Open Data for Business: The U.S. Experience
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The document discusses how open data is used in the private sector in the US and the economic value it provides. It finds that all sectors and company sizes use open data, especially weather, geospatial, health, financial and demographic data. Many companies use open data to create new businesses and products or optimize existing operations through greater efficiency, competitive advantages and improved decision making. Examples of companies that use open data include Enigma, JP Morgan Chase and Zillow. The document also discusses opportunities for open data use in India's private sector and makes recommendations like prioritizing demand, identifying high value datasets, and planning for early success.
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Open Data for Business: The U.S. Experience
- 1. Open Data for Business The U.S. Experience Laura Manley Laura_Manley1 laura.manley@nyu.edu
- 2. As much as $3-5 trillion in global economic value annually* *McKinsey Global Institute (October 2013) Open data: Unlocking innovation and performance with liquid information Economic Value of Open Data
- 5. Private Sector Trends Findings from the Open Data 500 • All sectors represented from across the country • Companies of all sizes • 50% of companies are SMEs (200 or less employees) • 20% of companies have +1000 employees • Most widely used data: • Weather • Geospatial • Health • Financial • Demographic and economic • 40% of companies founded in last 5 years • Social good component
- 6. How the Private Sector Uses Open Data New Businesses, Products, or Services Business Optimization
- 7. How the Private Sector Uses Open Data Business Optimization Greater efficiency Competitive advantage Improved decision-making
- 8. How the Private Sector Uses Open Data New Businesses, Products, or Services InformationData
- 9. Enigma
- 11. JP Morgan Chase
- 12. Zillow
- 13. Opportunities in India Open Data Community Meeting • Co-Hosted by IIT Delhi & World Bank • ~50 participants • Reasons for participating 65% provide feedback 46% enhance work • 72% said private sector growth and optimization was a benefit of open data use
- 17. Recommendations Prioritize Demand Side • Understand importance of demand-driven open data • Identify stakeholders and key data users Find High Value Data • Assume that 10 percent of datasets hold 90 percent of the value • Get feedback to identify priority areas for data release and improvement Plan for Success • Begin with low hanging fruit to build momentum and success stories • Continue collaboration with key users to maximum ROI
- 18. Open Data for Business The U.S. Experience Laura Manley Laura_Manley1 laura.manley@nyu.edu
Editor's Notes
- As we’ve seen with many studies: More recently McKinsey have Claimed that, globally, seven sectors alone could generate more than $3 trillion a year and perhaps as much as $5 trillion a year in additional value as a result of open data. While they recognised that open data is in Its early days, they showed that it is already giving rise to hundreds of entrepreneurial businesses and helping established companies to segment markets, define new products and services, and improve the efficiency and effectiveness of operations. A new goldmine
- McKinsey saw a clear potential to unlock significant economic value by applying advanced analytics to both open and proprietary knowledge to help uncover consumer preferences and allowing companies to improve new products.
- Department of Commerce: 100+ Census: 70+ NOAA (including weather data): 40+ Department of Health and Human Services: 60+ National Institute of Health: 20+ Centre for Disease Control and Prevention: 10+ Food and Drug Administration: 10+ Security and Exchanges Commission: 40+ Department of Labor: 20+ Bureau of Labor Statistics: 20+ Department of Energy: 20+ Department of Education: 20+ Department of Agriculture: 20+
- Lots of different business model frameworks and taxonomies. Generally speaking, we classify private sector open data use in 2 ways: Business Optimization – Improving your current established business Greater efficiency Competitive advantage Improved decision-making New Businesses, Products, or Services Data management and service companies Data-driven products and services
- Greater efficiency More timely, cost and resource effective Boost performance with data on benchmarks, market data, and best practices. Improve operations based on industry-wide benchmarks Change processes where data show performance can be improved Example: for an energy company – encouraging energy efficiency with data on consumption Example: Streamlining logistics Competitive advantage Improved products and services based on market trends Match supply and demand more accurately Make markets more competitive by making more information available Find and assess potential new markets Improved decision-making identify micro-segments of the population for targeted marketing Create more tailored and customized products and services Streamlining your operations for cost savings Energy: Improve utilities' project management and operations with benchmarking data Transportation: Make transportation and freight operations more efficient Manufacturing and retail: Customize store layouts and inventory for different neighborhoods Oil and gas: Improve investment decisions about where to explore for new reserves and build facilities Healthcare: Match patients with the most appropriate providers and treatments Banking and insurance: Improve product design, underwriting, and risk assessment Real estate: Help match buyers and renters with properties and inform development investments
- New Businesses, Products, or Services Data management companies Data is the final product. These companies make open data more accessible by aggregating, cleaning, and standardizing various types of data. Example companies: Data management, analytics and platform companies. Information based companies Information is the final product. Take open data and analyze, visualize, and package the data to transform that into information for the customer. These are data-driven companies, products, and services The purpose is to make the data usable for the average consumer or business
- Enigma is a company built entirely on all different types of open data, from public records commerce and trade data, to transportation, education, health, real estate data, to economic statistics and demographic statistics. Takes 100,000+ publically available datasets, cleans and indexes them, and puts them on a common web-based platform. This allows users to connect disparate and unorganized data that makes it easy for businesses, non-profits, consumers, or govt agencies themselves to use. Founded in 2011 Number of FTEs: 11-50
- Climate Corp is the classic example of a new company built on open data that has scaled rapidly to create huge economic value. Last year, they were bought for over $1 billion dollars. Climate Corp has reinvented farming and agriculture with geospatial satellite, weather, soil and crop data By using this data, Climate Corp helps farmers protect their potential profits against bad weather that can cause yield shortfalls and provide localized field information and updates to inform and improve farmers’ production decisions. Founded: 2007 Number of FTEs: 51-200
- Several established commercial banks and financial services firms also use open data to optimize business decisions These financial institutions use economic statistics, combined with credit card and transaction data The bank builds in open data to their digital analytics to get a more holistic view of their customers and a more detailed understanding of customer behaviors and consumer trends.
