ODI, London

Nicholas Gruen
E ngruen@gmail.com
T @ngruen1
Open data:
the new emergent public good of our time?
25
th
July 2014
Outline
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The free rider problem/the free rider opportunity
Open data and PSI
Embracing wider open data opportunities
Whats it worth
McKinseys estimates
Lateral Economics estimates

Public goods of opportunity
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Public goods
goods that no-one
will supply if the
government
doesnt
Public goods
Public goods . . . present serious
problems in human organisation.
Vincent and Elenor Ostrom - 1977
(as a problem)
Public goods
(as an opportunity)
He who receives an idea from me, receives instruction himself without
lessening mine; as he who lights his taper at mine, receives light
without darkening me. That ideas should freely spread from one to
another over the globe, for the moral and mutual instruction of man,
and improvement of his condition, seems to have been peculiarly and
benevolently designed by nature, when she made them, like fire,
expansible over all space, without lessening their density in any point,
and like the air in which we breathe, move, and have our physical
being, incapable of confinement or exclusive appropriation.
Thomas Jefferson to Isaac McPherson, August, 1813
Web 2.0 platforms are public goods:


Google (1998)
Wikipedia (2001)
Blogs (early 2000s)
Facebook (2004)
Twitter (2006)


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The Wealth
of Nations (1776)
Private Goods
The Theory of
Moral Sentiments
(1759)
The social preconditions
of markets
(Public Goods)
Language
Adam Smith
Public Goods
Private Goods
[The public good of]
Justice . . . is the main
pillar that upholds the
whole edifice. If it is
removed, the great, the
immense fabric of
human society . . . must
in a moment crumble
into atoms.

Adam Smith

The ecology of public and private goods
We will ever strive for the ideals and sacred
things of the city, both alone and with many; we
will unceasingly seek to quicken the sense of
public duty; we will revere and obey the citys
laws; we will transmit this city not only not
less, but greater, better and more beautiful than
it was transmitted to us.
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Public goods
Governments
Families
Civic association
Philanthropy
Within teams

Cooperation and
group-interest
The fractal ecology of public and private goods
Private goods
Individuals
Firms
Teams



Competition and
self-interest
The ecology of private and public goods: Markets
Private Goods
Traders address
their mutual
self-interest
Public Goods
Marketplace for
meeting
Price discovery
Liquidity
Private and public goods on a platform
Private Goods
Meeting private
needs
Linking to other
websites
Public Goods
Google uses this
information to rank
sites
Everyone benefits
Google monetises
with ads
The economics of abundance: a new birth of freedom
Public goods . . . present
serious problems in human
organisation.
Vincent and Elenor Ostrom - 1977
He who receives an idea from me, receives instruction
himself without lessening mine; as he who lights his taper
at mine, receives light without darkening me.

Thomas Jefferson
Public goods as a problem Public goods as an opportunity
When the economics of abundance runs out
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Public Sector Information (PSI)
Freedom of Information held by the government
is to be managed for public purposes, and is a
national resource
Freedom of Information Act 1982 as amended in 2010
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Publicly funded research
Recommendation 7.10: A specific strategy for
ensuring the scientific knowledge produced in
Australia is placed in machine searchable
repositories be developed and implemented
using public funding agencies and universities
as drivers.
Cutler Review of Innovation, 2008
PSI and Research Openness
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Conservatively estimated that greater openness
would contribute around 0.27% GDP
Or 1/7
th
of the 2% Growth Target

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Research
Findings &
Data
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McKinsey scaled to Australia
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To get a reasonable upper bound we . . .
Took McKinseys lower bound
$3.2 not $5.4 trillion
Assumed
Only ! of gains are value added
Only " due to policy
# remains to be realised
~ $16 billion ~ 1% Aus GDP ~ " G20 target
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McKinsey scaled to Australia
Lateral Economics case studies
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Lateral Economics case studies
Theyre partial
Like McKinsey
Range over public and private open data
Focus on incremental benefits
Suggest our McKinsey based upper bound was
conservative
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Macro-economic management
Better use of existing real time PSI
BAS data on
Activity
Exports
Capex
PAYE data
Open-sourcing forecasting models
As Treasury and the US Fed have done
Using real time private data
Supermarket scanner data
Payroll and accounting Data from online
providers Xero/MYOB

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5%
7.5%
Better macro-economic management
($ billions p.a)
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Total GDP $1,554
Consumption $1,136
Existing cost of fluctuations
(1.35% of consumption)
$15.3
5% reduction in volatility =>
9.75% of cost of recessions
$1.5
7.5% reduction in volatility =>
13.7% of cost of recessions
$2.1
Total benefits of open data $3.6
Better Workplaces
Better PSI
Release disaggregated State of service data
As they do in the US
Deliver better machine readability on government data
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APSJobs.Info
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Windows on Workplaces
Why isnt employee engagement data open?
Government suasion in education/health
workplaces to open more data
Comparison requires a standard
Government could convene standard setting
Voluntary standard making and reporting
Government bodies report to it
ABS survey of firms to establish benchmarks
Strengthen the market for good management
From both labour and capital market

Benefits to better job matching
$0 for better matching within public service
5-10% lower stress at work (=$14 bil) = $1.2 bil
$0 for productivity growth
Matching teachers better to jobs =
similar benefits to higher teacher quality
Jensen (2010) estimates a 10% better
teacher quality => 0.2% better growth
$ of that => 0.05% higher GDP growth = $2.3 bil
= $3.4 bil
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Lateral Economics Case Studies
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Open Data
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Midata data sharing
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Citizens Advice
Communications
Consumer Panel
Consumer Focus
Information
Commissioners
Office (ICO)
OFCOM
Office of Fair
Trading (OFT)
Which?

AMEE
Avoco Secure
billmonitor
British Gas
Callcredit
EDF Energy
E.ON
Garlik
Google
Lloyds Banking
MasterCard
Moneysupermarket.com
Mydex
npower
RBS
Scottish Power
Scottish Southern
Energy
The UK Cards
Association
Three
Visa
Case Studies (UK)
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When the economics of abundance runs out
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Allo Mobile
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10,000%
Productivity
Improvement
PPPs 2.0
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Private sector builds service
Public sector contributes its resources
Networks
Nudges
Non-obstruction
Financial internalisation
Subject to openness and privacy undertakings
Much more for each in partnership than alone
Australia acquires new research assets
Not picking winners but mediated through usual
processes such as open tenders, etc.
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Interfaces
Open Aust
SeeClickFix
CareMonkey
Internal Innovation
OneTouch
FixMyBudget
e-taskr
Chaperone
Murmur
Directory
HealthKit
Public Private Partnerships
23andMe
Seeding altruism
Code for Australia
Validation
Rate my prof
Rate Govt Services
Building platforms
Open Australia
Sense-t
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Government 2.0
Getting serious about
opening data
Institutions
Mining data
Pharma data
Standards
Windows on
Workplaces
Open Research
Getting serious about
opening research data
Data Linkage
Building data
linkage assets
Realtime Macro
ATO data
Open forecasting
Private accounting data
Data Sharing
Midata
AP Digital Postbox
Whats there not to
like?
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Open Data
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Open Knowledge Foundation Index
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Open data barometer
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Windows on Workplaces
Encourage employers to provide good jobs in
safe, healthy and productive workplaces, and
empower employees to choose their preferred
workplaces by facilitating the dissemination of
information about employment experiencefor
example, worklife balance and family-
friendliness.

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