Business from open data for the benefit of city residents

The potential benefits of data produced by cities are huge. Data is produced on transport, finances, energy use, people’s habits – on almost anything. According to the principle of open data, information can be used for free and without registering even for commercial purposes. But how can business be made from open data without contradicting these principles?

Turku City Data Oy is one of the companies working on this issue. It is presumably the first company in the world to have been established by a city for the purposes of refining data. The company does not sell or share data but offers methods for modifying raw data into comprehensible packages

One of its partners is the University of Turku, whose task is to develop methods for data enrichment.

In practice, the application developer only needs to know what kind of data is required. Through interfaces, data accumulates from different sources to a platform where is can be utilised.

– The aim is to enable the owners of the data, which in practice means the cities, to enhance their operations, provide better services and improve decision-making, explains managing director Jussi Vira.

Large cities pave the way

There are many challenges to be overcome and, currently, not very much use is made of open data in Finland. Raw data is scattered and difficult to combine, and the data may not necessarily be easy to retrieve. There may not have been enough understanding to include open interfaces in the systems when they were procured.

Vira also encourages cities to pay attention to the risks amidst the enthusiasm for big data. An individual piece of data may not pose a risk to data security, but the situation may be different when several sources are combined.

– What is needed is collaboration and discussion between cities. We need shared standards and a view on what kind of data is useful and can be published.

Collaboration is already taking place, of which the 6Aika project launched by large cities is an example. The project’s main objective is to make new business possible. Applications and services can be expanded from one city to another with the help of open and uniform interfaces.

– The data published by one city is not very often interesting as such, at least not to commercial operators, but everything changes when cities begin to publish the same kind of data in an easily accessible form. And in the case of research projects, reference data will be easier to find.

Added value to residents

According to Vira, the utilisation of open data should be based on what the city needs as it costs to make data open. A dialogue between the producers and users of data helps to identify the sources in which the required data can be found.

For example, the City of Turku has more than 500 information systems. So far, the city has opened more than twenty datasets, of which about one half are available as an open programming interface.

– Generally speaking, one of the basic ideas in the utilisation of open data is that the cities do not themselves need to invent all of the digital services they provide to their residents. They can focus on their basic tasks and other operators, especially companies, can create services that provide added value. In an ideal situation, companies can create business that is profitable for them, Vira says.

For example in Turku, the potential in the utilisation of data would in theory be more than one hundred million euros even according to a cautious estimate. This includes the direct and indirect financial benefits. The estimate is based on an analysis model that was used by the consulting firm McKinsey to investigate digitalisation in dozens of cities across the world.