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).”

Public interest models: a powerful tool for the advocacy agenda

Curated on Posted on by Stefaan Verhulst

at Open Oil: “Open financial models can clearly put analysis into a genuinely independent public space, and also trigger a rise in public understanding which could enrich the governance debate in many countries.

But there is a third function public models can serve: that of advocacy for targeted disclosure of information.

The stress here is on “targeted”. A lot of transparency debates are generic – the need to disclose data as a matter of principle.

It is striking that as the transparency agenda has advanced, and won many battles, so has a debate about whether it is contributing to an increase in accountability. As Paul Collier said: “transparency has to lead to accountability otherwise we’re just ticking loads of boxes”.

We need all these campaigns to continue, and we need to pursue maximum disclosure. Because while transparency does not guarantee accountability, it is its essential prerequisite. Necessary but not sufficient.

But here’s where modeling can help to provide some examples of how data can be used, in a very specific way, to advance accountability.

Let’s take the example of an oil project in Africa. A financial model has to deal with uncertainty and so provides three scenarios for future production and prices, which all have a radical impact on the revenues the government could expect to see. That’s unavoidable. Under the “God, Exxon and everyone else” principle, future price and to some extent production are hard to foresee.

But then there is a second layer of uncertainty caused specifically by the model having to use public domain data. The company, and the government if it exercised its rights of access to information, does not face this second layer because it has access to real data, whereas the public interest model must use estimates and extrapulations. These can be justified, written out and explained – they can be well-informed guesses, in other words, and in the blog on the analytical power of public models, we argue that you can still arrive at useful analysis and conclusions despite this handicap.

Nevertheless, they are guesses. And unlike the first layer of uncertainty, relating to future prices and the ever-changing global market, this second layer can be directly addressed by information the government already has to hand – or could get under its contractual right of access to information….(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)”

Turning Government Data into Better Public Service

Curated on Posted on by Stefaan Verhulst

OMB Blog: “Every day, millions of people use their laptops, phones, and tablets to check the status of their tax refund, get the latest forecast from the National Weather Service, book a campsite at one of our national parks, and much more. There were more than 1.3 billion visits to websites across the Federal Government in just the past 90 days.

Today, during Sunshine Week when we celebrate openness and transparency in government, we are pleased to release the Digital Analytics Dashboard, a new window into the way people access the government online. For the first time, you can see how many people are using a Federal Government website, which pages are most popular, and which devices, browsers, and operating systems people are using. We’ll use the data from the Digital Analytics Program to focus our digital service teams on the services that matter most to the American people, and analyze how much progress we are making. The Dashboard will help government agencies understand how people find, access, and use government services online to better serve the public – all while protecting privacy.  The program does not track individuals. It anonymizes the IP addresses of all visitors and then uses the resulting information in the aggregate….(More)

 

Index: Prizes and Challenges

Curated on Posted on by Shruti Sannon

The Living Library Index – inspired by the Harper’s Index – provides important statistics and highlights global trends in governance innovation. This installment focuses on prizes and challenges and was originally published in 2015.

This index highlights recent findings about two key techniques in shifting innovation from institutions to the general public:

  • Prize-Induced Contests – using monetary rewards to incentivize individuals and other entities to develop solutions to public problems; and
  • Grand Challenges – posing large, audacious goals to the public to spur collaborative, non-governmental efforts to solve them.

You can read more about Governing through Prizes and Challenges here. You can also watch Alph Bingham, co-founder of Innocentive, answer the GovLab’s questions about challenge authoring and defining the problem here.

Previous installments of the Index include Measuring Impact with Evidence, The Data Universe, Participation and Civic Engagement and Trust in Institutions. Please share any additional statistics and research findings on the intersection of technology in governance with us by emailing shruti at thegovlab.org.

