Annex 1 – Best Practice and Emerging Evidence - Economic Growth

A1.46              Finally, Open Data has the potential to drive economic growth.  A small market place has already developed in the UK in the health sector.  Companies such as Dr Foster and CHKS have formed the basis of a fledgling industry with an estimated total value of around £50 million per annum.  However, they are currently limited by their ability to access, analyse and publish anonymised data.  The NHS Information Centre has estimated that the true scale of the market in hospital data alone is £250 million; far more if other NHS data were made available.  The information market place in financial services globally is now estimated to be worth $23.2 billion.[1]  The potential for a health and social care information market is no less ambitious.

A1.47              Together with linked Open Data, cloud computing and the potential of the Semantic Web, the Royal Society anticipates that new forms of scientific analysis will arise.  Four members of the Royal Society’s Working Group on Open Data explained just one of the potential areas for enterprise and public value from Open Data:

“The meta-analysis of the raw data from clinical trials of the effects of aspirin in the prevention of cardiovascular disease including—as it did—data from 95 000 patients is a fine example of the benefits of data-sharing.  With the increasing use of electronic medical records, there is the opportunity for anonymised data from routine clinical use of drugs to provide high quality pharmacovigilance on a hitherto unprecedented scale.”[2] 

A1.48               There are similar opportunities in the education sector. The UK already has the largest e-learning market in Europe, worth an estimated £472 million in 2010.[3]  By creating the potential for expansion of services into educational data analysis, the size of the market itself is likely to expand.  An education publisher, Pearson, is enabling teachers and schools to access examination results. For example, teachers can see how close students were to grade boundaries and help students decide whether to resit an examination; identify skills gaps through results question by question, and devise suitable learning and revision plans for the following academic year.[4] 

A1.49              Open Data also has a key role to play in driving new business models and applications for geospatial information. In 2010 the Association for Geographic Information (AGI) estimated that the level of investment in the UK geographic information market, both in the public and private sector, is between £650 million and £900 million per annum.[5] The AGI anticipates that the market will grow to over £1 billion by 2015. In particular, it expects growth to come from: homeland security, climate change, disaster management, energy and food security.   

A1.50              Another driver will be ‘smart logistics’ stemming from environmental concerns, the high cost of fuel, and an increase in home delivery of retail and groceries.  Traditionally geospatial applications have been used to document or analyse the past or plan for the future.  It is likely there will be significant growth in applications focused on real time information; already over 15% of applications on Apple’s AppStore utilise location in some way.[6]  One German study suggested the value of spatial data is such that, on top of the economic value of basic public sector information “calculations for value added and employment can be higher by approximately a factor of two if all data are provided localised with a spatial reference in the future.”[7]  The AGI highlights the speed of growth of consumer applications based on geospatial information; their expectation is that the Location Based services market is likely to more than triple from the £50 million estimated currently.  

A1.51              Data collected by the US National Weather Service supports a huge industry.  According to the American Meteorological Society, the total size of the private sector weather market is greater than $1.5 billion per year[8] while research has estimated the direct economic value of access to US government meteorological data is $500 million per year[9]. A literature review by Arzberger et al (2004) also identified the role of this public data in supporting a rapidly growing weather risk management industry underwriting financial risk management instruments, valued at approximately $8 billion.  In contrast, the same study concluded: “the private-sector value adding industry for meteorological information in the European Union is very small, largely attributable to the highly restrictive data policies of most national governmental meteorological services.”[10]

A1.52               The UK is an exemplar of open government in Europe and the rest of the world, but still more could be done.  The US health informatics market indicates the potential market opportunities for economic growth that could arise from opening up data.  At over 17% of GDP, the US spends more than any other country in the world on healthcare.  Efficiency is a major issue, and ongoing discussions are closely linked with the introduction of healthcare ICT systems and processes designed to increase automation of transactions, enable greater self-care and make the diversity of proprietary systems interoperable.  For example, industries supporting billing automation, e-prescribing and online records are growing rapidly.

