• The Data Literacy Index commissioned by Qlik and produced by Wharton School academics and IHS Markit, reveals that organisations with a strong corporate data literacy score exhibit up to 5% higher enterprise value
• While the majority of business decision makers recognise the importance of a data literate workforce, fewer than 20% are encouraging their employees to become more confident with data
Qlik wants to be synonymous with the concept of data literacy and is driving the idea that interpretation of data should move beyond the data scientist community.
• While the majority of business decision makers recognise the importance of a data literate workforce, fewer than 20% are encouraging their employees to become more confident with data
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| Data literate companies are valued more highly than peers which are not data literate, according to the Data Literacy Index. |
“We're building a big part of the creation of the idea of a data literate world for all,” said James Fisher, Senior VP, Strategic Marketing, Qlik. “In the future, individuals and organisations will need to develop data literacy skills. We want to help organisations to understand the value of data-driven culture.”
That value could be as much as US$534 million. Qlik shared results under embargo of research* commissioned on behalf of the newly-launched Data Literacy Project in a sneak preview during its 2018 Data Revolution Tour in Singapore. A key finding was that organisations in the upper third of the Data Literacy Index showed a 3%-5% increase in the total market value of the business, or enterprise value.
“The average market value of organisations in the study is US$10 billion,” Fisher said, making the 3%-5% figure equivalent to US$320 million-US$534 million. Improved data literacy also correlates positively with other measures of corporate performance, such as gross margin, return-on-assets, return-on-equity and return-on-sales.
This means that a data literate workforce is important, but the benefits are only maximised if the ability to use data literacy for decision-making in the business is encouraged. Companies have not made the connection yet however. There is still a gap between how companies see the performance and relevance of data and an appreciation of the significance of data literacy, Qlik said.
While 92% of business decision makers in large enterprises believe that it is important for employees to be data literate, 17% say that their business significantly encourages employees to become more confident with data.
“We probably aren't doing enough... to get access to that value,” said Fisher.
Lorin Hitt, Professor, Wharton School, University of Pennsylvania said, “This is the first time that data literacy has been measured on a company level, which includes not only the data skills of company employees, but also the use of data for making decisions throughout the company.
“This is important because our research suggests that this broader concept of corporate data literacy represents a mutually reinforcing set of business practices that are associated with higher financial performance.”
The research has found that more respondents in the Asia Pacific region have pivoted to emphasise data in the last five years than in other regions globally. Ten percent in the region have made changes in the way they use data while 20% are willing to pay higher salaries to employees who are data literate, showing that companies are not yet "walking the talk". Additionally, 40% in Asia have made "quite a few" changes to the way their companies use data, against 47% in the US.
In the Asia Pacific region:
- Nine in 10 (92%) business decision makers believe is important for that their employees to be data literate
- A third (34%) of organisations are providing some form of formal data literacy training
- A sixth (17%) report that their business significantly encourages employees to become more confident with data
Singapore performed exceptionally within the Asia Pacific region and is the most data-literate nation globally. The country had a corporate data literacy** (CDL) score of 84.1 compared to 81.3 in the UK and 79.0 in Germany. The other leaders in Asia Pacific were Australia (a CDL score of 72.4) and India (76.2). Japan, on the other hand, scored 54.9.
Singapore is well-positioned for high data literacy with its large investments in technology, which provide access to data and analytics; an economy that is knowledge worker-driven; and university-level education with world-leading investments in computer science, specifically data science and visualisation skillsets, explained Fisher.
Other findings include:
Businesses are not ready to pay for widespread data expertise
The majority of businesses decisions makers feel it is vital for employees to be data literate, but just 24% of the global workforce reports being fully confident in their ability to read, work with, analyse and communicate with data***.
Further aggravating this skills gap, while two-thirds of companies (63%) are planning on hiring more data-literate employees, the onus is on the individual. Business leaders have been unwilling to commit resources to improve the data literacy of their workforce, with only 34% of firms currently providing data literacy training, and 36% willing to pay higher salaries to employees who are data literate.
Availability of data skills does not lead to more data-driven decision-making
Nearly all business leaders acknowledge that data is important to their industry (93%) and in how their company currently makes decisions (98%). Just 8% of firms have made major changes in the way the data is used over the past five years.
Data-driven decision making had the lowest score of the three dimensions of corporate data literacy measured. Even companies that have data-literate employees across every business unit are not likely to be turning data into useable information as effectively as possible.
“Even when we have the skills in place, organisations are not fully following through in terms of how they drive action and change within the organisation,” Fisher said.
