With Industry Research, You Get What You Pay For

bad dataFree is great. Who doesn’t like free?

Economists, that’s who. They don’t believe in it. Nothing is really free. There’s always at least an opportunity cost. There’s always a catch with free.

Yet, a lot of Freedonia’s industry analysts rely on free, public data provided by the government in order to do our work. Same goes for our competitors, as well as many of our customers.

“But government data is the gold standard!” is the common rejoinder we hear. Yes, the US government has the legal authority to require people and companies to respond to their data collection efforts, making it some of the best data around.

Nonetheless, it can still be wrong. It often is wrong. Assuming otherwise can be a costly mistake.

For example, it can be tempting to find a free government source like the US International Trade Commission (USITC), punch in the NAICS code for a particular industry, and assume the trade statistics returned are coherent, complete, and actionable. They’re not.

Raw data needs work. Improving free-but-flawed data is one of the tasks that The Freedonia Group does.

Examples of Bad Data in Need of Correction

Look at the two sets of import data shown below.

Industry Research Example 1

Industry Data Example 2

The charts show historical imports for consumption, both before and after Freedonia Focus Reports analysts adjusted the data. Our experience tells us that imports don’t just skyrocket or crater in the span of a single year except for a few extreme circumstances (e.g., regulatory changes, growth from a small base).

In these egregious cases, we could tell visually something was wrong, but we confirmed it by comparing the series to data we used in the previous version of our reports. It took days of consultation with the government entities responsible for publishing the data to understand what the problem was (time a customer or competitor may not have).

We discovered the government changed what products they assigned to the NAICS codes shown above, but did so inconsistently on a year-by-year basis. Thus it became our task to create our own grouping of products based on our research and knowledge of the topic.

Research Expertise Matters

Imagine putting the fate of a business, investment, or corporate reputation in the hands of a free data series that is so far off from reality.

This is why decision makers turn to us, even for information they could find for free. They’re paying for our experience and skill in recognizing and fixing problems, not just the research materials and proprietary tools needed.

For more examples of bad data, check out other posts on The Freedonia Group’s blog.

About Freedonia Focus ReportsFreedonia Focus Reports Industry Research

Each month, The Freedonia Group – a division of MarketResearch.com – publishes over 20 new or updated Freedonia Focus Reports, providing fresh, unbiased analysis on a wide variety of markets and industries. Published in 20-30 pages, Focus Report coverage ranges from raw materials to finished manufactured goods and related services such as freight and construction.

Analysis is intended to guide the busy reader through pertinent topics in rapid succession, including:

  • total historical market size and industry output
  • segmentation by products and markets
  • identification of market drivers, constraints, and key indicators
  • segment-by-segment outlook in five-year forecasts
  • a survey of the supply base
  • suggested resources for further study

To browse our research, visit FreedoniaFocusReports.com.

Topics: Market Research Strategy How To's