New surveys reveal dynamism, challenges of open data-driven businesses in developing countries

Curated on Posted on by Stefaan Verhulst

Alla Morrison at World Bank Open Data blog: “Was there a class of entrepreneurs emerging to take advantage of the economic possibilities offered by open data, were investors keen to back such companies, were governments tuned to and responsive to the demands of such companies, and what were some of the key financing challenges and opportunities in emerging markets? As we began our work on the concept of an Open Fund, we partnered with Ennovent (India), MDIF (East Asia and Latin America) and Digital Data Divide (Africa) to conduct short market surveys to answer these questions, with a focus on trying to understand whether a financing gap truly existed in these markets. The studies were fairly quick (4-6 weeks) and reached only a small number of companies (193 in India, 70 in Latin America, 63 in South East Asia, and 41 in Africa – and not everybody responded) but the findings were fairly consistent.

  • Open data is still a very nascent concept in emerging markets. and there’s only a small class of entrepreneurs/investors that is aware of the economic possibilities; there’s a lot of work to do in the ‘enabling environment’
    • In many regions the distinction between open data, big data, and private sector generated/scraped/collected data was blurry at best among entrepreneurs and investors (some of our findings consequently are better indicators of  data-driven rather than open data-driven businesses)
  • There’s a small but growing number of open data-driven companies in all the markets we surveyed and these companies target a wide range of consumers/users and are active in multiple sectors
    • A large percentage of identified companies operate in sectors with high social impact – health and wellness, environment, agriculture, transport. For instance, in India, after excluding business analytics companies, a third of data companies seeking financing are in healthcare and a fifth in food and agriculture, and some of them have the low-income population or the rural segment of India as an intended beneficiary segment. In Latin America, the number of companies in business services, research and analytics was closely followed by health, environment and agriculture. In Southeast Asia, business, consumer services, and transport came out in the lead.
    • We found the highest number of companies in Latin America and Asia with the following countries leading the way – Mexico, Chile, and Brazil, with Colombia and Argentina closely behind in Latin America; and India, Indonesia, Philippines, and Malaysia in Asia
  • An actionable pipeline of data-driven companies exists in Latin America and in Asia
    • We heard demand for different kinds of financing (equity, debt, working capital) but the majority of the need was for equity and quasi-equity in amounts ranging from $100,000 to $5 million USD, with averages of between $2 and $3 million USD depending on the region.
  • There’s a significant financing gap in all the markets
    • The investment sizes required, while they range up to several million dollars, are generally small. Analysis of more than 300 data companies in Latin America and Asia indicates a total estimated need for financing of more than $400 million
  • Venture capitals generally don’t recognize data as a separate sector and club data-driven companies with their standard information communication technology (ICT) investments
    • Interviews with founders suggest that moving beyond seed stage is particularly difficult for data-driven startups. While many companies are able to cobble together an initial seed round augmented by bootstrapping to get their idea off the ground, they face a great deal of difficulty when trying to raise a second, larger seed round or Series A investment.
    • From the perspective of startups, investors favor banal e-commerce (e.g., according toTech in Asia, out of the $645 million in technology investments made public across the region in 2013, 92% were related to fashion and online retail) or consumer service startups and ignore open data-focused startups even if they have a strong business model and solid key performance indicators. The space is ripe for a long-term investor with a generous risk appetite and multiple bottom line goals.
  • Poor data quality was the number one issue these companies reported.
    • Companies reported significant waste and inefficiency in accessing/scraping/cleaning data.

The analysis below borrows heavily from the work done by the partners. We should of course mention that the findings are provisional and should not be considered authoritative (please see the section on methodology for more details)….(More).”

Rebooting Democracy

Curated on Posted on by Stefaan Verhulst

 John Boik, Lorenzo Fioramonti, and Gary Milante at Foreign Policy: “….The next generation of political and economic systems may look very different from the ones we know today.

