Iceland: Restoring trust through open data and “brutal transparency”
Foreigners used to know one thing about Iceland. Since last autumn, they tend to know two:
- Iceland is green and Greenland is ice
- Iceland is bankrupt
Neither is fully accurate. In fact:
- Iceland is greener than Greenland, but the dominant colors are black and gray of volcanic origin
- Iceland is not bankrupt, but experienced one of the most spectacular economic crashes any Western country has since the second World War.
The Crash
A banking system that was more than 10 times larger than the nation’s GDP all but vanished in 3 days in early October. The currency has devalued roughly 50% to our most common trading currencies, inflation has been in the double digits for over a year, serious currency restrictions have been put in place, the stock market has lost over 90% of its value, housing prices are falling rapidly and foreign debt has increased dramatically.
I guess you could call it “rather a mess”.
On top of this, investigations of the crash continue to reveal negligence by regulators, mistakes in governance, failure by government institutions to take action, incredibly unfortunate series of events, miscommunication and seemingly fraudulent and criminal actions by key players in the Icelandic finance sector. And the investigations have barely begun!
As you can imagine, following such a catastrophe we have a serious trust issue.
The public hardly trusts the government (one has already fallen in public protest), let alone the semi-resurrected financial sector. In fact, most commercial activity is seen as highly suspicious and any sign of wealth is seen as a clear indication of wrong-doing.
This trust issue reaches abroad. Many Icelandic businesses are met with suspicion judged on origin alone and it is easy to get the feeling from recent developments that foreign governments don’t fully trust ours.
This level of distrust will destroy any rebuilding efforts. Restoring trust is the single most crucial thing for us to be able to move forward.
Brutal Transparency
Sometimes people talk about “brutal honesty”. I believe that the way to restore trust lies in “brutal transparency”. Iceland, more than any other nation needs to reinvent the way the government operates and the way business is done.
The public sure is ready for it. Many of us feel ashamed and to an extent responsible for what has happened as we failed to keep a watchful eye out and voice our concerns.
Earlier this month our company – DataMarket – together with the leading local news portal mbl.is launched an interactive model (unfortunately Icelandic only) of a giant loan agreement the parliament is debating. Almost 25 thousand people dug in. A nation where 10% of the population is eager to explore and experiment with a financial model of an international loan agreement, is a nation that is clearly on its toes about current affairs and will not be betrayed again. People crave data and understanding.
We need to show that we have nothing to hide – neither to each other nor to the rest of the world. Luckily we are extremely well equipped to do so. I’m pretty sure this is one of the best-measured economies in the world. For another project, we’re monitoring over 7 million variables measured as time series and recorded by the various government institutions. Almost all transactions, even at the retail level are real-time (transactions between banks happen instantly) and electronic making it a virtually cash-free economy for the last decade or so. Businesses as well as the infamous banking sector are running state-of-the-art IT systems and could easily meet the demands of such an arrangement.
“Brutal transparency” is – in other words – a low hanging fruit for us. The hard bit is introducing this new way of thinking.
A few days after the crash I outlined on my personal blog a few ideas about how total transparency was the future of finance. I believe this now more than ever, but I also believe it should reach all branches of the government and business in general. For example:
- Publicly traded companies should not file quarterly reports, they should file every day.
- Company ownership should not be a secret, it should be publicly available information.
- Every bill that the government pays should be open data.
- Composition of managed funds should be available in real-time to any customer.
- Retailers should be required to publish their prices online in real-time allowing for meaningful price comparison.
- Any data gathered or recorded by the government should be open data, unless privacy or other higher-order priorities prevent it.
- Every single national budget item should be tracked in real time demanding explanations if they are significantly off-target.
- …this list could go on.
And efforts should be made to make all of this easily available and understandable to locals and foreigners alike.
The Icelandic Model
I have met with government officials and public sector management that truly get the concept of transparency and open data, believe in its power and want to make it happen. But further education is needed. The sprouts are there but the field is not blooming.
Businesses also need to understand that in the current climate transparency is a competitive edge making them more desirable to do business with, invest in and trust their services.
A serious effort in open data and transparency could not only restore the trust that has been ruined, but also make the “Icelandic method” a model for others to follow.
Iceland’s Urbanization (1901-2009)
As a part of our development efforts we’re experimenting with different types of data and ways to represent them.
Currently we’re mainly working with Icelandic economy and society data. We decided to try to put the urbanization that happened over the last century or so in perspective by creating an animation of municipalities and their population. The animation also happens to show activity in municipalities’ splitting and merging, especially in recent years.
Each bubble represents a single municipality and the size of the bubble (its area to be exact) represents the population.
Click the video to play the animation. I recommend full screen viewing for all the details:
About the project
The population data we’re using comes from Iceland Statistics. Location data comes mainly from Geonames, with a few additions and corrections of our own. Data about mergers and splits of municipalities comes from Iceland Statistics and Wikipedia.
