LONDON – Many people have long believed that if government and the private sector agreed to share their data more freely, and allow it to be processed using the right analytics, previously unimaginable solutions to countless social, economic, and commercial problems would emerge. They may have no idea how right they are.
Even the most vocal proponents of open data appear to have underestimated how many profitable ideas and businesses stand to be created. More than 40 governments worldwide have committed to opening up their electronic data – including weather records, crime statistics, transport information, and much more – to businesses, consumers, and the general public. The McKinsey Global Institute estimates that the annual value of open data in education, transportation, consumer products, electricity, oil and gas, health care, and consumer finance could reach $3 trillion.
These benefits come in the form of new and better goods and services, as well as efficiency savings for businesses, consumers, and citizens. The range is vast. For example, drawing on data from various government agencies, the Climate Corporation (recently bought for $1 billion) has taken 30 years of weather data, 60 years of data on crop yields, and 14 terabytes of information on soil types to create customized insurance products.
Similarly, real-time traffic and transit information can be accessed on smartphone apps to inform users when the next bus is coming or how to avoid traffic congestion. And, by analyzing online comments about their products, manufacturers can identify which features consumers are most willing to pay for, and develop their business and investment strategies accordingly.