How Data Leads to Strategy|The Story of Analysis

The use of data is key in producing a successful economic strategy, highlighting the direction in which action should be taken to ensure the most efficient outcome. Without data analysis, the strategy may not address the necessary areas for development, since these are not always noticeable day-to-day.

Using data bases, relevant data can be extracted for analysis, for example average earnings, economic activity levels and economic skills. These categories can be concentrated on particular areas of interest, such as geographies and demographics. This allows for analysis to entirely focus on the relevant areas to each case, but also is available for comparison against local and national trends. It is then possible to identify causation and correlation between such data categories for each area and group of interest.

Following the calculation of summary statistics within particular categories, any relevant or revealing figures can be highlighted and questioned. Typically, the larger and smaller values are key for ranking the areas or groups in terms of economic performance, and this allows for comparison of the groups of study to their neighbouring demographics or geographies, as well as its similarity or difference to, typically, the national averages.

It is then critical to question why and how each area falls into its ranking position, as this will determine the areas which the economic strategy must target. It is possible to identify which areas are particularly successful in their ranking, and consider the reasons or methods for their success. Why are median earnings in an area so high? Why is such a large proportion of the workforce in an area economically active? These answers, if identifiable, can be transferred and applied to the strategy for the area in need of development, to aim for the same outcomes.

For visual comprehension, the data can be presented in an infographic or dashboard, before any formal strategy is developed. This allows for more accessible collaboration between contributors, and can highlight some key categories which may need to be focused on in strategy development.
Only then does it become possible to develop and fabricate a relevant economic strategy to correct the issues highlighted by the data analysis.

It is, however, essential to note that although data is extremely beneficial when “telling the story” of economic development, other intuition can also benefit the economic strategy, which data often cannot contribute to. A critical case of this is the 2021 census data, which economists can identify as influenced by the COVID-19 Pandemic which was still very much ongoing at the time. As a result, data such as employment and earnings may be affected, consequently affecting the analysis for strategies. Instead, older data sets can be considered, or economists can make note of the reasons for particular statistics, using their own intuition to develop a relevant and successful economic strategy.

Find more information on economic strategy here.

Written by Holly Dixon, University of Manchester Economics Undergraduate

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