DATA-DRIVEN INNOVATION
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1 Stordata og offentlige tjenester 3 May 2017 DATA-DRIVEN INNOVATION Definitions, Opportunities and Challenges Christian.Reimsbach-Kounatze@oecd.org
2 OECD - Organisation for Economic Co-operation and Development Like-minded Economic and social development Policy standard setter Inter-governmental Multi-stakeholder Inter-governmental organisation with 34 members Australia Austria Belgium Canada Czech Republic Chile Denmark Estonia Finland France Germany Greece Hungary Iceland Ireland Israel Italy Japan Korea Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak republic Slovenia Spain Sweden Switzerland Turkey United Kingdom United States + European Union 2
3 OECD report on Data-driven Innovation Ch.1 The Phenomenon of data-driven innovation Ch.2 Mapping the global data ecosystem and its points of control Ch.3 How data now drive innovation Ch.4 Drawing value from data as an infrastructure Ch.5 Building trust for data-driven innovation Ch.6 Skills and employment for a data-driven economy Ch.7 Promoting data-driven scientific research Ch.8 The evolution of health care in a data-rich environment Ch.9 Cities as hubs of data-driven innovation Ch.10 Governments leading by example with public sector data Find out more about our work at 3
4 WHAT IS DDI AND WHY IS IT IMPORTANT? WHAT ARE KEY DATA GOVERNANCE CHALLENGES? WHAT ARE THE KEY ENABLING FACTORS FOR DDI? HOW READY ARE COUNTRIES AND WHAT ARE POLICY OPTIONS?
5 Data is the new R&D for innovation across the economy Public Administration Health Retail Agriculture Transportation Science and Education 5
6 thereby enabling the next production revolution ( Industrie 4.0 ) 6
7 and helping to address global challenges Managing the effects of climate change and natural disasters Addressing complex diseases such as dementia and Ebola Fostering development and inclusive growth 7
8 What is data-driven innovation (DDI)? DDI refers to the use of data and analytics to improve or foster new products, processes, organisational methods and markets 8
9 DDI is not only about big data, it is about the data value cycle 9
10 WHAT IS DDI AND WHY IS IT IMPORTANT? WHAT ARE KEY DATA GOVERNANCE CHALLENGES? WHAT ARE THE KEY ENABLING FACTORS FOR DDI? HOW READY ARE COUNTRIES AND WHAT ARE POLICY OPTIONS?
11 Data is not oil, but an infrastructure with large spill-overs Data is non-rivalrous (but excludable) Data re-use and non-discriminatory access can maximize its value Data enables multi-sided markets Data is a capital with increasing returns Data can be re-used as input for further production Data linkage is a key source for super-additive insights Data is a general purpose input with no intrinsic value Data are an input for multiple purposes Its value depends on complementary factors related to the capacity to extract information (e.g. skills, software) 11
12 Max. data value max. data reuse Enhance data access 12
13 Max. data value max. data reuse Open PermID enables Thomson Reuters client to better link their own data and thereby to contribute to enhancing the quality and value of Thomson Reuters own data Economic benefits of enhanced data access: Facilitation of joint production or co-operation Support of value-creating activities by users (customers); Maximisation of the option value of data and data-related products (Cross-)subsidising the production of public and social goods 13
14 Policy dilemma: Striking the right balance between openness and closeness individuals privacy confidentiality Prevent social and economic harm multi-purpose reuse open data Close(ness) user lock-in walled garden free flow of data Prevent loss of profit Enable spill-over effects Openness data portability data sharing open APIs digital security open standards IPRs (e.g. trade secrets) organisations Algorithmic transparency 14
15 Data openness is not a binary concept, but spans a continuum Degrees of enhancing access to data Data portability Data sharing within PPPs Open data Data markets 15
16 Governments leading by example with open data The Open-Useful-Reusable (OUR) Government data index 1 0,9 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0 Data availability Data accessibility Government support to re-use No national OGD portal Source: 2014 OECD Survey on Open Government Data.
17 Macroeconomic impact assessment studies on enhanced data access For OECD countries, the PSI market is estimated to be USD 111 billion by 2010 => aggregate impact of USD 700 billion in 2010 (overall 1.5% of GDP; OECD, 2015b). For the United Kingdom, the PSI market is estimated to be GBP 1.8 billion per year => aggregate impact of GBP 5 billion per year (overall 0.5% of GDP; Shakespeare review, 2013). For G20 countries, open data policies could increase output by around USD 13 trillion over the next five years (overall 1% of GDP; Omidyar Network, 2014). Including public and private sector data, McKinsey Global Institute estimates that the reuse of open data in seven areas of the global economy could help create value worth USD 3 trillion a year worldwide (4% of GDP; MGI, 2013) Mobile number portability (MNP) can encourage switching, and as a result can reduce average prices in telecommunication services (by 6% to up to 12%). 17
18 WHAT IS DDI AND WHY IS IT IMPORTANT? WHAT ARE KEY DATA GOVERNANCE CHALLENGES? WHAT ARE KEY ENABLING FACTORS FOR DDI? HOW READY ARE COUNTRIES AND WHAT ARE POLICY OPTIONS?
