Ukraine has taken the first step toward building an open data market. Parliament has just passed a bill providing for the creation of a single state open data web portal.
The idea is a website that will bring together statistical information from all government agencies in a single format. Such data will be easy to process, analyze and organize. If the idea is implemented competently, the state will be able to produce highly accurate forecasts of economic processes and even provide services to private companies.
How it works
Open data portals exist in the United States, the United Kingdom and France. The EU open data portal has been running since December 2012. Open data is considered first and foremost a tool for ensuring transparency in government and fighting corruption. But it is also a huge market for innovative services and paid offerings. For example, by using data on the crime situation in a neighborhood, the number of pharmacies and schools, and the distance to the nearest recreation areas, realtors will be able to adjust property prices. A mobile app could be built for farmers to show how best to use their land.
Ukraine already has services based on data analysis. For example, the startup Edumeter ranks schools based on the results of external independent testing. Its founder, Artem Serdyuk, has said that although this data is publicly available, its format rules out automated processing.
"First we had to 'hack' the application with the ZNO test results, and only then could we work with it," he said in January at a round table titled "E-government: open data for fast creation and launch of startups."
"Open data monetization models are no different from classic business models: advertising, fees for additional services, and analytical insights," says the bill's author, Deputy Head of the Presidential Administration Dmytro Shymkiv.
According to European Commission estimates, adopting open data could bring the EU economy EUR 40 billion a year. The economic effect in the United States is estimated at $3 billion.
"If we manage to build a system that delivers even 10% of the efficiency of the working Western model, Ukrainian market players could earn about $10 million in additional revenue," says Shymkiv.
On a tight budget
The text of the bill does not make clear whether the state open data web portal will be built "from scratch." Nor does it specify the sources of funding. The Main Scientific and Expert Directorate also points to this gap in its conclusions. Shymkiv assures that the portal will be built on existing work, in particular the data.gov.ua website, which appeared in 2011. That portal was developed by the civic initiative Social Boost, with financial support from Microsoft Ukraine and the Renaissance Foundation.
They are ready to help the project, Shymkiv says. He expects data.gov.ua to be integrated with the single portal on the use of public funds. data.gov.ua is built on open-source software, so the state will not have to pay for software licenses.
Yuriy Syvytsky, member of the Supervisory Board of Intecracy Group, believes this is the right approach. By his estimate, including taxes and a programmer's salary but excluding administrative costs, the software part of such a portal costs UAH 60,000.
The server side, the invisible part, is hard to estimate, since it is not known what parameters were specified in the technical requirements. "There is no influx of visitors yet — up to 3,000 hosts a month. Even in the most expensive scenario, such a project will cost no more than UAH 500,000," he says.
The State Agency for E-Governance will receive the portal free of charge as international assistance, says Social Boost founder Denys Gursky. In his view, the cost of maintaining the portal can be kept to a minimum if the new functions are delegated to existing staff.
"We could do it the way Moldova did: they received $20 million from the IMF and created 700 datasets. That's good work, but Ukraine does not have that kind of money. We have to start from reality and our current capabilities," he says.
Once the new legislation takes effect, the portal will fill up faster, since government bodies will be required to publish information, Syvytsky believes. Making the portal comparable to its European counterparts will take several months of development. A beta version could be launched in the second month, he says.
Gursky expects the open data bill to be adopted in full by the end of March. "Experience shows that presidential initiatives get through the hearings fairly quickly," he says.
Hopes and fears
Private companies hope that the introduction of open data will spare them some of the paperwork and simplify their dealings with the authorities. "To take part in a tender, you have to submit a certificate stating that there are no bankruptcy proceedings against you. Ideally, this information should be 'pulled' automatically from one database to another," says a representative of a software development company. Gursky also believes that as soon as government agencies open access to their databases (except for personal data, which will not be included in open registers), the illegal trade in information will gradually stop. Businesses will be able to get up-to-date data in spreadsheet form, and it will become easier to communicate with investors and partners. The media will find it easier to analyze the government's work — the published information can easily be turned into interactive graphics using online tools such as Google Charts. Transport and construction professionals, suppliers of medicines and building materials, and agricultural market players will also benefit.
When it comes to big data, however, it also has to be interpreted correctly. "A specialist in processing large volumes of information is the most promising profession of the near future," says Syvytsky.
That, however, is the theory. In practice, Ukraine may face a number of difficulties. The main problem with open data portals is that they host outdated information, while businesses need current data to make accurate decisions, says Syvytsky.
Another issue is reliability and level of detail. If an official has fresher information, he will continue to earn fabulous sums. Today the error rate in many government databases is 40% or higher. "This information can hardly be called valuable for business," Syvytsky notes.
For example, official data in customs information systems differs greatly from the real picture because of smuggling, and companies' actual addresses often differ from their registered ones. Another example is the registration of migrants. People who come to Kyiv from other cities rarely register a change of residence. The same goes for average salary data: one figure is reported, while something quite different is paid in envelopes.
"Things need to be put in order, because in this situation it is impossible to talk about accurate forecasts of economic processes," says Syvytsky.
On top of that, there is the human factor. Data is entered by people, so there is a chance of accidental or deliberate errors. They can be minimized by connecting the databases to each other and identifying inconsistencies.
Source: Ekonomichna Pravda (a project of Ukrainska Pravda)