Big Data in Minas Gerais: Creating an Engine for the Brazilian Economy

Big Data in Minas Gerais: Creating an Engine for the Brazilian Economy

Summary: In our first chapter of a series about the use of Big Data by the government of Brazilian state of Minas Gerais, we cover the story of Data Viva.info, a recently-launched platform that opens data for exports and occupations for the entire formal sector of the Brazilian economy.

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This article was written by André Barrence, Director President of the Minas Gerais State Office for Priorities, government’s strategy and delivery unit and Cesar A. Hidalgo, the ABC Career Development Professor at the MIT Media Lab. 

The current Internet paradigm in which one can search about anything and retrieve information is absolutely empowering. We can browse files, websites and indexes and effortlessly reach good amount of information. Google, for instance, was explicitly built on a library analogy available to everyone. However, it is a world where information that should be easily accessible is still hidden in unfriendly databases, and that the best-case scenario is finding few snippets of information embedded within the paragraphs of a report.

But is this the way it should be? Or is this just the world we are presently stuck with? The last decade has been particularly marked by an increasing hype on big data and analytics, mainly fueled by those who are interested in writing narratives on the topic but not necessarily coding about it, even when data itself is not the problem.

Let’s take the case of governments. Governments have plenty of data and in many cases it is actually public (at least in principle). Governments “know” how many people work in every occupation, in every industry and in every location; they know their salaries, previous employers and education history. From a pure data perspective all that is embedded in tax, social security records or annual registrations. From a more pragmatic perspective, it is still inaccessible and hidden even when it is legally open the public. We live in a world where the data is there, but where the statistics and information are not.

DataViva: a Big Data Engine for the Brazilian Economy

The state government of Minas Gerais in Brazil  - the third largest economy of the country, territory larger than France and 20 millions inhabitants - made an important step in that direction by releasing DataViva.info, a platform that opens data for exports and occupations for the entire formal sector of the Brazilian economy through more than 700 million interactive visualizations. Instead of poorly designed tables and interfaces, it guides users to answer questions or freely discover locations, industries and occupations in Brazil that are of interest to them. DataViva allows users to explore simple questions such as the evolution of exports in the last decade for each of the 5,567 municipalities in the country, or highly specific queries, for instance, the average salaries paid to computer scientists working in the software development industry in Belo Horizonte, the state capital of Minas.

DataViva’s visualizations are built on the idea that the industrial and economic activity development of locations is highly path dependent. This means that locations are more likely to be successful at developing industries and activities that are related to the ones already existing, since it indicates the existence of labor inputs, and other capabilities, that are specific and that can often be redeployed to a few related industries and activities. Thus, it informs the processes by which opportunities can be explored and prospective pathways for greater prosperity.

The idea that information is key for the functioning of economies is at least as old as Friedrich Hayek’s seminal paper The Use of Knowledge in Society from 1945. According to Hayek, prices help coordinate economic activities by providing information about the wants and needs of goods and services. Yet, the price information can only serve as a signal as long as people know those prices. Maybe the salaries for engineers in the municipality of Betim (Minas Gerais) are excellent and indicate a strong need for them? But who would have known how many engineers are there in Betim and what are their average salaries?

But the remaining question is: why is Minas Gerais making all of this public data easily available? More than resorting to the contemporary argument of open government Minas understands this is extremely valuable information for investors searching for business opportunities, entrepreneurs pursuing new ventures or workers looking for better career prospects.

Lastly, the ultimate goal of DataViva is to provide a common ground for open discussions, moving away from the information deprived idea of central planning and into a future where collaborative planning might become the norm. It is a highly creative attempt to renew public governance for the 21st century.

Despite being a relatively unknown state outside of Brazil, by releasing a platform as DataViva, Minas is providing a strong signal about where in world governments are really pushing forward innovation rather than simply admiring and copying solutions that used to come from trendsetters in the developed world. It seems like real innovation isn’t necessarily taking place in Washington, Paris or London anymore.

In the second part of our series about the use of Big Data in the Minas Gerais government, we will cover how the Strategic Priorities team has started the journey of taking advantage of advanced analytics, as well as the challenges faced and plans for the future. Follow our exclusive program on Big Data in Brazil to read more and get in touch with our experts about how to effectively utilize Big Data tools in your organization. 

 

Topic: Mastering Business Analytics

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