Prize-Induced Contests

  • Year the British Government introduced the Longitude Prize, one of the first instances of prizes by government to spur innovation: 1714
  • President Obama calls on “all agencies to increase their use of prizes to address some of our Nation’s most pressing challenges” in his Strategy for American Innovation: September 2009
  • The US Office of Management and Budget issues “a policy framework to guide agencies in using prizes to mobilize American ingenuity and advance their respective core missions”:  March 2010
  • Launch of Challenge.gov, “a one-stop shop where entrepreneurs and citizen solvers can find public-sector prize competitions”: September 2010
    • Number of competitions currently live on Challenge.gov in February 2015: 22 of 399 total
    • How many competitions on Challenge.gov are for $1 million or above: 23
  • The America COMPETES Reauthorization Act is introduced, which grants “all Federal agencies authority to conduct prize competitions to spur innovation, solve tough problems, and advance their core missions”: 2010
  • Value of prizes authorized by COMPETES: prizes up to $50 million
  • Fact Sheet and Frequently Asked Questions memorandum issued by the Office of Science and Technology Policy and the Office of Management and Budget to aid agencies to take advantage of authorities in COMPETES: August 2011
  • Number of prize competitions run by the Federal government from 2010 to April 2012: 150
  • How many Federal agencies have run prize competitions by 2012: 40
  • Prior to 1991, the percentage of prize money that recognized prior achievements according to an analysis by McKinsey and Company: 97%
    • Since 1991, percentage of new prize money that “has been dedicated to inducement-style prizes that focus on achieving a specific, future goal”: 78%
  • Value of the prize sector as estimated by McKinsey in 2009: $1-2 billion
  • Growth rate of the total value of new prizes: 18% annually
  • Growth rate in charitable giving in the US: 2.5% annually
  • Value of the first Horizon Prize awarded in 2014 by the European Commission to German biopharmaceutical company CureVac GmbH “for progress towards a novel technology to bring life-saving vaccines to people across the planet in safe and affordable ways”: €2 million
  • Number of solvers registered on InnoCentive, a crowdsourcing company: 355,000+ from nearly 200 countries
    • Total Challenges Posted: 2,000+ External Challenges
    • Total Solution Submissions: 40,000+
    • Value of the awards: $5,000 to $1+ million
    • Success Rate for premium challenges: 85%

Grand Challenges

  • Value of the Progressive Insurance Automotive X Prize, sponsored in part by DOE to develop production-capable super fuel-efficient vehicles: $10 million
    • Number of teams around the world who took part in the challenge “to develop a new generation of technologies” for production-capable super fuel-efficient vehicles: 111 teams
  • Time it took for the Air Force Research Laboratory to receive a workable solution on “a problem that had vexed military security forces and civilian police for years” by opening the challenge to the world: 60 days
  • Value of the HHS Investing in Innovation initiative to spur innovation in Health IT, launched under the new COMPETES act: $5 million program
  • Number of responses received by NASA for its Asteroid Grand Challenge RFI which seeks to identify and address all asteroid threats to the human population: over 400
  • The decreased cost of sequencing a single human genome as a result of the Human Genome Project Grand Challenge: $7000 from $100 million
  • Amount the Human Genome Project Grand Challenge has contributed to the US economy for every $1 invested by the US federal government: $141 for every $1 invested
  • The amount of funding for research available for the “Brain Initiative,” a collaboration between the National Institute of Health, DARPA and the National Science Foundation, which seeks to uncover new prevention and treatment methods for brain disorders like Alzheimer’s, autism and schizophrenia: $100 million
  • Total amount offered in cash awards by the Department of Energy’s “SunShot Grand Challenge,” which seeks to eliminate the cost disparity between solar energy and coal by the end of the decade: $10 million

Sources

City Governments Are Using Yelp to Tell You Where Not to Eat

Curated on Posted on by Stefaan Verhulst

Michael Luca and Luther Lowe at HBR Blog: “…in recent years consumer-feedback platforms like TripAdvisor, Foursquare, and Chowhound have transformed the restaurant industry (as well as the hospitality industry), becoming important guides for consumers. Yelp has amassed about 67 million reviews in the last decade. So it’s logical to think that these platforms could transform hygiene awareness too — after all, people who contribute to review sites focus on some of the same things inspectors look for.

