Steven Feldman: #OpenData – who profits?

This week I picked up some comment around the last in a series of Open Data Master Classes. I think a lot of the content of these classes was around the use of OS OpenData™ but the comments and following thoughts probably apply to all public sector data released as OpenData. The conversation was about the constraints on startups building businesses on Open Data. Jonathan Raper had recently written this blog post explaining the challenges that small businesses experienced in trying to work alongside/in partnership with government in this area. While I have some sympathy with his view, I am not sure that he really makes the case for the economic benefit and opportunity from OpenData. It seems to me that the promised innovation is slow or non-existent (particularly in a commercial sense), data.gov.uk has been open for nearly 2 years and the London Data Store has been around for about 18 months, surely we should be seing some shining examples by now?

Quoting from Jonathan’s list, the principle players are:

• OpenlyLocal promoting local government transparency
• Placr aggregating public transport information
• CycleStreets open access to cycle routes
• Level business opening Companies House information
• MySociety campaigning with open data on transport, housing and transparency
• Open Knowledge Foundation creating standards and technologies for data releases
• OpenStreetMap crowd sourcing a map of the world
• The Stationery Office government data publishers

No doubt you can point to some others that Jonathan has missed (itoWorld for example, maybe they are too competitive to placr?) but just for a moment let’s take stock of the organisations that are listed.

I am going to discount The Stationery office because I don’t think the innovation and new business theme of advocates of OpenData intended the new businesses to start up within government agencies or be funded by government until they could be privatised! Let’s have a look at the remaining 8 including itoWorld and categorise their business models. Incidentally 2 of the organisations (CycleStreets and OpenStreetMap), to my knowledge, are not using public sector OpenData, they are based on crowd sourced data which is rather different.

I have broken things down into a few broad brush categories and then assigned companies to one or more category as they may have a mixed revenue model.

• No apparent business model at this stage – 2 companies.
  • These companies may not be seeking to build revenue, the sites could be a showcase for development skills and they may earn money from contracting.
  • Alternatively they may be searching for a revenue model and it just isn’t yet clear to them (or at least to me from their sites) what that model is.
• Grants or other funding from the Public Sector – 4 companies
  • In a time of austerity, relying on Public Sector to fund you with research grants or project based fees for manipulating OpenData may be a tad risky, funding may be curtailed or opened up to competitive procurement.
• Consulting – 2 companies
  • Of course consulting is a viable business model but if the consulting is to help public sector bodies get to grips with the challenges of OpenData this is hardly the creation of the vibrant innovative high growth businesses that some advocates have predicted.
• Charity/Donation funding – 3 organisations
  • Of course we want a 3rd sector but is the Open Knowledge Foundation really an example of an innovative startup that will create employment and new tax revenues?

No doubt my scepticism will be greeted with howls of “traitor”, “judas” etc and perhaps some of the organisations listed by Jonathan may want to follow Jonathan’s lead and set out the opportunities to build a business around OpenData in the way that he has done in his blog.

So what’s the point of this blog? While I have been a strong supporter of opening up data for 21st century democracy, supporting Transparency and even possibly Accountability (but see some reservations below and my previous posts and presentations on this subject – accountable to who?) I have always doubted the fantastic numbers (where on earth does that preposterous but much quoted £6bn come from?) that some advocates of OpenData have placed on the innovation gain.

With OS OpenData™ (can I say how much I dislike OS’ attempt to attach a trademark ™ to OpenData) the economic benefit seems to be largely down to the cost savings that some previous purchasers of the data have made and of course the important democratic gain of having some core reference data sets that can be used to visualise much of the other OpenData (the uncopyrighted or trademarked government type). Now if someone at BIS would give the Royal Mail a righteous kicking and get the PAF out of their grasping fingers we would have the missing part of Dr Bob Barr’s Core Reference Geography (yes I know NLPG/AddressPoint/AddressLayer/GeoPlace would be even better but PAF would be a start). I know an exercise has been commissioned to try and establish the economic benefit of opening up some OS data but the results have yet to be published, I look forward to considering the results if they ever see the light of day.

Personally I am very doubtful that there is a great deal of opportunity to generate profitable new information products and services on the back of public sector OpenData. I just can’t see colossal opportunities in bus departures, live train info, government expenditure data, planning, environment, health and crime data which are some of the topics that have attracted the most clamour from advocates. Of course there will be some small businesses that will survive or flourish but this is not the great information nirvana that we were promised by Rufus Pollock, Sir Tim Berners-Lee and Nigel Shadbolt. Maybe I am too impatient but in the fast moving world of digital, with all that suppressed entrepreneurship surely we should be seeing a bit more by now?

One last thought. OpenData is not without cost, infrastructure, API’s, web feeds, data maintenance, cleaning etc all cost money and require some level of human involvement at the moment. That is cost to the public sector that is making it available, possibly some innovative startups can do this more efficiently than government IT folk but there is still a cost to doing it.

Tony Hirst has done some great stuff visualising OpenData and would be considered by most to have impeccable credentials in this domain. In his blog post “So What’s Open Government Data Good For? Government and “Independent Advisers”, maybe?” he summarises some of the arguments for OpenData and looks at how businesses might monetise OpenData. He reviews the commercial models and suggests

“When all’s said and done, though, the biggest potential is surely within government itself? By making data from one department or agency available, other departments or agencies will have easier access to it.”

Tony manages to wrap up the accountability bit (remember that) with the commercial stuff with

“Maybe then, there is a route to commercialisation of public facing public data? By telling people the data’s there for you to make the informed choice, the lack of knowledge about how to use that information effectively will open up (?!) a whole new sector of “independent advisers”: want to know how to choose a good school? Ask your local independent education adviser; they can pay for training on how to use the monolithic, more-stats-than-you-can-throw-a-distribution-at one-stop education data portal and charge you to help you decide which school is best for your child. Want comforting when you have to opt for treatment in a hospital that the league tables say are failing? Set up an appointment with your statistical counsellor, who can explain to you that actually things may not be so bad as you fear. And so on…”

Maybe the PDC are right to be cautious about the economic benefit of opening up more public sector data.

Enough said, several hostages to fortune and the future left here. Perhaps someone will offer a convincing explanation of why I have got this completely wrong (sits back and waits)