This action might not be possible to undo. Are you sure you want to continue?
M AY 2 0 11
m c k i n s e y
g l o b a l
i n s t i t u t e
The challenge—and opportunity— of ‘big data’
A new report explores the explosive growth of digital information and its potential uses.
“smart” meters. enabled by big data. Can big data play a useful role? New research from the McKinsey Global Institute (MGI) finds that collecting. and the implications for the leaders of private-sector companies and public-sector organizations. competition. increasing access to data across separate departments can sharply reduce search and processing times. the amount of data available for analysis is exploding. how different domains can use large data sets to create value. Now. and other machines). and personal-location data. In the public sector. and productivity explores the state of digital data. The report identified five broadly applicable ways to leverage big data: 1. . enhancing the productivity and competitiveness of companies and the public sector and creating a substantial economic surplus for consumers. The report Big data: The next frontier for innovation. Use data and experiments to expose variability and raise performance. and operations. 2. they can collect more accurate and detailed performance information on everything from product inventories to sick days. and manufacturing units to facilitate concurrent engineering can cut time to market. 3. can unlock a great deal of value.000 to 190. and technology deployment. engineering. Companies capture trillions of bytes of information about customers. Segment populations to customize. The United States alone faces a shortage of 140. integrating data from R&D. MGI’s analysis shows that companies and policy makers must tackle significant hurdles to fully capture big data’s potential. Companies and policy makers must also tackle misaligned incentives around issues such as privacy and security. access to data. as well as for policy makers. storing.5 million managers and analysts with the skills to understand and make decisions based on the study of big data (exhibit). the public sector. Transparency. This approach is well known in marketing and risk management but can be revolutionary in areas such as the public sector. suppliers. Many citizens look with suspicion at the amount of data collected on every aspect of their lives. and mining big data for insights can create significant value for the world economy. The report’s analysis is supplemented by a detailed examination of five domains—health care. As organizations create and store more transactional data in digital form. as computers and cell phones continue to pervade our daily activities and as millions of networked sensors are being embedded in these devices (as well as in automobiles. retailing.2 The proliferation of data has always been part of the impact of information and communications technology. In manufacturing. The scale and scope of the changes that such “big data” are bringing about have reached an inflection point. Make big data more accessible and timely. manufacturing. Big data allow organizations to create ever-narrowing segmentations and to tailor services precisely to meet customer needs.000 people with analytical and managerial expertise and 1.
equal to 140. The emergence of real-time location data has created a new set of location-based mobile services from navigation to people tracking. Innovate with new business models. 5. company interviews. US Census Bureau. and services. products. . Source: Dun & Bradstreet. Use automated algorithms to replace and support human decision making.000 unﬁlled positions 1 Deep analytical talent are people who have advanced training with statistics or machine learning. McKinsey Global Institute analysis Related thinking “Clouds. US Bureau of Labor Statistics. Copyright © 2011 McKinsey & Company. To improve the development of next-generation offerings and to create innovative after-sales services. and smart assets: Ten techenabled business trends to watch” “The Internet of Things” “The global grid” “Meeting the demand for data storage” 4. thousands of FTEs1 Supply 2008 employment Forecast of graduates Net of additions through immigration and reemployment of previously unemployed minus expected attrition Projected 2018 supply 2018 demand to realize full potential of big data 156 +161 –32 285 425–475 50–60% gap relative to supply given current trends. Deep analytical talent.3 Web 2011 Big data teaser Exhibit 1 of 1 Exhibit Demand in the United States for people with deep expertise in data analysis could be greater than its projected supply in 2018.000–190. Such analytics have applications from tax agencies to retailers. All rights reserved. big data. Read the executive summary or download the full report on the McKinsey & Company Web site. minimize risks. FTE = full-time equivalent. and unearth valuable insights that would otherwise remain hidden. Sophisticated analytics can substantially improve decision making. manufacturers are leveraging data obtained from the use of products.