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Open Public Data as an Economic Stimuli

Open Public Data as an Economic Stimuli

CHAE Seung-Byung, PARK Sung-Min

Nov. 4, 2013

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The June G8 summit in Northern Ireland produced the Open Data Charter, which identified major achievements from open access to public sector information and committed the signatories to cooperation in advancing the principles of open data. In Korea, open data has become an important part of the "Government 3.0" vision to enable equitable and transparent information-sharing between the central government, local governments, government agencies and the public. The National Assembly passed the Act on the Provision and Facilitation of the Use of Public Data, which was scheduled to take effect in October (2013).

What is motivating countries to open their data?

A general trend toward more openness, sharing and cooperation has prevailed in private and public sectors over the past decade. It has paralleled globalization of the economy, heightened political participation via the Internet, increased awareness of social disparities, and continuous threats to basic security. Easily accessible public data provides more ways to address issues arising from these sweeping change and trends.

In the wake of the global fiscal crisis, governments around the world are trying to find new policy measures that can significantly boost their economy without putting undue burdens on their budget. Public data, in this sense, is an attractive resource, and functions as something like a modern-day New Deal that can respond to the stagnation caused by the Great Recession.

Governments possess massive quantities of digital data from the last two decades. Meanwhile, the demand for big data management and new Internet services for smart devices is unwavering. Close public-private partnerships can enable companies and individuals to more easily create added value by utilizing the data.

Such value is likely to be significant. The EU estimates its public data market would be 0.3% (US$50 billion) of its combined gross domestic product (GDP), valued at US$180 billion if it aggressively pursues an open data policy. According to an estimate conducted in Japan based on the EU's example, Japan can expect its public data market to account for 0.2% (US$12 billion) of its GDP, for a value of US$50 billion.

However, such estimates do not readily apply to Korea, which has a very weak market for public data and entrenched reluctance among consumers to pay for information and services. In 2012, the nominal GDP of the EU, Japan and Korea was US$16.6 trillion, US$6 trillion and US$1.2 trillion, respectively, a ratio of 14:5:1. In 2013, the size of the public data market was US$52 billion, US$12.2 billion and US$920 million, a ratio of 60:14:1, respectively. This indicates Korea's public data market is small in relation to the size of its economy.

This paper will examine business models for public data use as well as issues unique to Korea and ways to resolve them. Since open data policy requires public-private partnerships, this paper will also cover mid-to long-term issues for the public and private sectors.

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