4 reasons to governments should be open to Open Data

In recent years, Open Data has been gaining considerable traction globally, but there are countries, especially those in the Caribbean that have been reluctant to embrace it. This post highlights four key reasons why countries should revisit Open Data.

open-data word cloud (Source: rudebaguette.com)

Unlike term Open Source Software, which has been around for at least the past 20 years, the concept “Open Data” – data that can be freely used, reused and redistributed by anyone, but frequently with the proviso to attribute the source – is still relatively new. Although we have touched on Open Data in previous articles, typically it was usually within the context of events, such as the Caribbean Open Data Conference and Code Sprint, in which Open Data was being used to create software applications.

Having said this and over the past five to ten years, Open Data has been gaining considerable prominence, with some countries world wide implementing extensive Open Data policies, where a considerable number of public sector-generated data sets are made publicly available. Studied have been conducted to begin to determine the current and anticipated impact of Open Data. This post highlights five key findings from a few of the published studies, which could encourage policy makers to seriously revisit Open Data.

1.  Governments can realise considerable benefits

Governments are a key source for data, and should lead by example in terms of adopting policies to make information, except that which absolutely must be kept confidential, publicly available. Frequently, countries, such as those in the Caribbean, take a contrary approach. They recognise the value of the information that they possess, but are hesitant to share it unless there are clear ways in which it can be monetised. However, analysis conducted by Capgemini Consulting on 23 select countries found that when Open Data ecosystems have been implemented, additional public sector revenue was generated through increased tax revenues based on the commercial usages of Open Data. For example, across 27 economies in the European Union, the economic impact of applications based on Open Data was estimated at EUR 140 billion annually (Source: Capgemini Consulting).

2.  Fosters entrepreneurship, job creation and skill development

Open Data presents entrepreneurs with a wealth of opportunities to solve problems, create new businesses and new revenue streams. Global analyst firm, McKinsey, noted that

the availability of open GPS data in the 1980s created whole new businesses in consumer and business GPS and mapping services that today contribute an estimated $90 billion a year in value to the US economy.

Similar results have been found in the German market, where in 2007, geo-information was estimated at EUR 1.4 billion, and in Australia, where over 31,400 persons were directly employed in the geospatial information industry (Source: Capgemini Consulting).

The increasing focus on areas such as data analytics and big data, are driving the demand for skills that can process and analyse data in order to extract useful information and applications. However, as was noted in our post, What’s the big deal about big data?, a shortage of suitably skilled persons is imminent. Capgemini Consulting estimates that “by 2015, Big Data demand will reach over 4.4 million jobs globally. However, globally, there is a significant dearth of skills around Big Data and its application. It is expected that only a third of the 4.4 million positions are likely to be filled.

3.  Enhances data analytics

As volumes of data generated increased exponentially, there has been growing emphasis on processing, modelling and analysing that data to improve decision-making and forecasting. The volume and types of data that governments typically possess would usually be regarded as building blocks for more elaborate processing and modelling, and according to McKinsey, the values of Open Data is evident when open and proprietary data is combined.

In terms of volume of information handled, Open Data can be considered a subset of Big Data. Successful processing of Big Data will require considerable computer processing power and technical skills. For countries that have embraced Open Data, it can be a precursor to Big Data analytics, by allowing resources and skills to develop for more challenging undertakings

4.  Can improve productivity and efficiencies

Finally, when governments and public sector organisations, in particular, make the data they possess publicly available, it not only fosters transparency, but also can often lead to cost savings, improved productivity and greater efficiencies. A good example of transparency leading savings was reported in California (United States of America) where, “the state transparency portal (that cost around $21,000 to implement) saved the state over $20 million when visitors identified unnecessary expenditure” (Source: Capgemini Consulting).

Similarly, a number of cities, such as San Francisco (United States of America) and Bristol (United Kingdom), found that when more citizen data was placed online in a searchable format, considerable savings were realised. The Bristol City Council found that a typical service transaction was “15 times more expensive if answered in person or telephone than if answered over the Internet”, and San Francisco experienced a savings of over USD 1 million per year due to lower call volumes  (Source: Capgemini Consulting).


In summary, countries can realise considerable value if more open policies, specifically Open Data, were adopted. In a recent study published by McKinsey, in which it examined the anticipated impact of Open Data across seven domains (education; transportation, consumer products, electricity, oil and gas, health care, and consumer finance), it found that Open Data could contribute a minimum of USD 3 trillion in additional value annually. Hence, for countries that might be struggling economically, or where there is an emphasis on revenues generation and job creation, Open Data could unlock a wealth of new opportunities across a number of industries and, by extension, across their societies as a whole.


Image credit:  Rude Baguette