| GISdevelopment.net ---> Policy ---> International |
Government policy and the emergence of spatial information markets
Xavier Lopez
Director, Oracle Spatial, Location and Network Technologies
Oracle Corporation, 1 Oracle Drive
Nashua, NH 03062
Tel: (603) 897-3085, Fax: (603) 897-3269
E-mail:xavier.lopez@oracle.com
Xavier Lopez
Director, Oracle Spatial, Location and Network Technologies
Oracle Corporation, 1 Oracle Drive
Nashua, NH 03062
Tel: (603) 897-3085, Fax: (603) 897-3269
E-mail:xavier.lopez@oracle.com
Introduction
Government plays an important role in facilitating the development of a national spatial information infrastructure. With the growing use of the Internet, the Web, and wireless computing, commercial and non-profit organizations are surpassing government as users of spatial data. The private sector is playing a dominant role in this transformation through the delivery and use of spatial data and content services. Activities such as GIS, location-base services, logistics, navigation systems, and business intelligence -- all require various forms of value-added spatial content. Moreover, as the use of commercial spatial information extends to ever more sectors of a nation’s economy, the emergence of a spatial information marketplace begins to emerge. These transformations raise important policy questions for government providers and their role in this evolving spatial information marketplace. The manner in which government disseminates its spatial information resources to the private sector, the academic community and non-profit organizations will have impacts on growth of a spatial information marketplace.
This paper highlights alternative dissemination approaches taken by government agencies and illustrates their potential impact in marketplace dynamics. The paper does not promote one information dissemination approach over another, but rather suggests that irregardless of dissemination practices, the promotion of spatial information markets should be an important criteria, along with access to academic, scientific and non-profit organizations. The paper builds on earlier research investigating how comparative dissemination policies affected innovation-driven activities in the scientific and commercial sector (Lopez, 1996).
Alternative Spatial Data Dissmination Approaches
Whether implicit or explicit, pre-existing national priorities have a large influence on national information policies. In particular, the influence of revenue generation mandates, privatization goals, intellectual property rights, deficit reduction, and constitutional constraints are relevant factors to be considered. Increasingly, the role of government in promoting domestic commercial information industries has become another priority. These priorities are combined and embedded in a complex political and legal framework that can result in different spatial information dissemination policies.
The UK Ordnance Survey is an example of a mapping agency whose dissemination practices for spatial data are directly influenced by a mandated level of cost recovery. In the UK, the British Treasury office obliges the Ordnance Survey to collect 100 percent of its revenues from data sales and services. The result is a near-monopoly provider of very high quality data that meets the needs of most government and commercial users. While the data costs are expensive for some users, the Ordnance Survey has worked hard to accommodate the price sensitivity requirements of its diverse user base. Some might argue the OS provides a one-stop shop for all the nation’s spatial data requirements. While this might be the case now, the growing demands for value-added data produces and services will undoubtedly pose a challenge for any government agency. The OS’s strategy of partnering with 3rd party value-added intermediaries is a good step in addressing the need for enhanced data products and services.
In contrast, the US Geological Survey’s, National Mapping Division is bound to marginal pricing guidelines for Federal government information. US Federal policy maximizes broad public and private use and commercialization by providing low cost access to USGS topographical datasets and other Federal information resources. The marginal low price of US Federal digital mapping data, coupled with the absence of Federal copyright, is the outcome of an explicit national policy not to transfer the cost of digital map production to end users. This relatively open access policy leverages both scientific and private sector initiative to undertake use and value added processes. The dissemination policy of the USGS, and similar federal mapping agencies, has stimulated the use and value-addition of these information resources. This in turn has invigorated the domestic GIS and location-based services software industry. A drawback to US national mapping activities is that Federal appropriations are not keeping up with demand. For example, USGS digital map features are on average over 15 years out of date. While this problem is the result of appropriations and not dissemination policy, it does highlight how USGS has one less tool (cost recovery) for maintaining its outdated map features.
Role of Commerical Sector in Data Products and Services
The private geographic information industry is an important stakeholder in government information dissemination policy and should be carefully examined since it is better suited to provide a wide variety of end user products and services. The work of leading economists on new growth theory (Romer 1986) suggests that the ability of firms to identify and secure low-cost information resources is vital to stimulating economic growth in an information-based economy. The spin-off benefits of basic science and related government information resources have long been recognized in the scientific community as being the seedbed for promoting innovation and discovery (Nelson and Romer 1995). In explaining why it is generally not good practice to impose restrictive intellectual property rights on scientific information, some economists argue that "there are important efficiency advantages in a system where the government subsidizes the production of fundamental concepts and insights and gives them away for free" (ibid., 20).
