The world is awash in data that’s in the public domain but mostly goes to waste. Making better use of open data from the government and private sources could create $3 trillion of value worldwide in just seven industry sectors, according to a study released today by McKinsey & Co., the consulting firm.
McKinsey’s best case in point is data.gov, a website launched by the Obama administration in 2009 that has 91,054 data sets. Currently featured on the home page are baby names since 1879, a national bridge inventory, damage estimates from Hurricane Sandy, credit card complaints, and typical charges for inpatient and outpatient services.
This year 102 cities participated in the International Open Data Hackathon Day, held on Feb. 23. The mission was to “write applications, liberate data, create visualizations, and publish analyses using open public data to show support for and encourage the adoption of open data policies by the world’s local, regional, and national governments.”
Tim Berners-Lee, who invented the World Wide Web, has since gone on to create the Open Data Institute in the U.K. Similar institutes will open soon in the U.S. and Canada, ComputerWeekly.com reported yesterday.
Open data isn’t just from government agencies. It includes private data that’s placed in the public domain, such as Google Trends.
McKinsey says it’s not enough for data to be open. It has to be “liquid,” which means easily accessible and usable. “Blended with proprietary data sets,” McKinsey writes, open data “can propel innovation and help organizations replace traditional and intuitive decision-making approaches with data-driven ones.”
Some companies are already seizing the opportunity. Climate Corp., a startup that is being acquired by Monsanto (MON) for $930 million, “combines 30 years of weather data, 60 years of crop yield data, and 14 terabytes of soil data—all from government agencies—for such uses as research and pricing crop insurance.”
For data to be liquid is not as easy as it sounds. It requires investments in technology and expertise. It also demands policies to protect privacy and intellectual property and standards for speeding the sharing of information.
The seven industries that McKinsey examined were education, transportation, consumer products, electricity, oil and gas, health care, and consumer finance.
The study is by James Manyika, Michael Chui, Diana Farrell, Steve Van Kuiken, Peter Groves, and Elizabeth Almasi Doshi.