Open Data and Companies’ Competitiveness

    In general, big data and open data have been quite attractive, with large amount of published discussion on this very specific topic. Open data is able to bring significant holistic economic impacts, as viable revenue gains could be collected through increased competitiveness among business and entrepreneurs. McKinsey in 2013 has uncovered several viable benefits and potentials of open data. They argue that open data brings $3 trillion annual economic potential through seven domains: increased efficiency, development of new products and services, as well as consumer surplus (cost savings, convenience, better-quality products). The seven domains are across education, transportation, consumer products, electricity, oil and gas, health care, and consumer finance.[1] Much further benefits from open data are much more accentuated by looking at eight dimensions of business. Among those, for example, include the ability to save up to $271 million by providing highly accessible data, the increase of up to $2 billion in annual improvement in median total revenue due to increased productivity of employees, and so on.[2] By combining the values on open data and proprietary data, some benefits are further enabled. They are: creating transparency to unearth information to make better personal, business and government decision; exposing variability and enabling experimentation to identify areas of improvement; segmenting populations to tailor actions such as creating custom marketing offers; augmenting or automating human decision making; and defining new products, services, and business models.[3]

    Indeed, such feat on economic gain is not an easy task, and requires meticulous and strategic steps by business sectors. Competitiveness in the digital era that has been under the spotlight due to the inevitable stream of data and information is also requiring new sets of approach, particularly in understanding the phenomenon of digital society and open data in general.

    Full potential of open data, companies’ competitiveness among others, can be unlocked in certain supportive environment that is determined by two major players; business sectors and government. Government and business sectors should collaborate by first of all understanding what open data can bring to economic significance. As long as these two stakeholders have profound understanding on open data, it is easier to unearth the great potential we have talked about previously. By doing so, companies’ competitiveness will emerge along with better services on public sector and overall better economic productivity.[4]

    For business, the opportunities provided by the open data should also be translated into several actionable plans to increase their competitiveness. First of all, the openly and widely distributed datasets that were previously unavailable are able to transform and refine the process of defining and creating opportunities to match the demand and supply better. Open data helps business sectors, particularly companies to understand the most effective and efficient ways of producing their products and services offered to consumers. The more companies doing this, the more innovations derived from such new and vibrant activity of open data utilization. Secondly, directly related to the first proponent, companies are then able to get the bigger picture from their business and industry environment. This will help them to analyze other companies and businesses that act as their competitors. Better understanding on their own business environment will result to sound and comprehensive strategy on directly competing with the fellow companies playing on the same business sector. Open data is also used in formulating risk analysis for companies, enabling them to perform predictive analysis on future risks and threats to the companies. This will reduce their uncertainty on the companies’ future endeavors in value creation. Thirdly, open data also helps companies to develop new business models that are far more efficient and cost-effective, fueled by strong data-analysis. Such new business model is paramount in determining companies’ orientation in regards to their products and services. This business models can also be shared to wider business environment, providing more sharing of in hand practices of new business in the digital era, particularly with the utilization of big data. This shared business model is indeed becoming an additional revenue stream for the companies, enabling them to also take part in ever wider types of business sectors.

    Moreover, business sectors can increase their competitiveness by gaining insights from consumers. Consumers nowadays (mostly) are active internet users, with strong activities on social media, particularly. Activities on social media is supposed to be concerned by companies, to be managed further. Consumers now have more information on products and services provided by companies, enriching their tastes on products and services. This also means new standard of products and services of consumers. Business must adapt quickly with the changing trend of demands from consumers. Open data provide rigorous information on consumers’ focal behaviors on products and services selections. Constant evaluation and analysis on consumers’ taste on their products and services are undeniably critical in forging business model these days. Consumers become more ‘aggressive’ in some ways to form their collective demand on products and services. Careful consideration on this will result on companies being able to champion the consumers-driven market nowadays. 

    Government, on one side, also holds important role in forging companies’ competitiveness and eventually the overall better economic gains. Government has the authoritative power to impose data openness through sets of regulations and policies. Government is taking the main role in encouraging data openness, thus inevitably boost the economic performance. Government has also big role in creating suitable environment for value creation by not only encouraging data openness, but also imposing specific regulations on intellectual property rights, confidentiality, as well as data security. Such manners by government also encourages the tone of openness and transparency among organizations, which in the long run, will play significant role to the future development on open data.

[1] James Manyika, et al. (2013). Open data: Unlocking Innovation and Performance with liquid information. McKinsey Global Institute.

[2] Douglas Karr. (2016). ‘What is Big Data? What are the benefits of big data?’. MarketingTechBlog, 16 January 2016. Accessed from

[3] Further depicted on the Open Data report by the McKinsey Global Institute

[4] Tim McGuire, et al. (2012). ‘Why big data is the new competitive advantage’. Ivey Business Journal. Accessed from < http://iveybusinessjournal.com/publication/why-big-data-is-the-new-competitive-advantage/>