Impacts of open data: business

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
There is no direct return on investment on open data. As a matter of fact, economic impact of releasing open data is difficult, if not impossible, to anticipate and quantify beforehand, prior to the publication date. The causal chain connecting open data as a cause with its economic effects is particularly unrealiable. However, it seems to be feasible to recount the effect on business after the moment data is made accessible. For instance, an analyst may consider the number of uses by businesses comparing how it changed before and after the data was opened [1]. Accordingly, the economic value of open data can be rather considered as indirect.
Given the way open data affects economy, estimates of the market size for public sector data are based on methodologies that are insufficient to come up with accurate numbers. For example, most of the studies evaluating economic impact of opening up data in the public sector were based on extrapolations from research conducted on a smaller scale. In his study for the European Commission, Graham Vickery assessed the aggregate volume of the direct and indirect economic impacts of opening public sector information in the EU member countries to be EUR 140 billion annually [2, p. 4]. In contrast with this number, estimates of the direct revenue based on selling public sector information were much lower, and Vickery quantified it to EUR 1.4 billion [Ibid., p. 5].
Open data opens new opportunities for private businesses. It allows new business models to appear, including crowdsourced administration of public property by services such as FixMyStreet. Another example of a business that is based on public sector data is BrightScope that delivers financial information for investors. An area that may benefit the most from availability of public sector data are location-based services. The EU Directive on the reuse of public sector information was reported to have the strongest impact on the growth of the market of geospatial data that is essential for such services to be operated [Ibid., p. 20].
The opportunities offered by open data are particularly important for small and medium enterprises. These businesses are a prime target for reuse of open data since they usually cannot afford to pay the charges to public bodies for data that is not open. Stimulation of economic activities may result in new jobs being created. Availability of public data may give rise to a whole new sector of “independent advisers”, that add value to the data by making it more digestible to citizens [3]. More businesses eventually generate more tax revenue, which ultimately promises to return the investment in open data back to the budget from which the public sector is funded.
Open data fosters product and service innovation. It affects especially the areas of forecasting, prediction, and optimization. For example, European Union makes its official documents available in all languages of the EU member states. This multilingual corpus is used as a training set for machine translation algorithms in Google Translate leading to an improvement in quality of its service [4].
At the same time, open data disrupts existing business models that are based on exclusive arrangements for data provision by public sector bodies to companies. This is how businesses that thrive on barriers to access to public data are made obsolete. Open data weeds out companies that hoard public data for their benefit and establishes an environment, in which all businesses have an equal opportunity to reuse public sector data for their commercial interests.

References

1. ORAM, Andy. European Union starts project about economic effects of open government data. O’Reilly Radar [online]. June 11^th, 2010 [cit. 2012-04-09]. Available from WWW: http://radar.oreilly.com/2010/06/european-union-starts-project.html
2. VICKERY, Graham. Review of the recent developments on PSI re-use and related market developments [online]. Final version. Paris, 2011 [cit. 2012-04-19]. Available from WWW: http://ec.europa.eu/information_society/policy/psi/docs/pdfs/report/psi_final_version_formatted.docx
3. HIRST, Tony. So what's open government data good for? Government and “independent advisers”, maybe? [online]. July 7^th, 2011 [cit. 2012-04-07]. Available from WWW: http://blog.ouseful.info/2011/07/07/so-whats-open-government-data-good-for-government-maybe/
4. DIETRICH, Daniel; GRAY, Jonathan; MCNAMARA, Tim; POIKOLA, Antti; POLLOCK, Rufus; TAIT, Julian; ZIJLSTRA, Ton. The open data handbook [online]. 2010 — 2012 [cit. 2012-03-09]. Available from WWW: http://opendatahandbook.org/

Impacts of open data: participation

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
Open data enables better interaction between citizens and governments through the Web [1]. It redresses the information asymmetry between the public sector and citizens [2] by advocating that everyone should have the same conditions for use of public sector data as the public body from which the data originates. Sharing public data facilitates universal participation since no one is excluded from reusing and redistributing open data [3].
Open data opens the possibility of citizen self-service. It makes the public more self-reliant, which reduces the need for government regulation [4]. It enables to tap into the cognitive surplus and improve public services with the crowdsourced work of the public. One of the main benefits of open data consists in third-party developed citizen services [5, p. 40]. Citizens may thus become more involved in public affairs, which ultimately leads to a more participatory democracy.

