Beware of Bias in Emerging-Market Data
We want to believe that data is an objective, critical input for strategic planning and operations. But any data can be biased, leading executives to make misguided investment decisions and putting a company’s reputation and jobs at risk. This problem is exacerbated in emerging markets. For example, organizations tend to use local governments’ historical data, which may reflect whatever agenda the government has. While developed markets have stronger institutions that can challenge government estimates, this often is not the case in emerging markets, leaving data more susceptible to political interference. Don’t blindly trust data, even when it comes from a reputable source. Make sure that the data has been collected by sources with no interest in dressing up the numbers. Find out whether the figures were reviewed by analysts with in-depth market knowledge. And always question any potential motivations behind the numbers.