Monthly Archives: April 2013

The Value of Open Data – Don’t Measure Growth, Measure Destruction

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Alexander Howard – who, in my mind, is the best guy covering the Gov 2.0 space – pinged me the other night to ask “What’s the best evidence of open data leading to economic outcomes that you’ve seen?”

I’d like to hack the question because – I suspect – for many people, they will be looking to measure “economic outcomes” in ways that I don’t think will be so narrow as to be helpful. For example, if you are wondering what the big companies are going to be that come out of the open data movement and/or what are the big savings that are going to be found by government via sifting through the data, I think you are probably looking for the wrong indicators.

Why? Part of it is because the number of “big” examples is going to be small.

It’s not that I don’t think there won’t be any. For example several years ago I blogged about how FOIed (or, in Canada ATIPed) data that should have been open helped find $3.2B in evaded tax revenues channeled through illegal charities. It’s just that this is probably not where the wins will initially take place.

This is in part because most data for which there was likely to be an obvious and large economic impact (eg spawning a big company or saving a government millions) will have already been analyzed or sold by governments before the open data movement came along. On the analysis side of the question- if you are very confident a data set could yield tens or hundreds of millions in savings… well… you were probably willing to pay SAS or some other analytics firm 30-100K to analyze it. And you were probably willing to pay SAP a couple of million (a year?) to set up the infrastructure to just gather the data.

Meanwhile, on the “private sector company” side of the equation – if that data had value, there were probably eager buyers. In Canada for example, interest in census data – to help with planning where to locate stores or how to engage in marketing and advertising effectively – was sold because the private sector made it clear they were willing to pay to gain access to it. (Sadly, this was bad news for academics, non-profits and everybody else, for whom it should have been free, as it was in the US).

So my point is, that a great deal of the (again) obvious low hanging fruit has probably been picked long before the open data movement showed up, because governments – or companies – were willing to invest some modest amounts to create the benefits that picking those fruit would yield.

This is not to say I don’t think there are diamonds in the rough out there – data sets that will reveal significant savings – but I doubt they will be obvious or easy finds. Nor do I think that billion dollar companies are going to spring up around open datasets over night since –  by definition – open data has low barriers to entry to any company that adds value to them. One should remember it took Red Hat two decades to become a billion dollar company. Impressive, but it is still a tiny compared to many of its rivals.

And that is my main point.

The real impact of open data will likely not be in the economic wealth it generates, but rather in its destructive power. I think the real impact of open data is going to be in the value it destroys and so in the capital it frees up to do other things. Much like Red Hat is fraction of the size of Microsoft, Open Data is going to enable new players to disrupt established data players.

What do I mean by this?

Take SeeClickFix. Here is a company that, leveraging the Open311 standard, is able to provide many cities with a 311 solution that works pretty much out of the box. 20 years ago, this was a $10 million+ problem for a major city to solve, and wasn’t even something a small city could consider adopting – it was just prohibitively expensive. Today, SeeClickFix takes what was a 7 or 8 digit problem, and makes it a 5 or 6 digit problem. Indeed, I suspect SeeClickFix almost works better in a small to mid-sized government that doesn’t have complex work order software and so can just use SeeClickFix as a general solution. For this part of the market, it has crushed the cost out of implementing a solution.

Another example. And one I’m most excited. Look at CKAN and Socrata. Most people believe these are open data portal solutions. That is a mistake. These are data management companies that happen to have simply made “sharing (or “open”) a core design feature. You know who does data management? SAP. What Socrata and CKAN offer is a way to store, access, share and engage with data previously gathered and held by companies like SAP at a fraction of the cost. A SAP implementation is a 7 or 8 (or god forbid, 9) digit problem. And many city IT managers complain that doing anything with data stored in SAP takes time and it takes money. CKAN and Socrata may have only a fraction of the features, but they are dead simple to use, and make it dead simple to extract and share data. More importantly they make these costly 7 and 8 digital problems potentially become cheap 5 or 6 digit problems.

On the analysis side, again, I do hope there will be big wins – but what I really think open data is going to do is lower the costs of creating lots of small wins – crazy numbers of tiny efficiencies. If SAP and SAS were about solving the 5 problems that could create 10s of millions in operational savings for governments and companies then Socrata, CKAN and the open data movement is about finding the 1000 problems for which you can save between $20,000 and $1M in savings. For example, when you look at the work that Michael Flowers is doing in NYC, his analytics team is going to transform New York City’s budget. They aren’t finding $30 million dollars in operational savings, but they are generating a steady stream of very solid 6 to low 7 digit savings, project after project. (this is to say nothing of the lives they help save with their work on ambulances and fire safety inspections). Cumulatively  over time, these savings are going to add up to a lot. But there probably isn’t going to be a big bang. Rather, we are getting into the long tail of savings. Lots and lots of small stuff… that is going to add up to a very big number, while no one is looking.

