The economics of open data - there is no such thing as a free lunch


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A presentation given by Andrew Coote of ConsultingWhere at the GSDI, Addis Ababa, Ethiopia, November 2013.

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The economics of open data - there is no such thing as a free lunch

  1. 1. GSDI Addis Ababa The economics of Open Data: there is no such thing as a free lunch Andrew Coote ConsultingWhere Twitter: @acoote 1
  2. 2. Agenda • Problem Definition • Analysis • Solution Options 2
  3. 3. Problem Definition 3
  4. 4. The Open Data Proposition • Free and open public sector information – Strong political justification for making free to stimulate innovation and economic growth – Government information was created from taxation therefore citizens should be entitled to use it for free • Benefits flow to Government in the long-term – through growth in prosperity and increase in taxation – So, when the decision is taken it is an “Act of faith” – As there is no proof the promised benefits will be realised • In some circumstances there are genuine security reasons NOT to release data – Stir ethnic tensions – Bad uses outweight benefits of good uses 4
  5. 5. Producers have a problem • The problem for National Mapping Agencies: – There is no such thing as a free lunch – someone has to pay if they are to continue to produce / maintain the databases – Open data removes the primary source of income • Other issues – How to retain the “value proposition” that national mapping is an underpinning infrastructure if its free? – Coping with increased demand for web services – Intermediation from your customers – the public think its Google that created the data – The genie is “out of the bottle” – no way back to charging – A proportion of the economic benefit flow out of the country through big multi-nationals 5
  6. 6. Analysis 6
  7. 7. What is the future role of the National Mapping Agencies? • Apply economics of the market – where MUST Government intervene? • Critically analyse the logical of intervention: – Imperatives • Disaster management • Security – Core Government functions • eradicating poverty, guaranteeing land tenure, protecting the environment, clean water …. – Market failure – Market making – International Commitments – ICAO, SOLAS • Do this objectively 7
  8. 8. Solution Options There aren’t very many! 8
  9. 9. No change? • Accept the need to rely on central Government recognition of your value • In some countries there is “cultural” support for state funding of mapping: – this issue seems less problematic, for now …. – What happens when the political decision is close a hospital or reduce funding for the NMA? • If you chose this option, then creating and sustaining your political profile becomes paramount: – – – – Build political support Build industry support Develop a strong business case for continued funding Tie yourself to key Government initiatives (e.g. e-government) 9
  10. 10. Amalgamation • Merger with other smaller agencies – Statistics (safety in numbers) – Land Administration (independent source of income) • Seek to become part of a bigger department – – – – – Defence Environment Information Technology Transport This has to downside of being largely driven by one agenda, but may provide a “buffer” from direct cuts to your budget – On you own, you are vulnerable – there are no votes in mapping 10
  11. 11. Freemium Model • Already in play in the geospatial market – ESRI Free Viewers – Google Maps • Open data equivalent: – Some basic data free, more detailed data charged • Favoured by Ordnance Survey GB 11
  12. 12. Diversify • Grow new income streams by offering other services – Strategic advice – Training • In country, risks “treading on toes” of commercial players – Swede survey have privatised their commercial wing (Metria) • Internationally, can be seen as a positive move by Government. Selling the national “brand” overseas: – IGN France – Dutch Kadastre • Curating data for other agencies • Partnerships with commercial organisations 12
  13. 13. Retrench Focus on intercepting the Government agenda: – Political Imperatives • Policy Priorities • Incident-driven Responses – Core functions of Government • Backed by primary legislation, regulation or other forms of directive or accord – Market Failure¹ • Including partial failure e.g. advertising drives Google to capture of building footprint data in urban centres, but no business case for accurately capturing the coastal zone. – International commitments • International Civil Aviation Organisation (ICAO) • Safety of Life at Sea (SOLAS)
  14. 14. Privatise • Split operational and policy functions • Sell-off operational functions – Database production / maintenance – services • Retain policy and regulatory functions in Government – Land registrar – Surveyor general – SDI coordination? • New Zealand did this 10 years ago – The operational wing (Terralink) is now financially successful 14
  15. 15. Conclusions • Strong evidence for wider economic benefits of open data • If Government decides to open access, data providers (not only NMAs) have relatively few options in terms of their business model • There is an urgent need for a serious (balanced) debate about the future role of Government in geospatial information creation and maintenance 15
  16. 16. Thank you for Listening 16