A1.53              The inclusion of electronic prescribing in the Medicare Modernization Act (MMA) in 2003 helped to develop the industry now estimated to be worth $204 million and rising.  The number of electronic prescriptions increased 181% between 2008 and 2009 and the transfer of prescription histories online increased fivefold over the same period.[11]  The Health Information Technology for Economic and Clinical Health (HICTECH) Act (2009) has also promoted rapid growth of the online medical records industry.  For example, one of the country’s leading contractors – Epic.com – is expected to cover about 30% of the US population once all its systems are in place.  In 2009 its revenue already exceeded $650 million.  Providers of healthcare informatics and ICT are large scale employers, with revenue increasingly sourced from services as opposed to traditional forms of hardware or software.  Siemens Healthcare, for example, is the seventh biggest firm in the industry, employing 62,000 in the US alone and generating approximately $1.4 billion revenue (2009). Cerner, McKesson and Philips Healthcare are other major players in the space.  Combined their global annual revenues exceed $5.5 billion (2009). 

A1.54              The UK Government is already considering how to maximise the potential economic gains from Open Data.  In January this year, government announced its intention to create a Public Data Corporation (PDC). This would bring together data-rich organisations with the aims of:

• Providing a more consistent approach towards access to and accessibility of Public Sector Information, balancing the desire for more data free at the point of use, whilst ensuring affordability and value for taxpayers;
• Creating a centre of excellence driving further efficiencies in the public sector; and
• Creating a vehicle that can attract private investment

A1.55         Government believes that a PDC will provide structures and incentives to promote greater access to, and usage of, public data and information, delivering benefits and growth for the wider economy. There are also significant opportunities to drive efficiency and improvement of public services through better sharing of key data between organisations. The Government is currently consulting on important questions on key aspects of data policy for the PDC including charging, licensing, and regulation in preparation for the constitution of the PDC in autumn 2011.

A1.56          As part of the second phase of the Government’s Growth Review there will also be a specific work stream which will focus on, and bring more depth to, the economic benefits of Open Data by assessing the size of the opportunities for government. This will more fully elaborate the benefits, costs and tradeoffs needed in opening up data, and also look to identify specific data sets through which to make immediate progress.

Footnotes

[1] IRN research report 'The Global Financial Data market' August 2010

[2] Geoffrey Boulton, Michael Rawlins, Patrick Vallance, Mark Walport, ‘Science as a public enterprise: the case for Open Data’ The Lancet, Volume 377, Issue 9778, Pages 1633 - 1635, 14 May 2011

[3] http://www.e-learningcentre.co.uk/Resource/CMS/Assets/5c10130e-6a9f-102c-a0be-003005bbceb4/Learning%20Light%20-%20The%20UK%20e-learning%20Market%202010%20-%20Summary%20v2.pdf

[4] https://www.edexcel.com/resultsplus/Documents/rp_guide.pdf

[5] http://www.nao.org.uk/publications/1012/defra_gis.aspx

[6] http://www.agi.org.uk/storage/AGI%20Foresight%20Study%20Summary%20Report%201.1.pdf

[7] Fornefeld, M., Oefinger, P., and Rausch, U., ‘The Market for Geospatial Information: Potentials for Employment, Innovation and Value Added’ (Bundesministerium für Wirtscaft und Arbeit, 2003)

[8] http://www.ametsoc.org/boardpges/cwce/ 

[9] Weiss, P. (2003) Conflicting International Public Sector Information Policies and their Effects on the Public In Esanu, J. M. & Uhlir, P. F. (Eds.), The Role of Scientific and Technical Data in the Public Domain: Proceedings of a Symposium, Washington, D.C.: National Academies Press, 29-132.

[10] http://www.jstage.jst.go.jp/article/dsj/3/0/135/_pdf

[11] http://www.aafp.org/online/en/home/publications/news/news-now/practice-management/20100315surescriptsreport.html