New economic growth theories emphasize recognize that knowledge is an endogenous resource that must diffuse through the economy in order for it to realize its potential. Since promoting economic growth is a primary goal of national policy making, it becomes vital to develop and invigorate an information infrastructure that supports education, science, R&D and commercial endeavors. To do so, policy makers must confront some very sensitive issues: To what extent do fiscal priorities of mapping agencies take precedence over national goals and priorities? More specifically, can a nation afford to hold back public information datasets from important sectors of a society in order to privilege national mapping agencies to generate a requisite level of revenues?
The United States provides a set of general policies and practices that clearly promote greater access and commercialization of government information. This has served the nation well, in stimulating development of a robust GIS software and spatial data content industry. However, adopting these practices in other countries may be unfeasible or inappropriate. The policy environment in any country is a unique outcome of enduring legal, political, and cultural traditions. Moreover, a change in policy can only come about when a superior alternative can be implemented, one with demonstrably significantly higher social gains. Recognizing the persistence of existing political and institutional norms, institutions will nevertheless have to adopt information policies that simultaneously promote the high level of advanced scientific advancement, private sector commercialization and government accountability necessary to remain competitive in a global arena.
Marketplace and Innovation
Far sighted information policies can promote serendipitous discoveries and profitable uses of information which cannot always be identified at the onset. This means that policy makers need to move beyond the cost recovery or open access debates. Instead the focus should be placed on ensuring that information policies are defined to stimulate the development of a robust marketplace for spatial data. Only then will the wide variety of data products and services emerge to serve the broadest number of users. Once again, government will play a key role in promoting the widest possible uses of government information resources.
Commenting on constraints to the development of the European GIS database industry nearly a decade ago, the European Union's Information Market Observatory (IMO) noted that:
"One of the biggest constraints on the commercial GIS market in Europe is the lack of affordable digital geographic data and the attitude of some public sector agencies who have to provide the data and ... the pressure on government agencies to recover the cost incurred in collecting this information is seen by some to be severely impeding the growth of the GIS market" (IMO 1995, 8).
In reflecting upon the effects of government restrictions on the flow of scientific datasets, Reichman and Samuelson note that:
"[b]asic science needs abundant, unrestricted flows of raw data at prices it can afford. The evidence suggests, indeed, that "efficient" use of data is a concept antithetical to basic science. On the contrary, by gorging itself on cheap data in ways that encourage serendipity and playful exploration, basic science arrives at precisely those breakthroughs that lend themselves to more efficiently organized technical applications later on. When, instead, data becomes too expensive, scientific research suffers irremediable harm" (Reichman and Samuelson 1997).
In related developments, the success of Internet has contributed to a complementary communications infrastructure that in various research and industry sectors. Indeed, both basic and applied research in geographic information science may be impeded through misguided information policy. Likewise, the effect of information and telecommunications activities such as the Internet, global positioning system (GPS), and Landsat program demonstrate the national and global benefits derived from complementary technology developments. These remarkable developments suggest that government policies that promote use and experimentation can trigger serendipitous value-added activities that may not be anticipated in advance. The implication being that if countries cannot address complex technology and policy issues in parallel, they risk falling behind in the more exciting and fast growing information industries of this new century.
While previous research found that more open-access policies such as those promoted by U.S. Federal map producing agencies tended to contribute favorably to a spatial information marketplace, these same agencies found that their level of appropriations were insufficient to maintain the high quality and detail of mapping required by both government, commercial and academic users. In short, while their data was available at very low cost, it was becoming less and less relevant in a world where users required current and highly detailed spatial information. This has increasingly motivated private sector imaging, surveying and mapping companies to deliver the core mapping capabilities that government agencies once provided.
On the other hand, the UK Ordnance has been able to maintain a robust R&D capacity and deliver new products and services at to meet the domestic market’s need – all while meeting it’s Treasury’s requirement for full cost recovery. Although, some academic and commercial intermediary users in face significant impediments in accessing and commercializing spatial data from the OS, the agency does provide quality mapping products and services that are of use to a majority of institutional users. At the same time there is a growing community of commercial mapping companies that generate their own original map products and services and/or add value to OS products.
Summary
As we move toward global economies and international networked environments, the need to define information policies that advance national priorities is becoming a central concern of governments. Governments have a large stake in this issue and are expected to act in the public's interest. By the same token, this area of policy making is new, requiring a good understanding of the interests of stakeholders and of the probable consequences of alternative policies on the marketplace.
Although government agencies will continue to play an important role in the provision of digital map products, the rapid increase in demand, and changes in the technology will likely outpace their abilities to keep up with diverse user demands for high quality, affordable geographic information. The private sector is beginning to satisfy this demand by providing commercial geographic information products that target specialized, rather than general, users. National information policies should be formulated to encourage this complementary dissemination channel.
