Open Data Will Solve the Regulatory Riddle
June 23, 2014 / Nam Pham
Governments are the original big data entities. Our governments have long gathered data and compiled statistics on individuals and populations. The value proposition of a government’s use of data is the ability to transform information into an outcome that benefits the public good. Making good public policy stems from the ability to collect and analyze data and information, then execute changes based on those observations. Much of the promise for future generations will emerge from the trend of open data, which has taken place across the globe.
The most exciting transformations on this front in the U.S. are happening on the state and local level. The Sunlight Foundation’s Open Data Policy initiative has logged the efforts of 36 government bodies on the state, county, and city level that have passed open data legislation. A few states and cities have been the leaders in data-driven initiatives and program administration. Maryland set the bar for states with its StateStat program launched in 2007 by Governor Martin O’Malley and its open data program. New York City has refined and enhanced a comprehensive city-management program built on data and analytics for key performance indicators across the city. Above all, open data is leading the way for more effective and efficient government.
Cities can use open data to improve performance on local regulation. Our recent report—Enterprising Cities: Regulatory Climate Index 2014—measures the regulatory environments for small businesses across 10 U.S. cities in 5 areas of doing business. Our project documents the advances and improvements on the local level that these cities have taken. City governments in Chicago, New York City, and Boston have made proactive changes to make data more available. These changes have led to improvements in the issuance of permits and licenses for entrepreneurs and small businesses.
Our research just scratches the surface to the true potential of open data in transforming public administration. State and municipal governments now have the technology and data to improve the ability of businesses to receive licenses, accelerate the zoning and permitting process for construction firms, and expedite city inspections for restaurants and buildings. These transformations can reduce or eliminate unnecessary waiting time and cut administrative fees. The tools are available. It's just a matter of putting them to work to improve the regulatory environment on the state and local level.
Larger cities are able to support a more diverse set of start-ups across all sectors. However, drawing upon the authors’ conclusions about high-tech start-ups, further study should examine what factors lead to greater start-ups in different sectors and industries. These findings go against research that shows government- and university-funded research and patents are correlated with greater innovation more generally in industries such as pharmaceuticals.
Start-up companies and small businesses look to cities to start their businesses because access to the market is more immediate and demand is greater. Cities are best suited in attracting the diverse skills, abilities, materials, and processes that are required for the birth and growth of entrepreneurial small firms. Growth, new business formation, and free enterprise will do more for a city’s economy than any economic development policy can induce on its own.