ODI, London

Nicholas Gruen E ngruen@gmail.com T @ngruen1

Open data: the new emergent public good of our time?

25th July 2014

Outline

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The free rider problem/the free rider opportunity Open data and PSI Embracing wider open data opportunities Whats it worth

McKinseys estimates Lateral Economics estimates

Public goods of opportunity

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Public goods goods that no-one will supply if the government doesnt

Public goods Public goods . . . present serious problems in human organisation. Vincent and Elenor Ostrom - 1977

(as a problem)

Public goods (as an opportunity)

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.

Thomas Jefferson to Isaac McPherson, August, 1813

Web 2.0 platforms are public goods:

Google (1998) Wikipedia (2001) Blogs (early 2000s) Facebook (2004) Twitter (2006)

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The Wealth of Nations (1776)

Private Goods

The Theory of Moral Sentiments (1759)

The social preconditions of markets (Public Goods)

Language

Adam Smith

Public Goods

Private Goods

[The public good of] Justice . . . is the main pillar that upholds the whole edifice. If it is removed, the great, the immense fabric of human society . . . must in a moment crumble into atoms. Adam Smith

The ecology of public and private goods

We will ever strive for the ideals and sacred things of the city, both alone and with many; we will unceasingly seek to quicken the sense of public duty; we will revere and obey the citys laws; we will transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us.

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Public goods Governments Families Civic association Philanthropy Within teams

Cooperation and group-interest

The fractal ecology of public and private goods

Private goods Individuals Firms Teams

Competition and self-interest

The ecology of private and public goods: Markets

Private Goods Traders address

their mutual self-interest

Public Goods

Marketplace for meeting

Price discovery Liquidity

Private and public goods on a platform

Private Goods Meeting private

needs Linking to other

websites

Public Goods

Google uses this information to rank sites

Everyone benefits

Google monetises with ads

The economics of abundance: a new birth of freedom

Public goods . . . present serious problems in human organisation.

Vincent and Elenor Ostrom - 1977

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

Thomas Jefferson

Public goods as a problem Public goods as an opportunity

When the economics of abundance runs out

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Public Sector Information (PSI)

Freedom of Information held by the government is to be managed for public purposes, and is a national resource Freedom of Information Act 1982 as amended in 2010

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Publicly funded research Recommendation 7.10: A specific strategy for ensuring the scientific knowledge produced in Australia is placed in machine searchable repositories be developed and implemented using public funding agencies and universities as drivers. Cutler Review of Innovation, 2008

PSI and Research Openness

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Conservatively estimated that greater openness would contribute around 0.27% GDP Or 1/7th of the 2% Growth Target

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Research Findings & Data

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McKinsey scaled to Australia

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To get a reasonable upper bound we . . . Took McKinseys lower bound

$3.2 not $5.4 trillion

Assumed Only of gains are value added Only due to policy remains to be realised

~ $16 billion ~ 1% Aus GDP ~ G20 target

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McKinsey scaled to Australia

Lateral Economics case studies

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Lateral Economics case studies

Theyre partial Like McKinsey

Range over public and private open data Focus on incremental benefits Suggest our McKinsey based upper bound was conservative

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Macro-economic management Better use of existing real time PSI

BAS data on Activity Exports Capex

PAYE data

Open-sourcing forecasting models As Treasury and the US Fed have done

Using real time private data Supermarket scanner data Payroll and accounting Data from online

providers Xero/MYOB

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5%

7.5%

Better macro-economic management ($ billions p.a)

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Total GDP $1,554 Consumption $1,136

Existing cost of fluctuations (1.35% of consumption) $15.3

5% reduction in volatility => 9.75% of cost of recessions $1.5

7.5% reduction in volatility => 13.7% of cost of recessions $2.1

Total benefits of open data $3.6

Better Workplaces

Better PSI Release disaggregated State of service data

As they do in the US Deliver better machine readability on government data

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APSJobs.Info

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Windows on Workplaces

Why isnt employee engagement data open? Government suasion in education/health workplaces to open more data Comparison requires a standard Government could convene standard setting

Voluntary standard making and reporting Government bodies report to it ABS survey of firms to establish benchmarks

Strengthen the market for good management From both labour and capital market

Benefits to better job matching $0 for better matching within public service 5-10% lower stress at work (=$14 bil) = $1.2 bil $0 for productivity growth Matching teachers better to jobs = similar benefits to higher teacher quality Jensen (2010) estimates a 10% better teacher quality => 0.2% better growth of that => 0.05% higher GDP growth = $2.3 bil = $3.4 bil

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Lateral Economics Case Studies

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Open Data

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Midata data sharing

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Citizens Advice Communications Consumer Panel Consumer Focus Information Commissioners Office (ICO) OFCOM Office of Fair Trading (OFT) Which?

AMEE Avoco Secure billmonitor British Gas Callcredit EDF Energy E.ON Garlik Google Lloyds Banking MasterCard

Moneysupermarket.com Mydex npower RBS Scottish Power Scottish Southern Energy The UK Cards Association Three Visa

Case Studies (UK)

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When the economics of abundance runs out

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Allo Mobile

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10,000% Productivity Improvement

PPPs 2.0

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Private sector builds service Public sector contributes its resources

Networks Nudges Non-obstruction Financial internalisation

Subject to openness and privacy undertakings Much more for each in partnership than alone Australia acquires new research assets Not picking winners but mediated through usual processes such as open tenders, etc.

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Interfaces Open Aust SeeClickFix CareMonkey

Internal Innovation OneTouch FixMyBudget e-taskr

Chaperone Murmur

Directory HealthKit

Public Private Partnerships 23andMe

Seeding altruism Code for Australia

Validation Rate my prof Rate Govt Services

Building platforms Open Australia Sense-t

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Government 2.0 Getting serious about opening data

Institutions Mining data Pharma data

Standards Windows on

Workplaces

Open Research Getting serious about opening research data

Data Linkage Building data

linkage assets Realtime Macro ATO data Open forecasting Private accounting data

Data Sharing Midata AP Digital Postbox

Whats there not to like?

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Open Data

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Open Knowledge Foundation Index

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Open data barometer

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Windows on Workplaces

Encourage employers to provide good jobs in safe, healthy and productive workplaces, and empower employees to choose their preferred workplaces by facilitating the dissemination of information about employment experiencefor example, worklife balance and family-friendliness.

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