OPEN GOVERNMENT DATA AND VALUE CREATION THE CASE OF NORTAL A/S ROSKILDE UNIVERSITY Business Studies, Internship Report Spring 2017 SUPERVISON Kirsten Mogensen AUTHOR Ninni Gustavsen / 49883 Illustration: toolinux.com Logo: Nortal.com ABSTRACT This research project takes the starting point in the Estonian ICT market, with a particular focus on Open Government Data and value creation in private businesses. With Nortal as a case, the problem is explored through a thematic analysis of an interview with Oleg Schvaikovsky, Member of Board at Nortal. The findings are that value creation from OGD from Nortal’s point of view happens due to the use of particularly transparency and efficiency mechanisms with a focus on the entire ecosystem and not just implementing the IT. In conclusion, Nortal focuses a lot on value creation from Open Government Data by considering the surroundings and the ecosystem in which the technology will be implemented. Nortal makes use of both transparency mechanisms and efficiency mechanisms to create a seamless society. The findings of this project have contributed knowledge of value creation from Open Government Data in private businesses to a small academic field in development. Keywords: Open Government Data, Nortal, private business, Estonia, value creation, mechanisms 1 TABLE OF CONTENTS 1.0 INTRODUCTION 4 1.2 PROBLEM STATEMENT 5 2.0 CONTEXTUALIZATION 6 2.1 DATA AND OPEN DATA 6 2.2 OGD AND EUROPE 7 2.3 OGD AND ESTONIA 8 2.4 Nortal AS 10 3.0 METHODOLOGY 11 3.1 ANALYTICAL DESIGN 11 3.2 LEVEL ONE: GATHERING EMPIRICAL DATA 12 3.3 LEVEL TWO: ANALYSIS OF THE EMPIRICAL DATA 13 3.3.1 CRITICAL REALISM 14 3.4 LIMITATIONS 14 4.0 OPEN GOVERNMENT AND VALUE CREATION THEORY 15 4.1 OPEN (GOVERNMENT) DATA 15 4.1.2 CHALLENGES FOR OPEN GOVERNMENT DATA 16 4.2 VALUE CREATION 16 4.2.1 TRADITIONAL VALUE CREATION THEORIES 16 4.2.2 VALUE AND OPEN GOVERNMENT DATA 17 4.3 MECHANISMS 18 4.3.1 THE OPEN GOVERNMENT DATA VALUE GENERATION FRAMEWORK 19 4.3.2 TRANSPARENCY MECHANISM 20 4.3.3 PARTICIPATION MECHANISM 21 4.3.4 EFFICIENCY MECHANISM 21 4.3.5 INNOVATION MECHANISM 21 4.3.6 LIMITATIONS 22 4.4 PART CONCLUSION 22 5.0 ANALYSIS 23 5.1 MECHANISMS 23 5.1.1 TRANSPARENCY MECHANISMS 24 5.1.2 PARTICIPATION MECHANISMS 25 5.1.3 EFFICIENCY MECHANISMS 26 5.1.4 INNIVATION MECHANISMS 27 5.2 VALUE ENABLING FACTORS 28 5.2.1 CHANGE MANAGEMENT 29 5.3 PART CONCLUSION 30 6.0 DISCUSSION 31 6.1 INTERNAL CHALLENGES 31 6.2 BALTIC DIGITAL SINGLE MARKET 34 6.3 PART CONCLUSION 34 7.0 CONCLUSION 36 8.0 BIBLIOGRAPHY 38 2 Appendixes Appendix 1: E-mail Appendix 2: Interview Guide Appendix 3: Interview, Nortal Characters: 78.097 incl. Spaces / 32,5 standard pages 3 1.0 INTRODUCTION The use of information and communication technologies (ICTs) on technological devices is such a common thing today that it is almost taken for granted, and therefore we rarely think about the production of data. Governments and government institutions produce and commission huge quantities of data, which can be useful in many different ways such as catalysts for commercial and civic innovation as well as in public administration (Wernberg 2016:3; Ministry of Economics and Communications 2013:5; Open Knowledge Foundation n.d.). This data produced or commissioned by the government is what is referred to as Open Government Data (OGD). OGD can be viewed as a shared resource, owned by the public but provided by the government and its institutions (Jetzek 2013:48). OGD can be used to help the public understand the work of the government and to hold governments accountable. Additionally, it can help increase government transparency, lead to an increase in public participation, and perhaps even innovative solutions can be created from the use of OGD (Ubaldi 2013:4). Increased focus on the general use of social networks and increased availability of OGD have led to a change from a clear separation between the market and the state into a market with a rise in data-driven innovations, connecting the two previous dichotomous units. This data not only brings markets together, but also connects the world and is thereby forcing us to rethink the way we use OGD and the market (Jetzek 2013:47). These developments have resulted in the emergence of innovations such as Skype, Taxify, AirBnB, Google Maps, eBoks and many more. But how are businesses able to use OGD? How is OGD used in practice? How does OGD create value for companies? And which mechanisms create an incentive to use OGD? The starting point of this project is an interest in understanding how OGD is used in private organizations for innovation purposes. During my internship at the Royal Danish Embassy in Tallinn I was introduced to the Estonian ICT market and found an interest in the combination of OGD and private businesses. Open Data is