The Potential Of Open Data For Startups and Companies

What is Open Data?

For data to qualify as “open data”, three conditions must be fulfilled:

• Availability and accessability

The data is available freely, preferably as a download from the internet. At the most, the party providing data may charge a processing fee, if it is within reason. The data format must be convenient and editable.

• Data processing and data transfer

Open data are published under conditions that allow for editing, transfering, and consolidation with other sets of data. The data must be machine-readable.

• Participation is universally possible

Open data is built on participation: everyone must be allowed to use, process, and transfer the data. There may be no discrimination against relevant usage contexts, persons, or groups. There may be no restrictions on how the data is used (e.g., limited to non-commercial usage).

One of the most famous applications of data is the online encyclopedia Wikipedia. Although, Wikipedia is not only a quick-reference platform for knowledge and facts. The data available through Wikipedia is also used for linguistic models, e.g. for natural language processing (NLP) which is a subsector of artificial intelligence. The data is used to “train” these models which in turn are used in automated language processing and in translation services. The more subject-specific texts are available as open data for training these linguistic models, the more efficient and improved the results are going to be for specific applications, e.g. the automated comprehension of legal texts.

The Positive Impact of Open Data

Open data can also save lives. The “Visualize No Malaria” initiative, for example, has streamlined the way health data on the spread of malaria infections is being provided and has combined this kind of open data with other open data sets, geodata from Open Street Map among others. This has resulted in a map that can visualize the spread of malaria. Now, regions which have a pressing need for malaria prophylaxis medication can be identified easily and the need adressed quickly. The initiative has made a major contribution to fighting malaria: From 2014 to 2017, the malaria cases in southern Zambia have gown down by 85% and the number of malaria fatalites by 92% – a positive development on 1.8 million lives, just through the application of open data. The malaria cases in Senegal could be reduced by 60% as well.

The study “The Economic Impact of Open Data: Opportunities for Value Creation in Europe” (2020), published by the European Commission, has evaluated the added value of open data: Providing real-time information about public transportation as open data can help to reduce waiting times by 27 million hours per year for people travelling in Europe, because the information can be used for more efficient planning. The study has also discovered that using real-time traffic data can improve navigation for emergency services which could save 101 lives per year; in large European urban areas, the usage of real-time traffic data leads to emergency services arriving more quickly in 19.4% of all rescue operations. During peak hours, the percentage of faster rescue operations even increases to 38.9%.

Open Data Application Using the Example of Helsinki

To be able to make use of the added value posed by open data, it is not enough to simply provide the data – the data must also be used. This is an opportunity for founders and external experts: the data provided by organizations can be used to create innovative applications. For one, the simple change of perspective on problems that need solving can lead to new insights, by thinking outside the box, by combining the data with other sources of data, and asking different questions. Providing open data helps experts and startups to actively work on problems and develop completely new solutions.

The city of Helsinki has gone down this path, very consistently. Already in 2011, many public administration data (no personal data though) was made accessible through Helsinki Region Infoshore. In addition, a bill was passed that requires all public transportation operators to give third parties complete access to their ticket booking systems. This, in turn, enabled startups like Whim to offer mobility-as-a-service: users only need to enter a starting point and a destination and Whim detects the perfect combination of modes of transportation: from train and bus to rent-a-bike, taxi and rental car.

On its way to become carbon-neutral, Helsinki has, among other things, published the energy consumption of public buildings. One solution on this road is to calculate the perfect setup of solar panels for the energy consumption and the particular location using open weather data. This kind of service is, e.g., offered by Finnish startup Sun Energia. Using weather data and the number of solar hours, the startup determines the perfect equipment and alignment of solar panels.

These examples show how much potential open data is offering to startups and companies who can generate insights from that data and pass it on:

Open data must be used and processed. It is a component of the solution; on its own, it does not offer any added value for the end consumer. The fields science and research also generate more and more open data. The big idea is that knowledge multiplies if it is shared and if, again, external experts are consulted to create added value and transform the knowledge into new business models.

Open Data as Business Model

For a startup, it is also possible to develop business ideas that are based on collecting open data. For example, customers might provide the startup with their own data as open data.

Crowdsourcing can provide a community with data that, e.g., helps to make ideal contract conditions more transparent. A use case are comparing the conditions of insurance policies for increased transparency and consequently strengthening consumers who, in turn, can strengthen their bargaining position. Another case is a community-based platform like Open Food Facts that collects and publishes data about food products. This data enables the emergence of many more applications around this platform.

For existing companies, open data opens up the opportunity to integrate startups in the process of finding a solution for a particular problem. One such opportunity might be the increase of efficiency in a company’s supply chain or increasing transparency which in turn leads to customers being more committed to a brand. Nike has been pioneering this idea by openly sharing data about the manufacturers of their poducts.

From Open Data to Linked Data

The future of open data lies not in publishing more open data but in networking open data: open linked data. Combining data into knowledge graphs will help with finding and networking relevant information. The project “Open Data Germany”, for example, clusters open data on tourism for Germany. This creates a foundation for digitalization and product innovation within the tourism sector – which is a good starting point for startups to develop and support new applications.