The fifth open data principle – releasing data for innovation – directs the government to consult with users and empower the future generations of innovators.  The Committee heard from several witnesses that open data can drive innovation and value creation in a number of ways.

A. Value creation

According to the CIO of the Government of Canada, open data is a key catalyst for innovation. In Canada, the federal government recently announced the creation of an Open Data Institute, a public-private partnership based in Waterloo, Ontario. Joanne Bates, Lecturer in Information Politics and Policy at the University of Sheffield (U.K.), commented that the Open Data Institute model is a great one. According to Mr Stirling of the U.K.’s Open Data Institute, many of the really interesting things happen at the intersection of open data and closed data, or open data and big data, or open data and personal data. However, as some witnesses noted, a lack of venture capital in Canada may be one barrier to innovation.

Many witnesses agreed that open data creates value. Ms. Ubaldi explained that “[t]here's no clear data yet that demonstrates the value, but there are a number of examples from all levels of jurisdictions that demonstrate there are changes in the way the government interacts with society in creating economic and social value.”

B. Empowering innovation

One way to empower innovation is through crowdsourcing. To this end, governments can leverage the power of the crowd by sharing data in order to find a solution to a particular problem. Several witnesses agreed that open data is a way of providing solutions into government. Mr. Sharma noted that crowdsourcing is being used by the U.S. Government, which has a site named challenge.gov. The site is used by NASA and the Department of Energy, among others. It provides data to users to solve specific problems and reach savings for the government. A TBS official confirmed that currently, the Government of Canada does have such a website.

Another way to empower innovation is by directly engaging users of open data. According to Mr. Gayler, an “appathon” – a competition to develop a mobile or web-based application – “is a very simple example of transformational cultural change that can be brought about by sharing open data.” Ms. Dybenko agreed, saying that “one of the most important benefits will be the engagement of a populace, particularly a younger demographic, that today feels very disconnected from government processes.”

One way that the federal government has recently engaged youth, is through the 2014 Canadian Open Data Experience. This “appathon” challenged university students to see what kinds of applications they could develop using the federal government’s open data. Several witnesses agreed that this event had been successful, with over 100 different applications developed.

C. Dialogue

According to a TBS official, the federal government’s approach to conducting public consultations was to work with various municipal governments in order to “contact local users – local companies, the post-secondary institutions, civil society organizations, and government representatives as well.” According to the CIO of the Government of Canada, “[Canadians] were invited to participate in online consultations and were asked questions over a certain period of time […] by submitting their comments and their questions.” As well, the President of the Treasury Board used online discussion forums and established a dialogue on Twitter during several hosted sessions which were announced on the TBS website to encourage participation. He also participated in a series of open discussions throughout Canada, in several municipalities, to promote open data in various regions. Finally, the federal government is currently developing its consultation plan for the second phase of its action plan open government.

Beyond public consultations, Ms. Miller advocated that “open data is about information flow and that information flow can't be unidirectional. If the flow of information is solely from the government to the public then there's no incentive for people to do interesting and creative things with that data.” She added that “open data is fundamentally about creating participatory opportunities where people can become invested in that data and are incentivized to contribute to the data itself and incentivized to improve the data and to create new innovative ways of using the data. I think this investment creates trust.”

D. Economic value

Of particular interest to the Committee were the potential economic benefits associated with open data. However, as the Committee noted, few studies have been conducted to measure the economic impact of having access freely to more information. In fact, many witnesses explained that this impact is difficult to measure. The CIO of the Government of Canada reported that the TBS was not tracking the economic results of open data, and that they were struggling to find key indicators of success. Mr. McKay stressed that success would be hard to measure, but that the metrics could be developed alongside opportunities.

According to Mr. Sharma, there are intangible ways to measure the success of government open data portals, such as looking at the participation in “appathons” or measuring the number of datasets downloaded from the federal government’s open data portal.

The main report on the economic impact of open data, mentioned by many witnesses, was published by the McKinsey Global Institute. Mr. Chui, author of the report, appeared before the Committee to discuss its content. The McKinsey Global Institute report, Open data: Unlocking innovation and performance with liquid information, looked at the potential impact of open data in seven sectors: education; transportation; consumer products; electricity; oil and gas; health care; and consumer finance. According to the report, open data could help unlock an economic value between $3.2 trillion and $5.4 trillion annually worldwide, for those seven sectors only. These sectors were chosen because of their variety, representing a mix of goods and services, a mix of public and private sectors, and a cross-section of different industries.

The McKinsey Global Institute report also estimates that the potential value of open data would be divided roughly between the U.S. ($1.1 trillion), Europe ($900 billion) and the rest of the world ($1.7 trillion). Mr. Chui also acknowledged that a rough estimation of the potential impact of releasing open data in Canada (from government at all levels and from the private sector) would be close to $100 billion, based on the ratio of Canada’s Gross Domestic Product (GDP) to the U.S.’ GDP. As well, according to him, the federal government’s open data represent only a portion of all the potential open data in the Canadian economy. He added that this is not a direct impact on GDP, since over half of the impact is on consumer surplus, which is not included in the GDP.^[1]

According to Mr. Chui, one third of this potential impact comes from the combination of various sources of open data, which could help businesses comparing themselves with each other, defining new products and services, automating human decision making and segmenting the population to tailor specific actions or products. It could also help them to increase their productivity and create new products and services.

