Data literacy: How important are data skills for companies and society?

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Since the German government published its data strategy at the end of January 2021, the word data literacy has been on everyone’s lips. On the way to a bright, digital future, the need for innovative and responsible data processing mean that data literacy must be incorporated in our basic education. This is a challenge for many companies. Although companies have long understood the value of data, many employees in particular are unclear about how to deal with it – not least because companies have not fosteredtheir data skills much so far. Or they still believe that data skills are only for experts. But data literacy should be open to everyone.

In this article, we’ll clarify the definition of data literacy, what it means for society, and for companies in particular, and what steps you can take to achieve data literacy.

Data literacy definition and its relevance

Data skills, data awareness, data literacy: data literacy is the buzzword of the hour, but does the term mean and why is data literacy in more and more companies’ training plans? Literacy in general is the ability to write and read. And this already shows how important this topic is. Someone who is unable to read and write is predominantly excluded from participation in our society. People who lack data literacy are at a disadvantage in our digitized world, where data is constantly being generated.

In summary, data literacy is the ability to read, work with, analyze and communicate data. As simple as this may sound in theory, it still presents major challenges for most people in practice.

Everyone in our society is directly affected by decisions that are made based on data, which influence our lives. Yet data alone often does not allow us to draw clear conclusions. This is where data literacy can help us to take a critical look at data and analyze it. After all, if data is evaluated correctly or communicated in a comprehensible way, it can bring immense benefits.

While data literacy used to be something that only IT departments had to deal with, it has meanwhile changed from a specialist skill into an indispensable basic competence. “Big data, artificial intelligence, the Internet of Things are already accompanying us not only in our professional lives, but are part of our entire environment,” explained Volker Meyer-Guckel, deputy secretary general of the Stifterverband, which published its Data Literacy Charter in January 2021. According to the charter, data literacy means possessing the necessary judgment to be able to collect, process, manage, evaluate and thus transform data into knowledge. Accordingly, everyone should be able to examine how they handle data in light of the following questions:

What do I want to do with the data? 

(define the concrete use for the data collected)

What can I do with the data? 

(define technical and methodological possibilities and limits)

What am I allowed to do with the data? 

(include data protection, copyright and other legal frameworks)

What should I do with the data?

(Data is a valuable resource that must be handled responsibly and should add value. Not everything that data privacy allows has a positive impact).

This makes literacy THE key competency for systematically turning data into insights and being empowered and independent in our digital world. It is an indispensable component of a basic digital education and thus a core competence – not of the future, but the present. The charter contains the following guiding principles:

  • Data literacy must be accessible to everyone.

  • Data literacy must be taught at all ages, in all areas of education.

  • Data literacy must be taught as a transdisciplinary competence from three perspectives. [application-related (What is to be done?), technical-methodical (How is it to be done?) and social-cultural (Why is it to be done?)].

  • Data Literacy must systematically cover the entire process of using data for knowledge and decision.

  • Data Literacy must encompass knowledge, skills, and values for conscious and ethical use of data.

The very first guiding principle, “Data literacy must be accessible to everyone,” illustrates that data literacy is not just indispensable for academics or only for the IT department, but that everyone must learn and master how to deal with data. However, there is no need to apply a shotgun approach. The scope depends on the particular department, but it is still critical that every department and every employee, from customer service to IT, is “literate.”

 

Even though the ability to read and write well doesn’t necessarily mean you will become a novelist, it is still important for everyone to know their ABCs. Even though relatively few people will ever write their own novel, the literacy rate in Germany is 99.9 percent. The data literacy rate is likely to be far below the rate of people who come into contact with data on a professional level. The novelty of the topic must therefore not obscure its urgency. The basic competence of dealing with data should not be a privilege, but must be something that everyone aquires. The key here is targeted support. As we produce and consume data every day, both professionally and privately, education for everyone is becoming increasingly important.

 

It is important to foster this understanding in our society and in the world of work, which are increasingly impacted by big data and artificial intelligence. Most recently, the introduction of the GDPR in 2019 has shown how many professions come into contact with data and that many companies had to learn how to handle data correctly The Corona pandemic has fueled digitalization and has exposed societal failures. Data is now generated, collected, processed and analyzed everywhere these days. This already offers potential for serious manipulation – both intentional and unintentional. People who do not understand which data is stored, how, what is done with it, and what conclusions can be drawn from it, will not only be at a disadvantage in society, but will also soon find themselves out of the loop in the professional world.

 
 

The problem with gut feeling: a lack of data competence leads to excessive demands and absenteeism

 

A majority of companies have now recognized the added value in actively and effectively using data. But as companies use and process more and more data, the competence of their employees does not automatically increase accordingly. A 2020 study by Accenture showed that only one in four feel adequately prepared to use data. The remaining 74 percent feel overwhelmed when working with data. There is an urgent need for action here, because this overload can have a direct impact on corporate goals.

 

A company working on a digitalization strategy must involve its employees. This applies to both existing and new employees. A supplementary study by the Data Literacy Project (DLP) showed that about a quarter of the study participants said they had been adequately prepared for effective data use when they started their current job. Sixty percent of respondents preferred to let their gut instinct guide business decisions rather than basing them on hard data, despite the fact that 87 percent consider data critical to success in their jobs. No modern company can afford this discrepancy if it wants to survive in the market.