Some changes along these lines are already happening. Civil society groups, cities, organizations, and government agencies have begun to experiment with a host of innovations that promote decentralization, redundancy, inclusion, and diversity. These include participatory budgeting, where residents of a city democratically choose how public monies are spent. They also include local currency systems, open-source development, open-design, open-data and open-government, public banking, “buy local” campaigns, crowdfunding, and socially responsible business models.

Such innovations are a type of churning on the edges of current systems. But in complex systems, changes at the periphery can cascade to changes at the core. Further, the speed of change is increasing. Consider the telephone, first introduced by Bell in 1876. It took about 75 years to reach adoption by 50 percent of the market. A century later the Internet did the same in about 35 years. We can expect that the next major innovations will be adopted even faster.

Following the examples of the telephone and Internet, it appears likely that the technology of new economic and political decision-making systems will first be adopted by small groups, then spread virally. Indeed, small groups, such as neighborhoods and cities, are among today’s leaders in innovation. The influence of larger bodies, such as big corporations and non-governmental organizations, is also growing steadily as nation states increasingly share their powers, willingly or not.

Changes are evident even within large corporations. Open-source software development has become the norm, for example, and companies as large as Toyota have announced plans to freely share their intellectual property.

While these innovations represent potentially important parts of new political and economic systems, they are only the tip of the iceberg. Systems engineering design could eventually integrate these and other innovations into efficient, user-friendly, scalable, and resilient whole systems. But the need for this kind of innovation is not yet universally acknowledged. In its list of 14 grand challenges for the 21st century, the U.S. National Academy of Engineering addresses many of the problems caused by poor decision making, such as climate change, but not the decision-making systems themselves. The work has only just begun.

…

The development of new options will dramatically alter how democracy is used, adjusted, and exported. Attention will shift toward groups, perhaps at the city/regional level, who wish to apply the flexible tools freely available on the Internet. Future practitioners of democracy will invest more time and resources to understand what communities want and need — helping them adapt designs to make them fit for their purpose — and to build networked systems that beneficially connect diverse groups into larger political and economic structures. In time, when the updates to next-generation political and economic near completion, we might find ourselves more fully embracing the notion “engage local, think global.”…(More)

Using Innovation and Technology to Improve City Services

Curated on Posted on by Stefaan Verhulst

New report from the IBM Center for the Business of Government: “In this report, Professor Greenberg examines a dozen cities across the United States that have award-winning reputations for using innovation and technology to improve the services they provide to their residents. She explores a variety of success factors associated with effective service delivery at the local level, including:

  • The policies, platforms, and applications that cities use for different purposes, such as public engagement, streamlining the issuance of permits, and emergency response
  • How cities can successfully partner with third parties, such as nonprofits, foundations, universities, and private businesses to improve service delivery using technology
  • The types of business cases that can be presented to mayors and city councils to support various changes proposed by innovators in city government

Professor Greenberg identifies a series of trends that drive cities to undertake innovations, such as the increased use of mobile devices by residents. Based on cities’ responses to these trends, she offers a set of findings and specific actions that city officials can act upon to create innovation agendas for their communities. Her report also presents case studies for each of the dozen cities in her review. These cases provide a real-world context, which will allow interested leaders in other cities to see how their own communities might approach similar innovation initiatives.

This report builds on two other IBM Center reports: A Guide for Making Innovation Offices Work, by Rachel Burstein and Alissa Black, and The Persistence of Innovation in Government: A Guide for Public Servants, by Sandford Borins, which examines the use of awards to stimulate innovation in government….(More)”

Mission Control: A History of the Urban Dashboard

Curated on Posted on by Stefaan Verhulst

Shannon Mattern at Places: “We know what rocket science looks like in the movies: a windowless bunker filled with blinking consoles, swivel chairs, and shirt-sleeved men in headsets nonchalantly relaying updates from “Houston” to outer space. Lately, that vision of Mission Control has taken over City Hall. NASA meets Copacabana, proclaimed the New York Times, hailing Rio de Janeiro’s Operations Center as a “potentially lucrative experiment that could shape the future of cities around the world.” The Times photographed an IBM executive in front of a seemingly endless wall of screens integrating data from 30 city agencies, including transit video, rainfall patterns, crime statistics, car accidents, power failures, and more. 1

