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Last month, Web designer Sean Wittmeyer and colleague Wojciech Magda walked away with a $25,000 prize from the state of Colorado for designing an online tool to help businesses decide where to locate in the state.

The tool, called “Beagle Score,” is a widget that can be embedded in online commercial real estate listings. It can rate a location by taxes and incentives, zoning, even the location of possible competitors – all derived from about 30 data sets posted publicly by the state of Colorado and its municipalities.

The creation of Beagle Score is an example of how states, cities, counties and the federal government are encouraging entrepreneurs to take raw government data posted on “open data” websites and turn the information into products the public will buy.

“The (Colorado contest) opened up a reason to use the data,” said Wittmeyer, 25, of Fort Collins, Colo. “It shows how ‘open data’ can solve a lot of challenges. … And absolutely, we can make it commercially viable. We can expand it to other states, and fairly quickly.”

Open-data advocates, such as President Obama’s former information chief Vivek Kundra, estimate a multibillion-dollar industry can be spawned by taking raw government data files on sectors such as weather, population, energy, housing, commerce or transportation and turn them into products for the public to consume or other industries to pay for.

They can be as simple as mobile phone apps identifying every stop sign you will encounter on a trip to a different town, or as intricate as taking weather and crop data and turning it into insurance policies farmers can buy.

At least 39 states and 46 cities and counties have created open-data sites since the federal government, Utah, California and the cities of San Francisco and Washington, D.C., began opening data in 2009, according to the federal site Data.gov.

Jeanne Holm, the federal government’s Data.gov “evangelist,” said new sites are popping up and new data are being posted almost daily. The city of Los Angeles, for example, opened a portal last month.

In March, New York Gov. Andrew Cuomo said that in the year since it was launched, his state’s site has grown to some 400 data sets with 50 million records from 45 agencies. Available are everything from horse injuries and deaths at state race tracks to maps of regulated child care centers. The most popular data: top fishing spots in the state.

State and local governments are sponsoring “hackathons,” “data-paloozas,” and challenges like Colorado’s, inviting businesspeople, software developers, entrepreneurs or anyone with a laptop and a penchant for manipulating data to take part. Lexington, Ky., had a civic hackathon on a recent weekend. The U.S. Transportation Department and members of the Geospatial Transportation Mapping Association had a three-day data-palooza last week in Arlington, Va.

Open data is an outgrowth of the e-government movement of the 1990s, in which government computerized more of the data it collected and began making it available on floppy disks.

States often have trailed the federal government or many cities in adjusting to the computer age and in sharing information, said Emily Shaw, national policy manager for the Sunlight Foundation, which promotes transparency in government. The first big push to share came with public accountability, or “checkbook” sites, that show where government gets its revenue and how it spends it.

Many state legislatures are working to set policies for releasing data. Since the start of 2010, according to the National Conference of State Legislatures, nine states have enacted open-data laws, and more legislation is pending. But California, for instance, has been posting open data for five years without legislation setting policies.