Open Data as Business Model for the Public Sector

1. Open Data
as business model for the public sector
Insights from “POPSIS”
Pricing of PSI Study
Lionel Kapff
lkapff@deloitte.com
ePSIplatform conference 2012
Rotterdam, 16th March 2012

2. Study approach and
methodology
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3. Upstream and downstream effects of PSI charging models
Which PSI charging model works best?
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4. Case studies overview: 21 Public Sector Bodies covered
POPSIS objective A: POPSIS objective B:
Changed charging policy Cost-recovery policy
Business registers IT: Infocamere
NL: KvK
UK: Companies House
Geographic AT: BEV DE: SenStadt
information DK: DECA DE: BKG
ES: IGN-CNIG IT: Italian Cadastre
ES: Spanish Cadastre NL: Dutch Cadastre
FR: French Cadastre
UK: Ordnance Survey
Meteorological NL: KNMI DE: DWD
information NO: Met.no
SI: ARSO
Other PSI domains DE: DeStatis (statistics) FR: SIRCOM (fuel prices)
FR: DILA (legal) ES: CENDOJ (legal)
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5. Main findings from
case study analysis
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6. Main findings from the case studies
• The case studies show a clear trend towards lowering charges and/or facilitating re-
use (16 out of the 21 cases).
o Some PSBs only charge for commercial re-use and allow non-commercial re-use
either against reduced fees (7 out of 21 cases) or for free (9 out of 21 cases).
o In almost all cases, PSBs allow free access to their PSI (viewing without copying). In
some cases, free access has been the forerunner of a more flexible re-use regime.
• In those case studies where cost-recovery regimes are applied, the calculation basis
for determining PSI re-use charges appears to be weak.
o In discussions with interviewees, the PSBs' concerned were mostly unable to
explain the basis for their PSI cost allocation.
o In some cases, the setting of charges seems to be oriented towards filling budgetary
gaps rather than being geared to the cost-oriented tariff-setting required under the
PSI Directive 2003/98/EC.
• In all the case studies, the PSI re-use revenues of PSBs range from relatively small
to extremely small when compared to the total budget of the PSB concerned.
o 10 out of 21 cases have cost recovery ratios of below 1%.
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7. Upstream effects
of lowered charges
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8. Upstream effects of lowered charges
• All case studies where PSBs have lowered their prices demonstrate that demand
volumes expand strongly (there have been increases of up to 7,000%).
o In some cases, PSI sales revenues can remain stable or even increase after
drastic price cuts due to the growing demand.
o Of course, once charges are zero, revenues are also zero.
• Costs appear to increase very little: in fact, they may eventually decrease if the
volumes of re-use grow significantly. Once re-use facilitation processes are properly
organized, they become sub-routines within the PSB. To a large extent, they become
embedded in the PSB's public task-funded activities at no extra cost.
• Zero cost pricing has the additional advantage that transaction costs decrease
significantly. This decrease applies not only to administrative costs, such as invoicing,
but also to costs related to the monitoring of compliance with license arrangements.
• Several PSBs have reported that intensified ties with re-users may lead to improved
data quality and process efficiency since any deficiencies in the data are promptly
flagged up and reported back to the PSB.
o When the interest in data quality is shared, quality control is partly outsourced.
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9. Obstacles to change
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10. Obstacles to change
• A large majority of PSBs interviewed do not seem to have fundamental objections to
lowering charges. Yet, PSBs that rely on sales revenues from PSI and their own
value-added products appear to be stuck in a situation of deadlock:
o Although they are sympathetic to lowering charges and allowing more data re-use,
their dependency on sales revenues compels them to protect their current revenue
streams when there is no other sustainable alternative income stream available.
o Such an alternative income stream can often only be provided by the Treasury,
since the benefits from lowered charges are often concentrated in the form of
increased tax gains.
o Thus, the power to enable change does not necessarily lie with the Ministry
willing to support the move, let alone with the PSB concerned.
• Further barriers to change relate to statutory provisions imposing cost-recovery
schemes, the legacy of old re-use regimes, and the sheer difficulty of changing
existing practices.
• In addition, in several cases, incumbent re-users with considerable interests in the
preservation of the status quo are trying to prevent PSBs from lowering charges in order
to keep barriers to entry high.
o Some re-users are reported as lobbying actively and sometimes even litigating to
prevent PSBs from adopting lower charges.
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11. Conclusions
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12. Conclusions
HYPOTHESES:
“There is no need for financial stimulation of Open
Data policies within PSBs, because it is very easy
to create a positive business case for Open Data.”
The case study analysis suggests that:
• Many PSBs are implementing PSI re-use friendly policies, but shifts to zero-cost
policies are relatively rare, notably where valuable datasets are in the “possession of
the PSB” (business/meteo/geo).
• The shift to genuine Open Data generally requires some kind of stimulus / support:
Financial stimulation may be needed where PSBs strongly rely on PSI sales revenues
and own commercial re-use activities.
• Finance transition process + compensation for drop in income
Policy support is needed to overcome obstacles to change.
• Convince politicians and PSBs of the benefits of Open Data.
• Overcome the lobby of incumbent re-users.
• Help PSBs to develop and justify the business case for Open Data.
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