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Why America’s Path to Economic Prosperity Relies on Data

The industrial revolution profoundly changed the socioeconomic and cultural landscape of society. The breakthroughs in manufacturing, creation of new products, workforce changes by the movement to create unions to create workers rights, new forms of government regulations, and the emergence of new markets, this was all shaped and sculpted by the technological advancements of the 18th and 19th century.

America boomed into an economic powerhouse, while other nations began to falter, losing their competitive advantage. The technology created during this era changed nearly every aspect of life. The telegraph, telephone, airplanes, steam engine, railroads, once cutting edge technology, that today, we either take for granted, or have become completely archaic. Now, we are in the midst of another technological era: powered by data.

Data is helping to develop new markets, business and improving our standard of living, just like the technological advancements of the industrial revolution. Globally, governments have recognized that by opening data sets, and creating a platform for innovation, business can create new services to improve their economic standing, and gain a competitive advantage.

At the Data Innovation Day, Paul Zolfaghari, CEO of MicroStrategy, a leading global provider of enterprise software platforms for business intelligence (BI), mobile intelligence, and network applications, shared his opinions how data is transforming public and private sector organizations. “We see an enormous opportunity for companies to improve the services that they provide, and to provide greater value with data, whether it be to citizens or customers,” said Zolfaghari.

Yet, what resonates throughout Zolfaghari’s presentation was the importance of data to preserve a competitive edge. It’s the same concept that powered innovation during the industrial revolution. Data is reframing everything how businesses operate. Data is driving changes to organizational workflows, to drive improved productivity and efficiency, reducing costs and overhead for organizations. Data is impacting logistics, finance, performance management, and HR and talent management. Private and public sector organizations a like, leaders are challenged to unlock insights from data to drive organizational change.

“The companies and organizations that now understand that data has become not just an ancillary part of what they do, but virtually a core competency on how they produce and direct their service are advancing their competitive advantage,” said Zolfaghari.

The Open Data 500

Zolfaghari’s statements of data powering new business opportunity can be found in countless examples around the world. Recently, The Open Data 500 project highlighted the organizations and companies powered by government data. The Open Data 500 is an incredible spot to start looking at the impact data is having on the US economy. The Open Data 500 website states, “The Open Data 500 is the first comprehensive study of U.S. companies that use open government data to generate new business and develop new products and services. The Open Data 500 study is funded by the Knight Foundation and conducted by the GovLab. Open data is free, public data that anyone can use to launch commercial and nonprofit ventures, do research, make data-driven decisions, and solve complex problems.”

Joel Gurin, lead on the Open Data 500 project, and author of the new book, Open Data Now, also spoke at Data Innovation Day. He said, “The economic success of these companies very tremendously. We looked at organizations that either operate on a national or regional scale, and what we are seeing is that a lot these companies use state and local data, in addition to federal data. There are a number companies that might begin in one city, but in time are able to expand.”

In essence, cities are becoming the hubs for innovation. They are becoming the testing grounds for platforms, and organizations are learning how to scale and provide value across multiple cities. This is truly creating the opportunity for a data ecosystem, where information can live and be shared.

But, just like any business, and certainly what we saw during the industrial revolution, companies can either have enormous success, or enormous failures. Data provides the opportunity, but is no means the silver bullet for success. It’s clearly much more complex, but the open government sector is beginning to mature. “What I would say is that what we are seeing more than anything is that the open data sector is being to operate like other kinds of sectors, or other kinds of business, there are patterns and open data organizations are beginning to use and develop business standards,” said Gurin.

And it’s not just companies leveraging open data to build business; it’s also organizations being created to help manage data. One example would be OpenGov, which builds financial visualization and analysis tools to create a more transparent government. OpenGov started in Palo Alto, but has found that their platform is useful to governments across the country.

The Need for a Data Ecosystem

Although all of this data is great, there is still a pressing need to collaborate across sectors, and house all the data. Government data, in the most part, is used to build tools and create value for citizens. It’s the concept of government as a platform. Yet, in various disciplines, data and information is core to holding a competitive advantage, and rightfully so.

“What you find in research data is that in some disciplines, data really provides a competitive advantage. So, if you want to promote data sharing and open access its more difficult in some than others,” said Dr. Francine Berman, the Edward P. Hamilton Distinguished Professor in Computer Science at Rensselaer Polytechnic Institute.

She provides a great example from her field of computer science. Dr. Berman notes that her colleagues are typically willing to share data, as it does not provided a real advantage to anyone without analysis. Yet, in laboratory research, when findings are often tied to grants, there is serious competition between organizations. Yet, there is still a solution to have data shared. Dr. Francine Berman said, “Government has become more interested in how we manage and access our data. For example, the National Institutes of Health (NIH) has policies that tell you if you are taking our money you must deposit your data into these repositories that are publicly available. They have that for Alzheimer’s research, autism and a number of other things, these kinds of things are changing the culture around data sharing.”

Sculpting America’s Future

Simply, for America to remain competitive, we need more skilled and trained data scientists, working both in the private and public sector, and elected officials who understand the remarkable opportunity data presents. Paul Zolfaghari sums this up perfectly, stating:

“Our admission to the US is really to understand everything that we can do to foster not only the openness of our own datasets, but to continue to foster being at the leading edge of data scientist and research movement to continue to support advanced degrees, knowing that this is where the future of America’s competitiveness lies. If we don’t take this with the severity that we should, I think we will find ourselves back behind other countries, who now realize that they have the ability, by managing data, to leap frog the US.”

Just like in the 1800’s, technology emerged as seemingly a scary, yet promising future. Data today, is faced with the same anxiety, fear and confusion of how to leverage and regulate appropriately. The first step is continued education and awareness about the value and risks that data presents. Today, we must focus on educating and training leaders to think how data can not only drive organizational efficiencies, but also help improve the social and economic standing of our nation.

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