So when I look at open data, yes, I think there is economic value. Lots and lots of economic value. Hell, tons of it.

But it isn’t necessarily going to happen in a big bang, and it may take place in the creative destruction it fosters and so the capital it frees up to spend on other things. That may make it potentially harder to measure (I’m hoping some economist much smarter than me is going tell me I’m wrong about that) but that’s what I think the change will look like.

Don’t look for the big bang, and don’t measure the growth in spending or new jobs. Rather let’s try to measure the destruction and cumulative impact of a thousand tiny wins. Cause that is where I think we’ll see it most.

Postscript: Apologies again for any typos – it’s late and I’m just desperate to get this out while it is burning in my brain. And thank you Alex for forcing me to put into words something I’ve been thinking about saying for months.

 

Canada Post and the War on Open Data, Innovation & Common Sense (continued, sadly)

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Almost exactly a year ago I wrote a blog post on Canada Post’s War on the 21st Century, Innovation & Productivity. In it I highlighted how Canada Post launched a lawsuit against a company – Geocoder.ca – that recreates the postal code database via crowdsourcing. Canada Posts case was never strong, but then, that was not their goal. As a large, tax payer backed company the point wasn’t to be right, it was to use the law as a way to financial bankrupt a small innovator.

This case matters – especially to small start ups and non-profits. Open North – a non-profit on which I sit on the board of directors – recently explored what it would cost to use Canada Posts postal code data base on represent.opennorth.ca, a website that helps identify elected officials who serve a given address. The cost? $9,000 a year, nothing near what it could afford.

But that’s not it. There are several non-profits that use Represent to help inform donors and other users of their website about which elected officials represent geographies where they advocate for change. The licensing cost if you include all of these non-profits and academic groups? $50,000 a year.

This is not a trivial sum, and it is very significant for non-profits and academics. It is also a window into why Canada Post is trying to sue Geocoder.ca – which offers a version of its database for… free. That a private company can offers a similar service at a fraction of the cost (or for nothing) is, of couse, a threat.

Sadly, I wish I could report good news on the one year anniversary of the case. Indeed, I should be!

This is because what should have been the most important development was how the Federal Court of Appeal made it even more clear that data cannot be copyrighted. This probably made it Canada Post’s lawyers that they were not going to win and made it even more obvious to us in the public that the lawsuit against geocoder.ca – which has not been dropped-  was completely frivolous.

Sadly, Canada Post reaction to this erosion of its position was not to back off, but to double down. Recognizing that they likely won’t win a copyright case over postal code data, they have decided:

a) to assert that they hold trademark on the words ‘postal code’

b) to name Ervin Ruci – the opertator of Geocoder.ca – as a defendent in the case, as opposed to just his company.

The second part shows just how vindictive Canada Post’s lawyers are, and reveals the true nature of this lawsuit. This is not about protecting trademark. This is about sending a message about legal costs and fees. This is a predatory lawsuit, funded by you, the tax payer.

But part a is also sad. Having seen the writing on the wall around its capacity to win the case around data, Canada Post is suddenly decided – 88 years after it first started using “Postal Zones” and 43 years after it started using “Postal Codes” to assert a trade mark on the term? (You can read more on the history of postal codes in canada here).

Moreover the legal implications if Canada Post actually won the case would be fascinating. It is unclear that anyone would be allowed to solicit anybody’s postal code – at least if they mentioned the term “postal code” – on any form or website without Canada Posts express permission. It leads one to ask. Does the federal government have Canada Post’s express permission to solicit postal code information on tax forms? On Passport renewal forms? On any form they have ever published? Because if not, they are, I understand Canada Posts claim correctly, in violation of Canada Post trademark.

Given the current government’s goal to increase the use of government data and spur innovation, will they finally intervene in what is an absurd case that Canada Post cannot win, that is using tax payer dollars to snuff out innovators, increases the costs of academics to do geospatial oriented social research and that creates a great deal of uncertainty about how anyone online be they non-profits, companies, academics, or governments, can use postal codes.

I know of no other country in the world that has to deal with this kind of behaviour from their postal service. The United Kingdom compelled its postal service to make postal code information public years ago.In Canada, we handle the same situation by letting a tax payer subsidized monopoly hire expensive lawyers to launch frivolous lawsuits against innovators who are not breaking the law.

That is pretty telling.

You can read more about this this, and see the legal documents on Ervin Ruci’s blog.  has also done a good job covering this story at canada.com.

