[et_pb_section bb_built="1" admin_label="Section" fullwidth="on" specialty="off"][et_pb_fullwidth_image admin_label="Image" src="https://news.communitech.ca/wp-content/uploads/2017/05/Should-Government-Data-be-free.png" alt="Should Government Data Be Free?" title_text="Should Government Data Be Free?" show_in_lightbox="off" url_new_window="off" use_overlay="off" animation="left" use_border_color="off" border_color="#ffffff" border_style="solid" /][/et_pb_section][et_pb_section bb_built="1" admin_label="section"][et_pb_row admin_label="row"][et_pb_column type="4_4"][et_pb_text admin_label="Text" background_layout="light" text_orientation="left" use_border_color="off" border_color="#ffffff" border_style="solid"]
Without a doubt there’s a potential to make a lot of money in the wealth of public data that is released everyday worldwide – but should we pay to access that data? That’s a question that, to date, has been floating around the open data space with little traction. That said, this exact question has been resurfacing when considering the future of the commercialization of open data.
Currently governments (especially governments in Canada) operate under the notion that they provide data in an open format to the public; as a service. At the foundation of this movement is the assumption that since citizens pay taxes, citizens then have a right to transparency and the access to public information in a digitally liquid format. This approach promotes transparency, accountability, clean government, better internal performance management, and to a certain extent, innovation.
On the other side of the spectrum, companies in the private sector such as Uber, can be seen providing limited data and/or charging for large amounts of the data they collect. A case can be made around charging transactional fees for the commercial use of open data - but is this really the best option?
McKinsey released a 2013 study highlighting the fact that the open data economy could be worth $3-$5 trillion globally. This is clearly a massive market, with substantial untouched market potential – do we want to impose transactional fees which will without a doubt add friction and barriers to entry? Maybe, but the likely answer is no. Sure a portion of this untapped market will be already established large corporations, but an even larger portion will be newly created startups and entrepreneurs building businesses off the data released. Transactional fees may be pennies to large corporations but they are serious barriers to small companies and startups that are trying to leverage themselves into previously vacant markets. Therefore, when it comes to implementing any form of pricing strategy, whether it be full, partial or even marginal cost recovery regimes; large high-end firms will be in a more favourable position.
From this perspective, it is essential for public sector bodies to follow pricing models that foster use among new firms, specifically with startups and SMEs. As this market often deals with smaller margins on their products and services, barriers to obtaining data must be removed (and avoided) by suppliers.
Former Calgary Alderman, Gord Lowe, has spoken to the upstream impacts of open data when dealing with ‘Freedom of Information and Protection of Privacy’ (FOIP). According to Lowe, it would be much more effective to make FOIP requests publicly available to save tax money on transactional costs. According to Lowe, preparing documents can be as costly as $45,000, or have marginal costs of $6.75 per 15 minutes of work.
The proactive release of governmental data in an open format does many things. Open data begins to break down the silos that exist in government, improves the effectiveness of city programs, departments and applications, and creates efficiencies within government. More importantly, new firms and markets are also created once government agencies release information without barriers (such as fees and pricing schemes). With truly open data released to the market, government bodies may not see an immediate return on their efforts, but keep in mind municipalities don’t ask to see the ROI on a library either. Instead, open data is a medium to long term strategy that seeks indirect impacts, efficiencies, cost savings, and the tax revenue that is generated from the innovation and collaboration that takes develops downstream.
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section bb_built="1" admin_label="Section" fullwidth="off" specialty="off"][et_pb_row admin_label="Row"][et_pb_column type="4_4"][et_pb_divider admin_label="Divider" color="#9ea2a3" show_divider="on" height="3" divider_style="solid" divider_position="top" hide_on_mobile="on" /][et_pb_team_member admin_label="Person" name="John Chiappetta" position="Projects & Initiatives" image_url="https://news.communitech.ca/wp-content/uploads/2017/02/John-2017-warm.jpg" animation="off" background_layout="light" twitter_url="https://twitter.com/Chiappetta__" linkedin_url="https://www.linkedin.com/in/john-chiappetta-1b80136a/" use_border_color="off" border_color="#ffffff" border_style="solid"]
John Chiappetta leads Projects & Initiatives at Canada’s Open Data Exchange (ODX). He works with companies and municipalities of all sizes to enhance their use of data and innovation to improve services, inform local decision-making and drive engagement. John believes that the most critical business questions are not answered with what data you could or should access, but by first working out what your business is looking to achieve.
John holds a Masters degree in Political Science and has completed undergraduate work in Political Science and Business.
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