Open data not only promises needed innovation and government reform, but also unique business opportunities benefiting government and private sector entities alike.
Government is not the only driver of data transformation. Grassroots innovators working in specific information areas like geospatial, initiated most open data transformations. These efforts were aided by President Obama’s 2013 Open Data Policy, which played a pivotal role in directing data transformation.
In addition to the Open Data Policy, there are two pieces of legislation you need to know. Shortly after Open Data Policy’s implementation, Congress unanimously passed the 2014 Digital Accountability and Transparency Act (DATA Act), which instructed the executive branch to make spending data open to the public in a standardized and central format.
Next came the Financial Transparency Act of 2015, which requires financial regulators to increase the availability of information reported to them to the public under the securities, commodities, and banking laws.
Congressional leaders are considering further open data laws beyond spending and financial regulation, while federal leaders seek opportunities to standardize their data and make it more electronically searchable than ever before. As government continues to seek ways to advance open data, two steps are critical to keep in mind:1) standardize and 2) publish.
Future Vision: the Benefits of Open Data
Open data has three main benefits: transparency, efficiency, and automation. In the future, open data promises to enable public transparency about government, permit efficient, data-driven decision-making, and facilitate automatic reporting to and from the public sector.
- Transparency: When governments standardize and publish their information, citizens can better access, track, and understand the actions of their elected representatives and public servants. For example, with the DATA Act, citizens will eventually be able to track each stage of federal spending electronically – from appropriation to allocation and then from obligation to disbursement.
- Efficiency: Open data is machine-readable by definition and allows internal managers to deploy analytics to inform data-driven decisions, making organizations better informed and more efficient. For example, if the Financial Transparency Act were fully implemented, Securities and Exchange Commission lawyers would be able to automatically view corporate filings with mathematical errors, eliminating the painstaking task of manual checks.
- Automation: Open data transformations require consistent data formats and structures and, as a result, can enable new TurboTax-style automations. For example, in 2009, when the Recovery Accountability and Transparency Board was in charge of tracking over $300 billion in stimulus grants, the board adopted a consistent XML Schema (format of documents) to govern the reports grantees and contractors were required to compile. With a uniform format, tech companies were able to build software to automatically compile and transmit the reports. This enabled some grantees to comply with reporting requirements with just a single mouse click.
Open Data Makes Good Business
Mckinsey estimates the size of the global open data industry could reach $3 trillion annually. Take the Data Transparency Coalition for example (the organizers of the upcoming Data Transparency 2015 event). The Data Transparency Coalition is the nation’s only open data trade association. Since 2012, it has grown to over 35 corporate members with a budget of over $1 million.
Given Mkcinsey’s prediction, there is clear interest and energy in the tech industry for open data business opportunities. Coalition members can republish government information for transparency, analyze to improve efficiency, and automatically process it to reduce compliance costs.
These opportunities, however, all depend on whether governments truly embrace open data, through policy reforms and grassroots initiatives, and taking into account the importance of transparency, efficiency, and automation.
Data Transparency 2015
Join the Data Coalition on September 23 to be part of this conversation about how open data can transform government.
Data Transparency 2015 is the third annual gathering of the most influential US open data leaders- from the executive branch, the legislative branch, state and local government, the nonprofit sector, and the tech and financial industries. Organizers of the event hope to make this Washington’s largest-ever open data conference yet.
The event focuses on three main tracks where the transformation has begun: Government Management (DATA Act), Markets and Economy (Financial Transparency Act), and Law and Regulation (Congressional and regulatory bills, rules, and mandates expressed as data).