Open Data and the G20

OpenGovData Venn

From a recent column for the AFR. The report can be downloaded here.

Earlier this year our Treasurer, Joe Hockey, led the G20 Finance Ministers to pledge lifting GDP by 2 percent over ‘business as usual’ over the next five years. It’s a big win for the Treasurer, but how can it be delivered? There aren’t many easy options for reform on that scale that don’t create swathes of losers around whom the media then swarm, thus amplifying the inevitable campaigns against change.

But one opportunity is sitting under our noses. In a knowledge economy, data is the new infrastructure. The more open it is, the more it can be reused repurposed. The more it attracts value adding as business and civil society find clever new ways of making it ever more useful. Most data Google Maps delivers has existed for decades. But government open data policies – and Google – convey open data seamlessly to your mobile as you search out your target.

That’s why, Australia’s Government implemented the recommendations of the 2009 Government 2.0 Taskforce which I chaired. But in Australia as elsewhere, high-level commitments have achieved less than they could have if they’d been seamlessly translated down to the delivery coalface as Google has with geospatial data.

Omidyar Network today releases a Lateral Economics report that estimates that a more vigorous open data commitment could grow Australia’s economy by around $16 billion per year. That’s half Joe Hockey’s G20 growth target.

To deliver it we must not just break through the red-tape and inertia that’s obstructed open data implementation but also embrace a fresh agenda sketched in our report in which governments craft conditions in which private organizations open more of their data to benefit themselves, their business eco-system, and the wider public. The G20 would also address international dimensions including cross-national standardisation and harmonisation.

Our report’s six case studies show how open data can power innovation and productivity growth, but let’s illustrate it’s promise in just one area – managing the economy.

Currently we steer the economy looking through the rear vision mirror using data that’s months old. Yet Tax Office administrative data – for instance for Business Activity Statements (BAS) – can provide near real-time snapshots of our economy. Yet navigating the global financial crisis, it wasn’t normal for that data to be used in macro-economic management. Shockingly, it still isn’t.

This will all change. But do we want to be leaders or followers? As the classical Roman sage Seneca has it “Fate the willing leads, the unwilling drags behind.”

In the new world, anonymised BAS and other data will be publicly released as the national accounts are now, benefiting policymaking and punditry. Government macro-economic policy makers in Treasury and the Reserve Bank will also release their forecasting models – as our Treasury and the US Fed have begun doing – open sourcing critique and improvement as is common in software.

It seems conservative to suggest that these two changes could improve macro-economic decision making by 5 per cent. But that’s just the start. For the world of big data is upon us. Supermarket scanner and bank credit card data can help. But online accounting systems like Xero can take the pulse of the economy in real-time with a vastly larger sample of the economy than the ABS could ever hope to command. We think that partnerships with such providers of software as a service – in accounting, payroll, advertising and other functions could further improve decision making by about as much again and then some.

And the benefits of better macroeconomic management are non-linear with the economic cost of recessions broadly proportional to the square of their severity. So our estimated one eighth reduction in the volatility of the economic boom/bust cycle reduces its costs – which are currently around 1 per cent of GDP – by nearly a quarter, or on our figuring $3.6 billion each year.

Of course we must protect citizens’ privacy and respect firms’ ownership of their own data. Having done that, open data should attract overwhelming political support. In contrast to most economic reform, there are minimal losers and widespread winners from open data because it simply makes better use of already existing resources.

With potential gains of this scale to be made through open data, Treasurer Hockey has the opportunity to deliver a significant economic reform at the same time as providing global leadership by seeking a G20 Open Data Charter when G20 Finance Ministers return to Australia later in the year.

Australia was a huge beneficiary of the now fading mining boom, but the whole G20 can join the next mining boom – the data-mining boom.

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conrad
conrad
7 years ago

Having advanced maths getting chopped from high schools and closed down in universities has been going on for ages and is unfortunately not exactly the best way to harness all of these new potential goodies. Perhaps someone somewhere in government might screw their head on and connect the dots or all people will know how to do (and be taught) is how to put a marketing spin on numbers they don’t understand.

Tel
Tel
7 years ago
Reply to  conrad

People who are interested can learn from Wikipedia. For those who are not interested, do you think imposing a curriculum on them will help? Really?

Persse
Persse
7 years ago

Surprised to learn that BAS data is not extensively utilised. Using Xero type software as a data source is very innovative. However, if our government is a bunch of reactionary neo-thatcherites, it is a bit of a waste of time ” we don’t need your stinking data ” ( quote from the manifesto of the school of Hockeynomics manifesto )

paul walter
paul walter
7 years ago

One question that piece raises is, do governments WANT a “seamless and pain free” solution to improving growth?

Taking up from Conrad, it seems to me that many people in authority have “control” issues and personality issues that preclude the rational use of data for growth in developing a rational economy.

Do people like Joe Hockey and Tony Abbott , for instance, have the same flexibility and lateral thinking faculty coupled with the vision thing, that Nicholas perhaps is gifted with or has cultivated the tendency toward and presumes others possess, generous soul that he is?

Tel
Tel
7 years ago

Abbott and Hockey campaigned on bringing government spending under control, so how about publishing government spending details in a machine readable format, with reference numbers so we can crowd source the cost savings?

I don’t expect they will do it, but then I don’t see any evidence so far that they are serious about reducing spending either.

Tel
Tel
7 years ago
Reply to  Tel

http://infoaus.net/budget/

I just found it so I can’t vouch for anything. At any rate, it’s a rare day I’m impressed so I feel I should give public credit for the fact that it exists at all.