Countless experts have discussed the proliferation of big data over the last decade. The global market for big data is projected to reach $229 billion within the next five years. This is an important testament to the incredible value that big data has brought to organizations around the world.
Despite the global impact of big data, the focus is too frequently viewed through the lens of developed economies, such as the United States and Western Europe. Although the utilization of big data is clearly more widespread in developed economies, it is also becoming more dominant in emerging markets as well. Policymakers and entrepreneurs in emerging economies must appreciate the contributions made by advances in data technology.
Data analytics can also be useful for stakeholders abroad. They can use insights from data mining to identify financial trading and entrepreneurial opportunities in emerging economies that would have otherwise been overlooked. This can be great for forex traders. They can use data analytics to focus on forex software.
Data analytics can be most beneficial when it comes to identifying the impact of major socio-political events. This can play an important role in anticipating changes in currency prices. Some of the ways that data analytics can be invaluable for forecasting trends in emerging markets are listed below.
Identifying risks and opportunities associated with sovereign trade deals
During the beginning of 2019, Murat Ozemre and his colleague Ozgur Kabaduus from Yasar University published an article on the use of big data analytics for forecasting trade volumes among global supply chains. The research showed that data analytics can be incredibly useful for improving the efficiency of supply chains.
The principles of their findings can be applied at the macroeconomic level as well, particularly in a developing economy. Instead of focusing on the inter-relation between a supplier and end purchaser, they could assess the change for a broader economy participating in a trade deal with another sovereign entity.
Trade partnerships have tremendous implications for all parties involved. However, they tend to have the largest effect on smaller economies, particularly those that are part of an emerging market. A trade deal could move the needle in terms of economic growth for a large economy, such as the United States or Italy. On the other hand, it could cause a substantial stimulus effect or wreak devastation in an emerging economy in Africa or Latin America.
Although the expected outcome is easy to gauge with qualitative data, it is much more difficult to anticipate the exact impact with quantitative data. However, it is possible to use predictive analytics to draw such a conclusion.
Predicting the impact of a change in the political dynamics of a country s
leadership
Leadership changes occur at the national levels of almost every country occur at least once every 20 years. Of course, some of these changes are more significant than others. A regime change in a dictatorship transitioning to a democracy could have earthshaking implications. The election of a new president from the same political party would have much less of an impact.
The impact of leadership changes in emerging economies can be more significant than that of developed economies. These leaders have the power to influence policy to a greater degree, due to existing authoritarian power structures. They also can enhance or stifle optimism in countries that they have formed partnerships with.
Nevertheless, any change in leadership is going to have positive and negative implications for an economy. These changes can have a broader impact on an emerging economy, since these areas are more sensitive to such events.
Predictive analytics can use various models to anticipate the consequences of a change in political leadership. They can look at:
- The net impact from similar types of leadership changes in peer countries within the past 20 years
- The political positions of the new leaders
- Expected responses from business leaders, trade partners and other stakeholders based on poll data
- Levels of support for the new leaders by other politicians
Predictive analytics models try to account for every possible factor in these models.
Predicting the consequences of natural disasters
Natural disasters have considerable implications for national economies, which may be felt for years to come. The exact impact is easier to anticipate with the right data analytics models. It is also easier to predict natural disasters with big data in the first place.
Predictive analytics technology can account for disruptions in the supply chain within a country, as well as between other trade partners. It can also assess the degree to which it reduces or incentivizes innovation, as well as the economic toll of the physical destruction itself. All of these factors have a considerable impact on an economy. They can be even more significant for emerging economies, so it is important to use sophisticated data analytics models to draw accurate conclusions.