Futuristic control rooms have proliferated in dozens of global cities. Baltimore has its CitiStat Room, where department heads stand at a podium before a wall of screens and account for their units’ performance.  The Mayor’s office in London’s City Hall features a 4×3 array of iPads mounted in a wooden panel, which seems an almost parodic, Terry Gilliam-esque take on the Brazilian Ops Center. Meanwhile, British Prime Minister David Cameron commissioned an iPad app – the “No. 10 Dashboard” (a reference to his residence at 10 Downing Street) – which gives him access to financial, housing, employment, and public opinion data. As The Guardian reported, “the prime minister said that he could run government remotely from his smartphone.”

This is the age of Dashboard Governance, heralded by gurus like Stephen Few, founder of the “visual business intelligence” and “sensemaking” consultancy Perceptual Edge, who defines the dashboard as a “visual display of the most important information needed to achieve one or more objectives; consolidated and arranged on a single screen so the information can be monitored at a glance.” A well-designed dashboard, he says — one that makes proper use of bullet graphs, sparklines, and other visualization techniques informed by the “brain science” of aesthetics and cognition — can afford its users not only a perceptual edge, but a performance edge, too. The ideal display offers a big-picture view of what is happening in real time, along with information on historical trends, so that users can divine the how and why and redirect future action. As David Nettleton emphasizes, the dashboard’s utility extends beyond monitoring “the current situation”; it also “allows a manager to … make provisions, and take appropriate actions.”….

The dashboard market now extends far beyond the corporate world. In 1994, New York City police commissioner William Bratton adapted former officer Jack Maple’s analog crime maps to create the CompStat model of aggregating and mapping crime statistics. Around the same time, the administrators of Charlotte, North Carolina, borrowed a business idea — Robert Kaplan’s and David Norton’s “total quality management” strategy known as the “Balanced Scorecard” — and began tracking performance in five “focus areas” defined by the City Council: housing and neighborhood development, community safety, transportation, economic development, and the environment. Atlanta followed Charlotte’s example in creating its own city dashboard.

In 1999, Baltimore mayor Martin O’Malley, confronting a crippling crime rate and high taxes, designed CitiStat, “an internal process of using metrics to create accountability within his government.” (This rhetoric of data-tested internal “accountability” is prevalent in early dashboard development efforts.) The project turned to face the public in 2003, when Baltimore launched a website of city operational statistics, which inspired DCStat (2005), Maryland’s StateStat (2007), and NYCStat (2008). Since then, myriad other states and metro areas — driven by a “new managerialist” approach to urban governance, committed to “benchmarking” their performance against other regions, and obligated to demonstrate compliance with sustainability agendas — have developed their own dashboards.

The Open Michigan Mi Dashboard is typical of these efforts. The state website presents data on education, health and wellness, infrastructure, “talent” (employment, innovation), public safety, energy and environment, financial health, and seniors. You (or “Mi”) can monitor the state’s performance through a side-by-side comparison of “prior” and “current” data, punctuated with a thumbs-up or thumbs-down icon indicating the state’s “progress” on each metric. Another click reveals a graph of annual trends and a citation for the data source, but little detail about how the data are actually derived. How the public is supposed to use this information is an open question….(More)”

Design in policy making

Curated on Posted on by Stefaan Verhulst

at the Open Policy Making Blog: “….In recent years, notable policy and business experts have been discussing the value of design and ‘design thinking’ as an approach to improving the way Government delivers services in one form or another for (and with) citizens.  Examples include Roger Martin from Rotman Business School, Christian Bason formerly of Mindlab, Marco Steinberg of Sitra, Hilary Cottam of Participle, and many more who have been promoting the use of design as a tool for service transformation.

So what is design and how is it being applied in government?  This is the question that has been posed this week at the Service Design in Government conference in London.  This week is also the launch of some of the Policy Lab tools in the Policy Toolkit.

