The Unexploitable Smartness of Open Data

Grazia Concilio,Francesco Molinari

doi:10.3390/su13158239

Abstract

The paper identifies a contradiction between data openness and economic value, possibly hiding a ‘market failure’ requiring a more active intervention from the public hand. Though the sheer quantity of data available for free usage is steadily increasing worldwide, its average quality usually stays well below the minimum threshold required for value creation. In contrast, there is now growing evidence that the use of data has enormous potential for the economy and society, including research and the progress of science. Unfortunately, useful datasets are usually locked in and when actually made accessible, suffer from the same limitations mentioned before. Maybe the time is ripe to undervalue the generalized disclosure of government data in favor of an appropriately incentivized and targeted creation of actionable bases of new IT applications. We present four cases touching upon the issues and potentials of service design, urban innovation, and data-related policies. We identify two possible ways of tackling the highlighted market failure: direct subsidies to government bodies or agencies engaged in disclosing their own datasets and keeping them clean and accessible over time or new regulations that establish more productive data ecosystems, rewarding knowledge creation rather than mere data ownership.

Highlights

Compared with 2006, the share of papers published in the American Economic Review (AER) that obtained an exemption from the AER’s data availability policy grew by more than 500% in 2014, showing a clear change of mindset towards the eternal dilemma between protection of discovery and replicability of results [11]
‘barriers to government data disclosure’, which mostly delve into psychosocial—and emotional—rather than organizational—and rational—factors. (We develop this argument further in the conclusions.) the nesting of psychosocial and organizational with economic, financial, and maybe legal aspects in the ‘black box’ of public administrations only makes things more complex to configure but does not weaken per se the necessity, and anticipated usefulness, of a different policy intervention
On 24 January 2018 at the World Economic Forum in Davos, Angela Merkel announced that “data will be the raw material of the 21st century” and added that “the question

Summary

Introduction

In this paper, we propose to reverse the viewpoint and treat the ‘un-exploitable smartness of open data’ as a perfect example of ‘market failure’, in the sense well known to economists: “the failure of a more or less idealized system of pricemarket institutions to sustain ‘desirable’ activities or to inhibit ‘undesirable’ activities” [14] When such is the case, only a purposeful policy shift from non-intervention to intervention is likely to alter the framework conditions that create the observed impasse: just think of the classical example of public financial incentives to private R&D, lowering the threshold of convenience for this specific kind of investment. The remainder of this article goes as follows: Section 2 describes the concept of market failure and the paradox of unexploitable data smartness in more detail; Section 3 briefly presents four inspiring cases, from two European cities (London and Barcelona) and two popular applications (Foursquare and Ofo); Section 4 points at two areas where legislation and/or active policy making can contribute to improving the current scenario in the desired direction

Open Data Release Policies as an Example of Market Failure

From Theory to Practice

Findings

Discussion and Outlook