Some industries have higher data literacy
There are far greater differences in corporate data literacy between industries than between regions. The healthcare, retail and real estate industries underperformed on data literacy (with respective data literacy scores of 67.1, 69.2 and 70.7), while the administrative, technical services and finance industries performed more consistently (81.1, 80.2 and 77.4 respectively). Sector-wise, the banking and finance industry has the highest average CDL score in Asia Pacific.
Jordan Morrow, Global Head of Data Literacy at Qlik said: “With the greater presence of automation, robotics and artificial intelligence, the fourth industrial revolution is looming. Data will be its universal language and those companies that master it will reap the rewards.
“Yet, while companies pay strong lip service to the relevance and importance of data literacy to their business, their willingness to commit resources for data literate employees and evoke change to allow for data-driven decision making is lacking.
“Within just five years, the winners of the data revolution will be clear. The Data Literacy Index is not merely an eye opener. It is a call to arms for business leaders to defend their market share.”
Precursor research to the Data Literacy Index includes Qlik's data literacy survey, conducted earlier in 2018 and which assessed an employee’s data skillsets.
Even though Singapore is the most data-literate country in the world, there is more room for improvement. The earlier survey findings discovered a low data literacy level across the board in Singapore. About two thirds 66% of C-suites and directors do not know how to deal with data, and four in 10 (42%) admitted that they frequently make business decisions on ‘gut feel’ over informed insight.
- Nine in 10 graduates in Singapore enter workforce unprepared to deal with data.
- Employees in Singapore are under immense pressure to use data at work.
- Nearly two thirds (65%) agree that they have to work with a higher volume of data today compared to three years ago
Read the TechTrade Asia blog post citing Qlik Asia Pacific's comments on data literacy
Read the global report to guide enterprise on driving data literacy within a company
The Qlik data literacy education programme is designed to empower everyone with the ability to understand, analyse and use data with confidence. Lessons are product-agnostic and teach concepts that can be used in any context and with any business intelligence tool. Offerings include:
Try free data literacy classes from Qlik
Browse the earlier research on data literacy
*Qlik commissioned global research that explored the relationship between data literacy and corporate performance in partnership with Wharton and IHS Markit. The research covers data-driven decision making and data skill dispersion - how widespread the use of data is throughout the organisation. Six hundred and four global enterprise business decision makers in 10 geographies were surveyed about their companies' use of data and approach to data literacy. The research study was defined by Wharton academics and conducted by PSB Research.
The survey was conducted by PSB Research from June 27 through July 18, 2018. Business decision makers were selected from global publicly-traded companies, with at least 500 employees and which represented a wide range of industries including banking and financial services, manufacturing, retail, transportation, healthcare, energy, construction, utilities, and communications. The total number of interviews conducted was 604: 200 each in the US and Europe, and 204 in Asia.
Measures of Firm Performance The corporate value can be interpreted as the percentage difference in enterprise value of the organization for a one standard deviation difference in the corporate data literacy score, holding fixed all other assets of the firm. The analysis of performance was completed using public financial data for the surveyed companies. The result is statistically significant at conventional levels, and consistent with estimates from the performance regressions using other performance variables.
- Employees in Singapore are under immense pressure to use data at work.
- Nearly two thirds (65%) agree that they have to work with a higher volume of data today compared to three years ago
- Over half (56%) also admitted to feeling overwhelmed when dealing with data
The earlier survey also found that workers want to improve their data skills to boost their career (78%), but many are being held back by their employers. Almost half (47%) see the training offered as inadequate. Four in 10 (39%) graduate entry-level workers surveyed agree they have not had adequate training to be data literate, despite the majority (68%) willing to invest more time and energy to improve their skillset.
The earlier survey also found that workers want to improve their data skills to boost their career (78%), but many are being held back by their employers. Almost half (47%) see the training offered as inadequate. Four in 10 (39%) graduate entry-level workers surveyed agree they have not had adequate training to be data literate, despite the majority (68%) willing to invest more time and energy to improve their skillset.
Qlik's own technology makes use of data literacy knowhow to offer a better customer experience. Its visualisation capabilities help to ensure that users use colour and charts well. "We are now using cognitive artificial intelligence (AI) to instill a greater level of data literacy," said Fisher.
The Data Literacy Index was created by Qlik on behalf of the Data Literacy Project, a new global community dedicated to igniting richer discussion and developing the tools to shape a confident and successful data-literate society. The Data Literacy Project, whose logo spells out 'data' in Morse code, has a portal with inspiring stories, active conversation, self-assessment tools as well as resources and education.
And while Qlik is a driving force for data literacy, it is not going to go it alone. Founding partners for the Data Literacy Project include Accenture, Cognizant, Qlik, Pluralsight, Experian, the Chartered Institute of Marketing and Data to the People. More partners expected in the future.