The Policy Lab have produced a short introduction to design, service design and design thinking.  It serves to explain how we are defining and using the term design in various ways in a policy context as well as provide practical tools and examples of design being used in policy making.

We tend to spot design when it goes wrong: badly laid out forms, websites we can’t navigate, confusing signage, transport links that don’t join together, queues for services that are in demand. Bad design is a time thief.  We can also spot good design when we see it, but how is it achieved?…(More)”

The Missing Information That Municipal-Bond Investors Need

Curated on Posted on by Stefaan Verhulst

Marc Joffe at Governing: “…There are many reasons why the municipal market lacks sophistication in this area, but a big part of the problem has been a lack of free (or even low-cost) financial-statement data. In this regard, some strides are being made. First, the 2009 launch by the Municipal Securities Rulemaking Board (MSRB) of its Electronic Municipal Market Access (EMMA) system gave investors a one-stop shop for municipal financial disclosure. But as the Securities and Exchange Commission (SEC) observed recently, a large number of municipal-bond issuers have been posting their statements late or not at all. The commission’s Municipal Continuing Disclosure Cooperation Initiative has greatly increased the number of statements on EMMA. Finally, late this year the Census Bureau is expected to begin posting federal single-audit submissions online. These packages include the same basic financial statements typically found in municipal market disclosure.

But the simple publication of thousands of voluminous PDFs does not provide the degree of transparency needed to raise the level of municipal-bond-market financial literacy. The vast majority of investors and analysts lack the patience and/or technical skills needed to extract the valuable needles of insight from this haystack of disclosure.

Investors in corporate securities do not face these difficulties. For the last 20 years, company financial reports have been available in textual form on the SEC’s Electronic Data Gathering, Analysis and Retrieval system. As a result, corporate financial-statement data is freely available in convenient forms around the Internet: Yahoo Finance, MarketWatch, Morningstar and your broker’s website are just a few of the places you can find this data.

So while corporate investors can readily compare the financial statistics of a safe company like Apple to an insolvent one like Radio Shack, municipal investors cannot easily perform the same exercise for Dallas and Detroit.

It wasn’t always this way. Between 1909 and 1931, the Census Bureau published an annual volume entitled “Financial Statistics of Cities Having a Population of Over 30,000.” The final edition — available at the St. Louis Federal Reserve’s website — covered 311 American cities and included hundreds of revenue, expenditure, asset and liability data points for each municipality. Unfortunately, ever since 1931, Census financial data on local governments has become less comprehensive, less timely and less comprehensible to the lay user.

In the years after 1931, we lost the understanding that comparative local-government financial statistics were a public good. While we might look to the federal government to once again offer this this information in today’s era of heightened need, it may be challenged to take on this role in an era of sequesters.

But while we may need the private sector to provide this public good, the federal government can greatly reduce the cost of compiling a local-government financial-statement database. The SEC has required companies to file financial statements in text form — rather than via PDF — since the mid-1990s. In 2008, the SEC further standardized company financial reporting by requiring firms to file their statements in the form of eXtensible Business Reporting Language (XBRL), which imposes a consistent format on all filings. To date, neither the SEC nor the MSRB has pursued a similar course with respect to municipal financial disclosure.

Next week, the Data Transparency Coalition, a group that advocates for the use of XBRL, will hold a Financial Regulation Summit featuring numerous congressional representatives and regulators. Perhaps the extension of XBRL to the municipal-bond market can find its way onto the agenda….(More)

Gamification harnesses the power of games to motivate

Curated on Posted on by Stefaan Verhulst

Kevin Werbach at the Conversation: “Walk through any public area and you’ll see people glued to their phones, playing mobile games like Game of War and Candy Crush Saga. They aren’t alone. 59% of Americans play video games, and contrary to stereotypes, 48% of gamers are women. The US$100 billion video game industry is among the least-appreciated business phenomena in the world today.

But this isn’t an article about video games. It’s about where innovative organizations are applying the techniques that make those games so powerfully engaging: everywhere else.

