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People tend to think of ‘public goods’ as things like suburban roads that must be built by governments because if governments don’t provide them, then no-one will. But this is an impoverished definition of public goods. In fact, private and public goods operate in an ecology, each reinforcing the other, and they do so in every social organisation we have – within families, suburban football clubs, firms.We will explore these ideas and then focus on open data as the new emergent public good of our time.Nicholas Gruen is a prominent Australian economist and commentator on Web 2.0 and the CEO of Lateral Economics and Chairman of Peach Financial, the Australian Centre for Social Innovation and Online Opinion.Audio for this lecture can be found here >> https://soundcloud.com/theodi/friday-lunchtime-lecture-open-data-the-new-emergent-public-good-of-our-time-1
Citation preview
ODI, London
Nicholas Gruen E [email protected] T @ngruen1
Open data: the new emergent public good of our time?
25th July 2014
Outline
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The free rider problem/the free rider opportunity Open data and PSI Embracing wider open data opportunities Whats it worth
McKinseys estimates Lateral Economics estimates
Public goods of opportunity
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Public goods goods that no-one will supply if the government doesnt
Public goods Public goods . . . present serious problems in human organisation. Vincent and Elenor Ostrom - 1977
(as a problem)
Public goods (as an opportunity)
He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.
Thomas Jefferson to Isaac McPherson, August, 1813
Web 2.0 platforms are public goods:
Google (1998) Wikipedia (2001) Blogs (early 2000s) Facebook (2004) Twitter (2006)
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The Wealth of Nations (1776)
Private Goods
The Theory of Moral Sentiments (1759)
The social preconditions of markets (Public Goods)
Language
Adam Smith
Public Goods
Private Goods
[The public good of] Justice . . . is the main pillar that upholds the whole edifice. If it is removed, the great, the immense fabric of human society . . . must in a moment crumble into atoms. Adam Smith
The ecology of public and private goods
We will ever strive for the ideals and sacred things of the city, both alone and with many; we will unceasingly seek to quicken the sense of public duty; we will revere and obey the citys laws; we will transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us.
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Public goods Governments Families Civic association Philanthropy Within teams
Cooperation and group-interest
The fractal ecology of public and private goods
Private goods Individuals Firms Teams
Competition and self-interest
The ecology of private and public goods: Markets
Private Goods Traders address
their mutual self-interest
Public Goods
Marketplace for meeting
Price discovery Liquidity
Private and public goods on a platform
Private Goods Meeting private
needs Linking to other
websites
Public Goods
Google uses this information to rank sites
Everyone benefits
Google monetises with ads
The economics of abundance: a new birth of freedom
Public goods . . . present serious problems in human organisation.
Vincent and Elenor Ostrom - 1977
He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.
Thomas Jefferson
Public goods as a problem Public goods as an opportunity
When the economics of abundance runs out
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Public Sector Information (PSI)
Freedom of Information held by the government is to be managed for public purposes, and is a national resource Freedom of Information Act 1982 as amended in 2010
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Publicly funded research Recommendation 7.10: A specific strategy for ensuring the scientific knowledge produced in Australia is placed in machine searchable repositories be developed and implemented using public funding agencies and universities as drivers. Cutler Review of Innovation, 2008
PSI and Research Openness
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Conservatively estimated that greater openness would contribute around 0.27% GDP Or 1/7th of the 2% Growth Target
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Research Findings & Data
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McKinsey scaled to Australia
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!
To get a reasonable upper bound we . . . Took McKinseys lower bound
$3.2 not $5.4 trillion
Assumed Only of gains are value added Only due to policy remains to be realised
~ $16 billion ~ 1% Aus GDP ~ G20 target
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McKinsey scaled to Australia
Lateral Economics case studies
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Lateral Economics case studies
Theyre partial Like McKinsey
Range over public and private open data Focus on incremental benefits Suggest our McKinsey based upper bound was conservative
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Macro-economic management Better use of existing real time PSI
BAS data on Activity Exports Capex
PAYE data
Open-sourcing forecasting models As Treasury and the US Fed have done
Using real time private data Supermarket scanner data Payroll and accounting Data from online
providers Xero/MYOB
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5%
7.5%
Better macro-economic management ($ billions p.a)
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Total GDP $1,554 Consumption $1,136
Existing cost of fluctuations (1.35% of consumption) $15.3
5% reduction in volatility => 9.75% of cost of recessions $1.5
7.5% reduction in volatility => 13.7% of cost of recessions $2.1
Total benefits of open data $3.6
Better Workplaces
Better PSI Release disaggregated State of service data
As they do in the US Deliver better machine readability on government data
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APSJobs.Info
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Windows on Workplaces
Why isnt employee engagement data open? Government suasion in education/health workplaces to open more data Comparison requires a standard Government could convene standard setting
Voluntary standard making and reporting Government bodies report to it ABS survey of firms to establish benchmarks
Strengthen the market for good management From both labour and capital market
Benefits to better job matching $0 for better matching within public service 5-10% lower stress at work (=$14 bil) = $1.2 bil $0 for productivity growth Matching teachers better to jobs = similar benefits to higher teacher quality Jensen (2010) estimates a 10% better teacher quality => 0.2% better growth of that => 0.05% higher GDP growth = $2.3 bil = $3.4 bil
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Lateral Economics Case Studies
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Open Data
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Midata data sharing
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Citizens Advice Communications Consumer Panel Consumer Focus Information Commissioners Office (ICO) OFCOM Office of Fair Trading (OFT) Which?
AMEE Avoco Secure billmonitor British Gas Callcredit EDF Energy E.ON Garlik Google Lloyds Banking MasterCard
Moneysupermarket.com Mydex npower RBS Scottish Power Scottish Southern Energy The UK Cards Association Three Visa
Case Studies (UK)
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When the economics of abundance runs out
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Allo Mobile
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10,000% Productivity Improvement
PPPs 2.0
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Private sector builds service Public sector contributes its resources
Networks Nudges Non-obstruction Financial internalisation
Subject to openness and privacy undertakings Much more for each in partnership than alone Australia acquires new research assets Not picking winners but mediated through usual processes such as open tenders, etc.
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Interfaces Open Aust SeeClickFix CareMonkey
Internal Innovation OneTouch FixMyBudget e-taskr
Chaperone Murmur
Directory HealthKit
Public Private Partnerships 23andMe
Seeding altruism Code for Australia
Validation Rate my prof Rate Govt Services
Building platforms Open Australia Sense-t
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Government 2.0 Getting serious about opening data
Institutions Mining data Pharma data
Standards Windows on
Workplaces
Open Research Getting serious about opening research data
Data Linkage Building data
linkage assets Realtime Macro ATO data Open forecasting Private accounting data
Data Sharing Midata AP Digital Postbox
Whats there not to like?
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Open Data
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Open Knowledge Foundation Index
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Open data barometer
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Windows on Workplaces
Encourage employers to provide good jobs in safe, healthy and productive workplaces, and empower employees to choose their preferred workplaces by facilitating the dissemination of information about employment experiencefor example, worklife balance and family-friendliness.
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