Profiting from open data

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Much like a storehouse of free raw materials, open data is a vault of potentially high-value information collected by municipal and federal governments.

(Stock image)

by Christopher Smith

Open data portals are websites where anyone with an Internet connection can download government data sets covering many topics, such as health and safety issues and international assistance budgets.

Two new open data portals have recently launched in Canada: the federal open data portal, at, and the City of Ottawa equivalent at Both of these sites offer more than simple access to information: they offer the foundations for innovation, thriving entrepreneurship, and vibrant economic growth.

The business community is gradually learning the value of open data, thanks to the success story of U.S.-based business BrightScope. By using audit report data from the Department of Labor, BrightScope discovered American taxpayers collectively spend more than $4 billion on 401(k) plans. This enabled the founders of BrightScope to increase the profitability of their investment business, all thanks to freely provided government information.

Ordinary citizens have been using open data sets for several years to help organize their communities and make more effective use of existing resources.

The development of free apps has been a huge part of the open data movement. There are now apps that locate the nearest recycling centre or parking space in densely crowded urban corridors.

There are apps that can quickly calculate the amount of money in the civic budget spent on trash pickup versus the occupancy rate of certain neighborhoods, leading to better appropriation of funds that are otherwise wasted.

Those in the technology sector are already familiar with the profitability of apps. In a sense, apps are a small demonstration of the potential opportunities availed by open data to larger organizations.

Much as BrightScope was able to spot inefficiencies in the allocation of taxpayer funds and make a profit from it, the number of areas in which business can build a service based on poorly run or misallocated government spending practices is potentially unlimited. However, this is not necessarily an invitation to privatize government services as much as an opportunity to make better use of them.

The consumer-driven capitalist economy that started in the past century has reached a wall in terms of its growth potential in countries such as Canada, the U.S. and the U.K.

The next wave of business innovation will be a transition from cash as currency to information as currency. The businesses with the best and most comprehensive information will be able to anticipate consumer demand for services in a variety of sectors far before their ill-informed competition. This applies to any industry, but especially the tech industry.

As a somewhat futuristic example, imagine if a company could anticipate that an entire city block would require the installation of communal wireless electricity generation equipment to replace outdated, fire-prone physical wiring. The firm could plot out sectors of the city that would require this service based on housing data and beat their competitors to the punch.

As the technological advances of the 21st century increasingly change the standard business model from one of pure supply/demand to one that requires more nuanced interaction with individual customers, open data will become a more important part of every business's operational model.

The information is freely available; all it requires is for entrepreneurs to exercise their imagination.

Christopher Smith is the chief executive of local software company OPIN. He writes about open governance, technology, and the public sector on Twitter @csedev.

Organizations: Department of Labor, OPIN

Geographic location: Canada, U.S., Ottawa

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