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The Business Case for Open Data

- June 23, 2014 in Business, Open Data

Martin Tisné, Omidyar Network’s director, policy (UK) and Nicholas Gruen, economist and CEO of Lateral Economics, last week unveiled in Canberra the report, Open for Business. It is the first study to quantify and illustrate the potential of Open Data to help achieve the G20’s economic growth target. Martin makes the economic case for open data below. Manhattan

The G20 and Open Data: Open for Business

Open data cuts across a number of this year’s G20 priorities and could achieve more than half of the G20’s 2% growth target.

The business case for open data

Economic analysis has confirmed the significant contribution to economic growth and productivity achievable through an open data agenda. Governments, the private sector, individuals and communities all stand to benefit from the innovation and information that will inform investment, drive the creation of new industries, and inform decision making and research. To mark a step change in the way valuable information is created and reused, the G20 should release information as open data. In May 2014, Omidyar Network commissioned Lateral Economics to undertake economic analysis on the potential of open data to support the G20’s 2% growth target and illustrate how an open data agenda can make a significant contribution to economic growth and productivity. Combining all G20 economies, output could increase by USD 13 trillion cumulatively over the next five years. Implementation of open data policies would thus boost cumulative G20 GDP by around 1.1 percentage points (almost 55%) of the G20’s 2% growth target over five years.

Recommendations

Importantly, open data cuts across a number of this year’s G20 priorities: attracting private infrastructure investment, creating jobs and lifting participation, strengthening tax systems and fighting corruption. This memo suggests an open data thread that runs across all G20 priorities. The more data is opened, the more it can be used, reused, repurposed and built on—in combination with other data—for everyone’s benefit. We call on G20 economies to sign up to the Open Data Charter. The G20 should ensure that data released by G20 working groups and themes is in line with agreed open data standards. This will lead to more accountable, efficient, effective governments who are going further to expose inadequacy, fight corruption and spur innovation. Data is a national resource and open data is a ‘win-win’ policy. It is about making more of existing resources. We know that the cost of opening data is smaller than the economic returns, which could be significant. Methods to respect privacy concerns must be taken into account. If this is done, as the public and private sector share of information grows, there will be increasing positive returns.

The G20 opportunity

This November, leaders of the G20 Member States will meet in Australia to drive forward commitments made in the St Petersburg G20 Leaders Declaration last September and to make firm progress on stimulating growth. Actions across the G20 will include increasing investment, lifting employment and participation, enhancing trade and promoting competition. The resulting ‘Brisbane Action Plan’ will encapsulate all of these commitments with the aim of raising the level of G20 output by at least 2% above the currently projected level over the next five years. There are major opportunities for cooperative and collective action by G20 governments. Governments should intensify the release of existing public sector data – both government and publicly funded research data. But much more can be done to promote open data than simply releasing more government data. In appropriate circumstances, governments can mandate public disclosure of private sector data (e.g. in corporate financial reporting).

Recommendations for action

  • G20 governments should adopt the principles of the Open Data Charter to encourage the building of stronger, more interconnected societies that better meet the needs of our citizens and allow innovation and prosperity to flourish.
  • G20 governments should adopt specific open data targets under each G20 theme, as illustrated below, such as releasing open data related to beneficial owners of companies, as well revenues from extractive industries
  • G20 governments should consider harmonizing licensing regimes across the G20
  • G20 governments should adopt metrics for measuring the quantity and quality of open data publication, e.g. using the Open Data Institute’s Open Data Certificates as a bottom-up mechanism for driving the adoption of common standards.

Illustrative G20 examples

Fiscal and monetary policy

Governments possess rich real time data that is not open or accessed by government macro-economic managers. G20 governments should:
  • Open up models that lie behind economic forecasts and help assess alternative policy settings;
  • Publish spending and contractual data to enable comparative shopping by government between government suppliers.

