A new report shines a light on the value of open data to G20 economies. The report, led by Gov 2.0 champion Nicholas Gruen of Lateral Economics and commissioned by the Omidyar Network, is the first serious attempt to put a dollar figure on the value of open data, not only to the Australian economy, but to the 2% growth aspirations of the G20 as a whole.
The report, “Open for Business: How Open Data Can Help Achieve the G20 Growth Target” estimates the total potential value of open data to Australia at A$64 billion per annum. As a contribution to Australia’s cumulative GDP that figure is estimated at A$16 billion per annum, or around 1% of GDP over the next five years.
The release of the report is timed to influence discussions at November’s G20 meeting in Brisbane. Addressing all G20 economies, Open for Business finds that open data could increase output by US$13 trillion cumulatively over the next five years. With commitments by G20 nations to meet its 2% growth targets, the report finds that at a 1% contribution to GDP, open data can meet fully half of the growth targets sought by G20 nations.
Valuing open data: not so simple, Simon
It’s not easy to put a value figure on open data. Importantly, many governments - including those leading the open data agenda like the UK and the US - have made relatively slow progress in releasing data in open, machine-readable formats in recent years.
Governments have typically signed on to the open data agenda through initiatives such as the Open Government Partnership and the G8 Open Data Charter and made various high-level announcements, but there are many obstacles when, as the report authors remark, “agencies and those within them find ways to delay openness to minimise institutional risk”.
Putting a dollar figure on open data is therefore necessarily speculative. Where open data has the potential to be a game-changer for many industries, currently the data is not being released in sufficient volumes to realise maximum potential.
Institutional forums like the G20 can play a big part in building greater momentum by advocating the benefits across jurisdictions and improving the standardisation and harmonisation of existing policies.
Open for Business arrives at its findings by drawing from a 2013 McKinsey Global Institute study, which put a figure of USD $3-5 trillion on the annual value unlocked by open data across seven different sectors: education, transportation, consumer products, electricity, oil and gas, health care and consumer finance. Open for Business apportions these figures to the relative size of the Australian economy and the G20 as a whole.
As the report puts bluntly:
Estimating the economic value of all this is challenging. The benefits can include direct values (e.g. investment value and market value), as well as indirect values (e.g. wider social and economic impacts from data use).
Areas of value include:
Reducing the cost of existing government and private services (enhancing efficiency, doing more with less);
Enabling new services and improved quality of services (enhancing innovation);
Improving transparency and accountability (enhancing consumer empowerment and governance); and these effects contribute to
Engendering greater trust in government, which engenders further benefits, such as greater participation.
Open data is more than public sector information
The McKinsey report took a very broad definition of open data, which Open for Business likewise advocates. Open data is more than public sector information (PSI) like national statistics or services-related data released in open machine-readable formats. Also included here is private sector data - like trade data, seismic data from mineral exploration - and data released through scientific and other research activities.
Indeed, the report argues the value of open data can only be fully realised when the open data agenda advances to include those datasets that fall outside public sector domains, and calls for organisations of all types, public and private, large and small to publish and consume open data. “The real prize of open data is the innovation that results”. General purpose innovations can revolutionise life in ways we can scarcely imagine - or put a dollar figure on.
One of the key areas of potential value is in areas like trade and mineral exploration. TradeData is one example of how international coordination around open data can generate value. Using monthly updated customs returns, TradeData provides useful commercial intelligence and research to a mix of government and industry clients.
Areas for action
The key message for governments here is that advancing the open data agenda can generate much needed growth for G20 nations. This means not only accelerating the release of existing public sector data – both government and publicly funded research data. Open for Business argues much more can be done to improve collaboration through institutions like the G20, achieving standardisation and harmonisation of policies, practices and standards across jurisdictions and into industry.
While the benefits may be huge, what we know is that for many agencies, the obstacles to progress are not only technical but reflect entrenched cultures of institutional risk-aversion. The accountability that open data can bring may be one of the biggest obstacles of all.
Reports like Open for Business help to show that if governments, researchers and industry all commit themselves to open data as an innovation agenda, the values will be there to share.