The Economic Multiplier Effect
The Economic Multiplier Effect refers to the increase in value arising from any new injection of usage. The size of the multiplier effect depends upon Marginal Propensity to Consume (MPC).
The Economic Multiplier Effect is one of the most important economic concepts developed by J.M. Keynes to explain the impact of an incremental increase in input (investment) on the resulting incremental increase in output (value). From a data and analytics perspective, the Economic Multiplier Effect manifests itself in the realization that data and analytic assets can multiple their value as they are reapplied beyond their initial use case to other use cases.
For example, when retailers installed Point of Sale (POS) systems in the early 1980s, their primary motivation was a desire to reduce labor costs while ensuring consistent pricing at the cash register. Few imagined the add-on benefits from being able to reapply the same POS dataset across numerous sales...