Some witnesses were skeptical about the magnitude of some of the estimates of open data’s potential impact. For example, Mr. Eaves cautioned that there is a risk of overplaying the economic benefits of open data. He added that he “would be very, very cautious about believing every figure that passes by […] or why it's going to have an economic impact.”

Witnesses provided numerous examples of how open data can help increase productivity, develop new markets and innovate. An official from the Government of British Columbia talked about the way open data can create more knowledge for students and researchers. Businesses can also make more informed decisions. Mr. Baker provided some examples of how the economic benefits could be reached in the agriculture and health sectors, from products related to weather data to innovations based on genomic data. Some witnesses gave the example of transportation, where businesses in this field could benefit from open data by knowing, in real time, border wait times, traffic congestion or road repairs. This could save time and costs, as well as reduce pollution.

As another example, Mr. Eaves underscored the success of the Canadian Boreal Forest Agreement, highlighting that its total impact on the Canadian economy could be in the billions. According to Mr. Eaves, “[the] entire project is supported by government data.” Commenting on this project, he stated, “the economic opportunities around analysis that open data can provide is the place where […] federal government data becomes enormously valuable and interesting.”

Mr. Sharma explained that, according to a report by the Information and Communication Technology Council, Canadian employment in the mobile and web-based applications economy stood at 64,100 in 2014. Authors of this report expect this number to grow to 110,000 by 2019. Canadian applications enterprises are expected to generate $1.7 billion in revenues in 2014 – 43% of these revenues coming from exports (28% from the U.S. and 15% from the rest of the world). Their revenues are expected to grow to $5.2 billion by 2019. According to Mr. Sharma, all these jobs and revenues are not uniquely derived from the existence of the federal government’s open data portal, but it may be helpful in developing this industry.

Mr. Pineau, from the Canadian Institute of Forestry, mentioned that having information and quality data collected in collaboration saves time and money. He added that getting good data should not be seen as a cost, but as an investment to make better decisions. Mr. Chui expressed the opinion that Canada should perform its own analysis of what the economic benefits of open data may be in Canada and what data is more likely to create these benefits.

Several witnesses cautioned about the effects of placing too much emphasis on economic value. According to Ms. Bates, “all economic growth is not necessarily good growth” and it doesn’t necessarily equal positive social implications. She argued that “the prioritization of data over other aspects of the democratization process, could lead to an empowering of the empowered and a disempowering of those people who are already socially excluded.” For example, she explained that open weather data is very valuable for financial market trades around weather derivatives. However, she noted that open weather data “have a very questionable impact upon climate change mitigation because […] when businesses are buying these [derivative] products, they are essentially removing the financial impact of weather instabilities on their businesses.” As a result, she argued, it gives those businesses less of incentive to demand action on climate change mitigation.

E. Social value

The President of the Treasury Board told the Committee that “bureaucrats thinking of ways to create wealth is fine, but that's not the whole story […] the creativity of the marketplace can really unleash [open data] in a way that will create value for Canadians for years to come.” According to a TBS official, innovation doesn’t necessarily need to be attached to profit. According to Mr. Eaves, “the vast majority of [federal government] data is actually geared toward policy analysts, so it's geared to trying to do analysis and understanding what's going on in society or what's going on in the community.”

According to Ms. Ubaldi, open data can generate social value, for instance in terms of empowering citizens to make more informed decisions in their own lives. She added that this tends to do with a different type of engagement, participating in policy making and service delivery. In terms of generating social value, Ms. Bates suggested that when making policy decisions, governments should consider what they are aiming to achieve with open data, and then think about the wider policy ecology that needs to be in place in order to achieve the desired outcome. Mr. Baker added that some businesses use open data for social good, for example in relation to climate change.

With respect to how Canada compares internationally, Ms. Bates, noted that “in terms of social impact, and this includes things such as environmental sustainability and the inclusion of marginalized populations in policy making through using open government data, Canada is scoring relatively low.” Related to this finding, a few witnesses explained that social value can be created from open data but qualified that other groups need to be included in the dialogue. According to Ms. Ubaldi, “in terms of social value, there is certainly an increasing number of examples showing how open data has increased the participation and the engagement of parts of society that otherwise would not be brought into the discussion and dialogue with governments in terms of service delivery and policy-making.” Moreover, a representative from the City of Toronto noted that at-risk population groups, such as seniors, new immigrants, and youth, can benefit from open government data.

With respect to the release of data for innovation, the Committee recommends that:

RECOMMENDATION 21

The Government of Canada should create a crowdsourcing website where federal departments and agencies can release datasets linked to a particular issue and launch competitions to challenge the public to find ways to create savings for the federal government related to the issue.

RECOMMENDATION 22

The Government of Canada should establish performance measures in consultation with stakeholder groups to evaluate the success of its open data initiative.