It turns out that one way user reviews can transform hygiene awareness is by helping health departments better utilize their resources. The deployment of inspectors is usually fairly random, which means time is often wasted on spot checks at clean, rule-abiding restaurants. Social media can help narrow the search for violators.
Within a given city or area, it’s possible to merge the entire history of Yelp reviews and ratings — some of which contain telltale words or phrases such as “dirty” and “made me sick” — with the history of hygiene violations and feed them into an algorithm that can predict the likelihood of finding problems at reviewed restaurants. Thus inspectors can be allocated more efficiently.
In San Francisco, for example, we broke restaurants into the top half and bottom half of hygiene scores. In a recent paper, one of us (Michael Luca, with coauthor Yejin Choi and her graduate students) showed that we could correctly classify more than 80% of restaurants into these two buckets using only Yelp text and ratings. In the next month, we plan to hold a contest on DrivenData to get even better algorithms to help cities out (we are jointly running the contest). Similar algorithms could be applied in any city and in other sorts of prediction tasks.
Another means for transforming hygiene awareness is through the sharing of health-department data with online review sites. The logic is simple: Diners should be informed about violations before they decide on a destination, rather than after.
Over the past two years, we have been working with cities to help them share inspection data with Yelp through an open-data standard that Yelp created in 2012 to encourage officials to put their information in places that are more useful to consumers. In San Francisco, Los Angeles, Raleigh, and Louisville, Kentucky, customers now see hygiene data alongside Yelp reviews. There’s evidence that users are starting to pay attention to this data — click-through rates are similar to those for other features on Yelp ….

And there’s no reason this type of data sharing should be limited to restaurant-inspection reports. Why not disclose data about dentists’ quality and regulatory compliance via Yelp? Why not use data from TripAdvisor to help spot bedbugs? Why not use Twitter to understand what citizens are concerned about, and what cities can do about it? Uses of social media data for policy, and widespread dissemination of official data through social media, have the potential to become important means of public accountability. (More)

Opening travel spending through civic intelligence, participation and co-creation

Curated on Posted on by Stefaan Verhulst
Joel Salas Suárez at the Open Government Partnership Blog: “When we were appointed by the Senate as Commissioners of the Access to Information Institute in Mexico (IFAI), we identified two high profile issues that had negatively affected the Institute’s image: the acquisition of its new building and the lack of transparency on international travel expenditure of the former Commissioners.

IFAI has to lead by example, so my fellow commissioners and I decided to tackle these two problems with transparency actions to send a clear message to the Mexican society and the international community in our first hundred days in office. First we created the website sede.ifai.mx to publish all the information about the new building procurement (a 45.6 million USD lease). Secondly, we decided to start our first civic innovation project, a joint venture with civil society organizations, to find the best way to publish information related to travel spending by IFAI’s public servants.
Travel expenditure of IFAI is comparatively smaller. During 2013 it allotted to 186,760 USD, 0.5% of the Institute’s budget (38.2 million USD). However, this expenditure has historically been of public interest and it should be. According to the 2013 Mexican Government Expenditure Review (the latest available) the Federal Level (Executive, Legislative and Judicial Powers, and Autonomous organs) spent close to 633 million USD in official travel (Chapter 3000, concept 3700). Therefore, we decided to tackle the problem and design a platform that would allow us to effectively publish information related to the public money spent on travel by public officials and the results obtained during these trips.
In order to do this, we worked with civil society experts in public participation, accountability and technology, Codeando México, SocialTIC and IMCO. Together we launched a public challenge to create an open source web application to publish information on official travel spending.
The challenge #RetoViajesTransparentes was a very successful experience. Close to a hundred participants registered 14 projects that competed to develop an app that IFAI would officially use and to win a 3,500 USD prize. The jury selected 3 finalists, who presented their projects on a public Google Hangout. The winner app is named Viajes Claros and is being used to publish travel expenditure information of IFAI at viajesclaros.ifai.mx.
This challenge has allowed us to shift focus from the inputs of official travel (i.e. the money spent) to the outputs or results attained in each trip. Viajes Claros opens relevant information to understand and evaluate the activities performed by the public servants during their trips. It also allowed us to co-create with society an open source tool that can be replicated in Mexico and other countries….(More)”.

Is Transparency a Recipe for Innovation?