References

1. ACAR, Suzanne; ALONSO, José M.; NOVAK, Kevin (eds.). Improving access to government through better use of the Web [online]. W3C Interest Group Note. May 12^th, 2009 [cit. 2012-04-06]. Available from WWW: http://www.w3.org/TR/egov-improving/
2. GIGLER, Bjorn-Soren; CUSTER, Samantha; RAHEMTULLA, Hanif. Realizing the vision of open government data: opportunities, challenges and pitfalls [online]. World Bank, 2011 [cit. 2012-04-11]. Available from WWW: http://www.scribd.com/WorldBankPublications/d/75642397-Realizing-the-Vision-of-Open-Government-Data-Long-Version-Opportunities-Challenges-and-Pitfalls
3. DIETRICH, Daniel; GRAY, Jonathan; MCNAMARA, Tim; POIKOLA, Antti; POLLOCK, Rufus; TAIT, Julian; ZIJLSTRA, Ton. The open data handbook [online]. 2010 — 2012 [cit. 2012-03-09]. Available from WWW: http://opendatahandbook.org/
4. TAUBERER, Joshua. Open data is civic capital: best practices for “open government data” [online]. Version 1.5. January 29^th, 2011 [cit. 2012-03-17]. Available from WWW: http://razor.occams.info/pubdocs/opendataciviccapital.html
5. LONGO, Justin. #OpenData: digital-era governance thoroughbred or new public management Trojan horse? Public Policy & Governance Review. Spring 2011, vol. 2, no. 2, p. 38 — 51. Also available from WWW: http://ssrn.com/abstract=1856120

Impacts of open data: disintermediation

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
Who draws and controls the maps controls how other people see the world [1]. Who interprets data from the public sector controls how other people see the things described in the data. By releasing raw open data the public sector also releases its total control over the interfaces in which the data is presented. In this way, the interpretive dominance of the public sector data is abolished and it no longer controls the way how citizens should see the world described in the data [2]. Civil servants perceive this as a loss of control over the released data, but in fact, it is only a loss of control over interfaces in which the data is presented.
Providing raw data is an example of disintermediation. It reduces the frictions and inherent cognitive biases that come with interpretations by intermediaries. It allows users to skip the intermediaries that stand between them and access to raw data. For example, both civil servants producing reports based on primary data and journalists transforming data into narratives conveyed in articles serve as intermediaries that affect how the public perceives public sector data.
Depending on the type of use mediation may be either a barrier or a help. It is a barrier for those that want to access raw data to interpret them themselves. However, common perception has it that too few people are interested in raw data [3, p. 71]. Yet one should not make such generalizations as there is evidence that suggests otherwise. For example, after the release of data from the Norwegian meteorological institute, the institute registered more data downloads (14.8 million) than page views (4.5 million). These numbers were given by Anton Eliassen, the institute’s director, during the first plenary on the revised public sector information directive at the ePSI Platform Conference 2012. In general, it is the case that raw data receives relatively few downloads, yet access to raw data is vital to build new applications on top of the data.
Disintermediation creates a demand for reintermediation. Mediation helps users that need to get user-friendly translations of data in order to reach understanding. Applications mediating data in ways that are accessible and compelling, such as visualizations, may attract a lot of attention proving the demand for public sector data. For instance, this has happened in the case of the UK crime statistics, the visualization of which crashed under the weight of 18 million requests per hour at the time it was released [4].