- Last example – Zillow is another great example of a company built on open data that has reached the $1 billion mark in value. Zillow is the largest online real estate database in the US, providing info on home prices and rental estimates. DATA: census data, labor statistics, mortgages and real estate transactions, crime statistics, data on public schools How: Aggregates the information to provide detailed information about properties, cities and neighbourhoods, such as pricing and benchmarking information, information on schools, walkability, crime, market information. This information hasn’t just helped the real estate consumer. Housing-related research conducted by both Zillow and other institutions has resulted in important academic analyses on issues as diverse as neighborhood gentrification, wealth distribution, the social impacts of homeownership and home affordability. It has resulted in better-informed urban planning, more nuanced housing policy and a greater understanding of housing’s importance to the broader economy. Founded in 2006
- Co-Hosted by IIT Delhi & World Bank ~50 participants Reasons for participating 65% provide feedback 46% enhance work 72% said private sector growth and optimization was a benefit of open data use
- Frontal Rain provides agribusiness apps to help businesses in procurement and supply chain management of agri-commodities. Using the mandi data made available by the ministry of agriculture, under the data.gov.in portal, Frontal Rain offers clients a price discovery mechanism by creating an app which can search, visualise and analyse mandi rates for commodities across the country.
- DhilCare has created a very basic electro-cardiogram machine that can hook into smartphones and send reports for remote readings. The company estimates that there are 32 million heart patients in India, yet there are only 6,000 cardiologists. The vast majority of these patients live in rural areas, where they have poor access to medical professionals. DhilCare’s basic ECG machine offers rural patients access to diagnoses from remote doctors where there would otherwise have no ability to receive medical care. GPS Data
- A social enterprise that uses text messages as a launchpad for what it calls a "water smart grid lite" data system. It brings water more efficiently to consumers. With the help of local government, it devised a mobile phone system which connects valvemen to engineers and customers. Valvemen measure the level of water in reservoirs every day, and then NextDrop calls them every hour to get information on the levels. NextDrop sends the information to the engineers, who decide which areas should get water at what times, and how much, depending on supply. They then text the valvemen, who in turn text the customers, letting them know exactly when water will be released. "NextDrop has reaches 25,000 customers and has been working closely with the Hubli-Dharwad Water Utility." That's specifically from their blog. Tracking water resources in these areas Water - Next Drop (Article in the guardian) Here's a great quote from the CEO: "Most of India does not get 24/7 water, but that's not always because of lack of water, it's because of poor management," points out Sridharan, even as the country reported a good monsoon this year. "But how can water be managed and delivered to where it is needed, if you don't have information? The government is desperate for data. My job is to give them that."
- PRIORITIZE DEMAND SIDE Understand the importance of demand-driven open data Changing approach to frame open data policies and planning. Applying the mindset to the entire program. Once this is a priority: Identify current and potential stakeholders and key data users FIND HIGH VALUE DATA Assume that 10 percent of datasets hold 90 percent of the value Like the Pareto Principle Get feedback to identify priority areas/key datasets for release and improvement Data inventory - the demand side needs to know what the supply side has. Have to go beyond putting data out and they need to explain the capacity to make other data available Identify widely used datasets and make sure they’re as accurate and usable as possible. If people have a bad experience to begin with -it’s much harder to get them to use open data again PLAN FOR SUCCESS Begin with low hanging fruit to build momentum (success stories) Continue collaboration with key private sector users to maximize ROI Setting priorities with business is critical to high ROI Focus on making the most important data sets (from business perspective) as relevant, accessible, and actionable as possible