There is no longer a reasonable justification for keeping publicly funded data under lock and key. With the government ostensibly committed to transparency, Chris Yiu argues that opening up public data is a must, and could have solid economic and productive benefits

Yiu, Chris

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LSE Research Online

blogs.lse.ac.uk http://blogs.lse.ac.uk/politicsandpolicy/2012/03/16/open-public-data-yiu/Opening up public data should be an urgent priority forthe government and could lead to considerableeconomic benefitsMar 16 2012There is no longer a reasonable justification for keeping publicly funded dataunder lock and key. With the government ostensibly committed totransparency, Chris Yiu argues that opening up public data is a must, and couldhave solid economic and productive benefits.Running a government – any government – has always involved quantities of data.For centuries almost all of this data has been closely guarded. Governmentsaround the world have seen fit to provide access to data on a need-to-know basis and, for the mostpart, judged that their citizens didn’t need to know.The balance is, however, starting to shift. Advances in data storage, processing and communicationtechnologies are having a profound impact. For the first time in human history, it is technologicallyfeasible for every citizen to have access to every piece of data or content generated by theirgovernment. And as these same technologies drive fundamental changes in our economy andsociety, it is becoming clear that, with the right protections, opening up public data will deliverconsiderable benefits.A right to dataEarlier this month Policy Exchange published A Right To Data. This report examines the state of theopen data debate and makes three key recommendations for policymakers:That the government enshrine a right to public data in legislation. This should make all of thedata collected or created to support the day-to-day business of government open; easy toaccess and free at the point of delivery, without restriction on use or reuse (viz. the OpenDefinition). We argue that open data is so strategically important that it warrants being put ona statutory basis – guaranteeing the principle regardless of the mood of ministers and civilservants. We also argue that important protections for personal data, national security andministerial advice should be provided.That responsibility for open data is elevated to board level in every public sector body. Astatutory right to data will be most effective when mindsets and behaviours in the public sectorare geared toward open ways of working. This is a big ask – most government departmentsare geared for closed ways of working and in no hurry to change. Leading from the front,inspiring a culture of openness and setting the right incentives will be a far greater challengethan simply implementing the new technology required to organise and open up public data.That every public sector body define its public task and associated data requirements. Thepublic sector’s core role is to deliver public services. But there are many instances wherepublic sector bodies are also engaged in commercial or “value added” data activities, blurringthe line between the public task and a profit-driven, state-backed monopoly. We argue thatany activity based on leveraging public data to develop commercial products or servicesshould, ultimately, be spun out. In the long run this will help prevent crowding out and fosterinnovation around creative uses of public data.The economics of open dataIn the report we also set out the economic case for open public data. In recent years many debateshave deadlocked in this area. Governments see a clear and immediate cost from giving up the(small) amounts of money they make reselling public data. Set against this are uncertain estimatesof diffuse potential benefits – necessarily counterfactual in nature and with a wide margin of forerror.We take the analysis back to first principles, and argue that data has two important and unusualcharacteristics. First, public data typically involves high fixed costs – so high, in fact, that it would notnormally make sense for multiple bodies to collect or create the same data. Second, digital datacan typically be duplicated at very low cost – so low, in fact, that in many cases zero is a goodapproximation for the marginal cost of data provision.This cost structure implies that public data provision is a natural monopoly. From a narrow dataowner perspective, there is an opportunity to extract rents by setting a profit-maximising price fordata access. But from a public policy perspective this outcome is dominated by setting price equalto marginal cost. To cover the fixed costs of data collection this strategy requires a call on theExchequer (and / or a minimally distortive charge on data users using a Ramsey pricing tool).In practice we find that the direct cost to the Exchequer of giving away key datasets like maps andpostcode data may be far lower than sometimes thought – perhaps in the region of £50 million ayear in terms of lost commercial fees and charges. For key data organisations like the OrdnanceSurvey and Met Office the largest customers by far are actually other parts of government – so forthe most part a wash in public finance terms.The potential benefits of open public data are notoriously difficult to quantify, but are likely to beorders of magnitude greater (with estimates for the UK into the £ billions per annum based onincreased output, employment and public sector efficiency).We also argue that public sector bodies need to get clear on their public task, focus moreaggressively on core public service delivery and cease data activities that fall outside this remit.Mixing public task and commercial activities distorts price signals and introduces perverseincentives. Worse still, maintaining state owned monopolies in the markets for products andservices built on top of public data crowds out private sector activity and innovation.The future of open dataIn our view there is no longer any reasonable justification for keeping publicly funded data under lockand key. The government has described transparency as a defining characteristic of its futurepolicy, and we hope to see further open data announcements during the course of the year. In thewords of the minister for the cabinet office: I have no doubt that, as we become increasingly datarich, we will all look back and wonder how we ever tolerated such collective ignorance.Please read our comments policy before posting.Note:  This article gives the views of the author, and not the position of the British Politics andPolicy blog, nor of the London School of Economics. About the authorChris Yiu is Head of the Digital Government Unit at Policy Exchange. You can connect with himon Twitter @PXDigitalGov.You may also be interested in the following posts (automatically generated):1. Transparency is the foundation of accountability. The government is committed to Freedom ofInformation and to opening up public authorities to greater scrutiny to allow the public to holdthem to account.2. The House of Lords reforms are an opening gambit that will inevitably lead the UK into greaterdemocratic reforms3. Despite the uphill battle in extending Freedom of Information to companies doing public work,the open data movement is already beginning to hold many of them to account.4. Think before you nudge: the benefits and pitfalls of behavioural public policy

Opening up public data should be an urgent priority for the government and could lead to considerable economic benefits

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