References

1. ERLE, Schuyler; GIBSON, Rich; WALSH, Jo. Mapping hacks: tips & tools for electronic cartography. Sebastopol: O’Reilly, 2005, 568 p. ISBN 978-0-596-00703-4.
2. BARNICKEL, Nils; HÖFIG, Edzard; KLESSMANN, Jens; SOTO, Juan. Organisational and societal obstacles to implementations of technical systems supporting PSI re-use. In Share-PSI Workshop: Removing the Roadblocks to a Pan-European Market for Public Sector Information Re-use [online]. 2011 [cit. 2012-03-08]. Available from WWW: http://share-psi.eu/submitted-papers/
3. HALONEN, Antti. Being open about data: analysis of the UK open data policies and applicability of open data [online]. Report. London: Finnish Institute, 2012 [cit. 2012-04-05]. Available from WWW: http://www.finnish-institute.org.uk/images/stories/pdf2012/being%20open%20about%20data.pdf
4. TRAVIS, Alan; MULHOLLAND, Hélène. Online crime maps crash under weight of 18 million hits an hour. Guardian [online]. February 1^st, 2011 [cit. 2012-04-17]. Available from WWW: http://www.guardian.co.uk/uk/2011/feb/01/online-crime-maps-power-hands-people

Impacts of open data: efficiency

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
The public sector itself is the primary user of public sector data. Open access to public data thus impacts the way the public sector operates. While the initial costs of opening up data may turn out to be significant, adopting open data promises to deliver cost savings in the long run, enabling the public bodies to operate more efficiently. “There is a body of evidence which suggests that proactive disclosure encourages better information management and hence improves a public authority’s internal information flows” [1, p. 69]. For instance, open data produces cost savings on cheaper information provision and efficient development of applications providing services to citizens.
For information provision, similarly to health services, prevention is cheaper than therapy [2]. Prevention via proactive disclosure is presumed to be more cost-efficient than therapy via acting on the demand of freedom of information requests [3, p. 25]. Open data saves the effort spent on responding freedom of information requests by providing the requested data in advance. In this way, the effort of providing data is expended only once, instead of repeating it due to the requests for the same data. Although the initial set-up overhead for open data may be higher, it is supposed to lower the per-interaction overhead.
Open data promotes a new way of information management that may streamline the data handling procedures and curb unnecessary expenditures. By elimination of the costs associated with access to public sector data the adoption of open data removes the expenses on data acquisition from public sector bodies selling their data. In effect, a better interagency coordination is established, which lessens administrative friction. Given the reduced workload, it may lead to destruction of some clerical jobs [2], which will produce savings on labour costs.
A common argument in favour of open data is based on the observation that the public sector is not capable of creating applications providing services to citizens in a cost-efficient way. Commissioning software for the public sector must pass through the protracted process of public procurement. Such procedure is slow to respond to users’ demands and the resulting applications may end up being costly. With openly available public sector data, the public sector is no longer the only producer that can deliver applications based on the data. Third parties may take the data a produce applications on their own, substituting the applications subsidized by the public sector. This is how a more cost-efficient means of production of applications may be devised.
The way in which open data makes efficiency of the public sector better is not limited to monenatary savings. The internal impact of open data encompasses that the data quality may be improved by harnessing the feedback from citizens. It may also inform the way the public sector is governed through evidence-based policies.
Opening data enables anybody to inspect it. Feedback from users probing the data puts a pressure on the public sector to improve the data quality. Better quality data enables better quality service delivery, improving the pursue of public task on many levels, such as better responsiveness to citizen feedback. Based on user feedback, collection of less used datasets may be discontinued, leading to a more responsive and user-oriented data disclosure.
Quality of data influences the quality of the policy that is based upon it [4]. It may become a source for a more efficient, evidence-based policy. Public policies may be improved by considering data as an input, as an evidence of the phenomena to be policed, and should be made with publicly available data [Ibid., p. 384], empirical data that is open to public scrutiny [5, p. 4], in order to keep the policy creators accountable.

References

1. Beyond access: open government data & the right to (re)use public information [online]. Access Info Europe, Open Knowledge Foundation, January 7^th, 2011 [cit. 2012-04-15]. Available from WWW: http://www.access-info.org/documents/Access_Docs/Advancing/Beyond_Access_7_January_2011_web.pdf
2. FIORETTI, Marco. Open data, open society: a research project about openness of public data in EU local administration [online]. Pisa, 2010 [cit. 2012-03-10]. Available from WWW: http://stop.zona-m.net/2011/01/the-open-data-open-society-report-2/
3. HALONEN, Antti. Being open about data: analysis of the UK open data policies and applicability of open data [online]. Report. London: Finnish Institute, 2012 [cit. 2012-04-05]. Available from WWW: http://www.finnish-institute.org.uk/images/stories/pdf2012/being%20open%20about%20data.pdf
4. NAPOLI, Philip M.; KARAGANIS, Joe. On making public policy with publicly available data: the case of U.S. communications policymaking. Government Information Quarterly. October 2010, vol. 27, iss. 4, p. 384 — 391. DOI 10.1016/j.giq.2010.06.005.
5. SHADBOLT, Nigel. Towards a pan EU data portal — data.gov.eu. Version 4.0. December 15^th, 2010 [cit. 2012-03-10]. Available from WWW: http://ec.europa.eu/information_society/policy/psi/docs/pdfs/towards_an_eu_psi_portals_v4_final.pdf

