Open data - is the open private sector the next frontier?
This blog post looks beyond the role of private sector as ‘just’ re-users of open data and serves as a taster session for the various flavours of the private sector’s involvement in the open data ecosystem.
October 24, 2016
During our open data training sessions, the role of the private sector is often considered and debated by our public sector participants who consider where the private sector’s role starts and where it stops and whether there are overlapping responsibilities as illustrated by the image below:
Source: Open Data Value Chain European Data Portal Report
There is a lot going on in this image and it is not complete, as there are now also private sector organisations who create data and open data up. One such organisation is Uber. The company agreed to share trip data with the city of Boston, Massachusetts, USA, in January 2015 to enable decision makers to get new insights that might help manage urban growth, relieve traffic congestion, expand public transportation, reduce greenhouse gas emissions and help Uber appear in a favorable light before regulations was passed that governs Uber’s activities in Massachusetts. According to articles from June 2016, the quality of Uber's data didn’t live up to expectations, providing data on only the zip code level, which was too large of a geographical area to successfully aid decision makers in urban planning.
However, the data shared with Boston has the potential to become open data as it becomes part of the public records and can be accessed through an open records request. It is interesting to note that according to sources, the agreement between Boston and Uber contains contains a section in case the city received an open records request for the data: "the City shall notify Uber upon receipt of such request or lawsuit so as to afford Uber the opportunity to take steps to prevent disclosure" and further language in the agreement indicates that if the city is sued, Uber will pay the legal fees.
High visibility ‘private sector organisations sharing their data with the public’ as with Uber and Boston are significant because they show there is a growing trend towards open data, where companies support the data creation step in the open data value chain.
There is an ever-growing emphasis on and an increasing number of private sector players working with cities and public sector organisations' open data, recognising the innovation and business growth potential open data can unlock. Due to the substantial and expanding private sector presence in the higher levels of the open data value chain; the direct market size of open data is expected to increase by 36.9% between 2016 and 2020 to a value of €75.7bn in 2020. The total market value of open data is estimated to be between €193bn and €209bn for 2016, with an estimated projection of €265 to €286bn for 2020, including inflation corrections. Although according to the European Data Portal 2015 report, public administration remains the sector that gains the most from opening data up: €22bn in 2020, and the current primary re-user of open data is the public sector as well. However, in recent years private sector organisations are gaining ground and are increasingly building businesses and business models around the re-use of open data so the forecasted total number of direct open data jobs in 2016 has an upper bound of 75,000 and is predicted to increase to just below 100,000 by 2020 in EU 28+.
In a recently published platform The Open Data Impact Map, a project of the Open Data for Development Network (OD4D), one can find a public database of organisations that use open government data from around the world. Currently the global number is 1725, with the UK being represented by 160 organisations identified as working directly with open data; this number is growing. As a side note, in case you check the list and realise that there are organisations missing, you can add to the list. Your submission will be reviewed and posted once approved.
Actively engaging the private sector in the open data value-chain is considered an innovation imperative. Identifying mechanisms for catalysing private sector engagement and innovation in the open data value chain is key and is backed by organisations such as the World Bank and the Centre for Open Data Enterprise. Private-public collaboration is also key when it comes to strengthening the global data infrastructure. The benefits of open data are diverse and range from improved efficiency of public administrations to economic growth in the private sector.
Source: Deloitte LLP Open Data Ecosystem
Many have been urging and emphasising that private sector should join the open data revolution not just as data re-users but also as data publishers: Harvey Lewis, research director in the Insight team at Deloitte said open data drives innovation and growth in both the public and private sectors.
“The government and the private sector have to realise that data by itself does not create value. Other organisations and individuals need to analyse datasets to create innovations. Over time, companies will be encouraged to release their data publicly.”
— Harvey Lewis, Research Director Insight team Deloitte
There are many reasons listed in the Deloitte report for why the private sector should open up some of their data sets, to name a few:
...and to provide a balanced view in this post and not to loose all our current and future private sector partners - here are the reasons why some companies choose not to open their data up or why some data sets will forever remain closed:
Some more examples of Open Private Sector Data (World Bank):
Either way if your are a private sector organisation and want to learn more about the potential of open data and the business growth it can induce, OR if you are a public sector organisation interested in catalysing private sector engagement and innovation around your data check out our training programme and mentoring services and let us join forces with you in providing you and your organisation a crucial competitive advantage in the open data ecosystem.
Let us know in a comment below if you know of any other exciting Open Private Sector data initiative.
For more interesting examples on Open Data and Business watch these presentation from the International Open Data Conference 2016.