Open data and rent-seeking economies

Yesterday, I was introduced to a concept I hadn’t heard of before – rent seeking behaviour.  Its an economics term that essentially means that instead of investing time developing things that you can sell, you spend all your money making it really hard for the other guy to sell their stuff. The best analogy I’ve seen for it so far uses pirates – don’t all the best analogies have pirates!

As someone who works in journalism it was nice to finally have a way to describe the approach of commercial news organisations to the BBC.  But I digress. I came across it in the context of open data. Chris Taggart Co-Founder & CEO at OpenCorporates used it, saying it was the kind of behaviour that making data open discouraged.

It makes sense. In an information economy we tend not to make stuff other than information and increasingly we build economies around protecting that information. It’s collected and combined (and I’m not discounting the value of that process) but it’s not ‘ours’.  As consumers we are becoming more aware through our own understanding or by others efforts to lift the stones, of the value of data. So anywhere there a low level of transparency there’s a risk of rent-seeking that directly impacts us.  You can see how open data would ‘bust’ that except that it relies on two things:

  1. it assumes that those that benefit from the rent-seeking in the first place would change their ways. Yes, the logic of diminishing profits is compelling but in a world where we trade at micro-second speed, who’s in it for the long game?
  2. it assumes that the open data ecosystem isn’t in danger of rent-seeking itself.

At the moment, much of the open data economy may not be rent-seeking but it does seem to do a lot of sub-letting *. It borrows data from others to make its own products. It often add a lot of understanding (and value) but often not very much new data.

Advocates of open data would perhaps point at the Government as the biggest rent-seeker in the data market. But open data is now as much a business as it is a movement for transparency and accountability. Instead if using lobbying and legislation of traditional rent-seeking, it’s licensing that seems to be the means of control.  So maybe I shouldn’t be surprised at the amount of ‘open-washing’ I see in the open data community but it would be a shame if the lobbying took over from the core business of making more data more open.

* I know, the kind of rent in rent-seeking is not the same as housing rent but

Image from Peter on Flicker 

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