Impacts of open data: accountability

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
Transparency feeds into accountability. “In the world of big data correlations surface almost by themselves. Access to data creates a culture of accountability” [1]. Open data enables to hold politicians accountable by comparing their promises with data showing how are their promises put into practice. For example, unfavourable audit results based on open data may cause a politician not being reelected.
Public scrutiny of governmental data may reveal fraud or abuse of public funds. Given the availability of public data everyone may check out, we may see a rise of the so-called “armchair auditing.” In the same way, it improves the function of “watchdog” institutions, such as non-governmental organizations dedicated to overseeing government transparency. In this way, open data increases civic engagement leading to a more participatory democracy and better democratic control.
Open data enables to apply crowdsourcing to monitor institutions and their performance, which is described in the data. Rufus Pollock illustrated the opportunities of leveraging citizen feedback by saying that “to many eyes all anomalies are noticeable,” in which he paraphrased the quote “given enough eyeballs, all bugs are shallow” by Linus Torvalds. Accordingly, releasing data to the public allows to get the data verified or inspected for quality for free.

References

1. Data, data everywhere. Economist. February 25^th, 2010. Also available from WWW: http://www.economist.com/node/15557443

Impacts of open data: transparency

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
Transparency of the public sector reflects the ability of the public to see what is going on. David Weinberger declares that transparency is the new objectivity [1], a change that he claims to stem from the transformation of the currect knowledge ecosystem to one that is inherently network-based. Transparency replaces the role of the long-discredited objectivity in that aspects that it is used as a source of veracity and reliability [2].
Transparency serves for fraud prevention. It puts the public sector under a peer pressure based on the fact that anybody can inspect the its public proceedings. The peer supervision makes it more difficult for civil servants to profit from the control they have and abuse of the powers vested in them. By increasing the risks of exposure of venal activities, it lowers the systemic corruption [3, p. 9]. In effect, members of the public may hold civil servants accountable for corruption, illegal takeover of subsidies, or plain budgetary waste [4, p. 80].
An illustrative example of the self-regulating effects of transparency was presented in [5, p. 110]. In 1997, restaurants in the Los Angeles county were ordered to post highly visible letter grades on their front windows. The grades (A, B, C) were based on the results of County Department of Health Services inspections probing hygiene maintenance in the restaurants. The ready availability of evidence on insanitary practices in food handling made it easier for people to make better choices about restaurants and helped them to avoid restaurants that were deemed unsafe to eat at. The introduction of this policy proved to have a significant impact both on the restaurants and their customers. Revenues at C-grade restaurants dropped, while those of A-grade restaurants increased, leading over time to a growth of the number of cleanly restaurants and a steep decline of the poorly performing ones. The policy also improved health conditions of the restaurants’ customers, with a decrease of hospitalizations caused by food-borne illnesses from 20 % to 13 %. Transparency has an ambiguous impact on trust in the public sector. While there is a positive impression of stronger control over the public sector, at the same time more failures are identified, which chips away at the trust in public affairs. Furthermore, transparency makes citizens aware of how vulnerable to manipulation the public sector data is.
Open data shapes the reality it measures [6, p. 3]. When communicating, the sender conveying information modifies its content based on the perceived context of communication. Evaluation of the way of communication, the expected audience, and other circumstances factored into the communication context impacts what messages are sent. Open data establishes a new context with a wider and less defined range of potential recipients and a different set of expectations about the effect of communicated data. Such re-contextualization may affect what gets released and in what form. Data may be distorted in a direction so that it supports only the interpretations data producers expect [7]. As a result, some data may end up withheld from the public, while other data may turn out to be misrepresenting of the phenomena it bears witness to. At the same time, the change brought about by the obligation to disclose data may have positive consequences by forcing public bodies “to rethink, reorganize and streamline their delivery before going online” [8, p. 448].
As the control is ultimately in the hands of civil servants, data disclosure may be shaped as required by various interest groups, including politicians or lobbyists. It illuminates the fact that there is no direct causation between open data and open government. “A government can be an ‘open government,’ in the sense of being transparent, even if it does not embrace new technology” [9, p. 2]. Only politically important and sensitive disclosures take government further on its way to open government. “A government can provide ‘open data’ on politically neutral topics even as it remains deeply opaque and unaccountable” [Ibid., p. 2]. This reflects what Ellen Miller from the Sunlight Foundation calls the danger of a mere “transparency theater”. This is nothing new in the politics. For instance, questions that politicians get asked may be moderated to include only those that are not sensitive and do not require the interviewee to disclose any delicate facts.
It also indicates that there is a limit to transparency, a limit that Joshua Tauberer entitled the “Wonderlich Transparency Paradox” [10]. It is named after John Wonderlich from the Sunlight Foundation that once wrote that “How ever far back in the process you require public scrutiny, the real negotiations [...] will continue fervently to exactly that point” [11]. Some parts of the processes in the public sector are exempted from disclosure to provide a “space to think” [4, p. 74]. However, this paradox shows that no matter how thourough and deep the transparency of the public sector is, the real decision-making processes will always have a chance to elude what is recorded and exposed for public scrutiny.
Everything may be abused and transparency is no different. For example, releasing data about how well are civil servants paid may be used to identify targets for bribery. Disclosing salaries of politicians helps lobbyists to find a low-paid politician who is an easier target for corruption. A difficult question is also to ask whether terrorist watch list should be made open [5, p. 4].
These examples showcase the unintended consequences of opening data. What these concerns illustrate is that transparency is obviously not a panacea and it would be naïve to think it is. Open data is not an end to itself and transparency by itself is an input, not an output [12].

