Why Cutting E-Gov Funding Threatens American Jobs

The House of Representatives is proposing cutbacks to the E-Gov fund to reduce it down to $2 million. 

Without the funding, the USA will not be able to maintain the national spending data portal (USASpending.gov) and the national data transparency portal (Data.gov).

These are the tools that make openness real in practice. Without them, transparency becomes merely a toothless slogan.

There is a reason why fourteen other countries whose governments are left- and  right-wing are copying data.gov. Beyond the democratic benefits of facilitating public scrutiny and improving lives, open data of the kind enabled by USASpending and Data.gov save money, create jobs and promote effective and efficient government. As the Economist writes: “Public access to government figures is certain to release economic value and encourage entrepreneurship. That has already happened with weather data and with America’s GPS satellite-navigation system that was opened for full commercial use a decade ago. And many firms make a good living out of searching for or repackaging patent filings.”

For those interested in the topic, there's a longer discussion here in the Open Data, Open Society report. But here are a few, short reasons.

Saving Money

By making available the raw information about how government spends money, it is affording the opportunity to Congress, among others, to analyze the data and spot patterns of fraud, waste and abuse.  Here's one example published today. Because of the availability of data on these sites, the US attracts free evaluation by academics and others.  This kind of (free) feedback loop aids with analyzing what works and saving the taxpayer money. But we can't streamline government without access to the data.

Creating Jobs

Moreover, hidden within the troves of public data being made available through data.gov (and in the pipeline on their way to data.gov) is information that could translate into private sector job growth and the next GPS or genomics industry.

Here are a number of examples:

BrightScope has made a profitable business of using government data about 401(k) plans. They’ve raised $2 million in venture capital and hired 30 people and is likely to double headcount to at least 60 by the end of the year. They did $2M in sales in 2010 and are currently on a $10M+ run rate for 2011.

The National Oceanic and Atmospheric Agency in the United States has a ~$5 billion dollar annual budget. Through the open release of data, NOAA is catalyzing at least 100 times that value in the private sector market of weather and climate services when including market and non-market valuations. As just one example of a market that uses NOAA data, the total value of weather derivative trading has been estimated at $15.0 billion in 2007-2008.

The ~$1 billion it spends on the National Weather Service enabled weather.com, which has since been sold for $3.5 billion.  

The Health datasets (health.data.gov) on Data.Gov are unleashing the wider software development community to build robust tools that stimulate entrepreneurship and help Americans lead healthier lives.

The availability of ten year's of Federal Register data sets on Data.gov enabled three young programmers to design the new FederalRegister.gov, the daily gazette of government, and, at the same time, do business with the Federal government for the first time.

Promoting Innovation and Efficiency

By making government data available through these E-Gov programs, public officials can then reach outside of government for creative answers to tough problems, which, in turns help with identifying strategies that are more effective and save money. 

HHS CTO, Todd Park, gives several examples here of how the 1170 health data sets now available on data.gov are creating the "rocket fuel" for public sector innovation. In this era when government is trying to curtail spending, E-Gov technology creates opportunities to identify creative solutions for delivering services in new ways. The value from “doing more with less” is the potentially biggest payoff of the kinds of tools supported by the E-Gov fund. Also if Congress ever wants to cut the number of regulations then it has to support the availability of data to inform the identification of more efficient strategies.

If we care about saving money, creating jobs and doing more with less, we should ensure that this budget remains intact.

 

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