Open Data: Enabling $5 Trillion Annually in Economic Value?

first_imgOpen Data has the potential to unlock between $3 trillion to $5 trillion annually in economic value, says a report by McKinsey. Specifically, the identify seven sectors of the global economy where the value could be attained.Michael Chui, principal at McKinsey, told CMSWire that that “open data has traditionally been motivated by societal goals such as improving transparency. But it is important to recognize that by opening data, you also create significant economic value.”While the McKinsey results are interesting, they seem a bit of a stretch. While certainly Open Data is one technology that can contribute in improving the areas that they suggest, Open Data alone will not be able to unlock the enormous projections that McKinsey forecasts. Parallel advances in Big Data, analytics, and computing all play an equally important role in helping to better utilize and achieve value from data.The McKinsey report found that “Making data more ‘liquid’ (open, widely available, and in shareable formats) has the potential to unlock large amounts of economic value, by improving the efficiency and effectiveness of existing processes; making possible new products,services, and markets; and creating value for individual consumers and citizens.”The seven sectors where McKinsey sees open data playing a major role in unlocking economic value include:Education – Open data can enable $890 billion to $1.2 trillion annual savings by identifying effective teaching strategies, improving instruction, and better matching students to programs and jobs.Transportation – Open data could realize $720 billion to $920 billion in value by helping to improve planning and management of infrastructure. Open Data can also improve the purchasing, deployment and maintenance of fleets, and it can improve decision making by customers to better select from travel options so as to fit their needs and schedule.Consumer Products – Open data can help achieve $520 billion to $1.5 trillion annually by improving product design and manufacturing, making store operations more efficient, better targeting sales and marketing, better informing consumers about food benefits and product recalls, and improving post-sales interactions.Electricity – Open data can help enable $340 billion to $580 billion annually by helping to optimize how money is spent and invested for power generation. It can improve and make more efficient power generation. It can help to identify and develop ‘smart grid’ technologies for achieving more efficient transmission and distribution of power, and it can help consumers be better informed about the electrical appliances and the electric power services that they use.Oil and Gas – Open data can enable $240 billion to $510 billion annually by providing better seismic and geologic information that can help oil and gas businesses better decide how to invest in future discovery. Better data can improve the efficacy of exploration and production, help businesses better select plant locations, and to improve the reliability of their refining, processing and retail operations.Health Care – Open data in the Health Care industry can help realize $300 billion to $450 billion annually. The data could help people make better lifestyle and treatment decisions. The data can guide practitioners into selecting more effective treatments. Consumers would be better able to wisely select providers that better match their needs, and also help them to be more cost-effective in the decisions that they do make. Health-related research, such as in the area of new drugs and better medical devices, could be make more productive.Consumer Finance – Open data could unlock $210 billion to $280 billion annually. Better targeted and custom-designed financial products could be developed with better data. Consumer marketing could be more targeted. With better data, consumers would be able to make better informed financial decisions.last_img read more