The Absence of Data
Using data we don’t have and holding on to data we don’t use – many Nepali ventures find themselves trapped in this vicious cycle, their decisions based more on intuition and experience than hard facts. How do we break free from this cycle to find common footing with a data-driven world?
Billy Beane, the General Manager of the American baseball team, the Oakland Athletics took the underfinanced team to set the record for the longest consecutive winning streak in baseball history —20 wins. The movie ‘Moneyball’ recreates the real life event, showing how data can be used to identify undervalued players, replacing traditional, intuitional and experience-based player scouting methods. Unfortunately in Nepal, such useful data on sports is neither found nor used. This absence of data is not limited to sports though. Besides macroeconomic data from governement bodies, INGO-funded research, and a handful of private initiatives, data in the Nepali market is as rare as our ability and culture to appreciate its value.
Most would argue that the reason for not having data and thus not using it is because it is expensive and not worth it. This aversion points at a cultural issue rather than a financial one. Beed Investment’s Suman Rayamajhi says that “the availability and use of data is like the story of the chicken and the egg”; we do not use data because we do not have it, and we do not have data because we do not use it.
Supply side of data
Issues concerning the undersupplied side of data are not limited to just its supply, but extends to data characteristics such as inconsistency, inaccuracy, untimeliness and inaccessibility. A quick search on the Internet for unemployment rate in Nepal brought up figures from 2008, which ranged between 1.8% (Central Bureau of Statistics) and 46% (Central Intelligence Agency of the United States). To pin-point the current unemployment rate – the most basic indicator of the economic and social position of a nation – our guess is as good as anyone else’s.
According to a report published by Nepal Economic Forun (NEF) in 2010, ‘Nepali Statistics- Why don’t we get it?’, the inconsistency between figures issued by CBS and the Central Bank (NRB) – the two main government agencies that disseminates data – is another issue of concern for decision makers. According to the same report, CBS and NRB provide the International Monetary Fund with data, which is mostly kept beyond the reach of the public. Maybe that is why the CIA had to come up with its own figure for Nepalese unemployment.
These limitations on supply of data supply are direct products of a culture of inaccountability. The disorganized state in which this data exists, protects the people who inaccurately issue, fabricate and distort it, along with economists and journalists who often misinterpret it.
The demand side of data
Decision-makers in general do not believe in scrutinizing data. Most decisions are made on gut feeling and experience. The trial and error method is prefered in many cases over market research. Among the few exceptions to this local scenario, Beed Investment provides portfolio management services and works with a lot of facts and figures. According to Suman Rayamajhi, Co-founder of Beed, when the company started, most data, charts and information on listed companyies was not available freely. Beed had to approach each and every company to setup its database. Such private initiations are mostly limited to a few financial institutions and some banks.
Besides Beed, there are numerous multinationals that rely on data. These companies spend tens of millions every year to obtain data to understand their brand image and retail positioning. Most of these companies outsource the data collection process to foreign firms that specialize in collecting data to better understand the market in which they function. The bottomline then is that we do have people who think our data is important; we just don’t happen to be those people.
Escaping the cycle
Private Initiative: Beside suggesting what the government can do to escape the cycle, the private sector, which needs data the most, needs to be proactive. Beed’s initiative – Nepal Economic Forum (NEF) is an example. It has been issuing free handouts – ‘Nefport’, to disseminate information related to the Nepalese economy every quarter. But private initiatives to collect data do not have to limit themselves to macro-economic indicators. Any estimate directly or indirectly relevant to operations of a business or the overall industry is valuable. It doesn’t have to be made free either; there are ways to allow this to become a sustainable model. Approaching decisions armed with data is the step toward escaping this vicious cycle.
Digitization: Considering the significance of the Internet, the emphasis on the digitization of data is a no-brainer. The digitization of data in itself is a reason to focus on data-backed decision-making. The fact that data can be edited, processed and communicated with unprecedented ease makes data that much more important today. Cloud Factory, a company that deals with data digitization, collection, processing and categorization, provides these services to foreign clients. Mark Sears, the founder of Cloud Factory rightly points out that “many offices in Nepal are still filled with paper, and digitizing this data will help search for information and identify trends.” What we need are businesses who demand for services provided by companies like Cloud Factory.
Visualization: Collecting data and making them available does not solve the issue, data also needs to be understandable. Praveen Joshi is one of the proponents calling for visualization of data. “Having data is not enough, we need people who can understand it. Data visualization helps people find patterns and make sense of the numbers,” says Joshi. Decisions are made much quicker when data can be observed as charts and graphs, rather than dizzying lists of numbers. ‘Right to information’ should also include ‘right to be able to understand’; efforts to organize and make data comprehensible is necessary, for timely response, wider reach, and thus relevance.
Investing in market research is costly, and for most the cost is not justified. But the problem with a trial and error approach is that it could have potentially damaging results. The primary reason to support data-backed decision-making is to be competitive, not just with each other, but on a larger, global platform. In times where even presidential elections are using data in a big way to sway results – like it did for the Democratic Party in 2012’s US Elections, how are Nepalese businesses to compete without the right tools? The only way out of this problem is a paradigm shift in our business culture. We need more businesses that value data, that like numbers to back their decisions – that can support their ideas with actual facts and figures and not just gut feelings. With more businesses demanding data, the supply side of data will grow and the data collected will be more relevant, more accurate, more accessible and more affordable, making the cycle a positive one. Once that’s running, the possibilities are -to be modest- endless.
Kenyan Government’s effort:
In 2011, President Mwai Kibaki of Kenya launched the Kenya Open Data Initiative to make key government data freely available to the general public through a single online portal -opendata.go.ke, the first amongst developing countries. The site includes data from health, education, environment, justice, energy, national accounts and employment, to name a few –with data ranging from national exams performance to number of visitors to various tourist destinations. Till November 2011, 390 datasets had been uploaded to the site, with 17000 page views and over 2500 dataset downloads and endorsements from various websites and portals.
Open Data Nepal:
Open Data Nepal is an non-government initiative started in Nepal with the combined efforts of Young Innovations, Freedom Forum, NGO Federations of Nepal and Aidinfo. Through their protal –opendatanepal.org, they are working to make data in Nepal, accessible to everyone. Being more than just a repository of data, Open Data Nepal is an effort to make data simple, understandable, usable and accessible to everyone. Only in it’s initial stages, the portal contains seven datasets ranging from sanitation condition of schools to foreign aid data for Nepal. A budding effort to escape the vicious circle of absence of data in Nepal.