Wednesday, June 15, 2016

McKinsey: Monetizing Freely Available Data Worth $3.2-$5.4Trillion per Year

This is a repost from 2013 but important because much of what is calling itself innovation is just packaging with a price tag.
See also the next post, "Using Blockchain To Disrupt Uber".

Original post:
This is exactly what The Climate Corporation (née Weatherbill) did with U.S. National Weather Service data.

And then, because they couldn't sell the free historical weather data directly, they figured out that building the info into the opacity of various crop insurance products, where TheClimateCorp had the information asymmetry in their favor, was the way to build founder's net worth. Very smart*

From McKinsey & Co:

Open data: Unlocking innovation and performance with liquid information
October 2013 


Open data—machine-readable information, particularly government data, that’s made available to others—has generated a great deal of excitement around the world for its potential to empower citizens, change how government works, and improve the delivery of public services. It may also generate significant economic value, according to a new McKinsey report.1 Our research suggests that seven sectors alone could generate more than $3 trillion a year in additional value as a result of open data, which is already giving rise to hundreds of entrepreneurial businesses and helping established companies to segment markets, define new products and services, and improve the efficiency and effectiveness of operations.

Although the open-data phenomenon is in its early days, we see a clear potential to unlock significant economic value by applying advanced analytics to both open and proprietary knowledge. Open data can become an instrument for breaking down information gaps across industries, allowing companies to share benchmarks and spread best practices that raise productivity. Blended with proprietary data sets, it can propel innovation and help organizations replace traditional and intuitive decision-making approaches with data-driven ones. Open-data analytics can also help uncover consumer preferences, allowing companies to improve new products and to uncover anomalies and needless variations. That can lead to leaner, more reliable processes.

However, investments in technology and expertise are required to use the data effectively. And there is much work to be done by governments, companies, and consumers to craft policies that protect privacy and intellectual property, as well as establish standards to speed the flow of data that is not only open but also “liquid.” After all, consumers have serious privacy concerns, and companies are reluctant to share proprietary information—even when anonymity is assured—for fear of losing competitive advantage.


Open data can help unlock $3 trillion to $5 trillion in economic value annually across seven sectors.
Our research sought to quantify the potential value of open data by examining applications in seven fields of the global economy: education, transportation, consumer products, electricity, oil and gas, health care, and consumer finance (exhibit). For each of these, we identified ways that open data may create economic value, explored potential barriers to adoption, and considered which actions would be required for capturing value with open data. In fact, we found numerous ways it could drive growth and innovation across industries and sectors....MORE
HT:  vbouded

*Ha! Monsanto Buys Crop Insurer/Data Co. for $930 Mil. (MON)