As municipalities’ population data was only gathered once per decade until 1980, we’ve had to extrapolate some values to fill the gaps, so the map should not be seen as scientifically accurate. The idea is to show the big picture in the urbanization process.
Thanks to Samsýn for the map we used to make the background, and to Gísli Sverrisson (also known as “dad”) for help with the map projection algorithms.
The coding was done in Processing.
Representing the population of – what may be a relatively large – municipality as a single point is not entirely accurate, but will nevertheless give a decent picture of the development in the country as a whole. A more fine grained (and fully accurate) population projection would involve plotting single farms and addresses, will involve a lot more data and preparation work and will await another day … maybe.
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For other DataMarket projects, see our portfolio.
Iceland & Energy – presentation w. John Perkins
Just finished my previously mentioned presentation on Icelandic energy data. Some 250-300 people showed up – mostly to listen to John Perkins obviously.
Interesting audience to say the least, but a lot of fun!
My DataMarket piece went well – and putting it together at least helped me put some things in perspective. The slides are included below. As before, full screen viewing is recommended. Enjoy:
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Previously posted here
Iceland & Energy: Upcoming presentation
I have been invited – on behalf of DataMarket – to give a presentation at the University of Iceland on April 6th.
The occasion is a small conference due to the visit of “Economic Hit Man” John Perkins to Iceland. Perkins is here to attend the premiere of “Dreamland“, a documentary on the effects that large-scale energy projects – especially for aluminum smelting – have had on the Icelandic economy and society in general.
My role will be to present data on the Icelandic energy sector and try to visualize some of the developments that can be seen in this data. I’ll try to cover some of the developments the film talks about, but also the obvious benefits that an abundance of renewable energy brings. I’ve already seen several data sets that give us laymen an interesting perspective on these things.
As a teaser I include below a few slides on the history of electricity generation in Iceland associated with key milestones in the building of our power plants. Be there on April 6th for more 
(Full screen viewing recommended)
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Previously posted here
Icesave and Icelandic deposits
As DataMarket’s Money:Tech gig (see previous entry) approaches, we’re starting to see all sorts of interesting data coming together to form our “DataMarket on the Icelandic Economy”.
Some graphs just speak for themselves. Here’s one that caught my eye today:
The numbers are millions ISK.
Note that these are only deposits in Icelandic banks and their immediate branch offices, not the subsidiaries of Icelandic banks registered elsewhere. It therefore only includes Icesave (UK and Netherlands) and a minority of Kaupthing Edge’s operations (Finland, Norway, Germany and Austria). See here.
We’ve marked the month Icesave is opened (UK branch). Another interesting breaking point in the graph is in early 2008. Guess what? Icesave Netherlands was started in May 2008. So, just before the crash – foreign depositors held more than half of “Icelandic” deposits (1,710 billion ISK out of a total of 3,123 billion)!
In our upcoming tool, users will be able to view and correlate a wealth of Icelandic economy time series and mark them with events and news headlines interactively. It will be a pretty powerful tool!
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Previously posted here
DataMarket at Money:Tech 2009
DataMarket will be doing a presentation at O’Reilly’s Money:Tech conference in New York in February.
I attended the first Money:Tech conference earlier this year, and I must say it’s one of my favorite conferences ever, so I’m greatly honored to be speaking there.
The topic of my presentation is “What an Economic Collapse Looks Like: The Icelandic Economy Visualized“.
As you’ve probably heard, Iceland suffered a near-total collapse of the banking system in October. Such a collapse would have been bad enough under normal circumstances, but with banks whose assets are 10x the GDP and directly account for almost a quarter of a country’s economy, the consequences are rather dramatic.
At DataMarket, we’ve been up to our necks gathering and visualizing Icelandic statistics and economical indicators, so I think we can tell a pretty interesting story. I really look forward to showing the elite of money-techies our work!
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Previously posted here
DataMarket launched
I’m pleased to announce the launch of DataMarket’s new website.
As the name implies, DataMarket is about creating a marketplace for data – structured data to be more specific. This means all sorts of statistics and tabular data, including but not limited to: market research, exchange rates, various financial information, economic indicators, weather data, sports results, EPG data and the average weight of a male wallaby.
Structured data plays a big role in company operations, government and in fact many aspects of life. It therefore continues to amaze me how hard it is to find data and retrieve it in the appropriate format, let alone merging data from different data sources or creating visualizations.
DataMarket is founded to tackle these issues.
In this first phase, we open as “DataMarket – the service company”. As such we offer companies and individuals data aggregation services and custom data related projects, such as programming of interactive data applications and visualizations.
This is just the first step towards our vision of an active marketplace for structured data. Today’s launch is a way for us to get feedback and take on real-world projects as we build towards our final product – a global marketplace that brings together data providers and data seekers in a single easy-to-use, self-service market.
There are many small steps to be taken on the way to this vision. The next phase will be launched early next year when we open a relatively simple little marketplace, focused on a narrow subject – again giving us further feedback and guidance on our way towards the long-term goal.
Any ideas, feedback and help is welcomed, either in comments below or via email.
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Previously posted here
