A new study from Lateral Economics commissioned by the Omidyar Network shows that open data could increase G20 output by around $13 trillion over the next five years. This would boost cumulative G20 GDP by around 1.1% of the 2% growth target over five years. The report outlines the opportunities for value creation through strong open data policy implementation. However, authors also note that significant hurdles remain to the kind of broad-scale implementation needed to realize full value potential.
“Existing open data policy initiatives must be strengthened to prevent government policies dying the death of a thousand bureaucratic cuts in their implementation,” authors write.
Even so, the report says that a recent estimate by McKinsey that open data in the US could unlock $3.2 trillion in economic value alone, might be conservative. “Firstly, traditional methodologies often underestimate the impact of general-purpose innovations which typically revolutionize life in ways scarcely contemplated at their birth. Further, more formally theoretical considerations suggest non-linear benefits from opening data resources for use, again suggesting possibly large surprises on the upside. Thus, for instance, we provide an example of new digital approaches improving the productivity of some important tasks by 10,000%,” the report says.
Secondly, our own case study based estimates, on which we have sought to err on the side of
conservatism suggest similar magnitudes to the McKinsey study. And yet they are only a snapshot
of the G20 themes, which themselves focus on a sub-set of G20 economic activity.”
Authors suggest that opening up data isn’t only the responsibility of the government. They write that while open data policies requiring disclosure at the public sector level is important, it is equally important to foster the conditions for open data in the private sector. Public-private Big Data partnerships can also play a role in terms of establishing an open data architecture in the commons, allowing users to use both government and private sector data for development and analysis.
As open data moves forward, authors note that there will be harsh political realities in terms of the potential for job loss as redundant roles and programs are eliminated. These realities typically hold back political will for making necessary modernization changes, but the potential value creation is equally hard to ignore in weak economic conditions. The question for the public will be which considerations win out. The full report is available here.