Open Data Drives Economic Development (So What Gets in the Way?)

Karl Urich
Oct 11, 2017 · 6 min read

Townville and a Retailer

Imagine Townville — a city of about 25,000, recently emerged from decades of urban blight. Townville is now well into a recovery phase that includes restoration and redevelopment of its urban core. The city is actively courting retailers to open shop in the city center.

Conveniently, a coveted hyperlocal retailer (think high end coffee shop) is considering opening a new store in Townville. Coveted Retailer will use many tools, including geographic data, to choose a location. Townville’s own data (building footprints, demographics, real property etc.) will be a key analytical ingredient. Unfortunately, while Townville posts its GIS data online for download at no charge, it prohibits by license any commercial use of the data or distribution to any third party. Coveted Retailer can’t use Townville’s data for its location analysis. Neither can third party analytics firms or data aggregators that work for Coveted Retailer. The needed data is simply not available.

Coveted Retailer, anxious to hit its annual targets for new store openings and lacking the necessary data, tables the Townville analysis and moves on to low-hanging fruit in other locales.

This tale of Townville’s restrictive policy on data, while fictional, is emblematic of the patchwork quilt of data policies in cities and counties across the United States. We discuss in this article some of the Open Data shortcomings of cities and counties, why open government data is in the interest of government, business and society, and what we can do to catalyze economic development friendly policies.

What is Open Government Data?

“Open” government data been defined in various ways: In 2007, open government advocates identified eight principles of Open Data; the Data Foundation applies a simpler test; and Open Knowledge International publishes the Open Definition. These and other definitions all include two common themes: ease of access (machine-readability, standardized formats, online access, even free or nominal charge access) and limited or no restriction on use.

Townville is a fictional example of what we see every day. Our company, BuildingFootprintUSA, creates its products from Open Data, interacting with over a thousand government entities. Through our experience, we estimate that at least 20% of the U.S. population is covered by restrictive or “closed” data policies.

Full disclosure: our company is currently dependent on open government data as we rapidly expand coverage of our data product. We acknowledge that open government data is in our commercial interest. And we recognize that some believe that businesses should not benefit freely from public data. We think that is a minority view (and the comments to the article indicate general disagreement) and we disagree for reasons beyond our own commercial interest.

Who is Touting Open Data and Economic Development?

Responsible commercial use of open government data can advance innovation, enable development, and generally promote economic activity — all of which are good for government and society.

* At the 2017 ESRI User Conference, Smart Dubai Director General Dr. Aisha Bin Bishr explained that Smart Dubai expects open and shared data to add $2.9 billion to the local economy every year.

* Canada has established the Open Data Exchange, to “…make it simple to access and use any open data for commercial purpose.”

* In 2013, McKinsey estimated a global market powered by Open Data from all sectors would create an additional three to five trillion dollars a year.

* The global Organisation for Economic Co-operation and Development has said “by making their datasets available [and] encouraging the use, reuse and free distribution of datasets, governments promote business creation and innovative, citizen-centric services.”

* And would the Twitter handle OpenDataTaylorSwift exist if Open Data were not a “thing” (where the players gonna play, play, play, play, play)?

At BuildingFootprintUSA, we have a unique perspective on innovating and driving economic development using public data. We collect, buy and partner to acquire data, and then we enhance it using additional public data sources. We have accumulated hundreds of terabytes of data, connecting with over a thousand city, state, regional and county governments in the United States.

What Drives Closed Data Policies (and Gets in the Way of Economic Development)?

But we have also encountered challenges and we have a front row view of the obstacles to commercializing public data. When we engage a data owner, we encounter objections such as:

1. Cost: One U.S. county of 580,000 population charges $30,000 just for building polygons (at that rate, building a nationwide dataset would cost nearly $17 million). Governments charge for data to recover costs, generate revenue, or simply to put a toll on use of the data by entities that did not pay local taxes in support of the data production.

2. Legal barriers: Governments tend to be risk averse — concerned about litigation associated with privacy violations or bad outcomes from misuse or misunderstanding of what the data is or isn’t. They therefore try to reduce risk by restricting commercial use and redistribution.

3. Logistical hurdles: There are real costs associated with making data available in an accessible, usable format, via a platform or system. Before the advent of Open Data systems this cost was significant as agencies needed to DIY. Even as new technology facilitates Open Data, past perceptions of cost and effort prevail.

We have found that even within the same state, cities and counties may vary between truly Open Data policies, closed data policies or no policy at all. In practice, individuals within government may act as gatekeepers, implementing policy as they see fit, or inventing policy in the absence of well documented regulations.

By contrast, our experience gathering data in Canada is almost completely free of obstacles. This is in part due to the Canadian government’s adoption of the Open Government Licence, which provincial and city governments have implemented as a framework for their Open Data initiatives. Open Data Barometer ranks countries based on data openness. The U.S. is among the best, but fourth behind the U.K., Canada and France.

What Will Move the Open Data Needle?

There is no panacea to eliminate persistent barriers to more Open Data in the U.S. However, there are initiatives, technology and organizations that, collectively, will help in the coming years:

1. Open Data advocacy groups: The Open Data Institute, Canada Open Data Exchange, Open Data Global, the Sunlight Foundation, Transparency International — these organizations and others deserve our support.

2. Open Data technology platforms: companies like Esri are creating free Open Data service platforms, and companies like Socrata can deliver an Open Data platform to any local government

3. Open Data research: There is a place for the researchers, the academics and the economists to study and explain the net benefit of Open Data to a community, to government, and to business.

4. Open Data storytellers: Lastly, there is a place for the stories told by the stakeholders, from the government entities benefiting from Open Data practices to the innovators using that Open Data for economic development and social good.

Do these things matter? Will they move the needle? Absolutely. Just in the last six months, we have seen nearly a dozen cities and counties change their position on Open Data. Frequently it is the data owners themselves who are the strongest advocates for truly Open Data policies. They know the data. They see the value of the data. And they want to see their data used outside of the walls of government.

What Does Open Data Success Look Like?

One of our favorite Open Data observations is this: “Data by request is no #opendata! Data in a responsible repository, catalogued, licensed, citable, with metadata etc. That’s open.”

Open data means unfettered access to the data, use of the data and should come with no restrictions whatsoever.

When we see all government organizations embrace this definition of Open Data, we will know that the economic development potential of Open data has been realized.

Authors Karl Urich, President of BuildingFootprintUSA, & Matt Hoff, General Counsel of BuildingFootprintUSA have built their careers on the business of data. They would like to know what you think — have we captured the challenges of #OpenData & economic development? Have we missed any obstacles? What other solutions are there to promote economic development with #OpenData?

Karl Urich

Written by

founder @BFootprintUSA, all things #data, #datastrategy, #analytics , #drones, #GIS, #spatial @ #opendata

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