2014: Entering the age of open data business
ODI Commercial Director, Stuart Coleman, is featured in the Spring 2014 issue Data IQ magazine giving his insight on the future of open data in business:
2013 saw sustained industry hype about big data that also conflated and confused the domains of personal data and open data, all at a time when the debate over data privacy raged at a global level. Although there are important differences between the three “kinds” of data, there is also a rich ecosystem of ideas, innovation and ultimately social and commercial opportunity emerging in the spaces where they overlap.
But how do businesses make returns with open data? The answer begins by mining it! Consider Climate Corporation’s massive disruption of the US farming insurance market and subsequent £1bn exit at the end of last year. Its business began with ‘digging about in open data dirt’ and convened the smartest Silicon Valley data scientists (co-incidentally exploiting the same clojure tech stack as our very own Mastodon C).
Surely other parts of the insurance industry are ripe for similar transformation? I would love to see open environmental, social and economic data combine with telematics data to help sort out the stale mess that UK car insurance premiums are in.
Here is a space where personal data privacy could be really be debated. Imagine a dynamic monthly insurance premium fluctuating in line with risks assessed using open data sources and personal driving data - Citroen is already looking at this. So open data is there to be used, for social, environmental and economic gains.
The business case for publishing open data is gathering momentum. For example, our June 2013 research Show me the money (carried out in collaboration with the Bank of England) brought to the fore (and the front page of the FT) a showcase example. Using anonymous aggregate customer data sourced from the three largest UK peer-to-peer lending businesses, we proved a healthy market has been developing throughout the downturn, serving the needs of consumers and small businesses at a time when traditional lenders are not.
For those businesses leading new financial services, open data offers a credible and highly defensible path to ‘data intensive but prescriptively light’ regulation, providing consumers and investors with a deeper level of transparency and an opportunity to invest with greater confidence. Open data applied more broadly in finance has huge potential to help businesses keep nimble, honest and highly competitive. Let’s hope that 2014 sees the growth of more open finance and raises the transparency bar.
Show me the Money is an example of how greater openness might deliver competitive advantage in one sector but there are multiple reasons why for profit businesses can and should publish open data:
Openly outsourcing research and development: a unique, fast and inexpensive way to get your hands on expert outside help. Kaggle is using this approach in data science to investigate information challenges and opportunities. Look to reward and engage people for finding opportunities and errors. (Not everyone has a $100,000 prize fund like Microsoft, but incentives work on a smaller scale too!).
Open data procurement: as Nike opened up their supply chain data, their reputation improved and suppliers became more competitive on price and quality. In the same way that governments open data, businesses could open up their spending data. There would be no need to name the suppliers but the market could use the data freely to compete.
Open data product data: publishing product information as open data can help to extend and better syndicate the reach of products and services making it easier for partners and customers to embed, link to and curate company data.
Open data reputation: publishing frequent and relevant data on a company’s business activities helps to prove it is serious about being a better citizen.
2014 will be a year when more big businesses embrace openness. The question they will need to address is not whether they should publish open data but how and when. I look forward to helping them find the answers!
Stuart Coleman is Commercial Director of the ODI. For information, advice and training to help get your business started in open data, see our list of training courses.