Open-data sharing can offer huge benefits for development. How do we get the private sector to contribute?
In my previous blog—Information Liberation: What is Open Data, and Why Does it Matter?—posted back in April, I wrote about the Open Data Movement, including its origins, advantages, and relevance to international development. The post referenced Microsoft’s announcement of its support for the movement, vowing to use the company’s resources to address the “data divide” that separates those with access to data and the ability to interpret it, from those without.
With data comes power: the power to make better, smarter decisions; to use information to your advantage; to understand trends and predict future ones. No one knows this better than the private sector—experts in collecting, organizing, and interpreting data to improve business decisions and operations.
Apple Store on Fifth Ave, New York. As of April 2019, Apple claimed more than 1.4 billion active devices worldwide. Photo by Phil Aickenon on Unsplash.
As mentioned in my previous post, private companies, in comparison to public agencies or individuals, generally possess far more sophisticated, numerous, and comprehensive data sets. They have a strong incentive to collect consumer data and have set up a variety of mechanisms to do so. Have you ever been offered free WiFi in exchange for your email or social media profile? Asked to allow cookies on a website? Allowed an app to track your location? This information collected through these processes helps the company create better, more personalized marketing and to create new products that better respond to customer demand. Companies with a huge global presence and usership—such as Microsoft, but also Facebook, Google, Uber, and Amazon, to name a few—receive new information daily from their millions (or billions) of users.
According to estimates by Microsoft, fewer than 100 firms collect more than half of all data generated online. Fears around data privacy, information misuse, public transparency, loss of competitive advantage, costs, and logistics of data-sharing, among others all contribute to company reluctance to share information. Using this data to grow and continuing to collect new information while refusing to share results in vast amounts of information held in the hands of a few. This divide often means that newer, smaller players are unable to get a foothold in the market, impeding innovation and competition. While Microsoft has recognized the threat this poses, many large firms are not yet on board.
Demonstrating Value to the Private Sector
In a recent research effort, my teammate and I interviewed a variety of private sector stakeholders engaged in data-sharing across a variety of sectors, with the ultimate goal of understanding which factors enabled and incentivized these private actors to share data. To conduct the research, we delved into the stories behind organizations such as Together for Safer Roads, a global road safety initiative; Bud, a platform allowing customers and financial institutions to better connect; and Project Data Sphere, an initiative dedicated to sharing clinical trial data to advance cancer research. While these initiatives were built in part to benefit the public good, we heard a variety of other reasons for participation in data sharing, such as expanded business opportunities and partnerships, maintained credibility and transparency in the eyes of the public and potential partners, positive PR and marketing, mutual benefit among companies, and greater insight into both business operations and the market. For some, the decision to share was not voluntary but rather government-mandated (see U.K. Open Banking regulations), forcing companies to open their data to continue operations.
In the end, it was evident that there is no one-size-fits-all incentive package to sway a company. Each company will have its own set of incentives and concerns, influenced by its business model, the sector in which it operates, and the mandates and freedoms allowed to the company under its country’s legislation. What remains true is that the company under consideration must be both convinced of the long-term benefits of data sharing while feeling confident that doing so will not result in a serious burden or economic loss.
Open-data sharing is, encouragingly, a growing movement. Despite its attention and recognition as an important problem-solving mechanism for improvement in both domestic and international development, the “how” of safe, effective data sharing, especially on a large scale, is less agreed-upon. Certain companies, nonprofit organizations, research institutions, governments, and public-private partnerships have begun to promote the value of data sharing and work to reduce the obstacles, such as the creation of safe, interoperable, data collection and sharing tools. The Open Data Institute (ODI), a nonprofit organization and global network of businesses, data experts, and government leaders, completed a variety of studies and initiatives to better understand how data sharing can work effectively and to demonstrate the benefits of data sharing in both the private and public sectors.
For more information on data sharing mechanisms, resources, and initiatives, check out the links below:
Private sector case studies from The ODI
ODI research into data trusts as a mechanism for effective data-sharing
Projects from NYU’s GovLab – including a study on the impact of open data in developing economies