References
Government plays an important role in facilitating the development of a national spatial information infrastructure. With the growing use of the Internet, the Web, and wireless computing, commercial and non-profit organizations are surpassing government as users of spatial data. The private sector is playing a dominant role in this transformation through the delivery and use of spatial data and content services. Activities such as GIS, location-base services, logistics, navigation systems, and business intelligence -- all require various forms of value-added spatial content. Moreover, as the use of commercial spatial information extends to ever more sectors of a nation’s economy, the emergence of a spatial information marketplace begins to emerge. These transformations raise important policy questions for government providers and their role in this evolving spatial information marketplace. The manner in which government disseminates its spatial information resources to the private sector, the academic community and non-profit organizations will have impacts on growth of a spatial information marketplace.
This paper highlights alternative dissemination approaches taken by government agencies and illustrates their potential impact in marketplace dynamics. The paper does not promote one information dissemination approach over another, but rather suggests that irregardless of dissemination practices, the promotion of spatial information markets should be an important criteria, along with access to academic, scientific and non-profit organizations. The paper builds on earlier research investigating how comparative dissemination policies affected innovation-driven activities in the scientific and commercial sector (Lopez, 1996).
Alternative Spatial Data Dissmination Approaches
Whether implicit or explicit, pre-existing national priorities have a large influence on national information policies. In particular, the influence of revenue generation mandates, privatization goals, intellectual property rights, deficit reduction, and constitutional constraints are relevant factors to be considered. Increasingly, the role of government in promoting domestic commercial information industries has become another priority. These priorities are combined and embedded in a complex political and legal framework that can result in different spatial information dissemination policies.
The UK Ordnance Survey is an example of a mapping agency whose dissemination practices for spatial data are directly influenced by a mandated level of cost recovery. In the UK, the British Treasury office obliges the Ordnance Survey to collect 100 percent of its revenues from data sales and services. The result is a near-monopoly provider of very high quality data that meets the needs of most government and commercial users. While the data costs are expensive for some users, the Ordnance Survey has worked hard to accommodate the price sensitivity requirements of its diverse user base. Some might argue the OS provides a one-stop shop for all the nation’s spatial data requirements. While this might be the case now, the growing demands for value-added data produces and services will undoubtedly pose a challenge for any government agency. The OS’s strategy of partnering with 3rd party value-added intermediaries is a good step in addressing the need for enhanced data products and services.
In contrast, the US Geological Survey’s, National Mapping Division is bound to marginal pricing guidelines for Federal government information. US Federal policy maximizes broad public and private use and commercialization by providing low cost access to USGS topographical datasets and other Federal information resources. The marginal low price of US Federal digital mapping data, coupled with the absence of Federal copyright, is the outcome of an explicit national policy not to transfer the cost of digital map production to end users. This relatively open access policy leverages both scientific and private sector initiative to undertake use and value added processes. The dissemination policy of the USGS, and similar federal mapping agencies, has stimulated the use and value-addition of these information resources. This in turn has invigorated the domestic GIS and location-based services software industry. A drawback to US national mapping activities is that Federal appropriations are not keeping up with demand. For example, USGS digital map features are on average over 15 years out of date. While this problem is the result of appropriations and not dissemination policy, it does highlight how USGS has one less tool (cost recovery) for maintaining its outdated map features.
Role of Commerical Sector in Data Products and Services
The private geographic information industry is an important stakeholder in government information dissemination policy and should be carefully examined since it is better suited to provide a wide variety of end user products and services. The work of leading economists on new growth theory (Romer 1986) suggests that the ability of firms to identify and secure low-cost information resources is vital to stimulating economic growth in an information-based economy. The spin-off benefits of basic science and related government information resources have long been recognized in the scientific community as being the seedbed for promoting innovation and discovery (Nelson and Romer 1995). In explaining why it is generally not good practice to impose restrictive intellectual property rights on scientific information, some economists argue that "there are important efficiency advantages in a system where the government subsidizes the production of fundamental concepts and insights and gives them away for free" (ibid., 20).
New economic growth theories emphasize recognize that knowledge is an endogenous resource that must diffuse through the economy in order for it to realize its potential. Since promoting economic growth is a primary goal of national policy making, it becomes vital to develop and invigorate an information infrastructure that supports education, science, R&D and commercial endeavors. To do so, policy makers must confront some very sensitive issues: To what extent do fiscal priorities of mapping agencies take precedence over national goals and priorities? More specifically, can a nation afford to hold back public information datasets from important sectors of a society in order to privilege national mapping agencies to generate a requisite level of revenues?
The United States provides a set of general policies and practices that clearly promote greater access and commercialization of government information. This has served the nation well, in stimulating development of a robust GIS software and spatial data content industry. However, adopting these practices in other countries may be unfeasible or inappropriate. The policy environment in any country is a unique outcome of enduring legal, political, and cultural traditions. Moreover, a change in policy can only come about when a superior alternative can be implemented, one with demonstrably significantly higher social gains. Recognizing the persistence of existing political and institutional norms, institutions will nevertheless have to adopt information policies that simultaneously promote the high level of advanced scientific advancement, private sector commercialization and government accountability necessary to remain competitive in a global arena.
