Mon, April 22, 2024

Open Data & Private Business

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FACTS Research & Analytics

Today, the availability of data has increased substantially along with the improvement of the quality and diversity of data available. Further, fuelled by the advent of modern technological developments and the internet, the world is edging towards a data-based culture. This has also raised the creation of an open data system around the globe. The benefits of an open data system for the business sector has been well documented in mostly western developed economies. It is also believed that open data will be beneficial to developing countries such as Nepal.

According to the World Bank, “Data are considered to be open if anyone can freely access, use, re-use and redistribute them for any purpose, without restriction”. Consequently, open data can be thought of as accessible data in an electronic form (or databases) which can further be subjected to analysis through various electronic software, without any kind of constraints whatsoever. It is evident that when data are made open and accessible to use, it can foster significant change through value addition by spurring economic innovation, social transformation, and in a broader sense, enable sustainable development of an economy.

In Nepal, the open data culture is in its nascent stage. Some initial steps have been taken by the government, civil society and some private firms to develop and open data culture. For instance, the Government of Nepal has opened data publicly in areas like trade from the Department of Customs and the Trade and Export Promotion Centre. Similarly, there have been efforts from private sector businesses to create open data platforms as well as some utilisation of open data to aid organisational processes and identify opportunities.

However, there is still a significant gap to bridge the need for free flow of data from all sides including government, the business sector and civil society. This free flow of data does not mean disclosure of all and every kind of data including sensitive national and private business data; instead, it refers to the sharing of data that is necessary for businesses to function and improve without causing any harm to the data sources.

Potential impact of open data on business

To begin with, open data can facilitate development and improvement in the private sector of Nepal. Internationally, adopters of open data state it to be a facilitator for development. Over the past five years, a growing community of actors have sprung up in Nepal who are using open datasets and are working to progress the open data agenda. From research it was found that from the perspectives of these actors, open data benefits include in efficiency and quality of public services; innovation and economic value; transparency; accountability and public participation.

Open data supports businesses to innovate, create new jobs and build economic value. A number of macroeconomic studies have cited large figures when calculating the economic impact of open data, estimating that it can contribute between 0.4% to 4.1% of an economy’s GDP. Research typically cites that open data is important to create new innovations and business opportunities, improve the marketing of products and services, and allows fairer competition based on free open market information.

Demand and use of open data for business

Though recent years have seen a great spike in the use of data for a wide range of purposes, many businesses are still not using data in their decisions and operations. Many businesses report that research projects are rarely conducted and decisions are primarily informed by instinct. Where market research does take place, however, the survey showed that 90% of businesses use data in their processes.

Data are used for the purposes of identifying customers, pricing products and product development. Along the same lines, businesses in Nepal also use data for organisation optimisation, improving service delivery and bettering marketing processes.

There are a multitude of sources for these data, including internally produced, provided by the government, data from the media and sourced from business associations, among others. A majority of business in the study (68% of the sample) reported that they use self-generated data, followed by 56% that use data sourced from the government.

Businesses also reported mixed levels of confidence in the capacity to use data effectively in their business decisions. Low levels of digital and data literacy among large portions of the population are considered as major contributors for this situation. Further, it was also understood that small scale business have more limited data usage skills whereas larger and IT related firms have better technical capabilities to use open data for their business purposes.

Fostering an open data culture in the business sector

There is a growing demand for data in Nepal, there is no doubt about it. With internet encapsulating the business sector of Nepal, it is certain that this trend will only increase. Hence, Nepal’s businesses need to be supported in identifying their data needs and properly utilising data. Further research on the topic needs to be conducted in order to produce tangible benefits which data can bring to Nepali businesses.
Along the same lines, the country’s federal, provincial and local governments must be made aware about the potential value their non-confidential data has for businesses. It is necessary to open up non-confidential datasets that can generate economic value to businesses as well as the economy.

Nepali businesses, on the other hand, should concentrate on improving skills among the private sector to use data while making decisions and in turn, improving processes and innovation. Technical capabilities are pre-requisites without which it is not possible to reap the benefits of the open data system.

Finally, there is a need to grow willingness and feasibility for business to share their non-confidential data in the public sphere. Today, most businesses in Nepal cite untrustworthiness as the main reason for not sharing data publicly. Consequently, there is a need to foster an environment, preferably through business associations, where the private sector and the government can work together for sharing data together.
NOTE: This article has been developed on the basis of the research report entitled “The Demand, Use and Sharing of Open Data by The Private Business Sector in Nepal”. The research project was conducted and subsequent report was published by FACTS Research & Analytics, with support from the Data For Development Programme in Nepal (D4D Nepal). The report is publicly available. To learn more regarding the research, please contact at [email protected].

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MARCH 2024

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