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Fostering Innovation, Creating Jobs, Driving Better Decisions: The Value of Government Data

Everyone is talking about the importance of data to our society as data improves all of our decisions: those we make as individuals, as businesses, as governments. The federal government has been in the data business for quite some time, going back to the first decennial Census in 1790. Since then, the U.S. government has played a key role in providing valuable data to our country.

Just how valuable is the data the federal government provides? That question can’t be answered precisely, but there are many reasons to believe that the value of the data to our society far exceeds its cost. As a first step in ascertaining better estimates of just how valuable government data is, this report focuses on federal statistical data, data that informs us about our huge, complex, and dynamic economy and data that tells us about our ever-changing population. Examples of government statistical data include gross domestic product, employment and unemployment, consumer prices, retail sales, housing vacancies, residential construction, agricultural supply and demand, corporate profits and international trade – there are many more.

This report finds:

Government data potentially guides trillions of dollars of investments each year.

Government data helps governments to better target scarce resources, businesses stay competitive and individuals stay informed about the communities in which they live. As the real world examples in this report demonstrate, individuals, businesses, other organizations and state and local governments use government data to help make better-informed decisions that are better, faster and more plentiful because of the ready availability and high quality of government data.

The cost of Government data is small relative to its potential benefits.

Since 2004, the federal government’s principal statistical agencies have spent an average of $3.7 billion annually on data collection, processing and dissemination. This expenditure amounts to about three cents, per person, per day, and is only 0.02 percent of our roughly $17 trillion dollar economy.

Government data is uniquely comprehensive, consistent, confidential, credible, relevant and accessible.

Acting alone, the private sector would likely provide only some of the types of data produced by the government. The federal government is uniquely positioned to provide comprehensive, consistent, credible, relevant and accessible data, all while protecting confidentiality. Government data is used directly to support decision making, indirectly through commercially available value-added products, and as a benchmark and standard for private data products. Thus, the government and the private sector complement each other.

Government data is commercially valuable.

Government data is a key input to a wide variety of commercial products and services in the economy, although many of these uses may not be apparent because attribution to the government is not required. This report identifies industries that use government data intensively and provides a rough estimate of the size of this sector. The lower-bound estimate, based on a very short and incomplete list of firms that rely heavily on government data, suggests that government data helps private firms generate revenues of at least $24 billion annually – far in excess of spending on government statistical data. The upper-bound estimate suggests that this sector generates annual revenues of $221 billion. These crude estimates provide rough order-of-magnitude estimates of the range of the sector’s size and illustrate the importance of government data as an input into commercial products and services. The value of government data is the extent to which the decisions based on government data are better than the decisions that would have been made without government data. Because such counter-factual evidence is not widely available, this report makes the case that the value of government data far outweighs its cost by outlining the economic arguments for government provision of data, by estimating the size of the industry sector that intensively uses government data, and by illustrating the wide range of ways in which government data is used.

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