This post originally appeared on the blog of the U.S. Chamber of Commerce Foundation
Open data—data made available for anyone to access and use—is being recognized as a major public asset in the United States and throughout the world. Entrepreneurs and government officials alike are realizing that government agencies collect all kinds of data that can be used for innovation. The federal government has an estimated ten thousand different information systems that house hundreds of thousands of datasets on health, finance, energy, education, and other sectors of the economy. The economic value of all that data could be in the billions or even trillions of dollars—if it’s put to use. (The recent U.S. Chamber of Commerce Report, The Future of Data-Driven Innovation, describes the business potential of Open Data in Chapter 5.)
Under the U.S. government’s Open Data Policy, established by Executive Order in May 2013, federal agencies are now working to make as much of their data as possible available in open, machine-readable forms. When President Obama announced this policy, he focused on the business opportunities it would unleash.
“One of the things we’re doing to fuel more private sector innovation and discovery is to make vast amounts of America’s data open and easy to access for the first time in history. And talented entrepreneurs are doing some pretty amazing things with it,” he said. “Starting today, we’re making even more government data available online, which will help launch even more new startups. And we’re making it easier for people to find the data and use it, so that entrepreneurs can build products and services we haven’t even imagined yet.”
Despite the clear potential, however, starting a company with open data is not easy: It requires understanding what data is available where, how to analyze it, and what kinds of businesses it can support. Now the European Union is launching a new effort to give open data businesses a head start, in a way that the U.S. could learn from as well.
The European Union is launching a new effort to give open data businesses a head start.
The EU’s effort is being led by the Open Data Institute (ODI), which launched two years ago with $15 million in funding from the UK government. In addition to serving as an international convener, training institution, and advocate for Open Data, the ODI has been an incubator for new open data companies that share its office space in London’s Tech City. Some of these startups have included:
- Mastodon C, a big-data analytics company that is now analyzing drug prescribing patterns in the UK to help save the National Health Service hundreds of millions of pounds a year.
- Placr, a data service company that is creating a single source of UK transport information by unifying data for bus, rail, metro, and ferry services.
- Carbon Culture, which collects data on energy use to help businesses operate more sustainably.
- Open Corporates, which is amassing the world’s largest database of information on corporate structure and ownership from publicly available sources.
The ODI and the EU are now applying this model across the continent. Last November the European Union announced a grant of $18 million to support open data projects, a fund to be administered by the ODI along with corporate, academic, and other partners. The fund will be used to support up to 50 new open data startups as well as open data research and training programs.
Do we need an open data incubator in the U.S? There’s a good case to be made that we do. Using open data requires specific kinds of knowledge and skill, as well as a supportive funding environment. One new venture, the GovTech Fund, has been set up to provide financial support for new companies using open government data. But even more might be achieved by providing a space for such companies to learn from each other and potentially collaborate as the open data companies do at the ODI.
An open data incubator could be a specialized version of the tech innovation hubs that have launched recently in several American cities. One of the best known is Washington, DC’s 1776, where Cabinet officers and Congressmen regularly make appearances. Their roster of member companies includes many whose business centers on digital information, from Altitude, which uses big data to develop new education resources, toZoomph, which collects and organizes content from a number of social media sites.
With or without an open data incubator, government agencies can help new ventures now by working with them to use their data more effectively. The GovLab at NYU, which has mapped the use of government data through the Open Data 500 study, is now running a series of Open Data Roundtables to bring federal data providers together with data-users. The first events, held with the Department of Commerce, the USDA, and the US Patent and Trademark Office, have already led to some new, productive approaches to managing and using government data. It’s a first step to developing a stronger open data ecosystem in the U.S. that can help businesses innovate and grow.
- Joel Gurin, Founder and Editor, OpenDataNow.com