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Open Government Data: Not Just Good Policy, But Economically Sound

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One of the easiest targets for budget cutters in a recession is governmental initiatives to make data both accessible to the public and easy to work with. For example, the budget for the U.S. Office of Management and Budget's Electronic Government Initiatives was cut from $34 million in FY2010 to $8 million in FY2011. Recently Congress asked NOAA to consider charging other federal agencies for data that has historically been provided free of charge.

However, as Sen. Tom Carper pointed out when the OMB funds were cut, these reductions can be "penny wise and pound foolish," because the programs in question help identify "wasteful and duplicative spending."

In fact, the growing number of creative ways that open data can be used to meet the need to cut governmental waste, reduce governmental operating costs and boost entrepreneurial opportunity during hard times mean there's a solid economic -- let alone, good government -- argument to be made that open data initiatives should probably be increased, not cut.

A variety of examples demonstrate the benefits of making data accessible and in forms in which it can be easily used:

Reduce inefficiency. One of the innovations threatened by the spending cuts for the Electronic Government Initiatives' is the ITDashboard, which revealed more than $3 billion in inefficient government IT spending.
As I have written previously, if Congress were to pass Rep. Darrell Issa's DATA bill requiring all government agencies to report publicly using consistent government-wide data standards, this might spark a conversion within government agencies to , what I call, the "one report," also doing all of their routine internal reporting using the same standards, such as the eXtensible Business Reporting Language (XBRL), which could radically reduce government costs by increasing inter-agency cooperation, giving government workers real-time data to make better decisions, and reducing data errors.

Spark entrepreneurial activity: One of the few bright spots during the recession has been the staggering number of location-based apps and services that have been created, such as FourSquare, or Asthmapolis -- which helps asthma sufferers track what locations may trigger an attack. We may forget that it has only been since the year 2000 that entrepreneurs have been able to capitalize on the U.S. government's GPS signals to create them. Since government agencies routinely collect data about a wide range of economic activity, it's impossible to predict how many new applications and services widespread availability of this other information could spark.

Rebuild public faith in government: When I did corporate crisis management I counseled clients to adopt a "don't trust us, track us" mentality. Whether it's a corporation caught polluting or a government agency that's not delivering efficient services, the public has become rightly skeptical about protestations that "we get it, and we'll be different from now on." Instead of asking us to have faith in their sudden conversion, smart officials realize that public confidence must be earned through transparency. That's why the Obama Administration's ITDashboard site is so powerful: it takes metrics for evaluating whether government initiatives are meeting their deadlines, and makes them public. That not only satisfies public demands for transparency, but can serve as a powerful motivator for agencies whose projects are lagging: get the program on track or be prepared to have it scrutinized by Congressional committees and/or terminated (and perhaps your job as well in the aftermath) by agency administrators.'

Harness the wisdom of crowds. When Boston's MBTA released the data about trains and buses' real-time location, a wide variety of developers came up with innovative apps based on that data. It's no reflection on government employees to say they probably never would have come up with those apps themselves: they have too many responsibilities already, plus opening the data to the public means that individuals with a strong interest in the subject and distinctive way of addressing it can fill the gap -- at no expense to taxpayers!

Reduce the cost of business regulations. Reducing the cost to businesses of complying with government regulations is a key concern of conservatives worldwide. The innovative Standard Business Reporting initiatives in the Netherlands and Australia can potentially cut a company's cost of compliance by 25 percent-- while potentially improving the quality of government oversight at the same time.

Fortunately, it appears that government agencies worldwide are starting to get it about the benefits of open data -- nearly 100 new government data APIs were released last year -- however I think the pace will accelerate if it isn't just good government transparency advocates making this point. It's time for those on both the right and left concerned about the cost and efficiency of government to join in: opening up data makes hard economic sense as well.