Use of Big Data in Firms Promises Greater Market Success for Innovations

Companies that use vast amounts of data undertake more product innovations and display a higher innovation intensity. These innovations based on big data can bring these companies market success – but only if companies make sufficient investments in the IT skills of their employees. These are the findings of an empirical study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

This investigation of the relationship between the use of big data at the firm level and company innovation activity is based on data from a large-scale survey of 2,706 companies in the manufacturing and service sectors in Germany. It is the first study of its kind to look at the impact of big data in Germany on such a large scale.

The availability of big data has led to lasting changes in how companies make decisions with regard to their customers and customer information as well as their final products. For example, companies can benefit from taking feedback provided by customers via social media into account when attempting to innovate their products. Big data can be distinguished from conventional data and technologies in three key ways: the enormous volume of data that is available for use; the great variety of information that can be gleaned from the data; and the speed with which data can be processed by means of newly developing big data technologies.

Big data as a catalyst in the innovation process

“For companies, the innovation process is often associated with high levels of uncertainty and high R&D costs,” says Steffen Viete, researcher in the ZEW Research Department “Digital Economy” and one of the authors of the study. Due to the new types of information made available, big data opens up new possibilities for companies in terms of how they make decisions, which can be of great benefit to the innovation process. Companies who systematically analyse and strategically use big data are more likely to engage in innovation activity and generate higher revenues as a result of these new products and services.

“The knowledge that companies gain from their use of big data can potentially lead to innovations being brought to the market more quickly and cost-effectively or serve as a basis for innovation,” says Steffen Viete, summarising the main findings of the study.

For further information please contact:

Steffen Viete, Phone: +49(0)621 1235-359, E-mail: steffen.viete@zew.de