For over a decade, a common refrain in the corporate world was that data was exploding and companies needed the capacity to capture that data. As the challenges of data capture have been more or less mitigated, the next challenge has become how to get value out of that data. Between 2015 and the end of 2017, the use of big data analytics grew nearly 40 percent among companies surveyed, according to Dresner Advisory Services, while big data software and services revenues will reach $42 billion this year, and more than $100 billion by 2027.
Today, an ever-growing number of solutions are creating opportunities to utilize data for business, science, and technology breakthroughs in ways we’d never imagined. And if you look closely, you’d see that in no place is that more evident than in Ohio, with its growing big data sector.
Innovation driven by legacy institutions
Ohio’s 25 Fortune 500 companies give the state a key advantage in its bid to become a data analytics leader. Many of these companies are already training their significant IT workforces to utilize data analytics in ways that drive business development. According to the Wall Street Journal, Nationwide Insurance is in the third year of a five-year plan to overhaul its insurance business using technology and data analytics, exemplified by its new SmartRide usage-based insurance program; Cleveland Clinic is working on projects that harness CE telemedicine, data analytics, and AI; and Procter & Gamble is using big data to reach more niche audiences. Companies like these will drive applications that lead to new products and services, spinoffs, and related startups.
The public sector has also proven receptive to experimenting with analytics. In May, the city of Columbus launched the Smart Columbus Operating System, which utilizes transportation data, as well as the internet of things to better understand our city and its challenges. Smart Columbus is part of DriveOhio, a year-and-a-half-old public-private partnership that aims to encourage the deployment of connected vehicles and smart mobility projects.
Turning Ohio into an analytics destination
What’s really promising is that venture capital firms and accelerators in the state are also increasingly interested in backing data analytics startups. In 2017, Fintech71, a nonprofit startup accelerator targeting financial technology, funded 10 companies, seven of which heavily utilize data analytics. And various VCs and accelerators, such as Blue Chip Venture Company, CincyTech, Drive Capital, JumpStart, Mutual Capital Partners, Rev1 Ventures, River Cities Capital Funds, and many others have put their considerable support behind data platforms and analytics companies across multiple industries. These data companies include: Ahalogy, Clarivoy, ConnXus, ExpenseBot, IncludeFitness, Makers Workstation, MassMatrix, Nexosis, and WireTap. The Columbus Region is also hosting more events centered around data analytics, like the Smart Cities 2018 Conference and the Women in Analytics conference, which drew more than 450 attendees this year.
Lastly, the state’s universities are realizing the demand for data analytics talent. For example, Ohio University has its own business analytics major, and the Ohio State University produced its first class of data analytics graduates in 2017. The University of Cincinnati and Cleveland State University now offer data analytics certificates, and Miami University’s statistics majors can co-major in analytics. The latter also announced a $50 million initiative this year that will be spent on new programs to prepare students for in-demand fields in the state, including data analytics.
The challenges ahead
According to the McKinsey Global Institute, the U.S. economy could be short as many as 250,000 data scientists by 2024. Despite the growth in educational programs, a talent gap is possible if Ohio institutions don’t work hard enough to promote and expand these programs.
There’s the added difficulty of maintaining and expanding a local edge cloud and internet technology infrastructure that can handle this data explosion. Privacy and security concerns associated with personal information protection will be an ongoing issue and a potential impediment to innovation, so companies need to take a careful and thoughtful approach to how they incorporate cybersecurity earlier into the development life cycle — or the speed of innovation in the data analytics community could slow dramatically.
And finally, while investment in technology is growing, Ohio companies received only about seven-tenths of 1 percent of the country’s venture funding last year. We must continue to help investors understand that the Midwest is a great place to invest in analytics-related startups and make an effort to connect promising startups into an ecosystem of valuable customers and partners.
Despite the challenges, many Ohio startups are continuing to gain traction, like Columbus’ Root Insurance. The company, which uses data analytics to judge driver behavior, raised $51 million earlier this year. With a combination of information-intensive industries, huge and innovative companies driving the data explosion, a growing talent pool of data scientists, and civic and business leaders’ desire to invest in technology infrastructure and startup communities, Ohio has the ability to drive opportunities and meet the growing demand for big data analytics in the U.S.
Matt Wald is currently president and CEO of the Columbus Collaboratory, a unique advanced analytics and cybersecurity solutions company founded by seven member companies: American Electric Power, Battelle, Cardinal Health, Huntington, L Brands, Nationwide and OhioHealth.