Anti corruption

Open data may directly contribute to reduced corruption by increasing the likelihood corruption will be detected. G20 governments should:
  • Release open data related to beneficial owners of companies as well as revenues from extractive industries,
  • Collaborate on harmonised technical standards that permit the tracing of international money flows – including the tracing of beneficial owners of commercial entities, and the comparison and reconciliation of transactions across borders.

Trade

Obtaining and using trade data from multiple jurisdictions is difficult. Access fees, specific licenses, and non-machine readable formats all involve large transaction costs. G20 governments should:
  • Harmonise open data policies related to trade data.
  • Use standard trade schema and formats.

Employment

Higher quality information on employment conditions would facilitate better matching of employees to organizations, producing greater job-satisfaction and improved productivity. G20 governments should:
  • Open up centralised job vacancy registers to provide new mechanisms for people to find jobs.
  • Provide open statistical information about the demand for skills in particular areas to help those supporting training and education to hone their offerings.

Energy

Open data will help reduce the cost of energy supply and improve energy efficiency. G20 governments should:
  • Provide incentives for energy companies to publish open data from consumers and suppliers to enable cost savings through optimizing energy plans.
  • Release energy performance certifications for buildings
  • Publish real-time energy consumption for government buildings.

Infrastructure

Current infrastructure asset information is fragmented and inefficient. Exposing current asset data would be a significant first step in understanding gaps and providing new insights. G20 governments should:
  • Publish open data on governments’ infrastructure assets and plans to better understand infrastructure gaps, enable greater efficiency and insights in infrastructure development and use and analyse cost/benefits.
  • Publish open infrastructure data, including contracts via Open Contracting Partnership, in a consistent and harmonised way across G20 countries.

Other examples of value to date

  • In the United States, the National Oceanic and Atmospheric Administration’s decision nearly three decades ago to release their data sets to the public resulted in a burst of innovations — including forecasts, mobile applications, websites, research – and a multi-billion dollar weather industry.
  • Open government data in the EU would increase business activity by €40Bn. Indirect benefits (people using data driven services) total up to €140Bn a year[1].
  • Mckinsey research suggests that seven sectors alone could generate more than $3 trillion a year in additional value as a result of open data.
  • Releasing as open data in Denmark in 2002 gave €62m benefits 2005-2009 against €2m cost. ROI in 2010: €14m benefit against €0.2m cost[2].
  • Open data exposed C$3.2Bn misuse of charitable status in tax code in Canada[3].
  • Over £200m/year could have been saved by the NHS from the publication of open data on just one class of prescription drugs[4].
[1] https://www.ereg-association.eu/actualities/archive.php?action=show_article&news_id=167 [2] http://www.adresse-info.dk/Portals/2/Benefit/Value_Assessment_Danish_Address_Data_UK_2010-07-07b.pdf [3] http://eaves.ca/2010/04/14/case-study-open-data-and-the-public-purse/ [4] http://theodi.org/news/prescription-savings-worth-millions-identified-odi-incubated-company

What’s the point of open data?