Curated on Posted on by Stefaan Verhulst

Paper by Dr. Bastiaan Heemsbergen: “Innovation is a key driver in organizational sustainability, and yes, openness and transparency are a recipe for innovation. But, according to Tapscott and Williams, “when it comes to innovation, competitive advantage and organizational success, ‘openness’ is rarely the first word one would use to describe companies and other societal organizations like government agencies or medical institutions. For many, words like ‘insular,’ ‘bureaucratic,’ ‘hierarchical,’ ‘secretive’ and ‘closed’ come to mind instead.”1 And yet a few months ago, The Tesla Model S just became the world’s first open-source car. Elon Musk, CEO of Tesla Motor Vehicles, shared all the patents on Tesla’s electric car technology, allowing anyone — including competitors — to use them without fear of litigation. Elon wrote in his post “Yesterday, there was a wall of Tesla patents in the lobby of our Palo Alto headquarters. That is no longer the case. They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology.”2
In the public sector, terms such as open government, citizen sourcing, and wiki government are also akin to the notion of open innovation and transparency. As Hilgers and Ihl report, “a good example of this approach is the success of the Future Melbourne program, a Wiki and blog-based approach to shaping the future urban landscape of Australia’s second largest city. The program allowed citizens to directly edit and comment on the plans for the future development of the city. It attracted more than 30,000 individuals, who submitted hundreds of comments and suggestions (futuremelbourne.com.au). Basically, problems concerning design and creativity, future strategy and local culture, and even questions of management and service innovation can be broadcasted on such web-platforms.”3 The authors suggest that there are three dimensions to applying the concept of open innovation to the public sector: citizen ideation and innovation (tapping knowledge and creativity), collaborative administration (user generated new tasks and processes), and collaborative democracy (improve public participation in the policy process)….(More)”.

inBloom and the Failure of Innovation 1.0

Curated on Posted on by Stefaan Verhulst

Blog by Steven Hodas at The Center on Reinventing Public Education (CRPE): “Michael Horn’s recent piece on the failure of inBloom captures why it was the very opposite of a disruptive innovation from a markets perspective, as well the fatal blind spots and judgment errors present from its inception.
inBloom was a textbook example of what I call “Innovation 1.0”, which thinks of innovation as a noun, a thing with transformative transitive properties that magically make its recipient “innovative.” It’s the cargo–cult theory of innovation: I give you this innovative thing (a tablet, a data warehouse, an LMS) and you thereby become innovative yourself. This Innovation 1.0 approach to both product and policy has characterized a great deal of foundation and Federal efforts over the past ten years.
But as Michael points out (and as real innovators and entrepreneurs understand viscerally), “innovation” is not a noun but a verb. It is not a thing but a process, a frame of mind, a set of reflexes. He correctly notes the essential iterative approach that characterizes innovation–as–a–verb, its make–something–big–by–making–something–small theory of action (this is fundamentally different from piloting or focus–grouping, but that’s another topic).
But it’s important to go deeper and understand why iteration is important. Simply, it is a means to bake into the process, the product, or the policy a respect for users’ subjectivity and autonomy. In short, functional iteration requires that you listen.
True, durable innovation, “Innovation 2.0” is not some thing I can give to you, do to you, or even do for you: it must be a process I do with you. Lean Startup theory—with its emphasis on iteration, an assumption of the innovator’s fallibility and limited perspective, and the importance of low–cost, low–stakes discovery of product–market fit that Michael describes—is essentially a cookbook for baking empathy into the development of products, services, or policies…..
That doesn’t mean inBloom was a bad idea. But the failure to anticipate its vehement visceral rejection—however misinformed and however cynically exploited by those with larger agendas—was a profound failure of imagination, of empathy, of the respect for user subjectivity that characterizes Innovation 2.0….(More).”

New Implementation Guide for Local Government Innovation

Curated on Posted on by Stefaan Verhulst

Living Cities Blog and Press Release: “Living Cities, with support from the Citi Foundation, today released a toolkit to help local governments adopt cutting-edge approaches to innovation as part of the City Accelerator program. The implementation guide offers practical guidance to local government officials on how to build a durable culture and practice of innovation that draws from leading practices with promising results from cities around the United States, as well as from the private sector. The guide was developed as part of the City Accelerator, a $3 million program of Living Cities with the Citi Foundation to speed the spread of innovation with the potential to benefit low-income people in local governments. The implementation guide – authored by Nigel Jacob, co-founder of the Mayor’s Office of New Urban Mechanics in Boston and Urban Technologist-in-Residence at Living Cities – addresses some of the key barriers that local governments face when looking to incorporate innovation in their cities, and introduces fresh ideas as well…(More)”