References

1. WEINBERGER, David. Too big to know. New York (NY): Basic Books, 2012. ISBN 978-0-465-02142-0.
2. WEINBERGER, David. Transparency is the new objectivity [online]. July 19^th, 2009 [cit. 2012-04-25]. Available from WWW: http://www.hyperorg.com/blogger/2009/07/19/transparency-is-the-new-objectivity/
3. BERLINER, Daniel. The political origins of transparency. In HAGOPIAN, Frances; HONIG, Bonnie (eds.). American Political Science Association Annual Meeting Papers, Seattle, Washington, 1 — 4 September 2011 [online]. Washington (DC): American Political Science Association, 2011 [cit. 2012-04- 29]. Also available from WWW: http://ssrn.com/abstract=1899791
4. Beyond access: open government data & the right to (re)use public information [online]. Access Info Europe, Open Knowledge Foundation, January 7^th, 2011 [cit. 2012-04-15]. Available from WWW: http://www.access-info.org/documents/Access_Docs/Advancing/Beyond_Access_7_January_2011_web.pdf
5. LATHROP, Daniel; RUMA, Laurel (eds.). Open government: collaboration, transparency, and participation in practice.
   Sebastopol: O'Reilly, 2010. ISBN 978-0-596-80435-0.
6. BOYD, Danah; CRAWFORD, Kate. Six provocations for big data. In Proceedings of A Decade in Internet Time: Symposium on the Dynamics of the Internet and Society, 21 — 24 September 2011, University of Oxford. Oxford (UK): Oxford University, 2011. Also available from WWW: http://ssrn.com/abstract=1926431
7. KAPLAN, Daniel. Open public data: then what? Part 1 [online]. January 28^th, 2011 [cit. 2012-04-10]. Available from WWW: http://blog.okfn.org/2011/01/28/open-public-data-then-what-part-1/
8. HAZLETT, Shirley-Ann; HILL, Frances. E-government: the realities of using IT to transform the public sector. Managing Quality Service. 2003, vol. 13, iss. 6, p. 445 — 452. ISSN 0960-4529. DOI 10.1108/09604520310506504.
9. YU, Harlan; ROBINSON, David G. The new ambiguity of “open government” [online]. Princeton CITP / Yale ISP Working Paper. Draft of February 28^th, 2012. Available from WWW: http://ssrn.com/abstract=2012489
10. TAUBERER, Joshua. Open government data: principles for a transparent government and an engaged public [online]. 2012 [cit. 2012-03-09]. Available from WWW: http://opengovdata.io/
11. WONDERLICH, John. Pelosi reverses on 72 hour promises? In Open House Project [online]. November 7^th, 2009 [cit. 2012-04-19]. Available from WWW: http://groups.google.com/group/openhouseproject/msg/94060a876083d86a
12. SHIRKY, Clay. Open House thoughts, Open Senate direction. In Open House Project [online]. November 23^rd, 2008 [cit. 2012-04-19]. Available from WWW: http://groups.google.com/group/openhouseproject/msg/53867cab80ed4be9

