Synthetic data in market research
Editor’s note: Mario Carrasco is the co-founder and principal of ThinkNow.
The United States is experiencing a significant demographic shift, with multicultural communities driving the nation's growth. This highlights the importance of data accurately representing this multicultural reality.
In artificial intelligence and machine learning, the quality and representativeness of data are paramount. Synthetic data – artificially generated information that maintains the statistical properties of real-world data – has emerged as a powerful tool for training AI models. However, the effectiveness of these models hinges on the diversity embedded within the synthetic data.
Without adequate representation of various cultural and ethnic groups, AI systems risk perpetuating existing biases which can lead to skewed outcomes and can reinforce systemic inequalities.
The importance of multicultural representation in AI
Companies investing in synthetic data are particularly interested in capturing the nuances of diverse consumer behaviors. As multicultural communities drive population growth and influence market trends, understanding their unique preferences and needs becomes essential for businesses aiming to remain competitive. Synthetic data that accurately represents these groups offers a cost-effective way to gain insights compared to traditional data collection methods.
Representation is a significant issue facing AI today. But, by starting with the hardest-to-reach groups, such as multicultural communities, synthetic data creators can address the most complex challenges first. Addressing these challenges results in a more inclusive dataset and leads to higher-quality AI systems overall. Models that can effectively handle the nuances of diverse populations tend to perform better across all demographics, creating more robust and versatile solutions.
Diversity drives growth and innovation
Multicultural communities not only represent the fastest-growing demographic groups in the U.S., but they are also leading drivers of economic expansion. For instance, in 2023, the employment rate among Black and Hispanic Americans aged 25-54 reached a record high. These groups also experienced faster wage growth, contributing to higher income levels. Black women are the fastest-growing group of entrepreneurs, while Hispanics represent one of the fastest-growing populations in the U.S.
Businesses that fail to recognize these shifts risk missing out on opportunities to engage with a significant portion of the market. However, these communities are not monoliths. Due to the complexity of these thriving markets, tapping into them from a research perspective, can be daunting.
Generating synthetic data allows market researchers, marketers and strategists to address this growth opportunity in a scalable way. Instead of being hampered by incomplete or biased real-world datasets, they can rely on synthetic data that mirrors the full spectrum of human diversity.
By understanding the value of underrepresented groups, companies can create more relevant marketing strategies that deliver greater value to their audiences.
Embracing multicultural perspectives: A vision for the future of synthetic AI
The future of synthetic data is inherently multicultural. As the U.S. becomes more diverse, it is important to create AI and data solutions that reflect this reality. Training AI with multicultural insights helps create reliable synthetic data, leading to more inclusive applications and ultimately, better outcomes for businesses, consumers and society.