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Monday, August 04, 2014

Open Data-economic and social benefits

The wrap from a World Bank global policy dialogue event last week on the latest evidence of the economic benefits of Open Data and how it can be applied to advance socioeconomic growth in the developing world:
First, while there are several studies on the economic benefits of Open Data in OECD countries, there are few if any rigorous analytical studies on the economic benefits in developing countries. Although there was no discussion of this, I think that the research efforts of the Open Data Research Network can be a start. Secondly, there is no agreed methodology to evaluate the benefits of Open Data, and there is still no proper impact analysis –i.e. identifying a counterfactual- anywhere. There are plenty of concrete, factual examples of benefits and these show very high rates of return for open data investments, but still no agreed method to measure the overall benefits to an economy. The McKinsey report and the Lateral Economics study are good places to start, but these methodologies are themselves very data-driven and their applicability to data-scarce economies is still to be proven. Third, even though there is no standard methodology, it makes economic logic that increasing the re-use of any data will necessarily increase the return on investment on the data, since the value of the data is not depleted by use (an economist would say that data is a non-rivalrous good). 
Fourth, there was wide consensus that Open Data initiatives are quite inexpensive relative to the magnitude of their potential benefits, and are low-risk endeavors. Putting all of these together, we are not yet in a position to tell a government decision-maker that implementing an Open Data initiative will increase GDP in his/her country or region by a specific percentage or amount. But the evidence does suggest that the return on investment is substantial. And let's not forget that Open Data has non-economic benefits as well, such as transparency, improved service delivery, and increased data sharing in the public sector, which decision-makers should also consider.
On those broader impacts, Alex Howard following a separate thinkfest in Washington last week:
If national governments are going to invest time, money, and public attention on releasing data, they should also focus upon releases that have social benefits as well as economic outcomes..... As I've explored in past columns, publishing open data can increase resilience against climate change, offer insight into healthcare costs and outcomes, protect consumers, and fuel accountability and transparency.

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