Literature Review: Impact of Open Data on Business Innovation

This literature review examines the impact of open data on business innovation, exploring the use of open government data, open innovation strategies, and the economic benefits of utilizing open data sources. The review covers the opportunities for startups, open data business models, and the usage of open data in business, including its positive and negative impacts. It also discusses the requirements of open data-based businesses and the potential for cost reduction, service improvement, and innovation. Various scholarly works are reviewed to evaluate the influence of open data on business organizations, identifying both advantages and disadvantages of its implementation.

Running head: LITERATURE REVIEW
Impact of Open Data on Business Innovation
Name of the Student
Name of the University
Author’s Note

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Executive Summary
Various types of data sources are available these days ranging from online to offline data
sources. Technological innovation made everything available on the internet but accessibility is a
question. Hence, the data sources are divided in various different categories, but can be summed
up into two, based on the accessibility. They are open data sources and closed or licensed data
sources. Licensed sources are restricted for the few elite of the society. These data are available
for the public for which the government or the organization charges money from the reader. On
the other hand, open data sources are those where that data is freely accessible and anyone can
read it. These open data sources are the topic under consideration in this paper. Its impact on
various business would be studied, focusing on the scope of innovation for the business.

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Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Project Objective.............................................................................................................................3
Project Scope...................................................................................................................................3
Literature Review............................................................................................................................4
Open Government Data...............................................................................................................4
Open Innovation strategies...........................................................................................................4
Demand for Open Government Data in Business........................................................................4
Economic Benefits of using Open Government Data..................................................................5
Open data opportunity..................................................................................................................5
Opportunities for startups.............................................................................................................6
Open data in Business model.......................................................................................................7
Usage of open data in business....................................................................................................7
Impact of open data on business..................................................................................................8
Requirement of open data based business....................................................................................8
Conclusion.......................................................................................................................................9
Reference List................................................................................................................................11
Appendix........................................................................................................................................13

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Introduction
There are various data sources that are available in the internet at present time, which are
divided under a number of banners. Broadly, it is of two type, open data source and licensed
content. The licensed contents are only available on purchase. Whereas, open data are something
for which public do not have to pay (Lindman, Rossi and Tuunainen 2013). These data comes
from the sources that are not restricted by copy right and mostly found in various public domains
like municipalities, government, international organizations and many more. The typical one
among them is the government data which are made available for the public in their websites.
These data are used by various business organizations in order to grow their business and have a
proper idea of the market. It is not mandatory that the open data will always bring profit the
business. Open data have both positive and negative impact (Zuiderwijk and Janssen 2014).
Different scholarly works have been conducted which will be reviewed in this proposal.
Project Objective
 To evaluate academic literatures on ‘impact of open data source on business innovation’.
 To identify the direct or indirect influence of open data sources on business
organizations.
 To distinguish the negative impacts from the positive ones.
 To identify the disadvantages of using open data in business.
Project Scope
This part of the project will be focusing on the various business organizations and the
impact of the open data source on them. The scope of the project lies in the field of the negative
exposure of using the open data source where there is ample opportunity to conduct research.

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Literature Review
Open Government Data
Different government took initiatives to provide data to public offering them a better
understanding of the scenario. The numbers of these initiatives have grown considerably during
2009-13 from two to over two hundreds. These data that are available in the internet for free not
only provided the business organizations the opportunity, but also the ability and motivation to
set social and economic value of their organization. These data help in generating new
knowledge, value proposition and ideas. It can be summed up as the open data will enable the
company to increase he organizational capabilities, which in turn will supplement in idea
generation, conversion and diffusion. This will ultimately lead the company to form new social
and economic value (Kitchin, R., 2014).
Open Innovation strategies
Open Government Data initiative is taken up by almost every developed and developing
countries in the world. The governments are attracting the businesses to collaborate, participate
and re-use their data that are made available by them. Different innovative strategies can be
opted with the help of open data for the business growth. The author also posits a set of a set of
considerable for developing the open government data portal into an open innovation platform.
Businesses are also suggested to create e-service that leverage on the datasets available from the
portal (Chan 2013).
Demand for Open Government Data in Business
Demand for open business data in private sectors or business seems to be the highest
according to the Indonesian research team. A significant number of business owners have stated
that the available business data on the internet is useful for their business. They show interest in

