News

Data literacy adds up to $500M in enterprise value, research finds

October 12, 2018

A new academic study reveals a correlation between company performance and workforce data literacy.

The Data Literacy Index was commissioned by data management and analytics platform provider Qlik and produced by Wharton School academics and IHS Markit on behalf of the Data Literacy Project, a global organization.

The index shows that large enterprises with higher corporate data literacy — i.e., the ability of a workforce to read, analyze and utilize and communicate data — reap the rewards of a 3–5 percent (about $320 million to $534 million) higher enterprise value.

In addition, the index shows that improved data literacy appears to have a positive correlation with other measures of corporate performance, including gross margin, and return on assets, equity and sales.

However, while 92 percent of business decisions makers believe it is important for employees to be data literate, only 34 percent of firms currently providing data literacy training, and only 36 percent are willing to pay higher salaries to employees who are data literate.

And even companies that have data-literate employees across every business unit are likely not turning data into useable information as effectively as possible, the study found.

"While companies pay strong lip service to the relevance and importance of data literacy to their business, their willingness to commit resources for data literate employees and evoke change to allow for data-driven decision making is lacking," Jordan Morrow, global head of data literacy at Qlik, said in the release. "The Data Literacy Index is not merely an eye opener. It is a call to arms for business leaders to defend their market share."

The data literacy survey was conducted by PSB Research from June 27–July 18, and polled 604 business decision-makers from global publicly traded companies with at least 500 employees, and representing a wide range of industries.

The Data Literacy Index results summary can be found here.