19 There are new business opportunities for analytic services and entrepreneurs The data ecosystem as layers of key roles of actors 19
20 Poor adoption of advanced ICTs in firms The diffusion of selected ICT tools and activities in enterprises, 2016 Percentage of enterprises with ten or more persons employed % 100 Gap 1st and 3rd quartiles Average Lowest Highest Broadband Website Social Media E- purchases ERP CRM Cloud Computing E-sales Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD, ICT Database; Eurostat, Information Society Statistics and national sources, March Supply chain mngt. (ADE) Big Data RFID 20
21 with SMEs lagging behind Use of cloud computing as a percentage of enterprises, by size, 2016 Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD, ICT Database; Eurostat, Information Society Statistics and national sources, March
22 in particular in regards to big data Use of big data analytics as a percentage of enterprises, by size, 2016 Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD, ICT Database; Eurostat, Information Society Statistics and national sources, March
23 The data source used can differ significantly across industries Use of big data source as a percentage of big data using enterprises, 2016 Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD, ICT Database; Eurostat, Information Society Statistics and national sources, March
24 Digital security risks is a major barrier to adoption in some countries Reasons of businesses for not using cloud computing, 2014 Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD, ICT Database; Eurostat, Information Society Statistics and national sources, March
25 The lack of data specialists may be a more pertinent barrier % Data specialists as a share of total employment in selected OECD countries Source: OECD based on data from Eurostat, Statistics Canada, Australian Bureau of Statistics Labour Force Surveys and US Current Population Survey March Supplement, February
26 the lack of ICT specialists as well Share of employed individuals using programming languages daily at work % Source: OECD, based on PIAAC Database and national labour force surveys, December
27 Businesses in some countries face difficulties recruiting ICT specialists Enterprises that reported hard-to-fill vacancies for ICT specialists % As a percentage of all enterprises looking for an ICT specialist Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD, ICT Database; Eurostat, Information Society Statistics and national sources, March
28 Still a large majority of workers lack the most basic ICT skills Adult population by level of proficiency in problem solving in technologyrich environments, 2012 Level 1 or below Level 2 Level More advanced ICT and cognitive skills to evaluate problems and solutions No ICT skills or basic skills to fullfil simple tasks Source: OECD based on OECD (2013), OECD Skills Outlook 2013: First Results from the Survey of Adult Skills (PIAAC), OECD Publishing, Paris, 28
29 WHAT IS DDI AND WHY IS IT IMPORTANT? WHAT ARE KEY DATA GOVERNANCE CHALLENGES? WHAT ARE KEY ENABLING FACTORS FOR DDI? HOW READY ARE COUNTRIES AND WHAT ARE POLICY OPTIONS?
30 How ready are countries? Demand Supply Note: Index in relative terms to unweighted OECD average. Index value is set to 200 where it exceeds that value. 30
31 DDI-related indicators: Mexico Note: Index in relative terms to unweighted OECD average. Index value is set to 200 where it exceeds that value. 31
32 DDI-related indicators: Germany Germany OECD average Investments in data and software Investments in economic competencies Data specialists skills Wireless broadband 200 Online purchase Apps Local content hosted Export in ICT services Net ICT business growth RFID diffusion OECD site hosted Open government data breadth Note: Index in relative terms to unweighted OECD average. Index value is set to 200 where it exceeds that value. 32
33 DDI-related indicators: The Netherlands Note: Index in relative terms to unweighted OECD average. Index value is set to 200 where it exceeds that value. 33
34 DDI-related indicators: United States Note: Index in relative terms to unweighted OECD average. Index value is set to 200 where it exceeds that value. 34
35 DDI-related indicators: Norway Norway OECD average Investments in data and software Investments in economic competencies Data specialists skills Wireless broadband 200 Online purchase Apps Local content hosted Export in ICT services Net ICT business growth RFID diffusion OECD site hosted Open government data breadth Note: Index in relative terms to unweighted OECD average. Index value is set to 200 where it exceeds that value. 35
36 Policies for facilitating data reuse across organisations and sectors are popular Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD Digital Economy Outlook Policy Database, March
37 Governments are focusing on becoming more efficient through use of ICT Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD Digital Economy Outlook Policy Database, March
38 Governments still tend to lack attention to data and business model innovation Source: Based on OECD Digital Economy Outlook 2017 (forthcoming), OECD Digital Economy Outlook Policy Database, March
39 Thank you for your interest! Ch.1 The Phenomenon of data-driven innovation Ch.2 Mapping the global data ecosystem and its points of control Ch.3 How data now drive innovation Ch.4 Drawing value from data as an infrastructure Ch.5 Building trust for data-driven innovation Ch.6 Skills and employment for a data-driven economy Ch.7 Promoting data-driven scientific research Ch.8 The evolution of health care in a data-rich environment Ch.9 Cities as hubs of data-driven innovation Ch.10 Governments leading by example with public sector data Find out more about our work at Christian.Reimsbach-Kounatze@oecd.org 39
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