Gamification is the perhaps-unfortunate name for the growing practice of applying structural elements, design patterns, and psychological insights from game design to business, education, health, marketing, crowdsourcing and other fields. Over the past four years, gamification has gone through a cycle of (over-)hype and (overblown) disappointment common for technological trends. Yet if you look carefully, you’ll see it everywhere.

Tapping into pieces of games

Gamification involves two primary mechanisms. The first is to take design structures from games, such as levels, achievements, points, and leaderboards — in my book, For the Win, my co-author and I label them “game elements” — and incorporate them into activities. The second, more subtle but ultimately more effective, is to mine the rich vein of design techniques that game designers have developed over many years. Good games pull you in and carry you through a journey that remains engaging, using an evolving balance of challenges and a stream of well crafted, actionable feedback.

Many enterprises now use tools built on top of Salesforce.com’s customer relationship management platform to motivate employees through competitions, points and leaderboards. Online learning platforms such as Khan Academy commonly challenge students to “level up” by sprinkling game elements throughout the process. Even games are now gamified: Microsoft’s Xbox One and Sony’s PS4 consoles offer a meta-layer of achievements and trophies to promote greater game-play.

The differences between a gamified system that incorporates good design principles and one that doesn’t aren’t always obvious on the surface. They show up in the results.

Duolingo is an online language-learning app. It’s pervasively and thoughtfully gamified: points, levels, achievements, bonuses for “streaks,” visual progression indicators, even a virtual currency with various ways to spend it. The well integrated gamification is a major differentiator for Duolingo, which happens to be the most successful tool of its kind. With over 60 million registered users, it teaches languages to more people than the entire US public school system.

Most of the initial high-profile cases of gamification were for marketing: for example, USA Network ramped up its engagement numbers with web-based gamified challenges for fans of its shows, and Samsung gave points and badges for learning about its products.

Soon it became clear that other applications were equally promising. Today, organizations are using gamification to enhance employee performance, promote health and wellness activities, improve retention in online learning, help kids with cancer endure their treatment regimen, and teach people how to code, to name just a few examples. Gamification has potential anywhere that motivation is an important element of success.

Gamification works because our responses to games are deeply hard-wired into our psychology. Game design techniques can activate our innate desires to recognize patterns, solve puzzles, master challenges, collaborate with others, and be in the drivers’ seat when experiencing the world around us. They can also create a safe space for experimentation and learning. After all, why not try something new when you know that even if you fail, you’ll get another life?…(More)

Why Entrepreneurs Should Go Work for Government

Curated on Posted on by Stefaan Verhulst

Michael Blanding interviewing Mitchell B. Weiss for HBS Working Knowledge:  “…In the past five years, cities around the world have increasingly become laboratories in innovation, producing idea labs that partner with outside businesses and nonprofits to solve thorny public policy problems—and along the way deal with challenges of knowing when to follow the established ways of government and when to break the mold. States and federal government, too, have been reaching out to designers, engineers, and entrepreneurs to help redo their operations. The new US Digital Service, for example, follows other federal efforts like 18F and the Presidential Innovation Fellows to streamline government websites and electronic records—adapting from models in the UK and elsewhere.

“We have many talented people in government, but by and large they have tended to be analysts and strategists, rather than inventors and builders,” says Weiss, who hopes his course can help change that. “One reason we didn’t have them is we weren’t training them. At policy schools we had not been training people to be all that entrepreneurial, and at business schools, we were not prepping or prodding entrepreneurial people to enter the public sector or even just to invent for the public realm.”

“Government should be naturals at crowdsourcing”

Government entrepreneurship takes many forms. There are “public-public entrepreneurs” who work within government agencies, as well as “private-public entrepreneurs” who establish private businesses that sell to government agencies or sometimes to citizens directly.

