Components Supporting the Open Data Exploitation
twitter linkedin

Societal Benefits and Economic value of Open Data

open data pics

Is it possible to quantify the impact of Open Data? We could see above the range of benefits that Open Data can provide and some of them are hard to quantify. How can one put an exact price tag making an individual’s life easier or on improved decision making?

Models that estimate the economic impact of Open Data cannot provide accurate numbers but we believe that they are still useful. Trying to quantify the effect of cost savings or economic growth can lead to deeper thinking about where the published data can provide most value. Is such value significantly greater than the costs related to publishing it? If the answer is known to be positive, it should be a priority to publish such data as soon as possible. This is an investment with great payoff.

How about quantifying the value of transparency? One could argue that lowering corruption by even very few percent would immediately pay off any costs related to financial transparency. This remains a speculation, which is possibly true but hard to quantify. But transparency can go beyond detecting possibly corrupt behaviour; it helps us understand what is happening inside organizations. When we combine data from multiple sources, we can see sources of inefficiencies like overpaying for energy in an old building with improper insulation, inefficient scheduling of work by state employees revealed by data about their activities. Once people from the outside see what’s happening on the inside, they can offer a fresh “outsider” perspective on how to improve the situation.

We could debate whether the well-known McKinsey study from October 2013 as well as similar studies is substantiated. The “liquid data” concept is interesting and the estimated economic value of opening up data (in hundreds of billions of dollars annually) is staggering. Do these claims hold water? Can they be trusted? We invite you, the reader (the prospective data publisher), to read the study personally (an executive summary is available), contrast it to other studies available, and come to your own conclusions.

A lot of data, once published in an open format, can appreciate economically and new value can arise from its re-use. Making a cost-benefit analysis in light of existing Open Data studies can be a good exercise. While we think that it may be impossible to properly calculate all the economic impacts, the potential for added value is there, even if it’s hard to quantify.

Benefits of Open Data Can are manifold: a good summary is provided by the ePSIplatform in their Topic Report No. 2013/08 from August 2013. Building on the work of Capgemini Group analysis, they recognize the three main areas of benefits:

1) Benefit to government

  • Increased tax revenues through increased economic activity
  • Creation of jobs
  • Reduction in data transaction costs
  • Increased service efficiency (esp. through linked data)
  • Increased GDP
  • Encouraged entrepreneurship (economic growth)

2) Benefit to private sector

  • New business opportunities for services / goods
  • Reduced costs for data conversion (no need to convert into raw formats anymore)
  • Better decision-making based on accurate information
  • Better-skilled workforce

3) Benefit to NGOs / civil society

  • Better informed monitoring
  • New venues for project action: building tools/applications
  • Increased sustainability potential through increased capacity

The ePSIplatform report points out another benefits based on Open Data Research Network:

  • Open data empowering transformation in specific sectors such as the financial one;
  • Open data generating new kinds of Public-Private partnership models;
  • Open data policies accelerating the process of private businesses releasing its own data;
  • Open data disrupting traditional business models, lowering entry barriers and making the services industry more modular.

We can also point out to assets, such as benefits for individual users, not mentioned above. When data is available, mobile applications for smartphones can be created:

  • Better navigation facilitated by mapping data, databases of points of interest, etc. (route planning, public transportation schedules).
  • Easier interaction with the government (e.g. crime reporting, potholes reporting, fix-my-street).
  • Applications such as OpenSpending for financial data.

Also, more general benefits can be considered: better interaction between government and citizens, building of mutual trust and improved public perception of those who publish the data pro-actively, and finally helping with data clean-up from the users. If an organization publishes a dataset that contains errors, the users may notice them. When a feedback mechanism is provided, users can suggest corrections, which can be accepted or rejected by the publisher. By Cleaned data both parties benefit then: the publisher (who receives corrections for free) and the user (who offer corrections and receive cleaned up data in return) as well. There are other potential benefits that you may be aware of. This list is by no means exhaustive.

The issue of benefits of Open Data has also been addressed by COMSODE Deliverable 5.1, which we recommend as supplemental reading.

This article is part of the Blog post Series: The Bigger Picture of Open Data. All articles from this set would be added gradually in coming weeks and months and accessible at:

This blog post text has been adapted from COMSODE Deliverable 5.3. You can find the full text of this deliverable as well as other project outputs at

jan_gondolJan Gondol, PhD., graduated from the Comenius University (Slovakia) in Library and Information Science. He currently works on the COMSODE project at the Ministry of Interior of the Slovak Republic. More information:

Social tagging:

Leave a Reply