Seminario, Informatica GiuridicaUniversità Carlo Cattaneo - LIUC

Castellanza –12 Maggio 2010

Lorenzo Benussilorenzo.benussi@top-ix.org

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The Value of Public Sector Information

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Research & Business Development

Consorzio TOP-IX

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Fellow, Dipartimento di Economia

Università di Torino

Fellow, Centro NEXA

Politecnico di Torino

Chi sono

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• Background: Internet economics

• Government as a Platform

• The value of PSI

• Q&A

outline

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Internet economics

alcune caratteristiche economiche dei beni e delle reti digitali

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Digital technology could enable an extraordinary range of ordinary people to become part of a creative process. To move from the life of a consumer […] to a life where one can individually and collectively participate in making something new. (The future of ideas, Lawrence Lessig)

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The networked information economy makes individuals better able to do things for and by themselves, […] the emergence of this new set of technical, economic, social, and institutional relations can increase the relative role that each individual is able to play in authoring his or her own life. (The Wealth of Networks, Yochai Benkler)

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When I say that innovation is being democratized, I mean that users of products and services—both firms and individual consumers—are increas- ingly able to innovate for themselves.(DEMOCRATIZING INNOVATION, Eric Von Hippel)

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Digital goods are different…

Digital goods

Unique cost characteristics

Unique demand characteristics

A) Expensive to produce, cheap to reproduceB) High fixed costs, low marginal costs

A) Experience goodsB) Non exclusiveC) Overload

Fonte: Shapiro&Varian, 1999

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la “commedia” della scarsità

e dei rendimenti marginali crescenti

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Confrontando i dati di vendita dei libri e le ricerche on-line sulla piattaforma di commercio elettronico dell’editore californiano O’Reilly , si nota che esiste una grande quantità di titoli che potrebbero essere venduti ma sono assenti dalla distribuzione fisica.

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la lunga coda

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la lunga coda

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Social Media Revolution

Real-Time WEB

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Facebook = 400M users50% log-in every day

200M users interacting every day

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• The transition from a physically-based to a knowledge-based economy made information a primary wealth-creating asset.

• Digital access to information changes the structure of industries, promoting services-oriented business models based on disclosure and sharing of information and knowledge.

A paradigmatic shift:information economy

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la cattedrale il bazaar

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Government as a Platfrom

Nuovi modelli di valorizzazione delPatrimonio Informativo Pubblico

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My Administration is committed to creating an unprecedented level of openness in Government.  We will work together to

ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen

our democracy and promote efficiency and effectiveness in Government.

Transparency and Open Government Memorandum for the Heads of Executive Departments and Agencies (2009)

"People are tempted to keep it [data]. You hug your database, you don't want to let it go until you've made a beautiful website for it. Well I'd like to suggest that, yes, make a beautiful website, who am I to say don't make a beautiful website? Make a beautiful website, but first, give us the unadulterated data, we want the data, we want unadulterated data. We have to ask for raw data now."

Tim Berners-Lee, Creator of the WWW, advisor data.gov.uk

USA e UK

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USA - data.gov UK - data.gov.uk

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EUROPADirettiva 2003/98/CE del 17 novembre 2003

The evolution towards an information and knowledge society influences the life of every citizen in the Com-munity, inter alia, by enabling them to gain new ways of accessing and acquiring knowledge.

DIRECTIVE 2003/98/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 November 2003 on the re-use of public sector information

Europa, Italia e Piemonte

ITALIADecreto Legislativo 24 gennaio 2006 n. 36

PIEMONTE - Dimensione LocaleDelibera e Linee guida relative al riutilizzo del patrimonio informativo pubblico

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• The Public Sector holds and manages huge amounts of data and information. Fostering access to those repositories enables new business opportunities that can broaden market volumes in such sectors.

• PSI represents the raw material from which value added products and services can be designed.

PSI data mines

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COURTESY/RON WHEELER. The 8,000-foot deep Homestake Gold Mine in South Dakota is the site where scientists, including UC Berkeley researchers, plan to construct the world's deepest research center.

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• The US experience shows that PSI disclosure has strong implications in terms of e-government and transparency.

• EU countries have a “second mover” chance to massively implement such a disruptive paradigm shift.

GOV 2.0

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PSI can be used and reused in many ways (non rivalry in

consumption):1.Broad range of sectors

2.Different sets of actors3.PSI holders4.Private re-users

5.Regulatory bodies6.Citizens

The value of PSI (use)

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Several supply chain configurations.

1.Linear models (private re-users add value)

2.User generated contents3.Information sharing between public bodies

MEPSIR (2006) estimates the EU market value of PSI as

27 billion Euros.

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• The peculiar cost structure of digital data collecting, processing and delivering (high fixed costs, zero marginal cost) strongly influences the possible pricing strategies to be adopted by PSI holders.

• Pollock (2008): a price that equals marginal costs (i.e. PSI free of charge) is socially optimal provided that elasticity of demand and positive externalities overcome a given threshold.

✓ Empirics: those conditions are likely to be verified in most of the PSI domains.

The value of PSI:the “free data” approach

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Although a cost recovery regime may bound potential demand and distort competition, several critical issues could trigger its adoption.

✓ Lack of long-run commitment in subsidizing PSI collection.

✓Underestimation of downstream demand and network externalities.

✓ Short-term decision making.

✓Moral hazard (?).

The value of PSI:cost recovery approach

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Directive 2003/98/EC is aimed at fostering PSI reuse mainly by promoting:1.PSI availability in digital format

2.Transparency of reuse conditions and pricing3.Non discrimination

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Directive impact Main condition Example

Closed shop Minor. Public Sector bodies continue to control the supply chain.

Information is strongly liked with the functioning of public bodies.

Cadastral information

BattlefieldNon-negligible. New entrants step into

the downstream market.Information is important while not strategic

for PA.Meteorological

data

Playground

Strong. Public Sector enlarges its influence over the downstream stages.

Digitalization offers new opportunities for value extraction.

Legal information

Non-negligible. Public Sector has the only role of information holder.

Information reuse generates high demand volumes from citizens and firms

Traffic and transport

information

MEPSIR (2006) Which market configurations are likely to emerge?

The value of PSI: possible scenarios

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All pricing strategies encompass potential risks of inefficiency for PSI holders (due to lack of incentives in reducing costs

and/or improving quality).

The importance of the regulatory framework

The price of PSI:Externalities & Policy

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The Central Role of Externalities

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“The project of the next president is figuring out how you create bottom-up economic growth.”  ( Barack Obama, The New York Time, February 2 2008)

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GRAZIElorenzo.benussi@top-ix.org

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