In Philadelphia, for example, Textizen enables citizens to communicate with city health and human services agencies by text messages, leading to new enforcement on air pollution controls. In California, OpenCounter streamlined registration for small businesses and provided zoning clearances in a fraction of the usual time. In New York, Mark43 is developing software to analyze crime statistics and organize law enforcement records. And in Boston, Bridj developed an on-demand bus service for routes underserved by public transportation.

The innovations are happening at a scale large enough to even attract venture capital investment, despite past VC skepticism about funding public projects.

“There was this paradox—on the one hand, government is the biggest customer in the world; on the other hand, 90 out of 100 VCs would say they don’t back business models that sell to government,” says Weiss. “Though that’s starting to change as startups and government are starting to change.” OpenGov received a $15 million round of funding last spring led by Andreessen Horowitz, and $17 million was pumped into civic social-networking app MindMixer last fall….

Governments could attract even more capital by examining their procurement rules to speed buying, says Weiss, giving them that same sense of urgency and lean startup practices needed to be successful in entrepreneurial projects…(More)”

Citizens Connect

Curated on Posted on by Stefaan Verhulst

Harvard Business School Case Study by Mitchell Weiss: “Funding to scale Citizens Connect, Boston’s 311 app, is both a blessing and a burden and tests two public entrepreneurs. In 2012, the Commonwealth of Massachusetts provides Boston’s Mayor’s Office of New Urban Mechanics with a grant to scale Citizens Connect across the state. The money gives two co-creators of Citizens Connect, Chris Osgood and Nigel Jacob, a chance to grow their vision for citizen-engaged governance and civic innovation, but it also requires that the two City of Boston leaders sit on a formal selection committee that pits their original partner, Connected Bits, against another player that might meet the specific requirements for delivering a statewide version. The selection and scaling process raise questions beyond just which partner to choose. What would happen to the Citizens Connect brand as Osgood and Jacob’s product spreads across the state? Who could help scale their work best then nationally? Which business models were best positioned to drive that growth? What intellectual property arrangements would best enable it? And what role should the two city employees have, anyway, in scaling Citizens Connect outside of Boston in the first place? These questions hung in the air as they pondered the one big one about passing over Connected Bits for another partner: should they?…(More)”

Wittgenstein, #TheDress and Google’s search for a bigger truth

Curated on Posted on by Stefaan Verhulst

Robert Shrimsley at the Financial Times: “As the world burnt with a BuzzFeed-prompted debate over whether a dress was black and blue or white and gold, the BBC published a short article posing the question everyone was surely asking: “What would Wittgenstein say about that dress?”

Wittgenstein died in 1951, so we cannot know if the philosopher of language, truth and context would have been a devotee of BuzzFeed. (I guess it depends on whether we are talking of the early or the late Ludwig. The early Wittgenstein, it is well known, was something of an enthusiast for LOLs, whereas the later was more into WTFs and OMGs.)

The dress will now join the pantheon of web phenomena such as “Diet Coke and Mentos” and “Charlie bit my finger”. But this trivial debate on perceived truth captured in miniature a wider issue for the web: how to distil fact from noise when opinion drowns out information and value is determined by popularity.

At about the same time as the dress was turning the air blue — or was it white? — the New Scientist published a report on how one web giant might tackle this problem, a development in which Wittgenstein might have been very interested. The magazine reported on a Google research paper about how the company might reorder its search rankings to promote sites that could be trusted to tell the truth. (Google produces many such papers a year so this is a long way short of official policy.) It posits a formula for finding and promoting sites with a record of reliability.

This raises an interesting question over how troubled we should be by the notion that a private company with its own commercial interests and a huge concentration of power could be the arbiter of truth. There is no current reason to see sinister motives in Google’s search for a better web: it is both honourable and good business. But one might ask how, for example, Google Truth might determine established truths on net neutrality….

The paper suggests using fidelity to proved facts as a proxy for trust. This is easiest with single facts, such as a date or place of birth. For example, it suggests claiming Barack Obama was born in Kenya would push a site down the rankings. This would be good for politics but facts are not always neutral. Google would risk being depicted as part of “the mainstream media”. Fox Search here we come….(More)”