Five ways to enable a data-driven approach in Nepal’s private sector

In 2019, we engaged with a group of executives and practitioners from the education, finance and media sectors in Kathmandu to discuss their awareness and practices in using data to support operations and decision-making.

A director of a private college remarked that data can help track a student's performance and enable educators to customize their approach to each student. He, however, added the need for technical skills to help make use of all the data collected.

From our focused group discussions, we learned that the availability and capacity to use good-quality and timely data could help Nepal’s private sector make better decisions, raise its productivity, and contribute to the country’s development. 

"The report highlights the importance of data for Nepal’s private sector to innovate, increase their customer base, and scale up."

The learnings from the sectoral discussions were consolidated into a recently published report: Use of Data in the Private Sector of Nepal: The Current State and Opportunities in Finance, Education, and the Media. The financial sector is one of the most significant contributors to Nepal’s economy. The education sector is a pillar of human development. The media’s use of data in reporting can serve as a proxy for the effective use of statistics and data in public discourse. Analysis of data use by the three sectors is a good starting point for understanding the use of data in the private sector.

The report highlights the importance of data for Nepal’s private sector to innovate, increase their customer base, and scale up. For example, leveraging data can help commercial banks increase financial inclusion, support higher education institutions to better understand student’s needs and prepare them for job markets, and enable journalists to cover in-depth stories, increase accountability, and engage more readers.

The report, however, notes that across the three sectors, the awareness of the value of data and capacity to analyze it remain low, preventing businesses from tapping the full potential of data use.

Furthermore, low awareness of data privacy policies adds to executives’ concerns about data security risks in producing, using and sharing data.

With these in mind, here are five recommendations to enable the private sector entities in Nepal to use data more effectively: 

1. Increase awareness of data opportunities for businesses. Building awareness among the finance, education and media sectors on the transformational power of data and its business benefits is an important first step. The government, business leaders and media can play an instrumental role in increasing awareness by advocating for benefits of data. 
    
2. Develop and implement a data strategy to increase the availability and usability of government data. Across all the three sectors studied, there is a demand for government data. Such data, however, is most often either unavailable, outdated or in a format that is not machine-readable. To bridge this gap, the government could produce and publish timely, quality, and disaggregated data in machine-readable format, and invest in developing human capital of its citizens to use data.
    
3. Develop and implement a robust open government data program. Executives in Nepal note that it it’s difficult to find government data or data is not available in a usable format. Globally, governments have made their data freely available to citizens and businesses by launching open data initiatives. Implementing such open data programs in Nepal would allow users to find and use government data easily and freely, potentially raising productivity and improving products and services.
    
4. Build a data-use culture by investing in data skills and literacy within the private sector and government. Together with low awareness, lack of technical capacity is a key constraint in promoting data use for decision making. A holistic approach to capacity-building can help enhance data literacy for staff at different levels of an organization and, in turn, improve production, dissemination and use of data. 
    
5. Enact policies that facilitate data sharing and privacy protection. Data privacy is a key concern, especially for consumers of any private entity that makes extensive use of such data. Encouragingly, steps have been initiated in Nepal to address privacy concerns such as the Nepal Data Privacy Act  passed in 2018.

But the awareness of the Act is low among the executives. For effective implementation of the Act, it is important to help stakeholders understand how the Act would impact them.

In addition, crafting a policy on data disclosure and disclosure format would increase data use, and potentially encourage private companies to engage in “data philanthropy” and help fill the data gaps.

"...Nepal must ramp up efforts to strengthen the country’s data ecosystem to support business growth and overall development."

While this report was prepared before the pandemic, the findings and the recommendations are equally relevant post-pandemic, especially as more formal businesses in Nepal are found to be using digital platforms to continue operations during the pandemic.

With greater emphasis on a digital economy to drive recovery from the pandemic’s impacts, Nepal must ramp up efforts to strengthen the country’s data ecosystem to support business growth and overall development.

Editor's note: This publication was funded by the Trust Fund for Statistical Capacity Building, a global grant facility administered by the Development Data Group of the World Bank on behalf of the contributing donors, and the Partnership for Knowledge-Based Poverty Reduction and Shared Prosperity, a World Bank project with support from the UK’s Foreign, Commonwealth & Development Office (FCDO), to increase the production and usage of data and statistics in Nepal. This publication was implemented under the Partnership for Knowledge-Based Poverty Reduction and Shared Prosperity project.