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more government data to become publicly available which can significantly fund for their
business uptake. But the authenticity of the data reduces if it becomes free. Henceforth, the
proprietors of the private businesses do not mind in purchasing the government data if it is made
available by the government authority. Data from the education sectors, for instance, the number
of graduates in specific fields in certain geographical region is a considered useful data for any
business. It makes it easier for the private companies find out the required talents from the
market and decide where to invest and where to hire the talents (Indonesia 2013).
Economic Benefits of using Open Government Data
According to the author, Open government Data plays potential role in innovation of any
business. It provides valuable and important data for the new enterprises and business models.
Though, the new business models to enter in the market, standard, which future-proof financial
investment is absolute necessity. Great economic benefits are expected for the business and
startup niches. According to one interviewee of the author, the open government data helped him
to increase his sales by 5% (Parycek Hochtl and Ginner 2014). There are other ways of
benefiting from the open data that are provided by the government. Those are outsourcing
present government procedures for business cycles and as a business network. The business
models, which are making use of open government data, are expected to emerge in the field of
economy. It can be based on data handling, data integration, data analysis, or even visualization.
OGD have the potential to provide job creation or preservation or job creating which in term will
bring economic growth (Parycek Hochtl and Ginner 2014).
Open data opportunity
Open data is widely used by various companies as it offers productive growth and
economic reform of the company. By extracting the knowledge available in open data in the

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internet permits the organizations to make better use of the existing data. Proper use of these
open data policies can considerably increase any business’s output that would boost the
cumulative GDP. It also helps in promoting the theme of the business agendas such as trade,
monetary policy, fiscal, employment, finance, infrastructure and fiscal. This in turn offers
achievement of the company’s growth target. It also opens up the opportunity to create economic
and social value of the company. The business can reduce its costs in provision of existing
services. New services are enabled by using this and also help in quality improvement. The
governance of the company is also being improved using open data (Jetzek, Avital and Bjorn-
Andersen 2014).
Opportunities for startups
The startup based on open data has endless possibilities as stated by the author. The open
data can be used as a fuel in innovation in terms of new apps that are based on open data.
Necessary commitment and effort towards the work is of absolute necessary for the startup to run
in the first days. A structured plan is required to engage with preparing both short and long term
targets. Development of apps can provide enormous benefits to citizens, that it will be import to
capture how open data can supplement in development in the particular area. The open and
closed data can provide opportunity for the startup to consolidate and further growth. The author
found gaps in important information where innovation can work with help of open data and
presented his idea with an example of parking issue that is found in everyday life. An app based
on open data can solve their quarries and problems and the startup can thrive using the open data
(Kitsios and Kamariotou 2018).

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Open data in Business model
A number of organizations opened their data for the general public in order to stimulate
the innovation of their business. It has resulted into rise of new business models for the
organization. According to Janssen and Zuiderwijk (2014), these newly innovated open data
business models can be divided into six types, which are interactive app, comparison model,
service platform, single–purpose app, information aggregators and open data repositories. These
models have different level of accessibility to the raw data. Social media is used by many
business organizations for rating and discussion to get the idea for improving their business.
Hybrid models on the other hand have a combined model of value creating where both private
and public organizations interact (Janssen and Zuiderwijk 2014).
Usage of open data in business
Open data is considerably a new thing in the market and very few companies have been
using open data as an integral part of the company. Such companies see the open data as a tool to
maintain their present situating and help in creating values to the customers. It cannot help
directly in financial benefits. Some also considers the utilization of these open data is to improve
the quality of the content and making them more comprehensive. Combination of company’s
data with open data can bring new possibilities for the company. Several motives and
opportunities are identified. They can be summed up as follows. The companies can use the open
data for creating value, upgrading the quality of their product and services of the business and to
improve the quality of the information and knowledge produced from the source. It can also
supplement in improving the usability of the data. Open map can be an example where it is used
in the visualization of the data. The open data can also contribute in assisting the comprehension
of the situation that is in hand. Moreover, these open data is considered as valuable tool for

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business’s internal use. Refinement of data, service development, information and knowledge
based management and decision making are considered as opportunities of using the open data.
Moreover, some new and less identified opportunities such outsourcing of the services, business-
driven opening of public data can be spotted (Immonen, Palviainen and Ovaska 2014).
Impact of open data on business
The open data offers various possibilities of imitating as well as learning opportunities
for avoiding pitfalls. The biggest opportunity that can be identified is the hybrid model as
discussed in earlier review where the models tend to pertain the ways in which companies can
constrain portion of their offerings for the purpose of extracting profit. Example can be drawn of
the dual-licensing. As the services and data are made free for all, the company doesn’t need to
purchase the products. This saves a lot of money that can be used in different grounds. On the
other hand of the glittery benefits of open data sources, there are also negative impacts of this
practice. It possesses a negative impact on the business ideology based on the company’s
respondents alone. Every business requires investing both time and money in setting up their
respective businesses. Open development is something that opposes the profit motives of the
company which can be considered as bad for the business (Lindman 2014).
Requirement of open data based business
According to Immonen, Palviainen and Ovaska (2014), the open data source creates new
opportunities for the business for the factors that provided data, consume data and develop
innovative services and applications around the open data. These businesses require separate
business models and synergetic environment called ecosystem to support the business
applications and services. The actors of these open data ecosystem businesses are differently
oriented and the business model elements. Services and business models that are needed in open

