Every year, trillions of dollars are loaned and invested around the world based on outdated economic indicators.
Consumer price indices in many countries, for example, are based on data that is more than six weeks old.
While financial markets still move to these numbers, there’s a growing acknowledgment that the official data is insufficient, and that decision makers – such as policymakers and investors – need real-time data to gain a better idea of where economies are headed and why.
There are 2.6 billion smartphone users globally, according to Ericsson’s 2015 Mobility Report. By 2020, that number is expected to increase to 6.1 billion. In her latest book, GDP: A Brief But Affectionate History, renowned economist Diane Coyle makes a plea for modernising economic statistics. Mobile technology is what will enable this to happen.
Just over a year ago, Premise and Standard Chartered partnered to launch a consumer price tracker in Nigeria. Data contributors on Premise’s network use a simple smartphone app to help track the prices of 150 consumer goods in real time.
With real-time data gathered by people on the ground, we can track the sensitivity of prices in Nigeria and how they correlate to a wide range of local events
To date, we have collected nearly 650,000 data points, each allowing us to understand the latest price trends that could affect overall inflation.
With real-time data gathered by people on the ground, we can track the sensitivity of prices in Nigeria and how they correlate to a wide range of local events, including the recovery of the region post-Ebola, national elections, and the sensitive security situation in the north of the country.
And it’s not just price data that we’re collecting. In Venezuela, Premise is currently monitoring widespread resource security issues by tracking line lengths inside and outside of markets, shelf stock and police presence, and how these patterns are changing over time.
We’re only at the beginning of what I anticipate could be a large-scale ‘rip and replace’ of current data-gathering pipelines
In sub-Saharan Africa, we’re measuring electricity grid stability, helping investors to better understand where greater investment should be made based on the data. In the Philippines, we’re measuring the efficacy of efforts to recover government revenue following the implementation of a tax law on cigarettes, beer and spirits.
Today’s widespread, persistent and worsening geopolitical volatility means an even greater need for decision makers to have access to better data.
I’m optimistic that mobile technology is finally starting to become a greater part of the global statistics machine, but we’re only at the beginning of what I anticipate could be a large-scale ’rip and replace’ of current data-gathering pipelines.
There may be no end in sight to geopolitical instability, but at least we know the tools and technology now exist to help decision makers get better insights. From tracking the rising cost of feeding families in Nigeria to helping investors bring electricity to the last mile in Kenya, there are hundreds of millions of lives that can benefit – and ultimately, this is what matters most.