Marketplace and Innovation
Far sighted information policies can promote serendipitous discoveries and profitable uses of information which cannot always be identified at the onset. This means that policy makers need to move beyond the cost recovery or open access debates. Instead the focus should be placed on ensuring that information policies are defined to stimulate the development of a robust marketplace for spatial data. Only then will the wide variety of data products and services emerge to serve the broadest number of users. Once again, government will play a key role in promoting the widest possible uses of government information resources.
Commenting on constraints to the development of the European GIS database industry nearly a decade ago, the European Union's Information Market Observatory (IMO) noted that:
"One of the biggest constraints on the commercial GIS market in Europe is the lack of affordable digital geographic data and the attitude of some public sector agencies who have to provide the data and ... the pressure on government agencies to recover the cost incurred in collecting this information is seen by some to be severely impeding the growth of the GIS market" (IMO 1995, 8).
In reflecting upon the effects of government restrictions on the flow of scientific datasets, Reichman and Samuelson note that:
"[b]asic science needs abundant, unrestricted flows of raw data at prices it can afford. The evidence suggests, indeed, that "efficient" use of data is a concept antithetical to basic science. On the contrary, by gorging itself on cheap data in ways that encourage serendipity and playful exploration, basic science arrives at precisely those breakthroughs that lend themselves to more efficiently organized technical applications later on. When, instead, data becomes too expensive, scientific research suffers irremediable harm" (Reichman and Samuelson 1997).
In related developments, the success of Internet has contributed to a complementary communications infrastructure that in various research and industry sectors. Indeed, both basic and applied research in geographic information science may be impeded through misguided information policy. Likewise, the effect of information and telecommunications activities such as the Internet, global positioning system (GPS), and Landsat program demonstrate the national and global benefits derived from complementary technology developments. These remarkable developments suggest that government policies that promote use and experimentation can trigger serendipitous value-added activities that may not be anticipated in advance. The implication being that if countries cannot address complex technology and policy issues in parallel, they risk falling behind in the more exciting and fast growing information industries of this new century.
While previous research found that more open-access policies such as those promoted by U.S. Federal map producing agencies tended to contribute favorably to a spatial information marketplace, these same agencies found that their level of appropriations were insufficient to maintain the high quality and detail of mapping required by both government, commercial and academic users. In short, while their data was available at very low cost, it was becoming less and less relevant in a world where users required current and highly detailed spatial information. This has increasingly motivated private sector imaging, surveying and mapping companies to deliver the core mapping capabilities that government agencies once provided.
On the other hand, the UK Ordnance has been able to maintain a robust R&D capacity and deliver new products and services at to meet the domestic market’s need – all while meeting it’s Treasury’s requirement for full cost recovery. Although, some academic and commercial intermediary users in face significant impediments in accessing and commercializing spatial data from the OS, the agency does provide quality mapping products and services that are of use to a majority of institutional users. At the same time there is a growing community of commercial mapping companies that generate their own original map products and services and/or add value to OS products.
Summary
As we move toward global economies and international networked environments, the need to define information policies that advance national priorities is becoming a central concern of governments. Governments have a large stake in this issue and are expected to act in the public's interest. By the same token, this area of policy making is new, requiring a good understanding of the interests of stakeholders and of the probable consequences of alternative policies on the marketplace.
Although government agencies will continue to play an important role in the provision of digital map products, the rapid increase in demand, and changes in the technology will likely outpace their abilities to keep up with diverse user demands for high quality, affordable geographic information. The private sector is beginning to satisfy this demand by providing commercial geographic information products that target specialized, rather than general, users. National information policies should be formulated to encourage this complementary dissemination channel.
References
- Information Market Observatory (IMO). Geographic Information Systems in Europe: Problems and Potential, Information Market Observatory Working Report 95/2. Luxembourg: CEC DG-XIII, 1995.
- Lopez, Xavier R. The Dissemination of Spatial Data: A North American European Comparative Study on the Impact of Government Information Policy. Norwood, NJ: Ablex, 1998.
- Nelson, Richard R. & Paul Romer. "Science, Economic Growth, and Public Policy," Challenge, 39 (March 1996): 9-21.
- Reichman, J. & Samuelson, P."Intellectual Property Rights in Data: An Assault on the Worldwide Public Interest in Research and Development," Vanderbilt Law Review, 50: 1997: 51.
- Romer, Paul M. "Increasing Returns and Long-Run Growth," Journal of Political Economy, 94 (October 1986): 1002-37.