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data based business supposed to be different in order to gain the full advantage of the service
(Immonen, Palviainen and Ovaska 2014).
Literature Gap
Previous studies have focused on the positive aspects of the open data sources. They also
discussed about the policies of different countries for the initiative of opening data to the public.
Different authors had also covered impacts of this open sources data, but only focusing on the
positive approach. Economic benefits, social, and corporate value adding are discussed in dept.
However, the negative approaches of this initiative are barely discussed and there are very few
literatures available which focuses on this topic. Ample amount of scope is available to carry out
a project in finding out the major drawbacks of the open source in the business innovation
process.
Conclusion
It can be concluded from the above discussions of literature reviews that governments of
all the developed and developing countries are considering making the data available to the
private companies and the public, where the process has already started. Different benefits of
these data are discussed and reviewed with the potential outcomes. The impact of these open data
sources, both from government and private businesses are discussed. Economic benefits of the
usage are also highlighted. The opportunities of the business in using open data can be found in
the report with the innovation of the business model that is required in applying it. From the
review, the gap can be found in the demerits of the use of open data. There are very few
literature which discuss and highlights the demerits of open data which can be considered as a
great opportunity for carrying out the research.

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Reference List
Chan, C.M., 2013, January. From open data to open innovation strategies: Creating e-services
using open government data. In System Sciences (HICSS), 2013 46th Hawaii International
Conference on (pp. 1890-1899). IEEE.
Indonesia, R.A., 2013. Open Government Data.
Immonen, A., Palviainen, M. and Ovaska, E., 2014. Requirements of an open data based
business ecosystem. IEEE Access, 2, pp.88-103
Immonen, A., Palviainen, M. and Ovaska, E., 2014. Towards open data based business: Survey
on usage of open data in digital services. International Journal of Research in Business and
Technology, 4(1), pp.286-295.
Janssen, M. and Zuiderwijk, A., 2014. Infomediary business models for connecting open data
providers and users. Social Science Computer Review, 32(5), pp.694-711.
Jetzek, T., Avital, M. and Bjorn-Andersen, N., 2014. Data-driven innovation through open
government data. Journal of theoretical and applied electronic commerce research, 9(2),
pp.100-120.
Kitchin, R., 2014. The data revolution: Big data, open data, data infrastructures and their
consequences. Sage.
Kitsios, F. and Kamariotou, M., 2018. Open Data and High-Tech Startups Towards Nascent
Entrepreneurship Strategies. In Encyclopedia of Information Science and Technology, Fourth
Edition (pp. 3032-3041). IGI Global.

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Lindman, J., 2014. Similarities of open data and open source: Impacts on business. Journal of
theoretical and applied electronic commerce research, 9(3), pp.46-70.
Lindman, J., Rossi, M. and Tuunainen, V.K., 2013, January. Open data services: Research
agenda. In System Sciences (HICSS), 2013 46th Hawaii International Conference on (pp. 1239-
1246). IEEE.
Parycek, P., Hochtl, J. and Ginner, M., 2014. Open government data implementation
evaluation. Journal of theoretical and applied electronic commerce research, 9(2), pp.80-99.
Zuiderwijk, A. and Janssen, M., 2014, June. The negative effects of open government data-
investigating the dark side of open data. In Proceedings of the 15th Annual International
Conference on Digital Government Research(pp. 147-152). ACM.

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Appendix
Open data offers a new start for economic reform and productivity growth. Leveraging the new
possibilities of the Internet to make better use of existing resources, it offers us a way of getting
past the political economy of winners and losers.
The biggest benefits are expected for start-ups and business niches. One interviewee mentioned
that the use of OGD has led to a 5% increase in sales. Other possible benefits will emerge from
outsourcing present government procedures, as a business network and for business cycles.
However, open data is a new thing for companies and is not yet commonly used in the
interviewed companies. Only one company used open data when quality of data was found good
enough. However, the potential of open data has been noted in the companies. One interviewee
estimated that open data does not provide direct financial benefits, but it helps the company to
maintain the current situation better, and it creates value to customers.
Over 280 government data catalogs have been published and over a million datasets have been
released by governments around the world, spawning new businesses and social projects.
One private sector representative mentioned data from the education system, such as the number
of graduates in specific fields in a certain region, as a potentially useful resource for private
companies allowing them to find out where to invest and where to hire talent.