Big data & the public sector: Resource blessing or curse?

If data is the new oil, then governments are asset rich with massive data fields. Data provides governments with the opportunity to design better policies and gain financially. However, just as there are long-standing concerns about an oil curse in natural resource rich countries with weak policies and institutions, are governments at risk of squandering the value of their data assets?

Governments – and the development partners that support them -- need to start thinking proactively about the upsides and downsides of digital data assets.  The upside is that digital data can be harnessed for better decision making or services. For example, AI can be deployed for better beneficiary targeting and identifying collusive networks for anti-corruption efforts. A failure to think how digital data can be channeled in the public interest is like needlessly flaring gas; literally burning value and treating an asset as waste, more with adverse environmental consequences.

In the recent book Infonomics, the author looks at quantifying information asset values focused on the private sector. He finds that today’s companies are likely to generate the greatest value not from trying to simply sell data, but by figuring out how data can be deployed for comparative advantage.  Likewise, developing countries should think carefully about how current digital data assets can improve the prosperity of their current and future generations.

Natural resource-led development highlights that outcomes depend on endowment, effort and technology. Harnessing digital assets requires that governments know what data assets they have (or where they can discover and generate more data), and to understand how to translate this data into value, while managing risk.  (Even in technologically savvy Singapore, the Prime Minister’s health records along with over a million others were last year subject to a data breach.)

A proactive strategy for better harnessing digital assets in the public sector needs to start by articulating - and ideally putting in monetary terms – the value that a combination of endowment, effort and technology can bring to how government operates. Harnessing government data fields – or so-called emerging data lakes – will be part of showing value in making traditional government processes work better,  and distilling new value propositions.  This spectrum can range from better managing physical infrastructure assets, combating corruption, or reduces paperwork costs, to predictive services.

Source: Nounproject

The World Bank invested a lot of thinking, and financing, into helping countries better harness their natural resources. How is the Bank’s thinking on this issue developing? Here are some entry points:

• Pay more attention to country diagnostics to determine the digital assets held by government. Many of our current public sector diagnostics focus more on systems and processes (think oil rigs rather than the actual oil in the ground!). 
• Assess responsibilities in government for harnessing and providing stewardship to the value created by data, and mitigating risks from these present and future assets
• Build foresight in technological capabilities. Learn from the shale oil extraction technology revolution that dramatically changed the balance in global oil markets. Technologies will change the data access of developing countries
• Pursue digital data asset safeguards. The Bank has developed a considered approach to environmental and social safeguards for natural resources related operational engagement. In the digital space, privacy and data protection laws are an important part of this trend, but orientation, regulation, and enforcement differ across developed and developing countries, and consequently the contexts for Bank operations
• Manage public digital assets for real value. Digital assets in government have limited benefit if not used in the public interest. Government held data creates public purpose asset. 

Whether natural resources can be harnessed for a boon or whether they result in a curse for development ultimately comes down to effective governance and institutions. The fate of government held and regulated digital data assets are likely to be the same; it is the new frontier of getting reliable institutions in place to convert this potential development boon into reality.