA uses Big Data analytics to track and analyze user transactions, providing insights into customer behavior and patterns. With the data insights Mpesa Fuliza service was born – a continuous overdraft service that allows Safaricom’s M-PESA customers to complete their M-PESA transactions even when they do not have enough funds.
In a report by business daily in 2019, the service had registered over 1 million subscribers within a week of its launch. Its loan book hit 1 billion shillings, way higher than banks. How Mpesa Fuliza was able to hit banks in lending, the Big Data analytics helped in understanding the market, and for decision making.
Another company unleashing the power of data in Africa is Rwazi that uses on-ground data from markets across sub-Saharan Africa. The company’s founder Joseph Rutakangwa, came to the Emerging Markets Today podcast and explained why this is so important for emerging markets economic development in the private sector and also in the public sector. So he came up with the idea of starting Rwazi using gig workers – what he calls “mappers” – and they provide the most accurate and localized data for companies and NGOs.
What the Blockchain Technology Has to Offer to Emerging Economies
The emergence of blockchain technology is providing a potential solution to the problem of data ownership. Blockchain can give individuals in emerging economies control over their personal data and the ability to leverage it in whichever way they see fit. By using a peer-to-peer network system, data can be owned by the individual, not held captive by companies for extraction and analysis.
A real-life example of this can be seen in Ghana, where the Bitland project is using blockchain technology to create a land registry system that is secure and transparent. By giving individuals ownership over their land, it is hoped that this will reduce corruption and land disputes in the country.
In conclusion, the future of Big Data analytics in emerging economies is bright and growing rapidly. The emerging markets are the ones to gain more from this technology. With the help in decision making, they are likely to come up with smart choices in the respective fields, and thus increase their operations globally.
Main Photo: A GiveWell staffer tests the m-Pesa system that is used by GiveDirectly for cash transfers in rural Kenya - CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=23607888