How to encourage innovation and entrepreneurship using open data

Open data has direct benefits in the economy, as it contributes to improve income, create jobs and save costs. Thanks to open data, companies can not only acquire a greater knowledge about their environment and make better decisions, but also use open data as raw material for their business development.

According to the Economic benefits of Open Data, a report carried out by the European Data Portal, the direct market size of open data will increase by 36% between 2016 and 2020 in the European Union, reaching a cumulative direct market size of 325 billion euros. The same report highlights that more than 25,000 jobs will be created in the private sector, at the same period.

Although innovation around open data takes place in organizations of all sizes and maturity levels, its value is especially notable when we talk about entrepreneurs and start-ups. Open data decreases the risk of starting a new business, since many data are free or have a marginal cost. Therefore, an increasing number of companies are starting their professional journey using public data to create new business models, products and services: according to the latest ASEDIE report, 23% of Spanish reuser companies have been founded in the last 5 years.

Although the outlook is positive, it is true that companies that want to undertake using open data also have to face a series of organizational, technical and financial challenges. Building a business case can be slow, especially if you don´t have all the economic resources and the necessary technical skills. Here, public administrations can play an important role.

According to the Open Data and Entrepreneurship report, public administrations can help drive innovation and entrepreneurship based on open data through 5 principles:

• Build the ecosystem including technical experts with business knowledge, citizens, journalists and data providers. The objective is to create a space for dialogue where player´s needs can be addressed, driving collaboration and the creation of new financing mechanisms and income streams.
• Promote that young people use open data through education. On the one hand, encouraging academic plans to increase the offer in terms of data analysis and disruptive technologies. On the other hand, promoting educational projects, contests or events that communicate the value of open data, encourage its reuse and promote the acquisition of new skills. As an example, Barcelona Dades obertes and the Escuelas Comciencia.
• Invest in national and regional acceleration and incubation programs. A good idea is to advise and support entrepreneurs through virtual accelerators, grants, mentoring programs and other actions aimed at promoting innovation. All actions should be linked with the community we have created, fostering the replication of successful strategies.
• Make the link between entrepreneurs, data and domain. Organizing hackathons or challenges on themed lines to engage with the domain, drive certain data sets and help companies focused on this area.
• Monitor entrepreneurs’ activities. Knowing which data sets are the most reused and their purpose allows to measure open data impact and promote the opening of new data sets.

In short, the role of public administrations does not end with the publication of open data, but its contribution is essential to promote a data-based economy, driving the reuse of information and the creation of new business models and work positions.