 

It is therefore not surprising that every third person avoids working with data and that around 31 percent have even called in sick at some point because of IT, data and information problems. This percentage may sound high, but it is simply a consequence of the fact that 9 out of 10 executives feel inundated by data. Some feel fundamentally overwhelmed and give up. Hardly anyone wants to voluntarily swallow their pride in front of colleagues and employees and admit to a lack of competence. This leads to more absenteeism and poor. If companies fail to train their employees in the necessary data competencies, these figures will rise sharply as the use and processing of data increases in this decade. No industry will be left untouched by this development.

 
 

A must for your 2021 roadmap: establishing a data literate company

 

Data is a relatively young, industrial sector. It is therefore not surprising that the topic of data literacy or data awareness has fallen by the wayside in many companies. Until now, companies were able to ignore the issue without too much pain. This is now changing. Like diseases that are painless to start off with, a lack of data literacy can cause damage at an early stage, even if many companies are not aware of it.

 

The influence of data technologies is now too significant to be suppressed any longer. While in the past years it was only necessary to turn a blind eye, many companies now run the risk of flying into their economic future completely blind. Those who put their data literacy on the back burner are threatening their own existence. Data literacy is not a “nice-to-have” skill and must not be seen as an optional qualification. This is especially true in the world of work. Many companies are now asking themselves how data literacy can be implemented in concrete terms. To do this, you should be able to answer the following questions:

 
  1. What digital competencies do you need as an overall company? 

  2. Which department needs which further training? 

  3. Where does data literacy feature in your company’s training plan?

  4. How do you embed digital capabilities and data skills in your company culture or values?

 

 

 

A first step to this can be a survey. Find out which departments and which employees work intensively with data and how confident they are in doing this. Make sure that the Dunning-Kruger effect does not come into play. After all, it is easy to overestimate your own abilities and the abilities of others.

 
 

HR development best practice: Data-driven decision-making with the help of data literacy training.

 

The DLP study also found that 37 percent of participants believe that data literacy training or continuing education would increase their data literacy skills and, in turn, their productivity. This means it is now up to companies, L&D managers and executives to promote data literacy among their employees.

 

The good news is that the results of a Splunk and Enterprise Strategy Group (ESG) survey show that an aligned data strategy has a positive impact on revenue, operating costs and customer satisfaction. Last but not least, this strategy includes investing in training in many ways. Companies that survey individual training needs among their departments and employees have the advantage of being able to target training. Not every employee needs to be trained as a data expert. But a space for education must be created where employees learn the basics of handling data, as well as how to handle it responsibly, analyze it correctly, and what conclusions they can draw from it. The most important point here is that educating employees makes a significant contribution to the continued success of the business at the same time. 

 

This is why you should implement effective training and teach your employees how to do the following:

 
  • read data

  • work with data independently

  • analyze data and make predictions

  • assess risks

  • communicate results in a professional and understandable way

  • make data-driven decisions.

 
 
 

We are happy to help you with this. Our training courses are designed for employees who want to gain a better understanding of data analytics, who want to carry out simple analyses on their own or who want to work together with data experts in a practical way. Our in-service online trainings consist of instructional videos, expert interviews, text content, and interactive assignments as well as business scenarios to apply and reinforce what you’ve learned. Our mentoring team will guide you throughout the course to help you achieve the data literacy you need to succeed in the digital workplace today and in the future.

 

Learn more about our trainings and schedule a free consultation with us.

 
 
 

Sources:

 

Forbes (2018): “Why All Employees Need Data Skills In 2019 (And Beyond)” [08.02.2021] 

 

Forbes (2018): “The Citizen Data Scientist” [08.02.2021] 

 

Gartner (2018): “Citizen Data Scientists and Why They Matter” [08.02.2021] 

 

Forbes (2017): “What Is Data Democratization? A Super Simple Explanation And The Key Pros And Cons” [08.02.2021] 

 

The Data Literacy Project (2021): “The Data Literacy Project” [05.02.2021] 

 

Stifterverband (2021): “DATA-LITERACY-CHARTA” [03.02.2021] 

 

Industry of Things (2020): “Data-Driven statt Bauchgefühl: Mit aktiver Datennutzung zur Marktführerschaft” [03.02.2021] 

 

Handelsblatt (2021): “Stifterverband will Umgang mit Daten zum Teil der Allgemeinbildung machen” [03.02.2021] 

 

Focus (2021): “Statistikerin Schüller: Datenkompetenz ist für Kinder wichtiger als Tischmanieren” [04.02.2021] 

 

Medium (2021): “Dare to be wise — Become data literate” [04.02.2021] 

 

DW (2020): “Germany’s new data strategy may come ‘too late'” [03.02.2021] 

 

Human Resources Manager (2020): “Der Umgang mit Daten will gelernt sein!” [04.02.2021] 

 

Deutschlandfunk (2021): “Stifterverband veröffentlicht Data-Literacy-Charta” [03.02.2021] 

 

Deutsche Bundesregierung (2021): „Datenstrategie der Bundesregierung“ [10.02.2021] 

 

ZDnet (2020): “Data strategy: Enterprises boosting profits with better data asset management, eye dark data utilization” [11.02.2021] 

Laura Redlich
Laura Redlich
As an authentic Berliner, Laura quickly joined the creative and start-up scene. After studying Media and Communications Management at Media Design University of Applied Sciences, Laura worked as the editor in charge of Finance, Tech, Data and AI at IQPC and interviewed well-known industry pioneers at conferences. At StackFuel, Laura is steadily adding to the Content Lab - our varied offering of free content, webinars, and publications.

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