Government transparency–are you up for it?

Regular readers of this blog might be familiar with the sometimes-skeptical tone around government and data. Specifically, there’s a lot of hard work in having a transparent government, and it’s not universally thought of as a good thing–openness means increased scrutiny and possibly greater costs. Obviously the idea behind openness is that benefits vastly outweigh costs. This is of course measured in a societal benefits, so a strict economic calculus may give a different result than one that includes externalities.

The Danish government just released a strategy document, Good Basic Data for Everyone-A Driver for Growth and Efficiency, and it should be required reading for anybody who things about this stuff. This is more than press release/high five photo op with politicians. The Danes started the initiative 10 years ago, and a report showing economic benefits makes it clear: the roughly 2m EUR investment to freely release a nationwide geocoding database created a direct financial impact of 62m EUR over a five year period. Denmark is not a large country, but a calculator isn’t required to understand the ROI. Denmark isn’t finished– the next step is to release “basic data”:

Basic data is the core information authorities use in their day-to-day case processing. Basic data is e.g. data on individuals, businesses, addresses, real properties and geography (i.e. digital maps)…

And later to create a sort Yelp-style claim-your-listing service. This translates to improved accuracy and currency, allowing the private sector to add meaningful value on top of basic data:

The modernisation of basic data will initially include the most important information about businesses, cadastral registers, maps and buildings, and it will establish a new register of property owners of real property (Register of Property Owners)…

If you you don’t want to read, the graph below shows it all. Granted, these are projections and they are few years out, but the cases of the SEC’s EDGAR, National Weather Service and creation of the GPS tell similar story: basic government investment + private capital = good economic sense (but let’s not forget the failings of the US government in this realm).

Of course there will be parties who object, and it is natural that those who have most to loose will fight tooth and nail. This is likely the entrenched bureaucracy and government contractors. But these parties also win if they take a longer term view, with more efficient, responsive government services, a flourishing commercial industry around a government resource. A study of 15 countries with open data led to corporate growth at a rate 15% higher compared with other countries. Since Australia broadly released basemap data, usage has increased 20x and led to an annual net benefit of 4m USD. Sure, this isn’t huge, but it also means the net cost to the government is negative.

Free access to good basic data for everyone is good business; for the public sector and for society in general. Once the initiatives have been fully implemented in 2020, revenues for society are expected to be approx. DKK 800 million annually.