Impact of open data

The following post is an excerpt from my thesis entitled Linked open data for public sector information.
Rufus Pollock from the Open Knowledge Foundation argues that “open data is a means to an end, not an end in itself” [1]. Open data alone has no impact, as its impact is triggered by its use. Thus, no impact is guaranteed by the intrinsic properties of open data.
Open data discourse contains a vision that promises a better society in the offing. It is a vision that stems from the belief in transformative effects of open data principles and information technologies that are entrusted to deliver this vision. However, this vision will not be put into practice by releasing open data. Its the use of open data that puts the transformation into motion.
Rhetoric of open data advocates emphasizes the positive side of open access to public sector data. Moreover, it is often presented as an asymptomatic and strictly apolitical issue. However, it would be short-sighted to assume it is a neutral, technological change. We need to admit that there are both positive and negative impacts of open data, bringing both benefits and repercussions.
Distinguishing between the target of open data impacts, a rough categorization can be drawn classifying impacts either as internal, if they affect data producers, or as external, if they influence others.

Internal impact

Internal impact, which affects the producers of public sector data, is based largely on data about the public sector. The data describing the public sector is a record of its activity that may be used and scrutinized to improve the workings of the public sector. An open and better performing public sector is among the key objectives of the open data movement. Ultimately, open data paves the way to an open and more efficient government.
Open data disrupts existing workflows that are established in the public sector. It subjects the public sector to a greater transparency, which enables to held civil servants accountable, and establishes conditions under which the public sector may function in a more efficient way.

External impact

External impact of open data affects the demand side of open data. It results chiefly from availability of data about the environment governed by the public sector bodies releasing the data.
A recognized issue with the open data movement is that it lacks focus on the demand side of data. It suffers from unrealistic expectations brought about with the pervasive tendency to pay attention solely to the supply side, which is coupled with a lack of consideration of how the data would be used after its release [2, p. 1]. The public sector should abandon this ill-considered model and instead adopt a user-centric model for data disclosure.
Close attention to the demand side is needed because the power of open data is not in itself, it resides in the ways it can empower people that use the data. Open data empowers citizens to make better decisions. For example, access to crime data may assist city dwellers in finding the safest route home. Information about wheelchair access to public transportation may help persons with reduced mobility to arrange their city transport better. The effects of open data that impact users of data are covered in the following sections. Among the effects that are discussed is the phenomenon of disintermediation that allows users of data to by-pass intermediaries and the ways in which open data enables citizens to participate in public affairs. Influences of open data on two specific domains are considered. The availability of public sector data is a new potential for the economy. For journalism open data brings about a change that makes it become more data-driven.

References

1. POLLOCK, Rufus. Open data: a means to an end, not an end in itself [online]. September 15^th, 2011 [cit. 2012-04-06]. Available from WWW: http://blog.okfn.org/2011/09/15/open-data-a-means-to-an-end-not-an-end-in-itself/
2. MCCLEAN, Tom. Not with a bang but with a whimper: the politics of accountability and open data in the UK. In HAGOPIAN, Frances; HONIG, Bonnie (eds.). American Political Science Association Annual Meeting Papers, Seattle, Washington, 1 — 4 September 2011 [online]. Washington (DC): American Political Science Association, 2011 [cit. 2012-04-19]. Also available from WWW: http://ssrn.com/abstract=1899790