From rhetoric to reality: how better data can inform economic policy
Originally published on the World Economic Forum’s blog here.
This year’s World Economic Forum Annual Meeting in Davos will explore the many ways in which our world is becoming increasingly complex and fragmented—and how world leaders should respond.
The meeting comes at a time when technological advances have fueled a polarizing debate about the future of work. Will tech-fueled shifts in global labor markets exacerbate existing inequities, pushing us further away from our goals of inclusive growth? Or will advances in automation and machine learning liberate human potential to pursue more noble aims?
We’re hopeful that unprecedented access to more — and more timely — data on the economy can ground otherwise divisive conversations in the sort of hard facts that can lead to shared understanding and collaborative solutions. By combining historically disparate data sources, such as administrative labor market data, with new ones from digital platforms like LinkedIn, we have a far more complete and real-time picture of both the status quo and emerging trends in the labor market.
At LinkedIn, we’ve created a digital representation of the global labor market — what we call the Economic Graph — which enables us to understand and share insights into hiring rates, employer skills demands, and inter- and intra-national talent migrations.
We believe that one of the best ways of realising our company’s vision — to create economic opportunity for every member of the global workforce — is to empower policymakers with these insights so that they can make timely, informed, and targeted decisions, rooted in data, when managing their labor markets.
We help our partners draw on the Economic Graph to get to grips with the new challenges we’re all facing as we enter into the Fourth Industrial Revolution. But it can also help us with some of the problems that have always been with us.
Consider endemic gender gaps that vex policymakers, organizations, and labor markets. In partnership with the World Economic Forum (WEF), LinkedIn has been able to examine how diverse industries are failing women at each stage of their careers, and where in the pipeline women are falling behind — from entry level to most senior leadership level. These insights, reflected in the WEF 2017 Global Gender Gap Report, help us to understand where structural problems arise — from unfair hiring practices to potential biases in promotion — and rally decision-makers to collectively address these pain points.
WEF also recently utilized LinkedIn data to inform its Global Human Capital Report, which ranks countries on how well they are investing in and leveraging the knowledge and skills of their workforce to create economic value. Our unique data on the supply and demand of 50,000 skills allowed us to create “skills genomes” for different university degrees over time, to better understand what skills are commonly shared across degrees, and which cross-functional skills are most important regardless of area of study. By understanding the skills most in demand in high-growth fields, policymakers can make more informed decisions about how best to support labor force development and grow their human capital.
Historically, labor market data has been collected at set intervals—monthly, quarterly, yearly, or even less frequently—making it useful for reflecting on what has happened, but less useful for understanding what is currently happening. The power of more real-time data sources, like LinkedIn, now enables us to understand the structure and changes of the labor market in a new and exciting ways.
Analysing labor market shifts in real time through the Economic Graph provides deeper insights into the nature of these shifts—what is behind them, what other factors may also drive them, what downstream impacts they may cause, and what we can expect in the future as a result. LinkedIn's Economic Graph data gives us a window into changes happening at multiple levels and in multiple ways, from a global view of emerging macro trends to a national, regional, or even city-level view of what’s happening on the ground.
We are looking forward to developing many new innovative and impactful partnerships in 2018. Our fundamental principle is to objectively leverage data to help governments and research institutions tap previously unavailable insights to deliver the best policy and services outcomes for their citizens.