- September 17, 2013 in Access to Information, Open Data, Open Government Data

I’ve been puzzling for a while how the open data community can help the many great groups that have been fighting for transparency of key money flows for the past decade and more. I think one answer may be that open data helps us go beyond simply making information available. If done well, it can help us make it accessible and relevant to people, which has been the holy grail for transparency advocates for a long time. The transparency community has focused too much on just getting information out there (making information available). But what’s the point of having information available if it’s not accessible? What’s the use of public reports that are only nominally ‘public’ because they languish in filing cabinets or ‘PDF deserts’ hidden within an obscure website? If we can get this information more accessible, we can then work to increase participation and help people use it. This for me is what open data people are talking about when they talk about open formats. Machine readability and open formats matter because they are tools to increase access. I’ve seen too many techies talk about ‘open formats’ and activists’ eyes glaze over. But I think we’re both talking about the same thing we hold dear: improving access to vital data for all. Likewise, it’s the connections between the datasets that are powerful and interesting. You may not care so much to know where most people under 15 years old live in your country, but if you’re told that those that live close to a nuclear waste disposal site happen to have the highest cancer rates, then it becomes seriously relevant. Same as above, techies often talk about technical data standards and get quizzical/skeptical – at best – looks in exchange. But technical data standards are the fuel that allows policy wonks to compare datasets, which creates relevant data. Connecting the dots makes it policy relevant – without data, you can’t make policy. [availability of data] => [accessibility of data] => [comparability of data] [availability of data] => [open formats] => [data standards] Follow the Money groups do amazing work: extractives’ transparency advocates campaigning for vital releases of information on oil, gas, mining revenues into the hundreds of millions of dollars. Groups looking at curbing illicit flows of funds out of desperately poor countries via shell companies and phantom firms. Activists who scrutinize budgets, everything from big ticket national budget allocations, all the way down to very local issues like your local school spending on basic reading materials. And many more. Together, these groups share one big thing in common – they are all seeking to follow the money. In other words, they are all trying to understand how money either gets in to government coffers, or how it fails to get there, and then how and whether it is spent for the good of the many, rather than the few lining their pockets. To succeed, we all need data that’s not only public (e.g. public registries of beneficial ownership) but also accessible (in open formats) and comparable to other money flows. Let’s work together to make it happen. The following guest post from Martin Tisné was first published on his personal blog. If you’re at OKCon 2013 and interested in joining the Open Knowledge Foundation and ONE to follow the money, you can come to our session on this topic at OKCon 2013 in Geneva, on Wednesday 18th September, 10:30-11:30 in Room 8, Floor 2 at the Centre International de Conférences Genève – CICG). Due to limited space, if you’re interested in joining us please email followthemoney@okcon.org.

Follow the Money, Follow the Data

- May 3, 2013 in Ideas and musings, Open Data, Open Government Data, Open Spending

The following guest post from Martin Tisné was first published on his personal blog. Money tunnel by RambergMediaImages, CC-BY-SA on Flickr Some thoughts which I hope may be helpful in advance of the ‘follow the data‘ hack day this week-end: The open data sector has quite successfully focused on socially-relevant information: fixing potholes a la http://www.fixmystreet.com/, adopting fire hydrants a la http://adoptahydrant.org/. My sense is that the next frontier will be to free the data that can enable citizens, NGOs and journalists to hold their governments to account. What this will likely mean is engaging in issues such as data on extractives’ transparency, government contracting, political finance, budgeting etc. So far, these are not the bread and butter of the open data movement (which isn’t to say there aren’t great initiatives like http://openspending.org/). But they should be: At its heart, this agenda revolves around ‘following the money’. Without knowing the ‘total resource flow’:
  • Parents’ associations cannot question the lack of textbooks in their schools by interrogating the school’s budget
  • Healthcare groups cannot access data related to local spending on doctors, nurses
  • Great orgs such as Open Knowledge Foundation or BudgIT cannot get the data they need for their interpretative tools (e.g. budget tracking tool)
  • Investigative journalists cannot access the data they need to pursue a story
Our field has sought to ‘follow the money’ for over two decades, but in practice we still lack the fundamental ability to trace funding flows from A to Z, across the revenue chain. We should be able to get to what aid transparency experts call ‘traceability’ (the ability to trace aid funds from the donor down the project level) for all, or at least most fiscal flows. Open data enables this to happen. This is exciting: it’s about enabling follow the money to happen at scale. Up until now, instances of ‘following the money’ have been the fruit of the hard work of investigative journalists, in isolated instances. If we can ensure that data on revenues (extractives, aid, tax etc), expenditures (from planning to allocation to spending to auditing), and results (service delivery data) is timely, accessible, comparable and comprehensive, we will have gone a long way to helping ‘follow the money’ efforts reach the scale they deserve. Follow the Money is a pretty tangible concept (if you disagree, please let me know!) – it helps demonstrate how government funds buy specific outcomes, and how/whether resources are siphoned away. We need to now make it a reality.