How not to sell the Oil Sands

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If you haven’t read Tzeporah Berman’s Daily Kos piece – My Government Doesn’t Believe in Climate Change – go check it out. It’s amazing to see how out of sync, and behind the ball, the government has gotten on this issue.

Indeed, the current government really is becoming the best weapon opponents to the pipelines have against their construction and the further development of the oil sands.

First, the Natural Resource Minister called environmentalists who opposed Northern Gateway – the pipeline that would take Oil Sand crude from Alberta to British Columbia’s west coast – a “radical”. In short order it turns out that, well, the vast majority of British Columbians were radicals since opposition to the pipeline has been, and remains, strong.

Worse, by declaring war on environmentalists and those concerned about climate change, the Minister set a table that would become distinctly awkward when it came to trying to get the White House and State Department to approve Keystone XL – the pipeline that would export oil sands oil down to the US. Consider that the US President mentioned his concerns about climate change in his State of the Union address and the US ambassador to Canada has hinted that Canada’s commitment to addressing climate change may factor into their decisions around Keystone. So now, at the very moment the Canadian Government needs help to persuade the Americans they actually are serious about climate change, they just come out of a five year patch where they’ve labeled everyone who disagrees with it as a radical, sicced auditors on them and tried to shut many of them down. So suddenly they are in a difficult position of having few, if any, allies in the environmental movement they can turn to to help it gain credibility around any of the actions they wish to take. It’s a communications and policy disaster.

Of course, it doesn’t help that even in the midst of trying to convince the United States it actually is serious about Climate Change, the Natural Resource Minister has speaking notes that feature strong climate change denier comments. Elizabeth May, Green Party candidate in the house of commons summed up the Minister Oliver’s quotes – made to the editorial board of La Presse – quite nicely:

This is what Oliver told the editorial board of La Presse: “I think that people aren’t as worried as they were before about global warming of two degrees… Scientists have recently told us that our fears (on climate change) are exaggerated.”

Thank goodness the editorial board at La Presse knows how to ask questions. They pressed him to name any scientist who thinks our fears are exaggerated. He couldn’t.

So basically, we have a minister who is willing to go on record to make a claim about the future of the planet without being able to reference a single source. I’m sure the White House and State Department are deeply comforted.

It is all doubly amazing as this government has been masterful at handling communications around virtually every issue – except for the one that matters most to it, where it has suddenly becoming a bumbling idiot.

 

 

You Have No Rights – Because you are Breaking the Law Right Now

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For those who missed it, which I suspect is most people, there is a fantastic Op-Ed in the New York Times by Peter Ludlow of Northwestern University.

Titled Hacktivists as Gadflies it is a scary look at how much legal power the US government has over people who use the web (e.g. pretty much anyone) since almost all of us are, via one way or another probably violating law as interpreted by US prosecutors.

Here’s a juicy line:

“The law, as interpreted by the prosecutors, makes it a felony to use a computer system for “unintended” applications, or even violate a terms-of-service agreement. That would theoretically make a felon out of anyone who lied about their age or weight on Match.com.”

And its scary conclusion:

“In a world in which nearly everyone is technically a felon, we rely on the good judgment of prosecutors to decide who should be targets and how hard the law should come down on them. We have thus entered a legal reality not so different from that faced by Socrates when the Thirty Tyrants ruled Athens, and it is a dangerous one.”

Basically, there is a real risk that everyone is in legal limbo. All it takes is the government to decide they want to attack you, since they already have the means. Scary, scary stuff.

Toronto Star Op-Ed: Muzzled Scientists, Open Government and the Limits of Rules

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I’ve a piece in today’s Toronto Star “Rules are no substitute for cultivating a culture of open government” about the Information Commissioners decision to investigate the muzzling of Canadian scientists.

Some choice paragraphs:

The actions of the information commissioner are to be applauded; what is less encouraging are the limits of her ability to resolve the problem. The truth is that openness, transparency and accountability cannot be created by the adoption of new codes or rules alone.

This is because even more than programs and regulations, an open government is the result of culture, norms and leadership. And here the message — felt as strongly by government scientists as any other public servants — is clear. Public servants are allowed less and less to have a perspective, to say nothing of the ability to share that perspective.

and on ways I think this has consequences that impact the government’s agenda directly:

This breakdown in culture has consequences — some of which may impact the government’s most important priorities. Take, for example, the United States’ preoccupation with Canada’s environmental record in general and its specific concerns about the oilsands in regards to the proposed Keystone XL pipeline. The government has spent the last month trying to burnish its environmental record in anticipation of the decision. And yet, it is amazing how few in Ottawa recognize the direct link between the openness around which government scientists can speak about their work and the degree of trust that Canadians — as well as our allies — have in our capacity to protect the environment.

I hope you’ll give it a read.