Could Open Data Open Doors for Entrepreneurs?
Open data could lead to over $3 trillion a year in additional value every year from just 7 sectors alone, says a new report from the McKinsey Global Institute. Information that is openly available and machine readable has the potential to foster greater entrepreneurship, more innovation, and better performance. Here’s the main point:
Although the open-data phenomenon is in its early days, we see a clear potential to unlock significant economic value by applying advanced analytics to both open and proprietary knowledge. Open data can become an instrument for breaking down information gaps across industries, allowing companies to share benchmarks and spread best practices that raise productivity. Blended with proprietary data sets, it can propel innovation and help organizations replace traditional and intuitive decision-making approaches with data-driven ones. Open-data analytics can also help uncover consumer preferences, allowing companies to improve new products and to uncover anomalies and needless variations. That can lead to leaner, more reliable processes.
A few key challenges remain, mainly from the degree of investment still needed on the technological front as well as the public sector’s restrictive data policies.
Businesses must be mindful of their reputations too, as consumer privacy fears remain high. Clearly demonstrating how data are being used and why, as well as building feedback channels into every point of customer engagement, would be proactive steps to take.
The benefits from open data appear to be great, but as the report concludes, “This cycle can gather momentum only if private industry and public agencies cultivate a vibrant open-data ecosystem and implement policies to protect stakeholders.”