The economics of open data - there is no such thing as a free lunch
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Transcript of The economics of open data - there is no such thing as a free lunch
Twitter: @acoote
Andrew Coote
ConsultingWhere
GSDI Addis Ababa
The economics of Open Data:
there is no such thing as a free lunch
1
Agenda
• Problem Definition
• Analysis
• Solution Options
2
Problem Definition
3
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
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
Analysis
6
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
Solution Options
There aren’t very many!
8
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
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
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
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
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)
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
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
Thank you for Listening
16