There are many aspects to effective data literacy in organisations, including understanding the current corporate analytic strategy in conjunction with partners; democratising data literacy and embedding data literacy into core business processes. "It requires a fundamental change in the way individuals think and the culture of an organisation," Fisher noted.
In a panel discussing data literacy, Dr Keith Carter, Associate Professor, School of Computing, National University of Singapore, said there is a place for data scientists in organisations, but there needs to be supporting culture and a way to put them to use.
Dr Carter, who teaches "ABCD", or AI, Blockchain, cloud, and data, said that culture is critical as it can be brought in the wrong way, or hacked. "With AI you can train it so that it provides the wrong answers, so you lose trust or make a bad decision," he said.
"We need to do more to be able to create a culture where we understand what data is and how we can get better being data driven," agreed Dr Meri Rosich, Executive MBA Lecturer at GLOBIS University. "We have to enable not just people to understand (data) but understand the core ethical principles around the execution."
Dr Rosich said data literacy is a core skillset that should be developed professionally and personally, and updated continually. While the Singapore academic curriculum is integrating more data-driven subjects, so children can understand data, tell stories, and test for facts, she said that an AI certification from a school will be obsolete in two years.
"The process doesn't stop when you graduate. You need to develop systems that help you continue to learn," she said.
"The foundation is there. We now need to use that (and) apply it to something that is new to us, which is how to use data and how to apply data," summarised Fisher.
Dr Carter called the 3%-5% figure from the Qlik research conservative but impactful. "In the very near future, with good data, trustable data, AI can run a department, and then it can run a business unit; it can run a business, run a sector," he said. "Ultimately we'll see... sections of the government making top decisions on AI. It is moving faster than you expect."
Explore:
Read the TechTrade Asia blog post citing Qlik Asia Pacific's comments on data literacy
Read the global report to guide enterprise on driving data literacy within a company
The Qlik data literacy education programme is designed to empower everyone with the ability to understand, analyse and use data with confidence. Lessons are product-agnostic and teach concepts that can be used in any context and with any business intelligence tool. Offerings include:
- A one-day instructor-led class available worldwide, onsite or virtually
- Free self-paced online learning modules in the Qlik Continuous Classroom
- Free comprehensive data analytics certification in the Qlik Continuous Classroom
- Free learning resources for professors and students through the Qlik Academic Program
- Free skills assessment to receive a training roadmap based on skill level
Try free data literacy classes from Qlik
Browse the earlier research on data literacy
*Qlik commissioned global research that explored the relationship between data literacy and corporate performance in partnership with Wharton and IHS Markit. The research covers data-driven decision making and data skill dispersion - how widespread the use of data is throughout the organisation. Six hundred and four global enterprise business decision makers in 10 geographies were surveyed about their companies' use of data and approach to data literacy. The research study was defined by Wharton academics and conducted by PSB Research.
The survey was conducted by PSB Research from June 27 through July 18, 2018. Business decision makers were selected from global publicly-traded companies, with at least 500 employees and which represented a wide range of industries including banking and financial services, manufacturing, retail, transportation, healthcare, energy, construction, utilities, and communications. The total number of interviews conducted was 604: 200 each in the US and Europe, and 204 in Asia.
Measures of Firm Performance The corporate value can be interpreted as the percentage difference in enterprise value of the organization for a one standard deviation difference in the corporate data literacy score, holding fixed all other assets of the firm. The analysis of performance was completed using public financial data for the surveyed companies. The result is statistically significant at conventional levels, and consistent with estimates from the performance regressions using other performance variables.
**Corporate data literacy (CDL) is defined as the ability of a company workforce to read, analyse and use data for decisions; communicate with data in the organisation; and use that data in decision-making for work purposes. The measure of corporate data literacy was established by IHS Markit and a Professor from the Wharton School. It lies on a continuum based on
- The data skills of the employees (human capital)
- Data-driven decision making and
- Data skill dispersion (how widespread is the use of data throughout the organisation).
A survey was designed to measure the three dimensions of corporate data literacy. For each question a scale was developed from the categorical responses and the z-score computed to standardise responses across all indicators in order to aggregate them. The overall corporate data literacy score is computed as the sum of the three pillar scores. For the global sample, the distribution of CDL scores range from a low of 0 to a high of 100.
**** Source: How to Drive Data Literacy within the Enterprise
- The data skills of the employees (human capital)
- Data-driven decision making and
- Data skill dispersion (how widespread is the use of data throughout the organisation).
A survey was designed to measure the three dimensions of corporate data literacy. For each question a scale was developed from the categorical responses and the z-score computed to standardise responses across all indicators in order to aggregate them. The overall corporate data literacy score is computed as the sum of the three pillar scores. For the global sample, the distribution of CDL scores range from a low of 0 to a high of 100.
**** Source: How to Drive Data Literacy within the Enterprise