becoming more and more important as a resource for businesses, however it is difficult to understand the value of this data. The use of OGD in businesses is relatively new and for this reason the amount of literature focusing on OGD and value creation is sparse (Granickas 2013). This project focuses on OGD in Estonia and how Estonian companies use OGD, and will end with a discussion of the possibilities for OGD from a macro-regional approach in the Baltic Sea 4 region. In this project, I have chosen Nortal as a case study in order to analyse how OGD creates value. Nortal is the largest Estonian IT Company and has a great deal of experience in working with open data for many different jobs worldwide (Nortal 2017). Nortal is a consultancy company delivering platforms for both private and government institutions allowing the institutions to make full use of the potential of OGD. Nortal is therefore familiar with private and public sectors work with OGD. Estonia is often described as a leading e-country, but there are still bumps on the road (e-Estonia). The technical interoperability between private and public sector is lacking, which hinders (among other things) economic productivity. The Digital Agenda 2020 for Estonia focuses on “(...) creating an environment that facilitates the use of ICT and the development of smart solutions in Estonia in general” (Ministry of Economic Affairs and Communications 2013:2). It is a strategy that through various measures and actions hopes to “(...) increase the economic competitiveness, the well-being of people and the efficiency of public administration” (Ibid). There is a great focus on ICT and the abilities to optimise current business processes as well as to develop new innovative products and services (Ibid:5). There are many ways of working with OGD and several ways of approaching a concept as complex as open data. Through the use of a case study, I will explore Nortal’s use of OGD and analyse which mechanisms generate value for the company and its clients. This will be answered through the application of empirical data collected in the form of a semi- structured interview with Oleg Shvaikovsky, Member of Board, combined with secondary sources. This approach will allow for a discussion of the pros and cons of working with OGD now and in the future as well as discuss the opportunities and challenges in relation to a macro-regional approach to OGD. Based on the choices and considerations presented above, the following problem statement is to be answered: 1.2 PROBLEM STATEMENT How can we understand the use of Open Government Data from Nortal’s point of view and how is value created for private businesses? 5 2.0 CONTEXTUALIZATION This chapter will provide the reader with an introduction to Open Government Data (OGD) in general as well as a country specific description of the Estonian approach to OGD. The case study for this project, Nortal, is presented with respect to the historical context as well as the current situation and other relevant data. These two topics are introduced and described in order to contextualize the problem this project is dealing with. 2.1 DATA AND OPEN DATA There are several recurring terms when talking about data: Big Data, Open Data and Open Government Data. Big Data is extremely large and often complicated datasets. The gathering of such large datasets has become possible due to the increasing use of devices collecting and sharing data, plus an increase in storage and processing capacities. Big Data can take the form of many different data types e.g. texts, numeric data sets, images and videos (Bertot et al. 2014:6). Many governments are using big data to identify and analyse problems but also to make data available. Data.gov is one of many examples of open government initiatives building on Big Data. Open Data is data that is freely available, accessible, can be republished and exists beyond the limit of technical restrictions such as copyright, patents or similar barriers that might hinder the openness of data (Bertot et al. 2014; Open Knowledge Foundation, 2012; Jetzek et al 2013, 102). Therefore OGD relates to government data that is open to the public as well as private agencies. According to OECD, OGD is a philosophy promoting “(...) transparency, accountability and value creation by making government data public to all” (OECD 2017). Government data can be anything from traffic, weather and geography to statistics and data on businesses and public sector budgeting (M. Janssen et al. 2012). This opens up an interesting subset of open data allowing for data-driven innovation. Open data can lead to businesses creating new innovative products and services for individuals as well as communities or governments (Ministry of Economic and Communications 2013).