Open data has been gathering momentum among governments ever since United States Federal Government data was placed in the public domain. The principle of free and open access to government geospatial data has been adopted by many governments including US Federal, Canada, Japan, South Africa, Brazil, California state and counties, and by the City of Vancouver and other cities. G8 leaders (Canada, France, Germany, Italy, Japan, Russia, United Kingdom, United States, and the European Union) recently signed a charter on open data. But being able to access prepared maps and other derived material is just a first step, governments need to provide access to raw geospatial data in commonly used Web-friendly formats. In May 2013, President Obama issued an Executive Order making open and machine readable the new default for federal government information in the United States.
A major motivation for open data has been government transparency. But there is also a strong belief that open data contributes to the economy. I blogged earlier about a study by a team at Cambridge University commissioned by the Treasury that found that making all Ordnance Survey data (geospatial data) free would cost the government £12m but bring a net gain of £156m. Australia and New Zealand have commissioned studies of the contribution of spatial data to the national economy that have concluded that with appropriate government policies the contribution to the GDP, estimated to be on the order of 1%, could be doubled.
McKinsey Global Institute (MGI) have just published a study that seeks to quantify the value of open data by examining
applications in seven fields of the global economy: education,
transportation, consumer products, electricity, oil and gas, health
care, and consumer finance. Their research found that seven sectors alone would generate more than $3 trillion a year in additional value as a result of open data.
For each of the sectors they looked at, MGI identified ways that open data could create economic value and identified potential barriers to adoption.
- improved generation investment
- efficient generation operations
- optimized investment in transmission and distribution
- efficient transmission and distribution operations
- optimized retail and consumption
By using publicly available data such as siting applications, resource planning documents, and regulatory filings, utilities can streamline the permitting process for new power projects.
Open data can help optimize investments in transmission and distribution.
Sharing data gathered via “smart grid” technologies can help identify efficiency opportunities in transmission and distribution operations.
Open data makes it possible to compare products and services so that residential and business users make better decisions about which appliances, equipment an electric service to use.
Electric power usage data combined with community-wide data can show customers how their energy use compares with neighbors and peer organizations.
MGI estimates that open data has the potential to add $340 billion to $580 billion of value annually across the electricity value chain.
MGI found that the benefits of open data has a large potential economic value including increased efficiency, new products and services, and a consumer surplus (cost savings, convenience, better products). The concluded that it benefits consumers more than businesses, by creating price and product transparency as well as new channels to provide feedback that improves the quality of goods and services (including public ones).
But open data involves business risks, including the potential release of negative information; the potential consumer backlash from aggressive open-data use; and the inadvertent release of confidential information.
The barriers to wider use of open data include privacy issues and the need for legal and regulatory frameworks. To address these issues MGI recommends that governments need to play a central role by developing and implementing policies to mitigate consumer and business concerns about the misuse of open data and to help set standards that will allow the potential economic and social benefits to materialize.