BUSINESS HORIZON QUARTERLY ISSUE NO.12
DATA AND OPPORTUNITY GROW IN THE HEARTLAND
DATA-DRIVEN ERA OF DISCOVERY pg. 12
pg. 4
THE ELEPHANT IN THE ROOM pg. 8
FOOD + DATA = GREAT OPPORTUNITIES
pg. 24
A note from the publisher Imagine a future where cars drive themselves. Where doctors prescribe medicine formulated for each individual patient. Where farmers measure sunlight and rainfall, not by the acre, but by the foot. It may seem like science fiction, but this incredible future is already here, thanks in large part to the growth of data-driven innovation. In this edition of the Business Horizon Quarterly, we explore the many ways data is improving business, government, and most importantly, people’s lives.
Freeenterprise.com TELLS THE STORIES OF AMERICAN BUSINESSES AND ALL THAT THEY DO TO INSPIRE, INNOVATE, AND CREATE OPPORTUNITIES.
Features include: Companies pushing the boundaries of innovation Interviews with successful entrepreneurs and business personalities Businesses helping to improve the world around them Inspiring stories of American ideals at work How our cities and towns are encouraging growth
In this issue, we hear about the story of DC Central Kitchen, which uses data to help prepare and distribute meals to thousands of less fortunate people in Washington, DC. We also hear from experts in the healthcare industry about how data is helping optimize care delivery and improve outcomes. And we hear from technology leaders in the Midwest about data-driven agricultural applications that are making America’s farms more productive and profitable. This issue comes on the heels of the U.S. Chamber of Commerce Foundation’s year-long examination of the growth of data-driven innovation. We spoke with dozens of experts around the country and produced more than 100 articles and blog posts, as well as a groundbreaking report, The Future of Data-Driven Innovation. On October 7, I was pleased to speak at the Chamber Foundation’s daylong summit releasing the report and featuring discussion from experts and thought leaders in business and government on how data is impacting and improving their domains. If there was one takeaway from the summit, it’s that the growth of data-driven innovation offers unparalleled opportunity and can be a catalyst for economic growth and a more competitive country. Yet, despite the evident benefits and near-unlimited potential, this data revolution, sometimes dubbed “Big Data,” is often (and incorrectly) conflated with government data collection and the privacy concerns that raises. It is important for data to be treated carefully and guarded closely, but we must not allow vague concerns to preclude us from the benefits of real innovation. Data, when used responsibly, can be an enormous force for good. It helps businesses develop new products, operate more efficiently, and grow, creating much-needed jobs. The data revolution has enormous benefits for consumers and for the country as a whole. Like so many of my colleagues across the country and the world, I am excited about the promise of data-driven innovation. Read on to learn more about all of the ways data is making our world a better place.
Sincerely,
PUBLISHER JOHN R. McKERNAN JR. EDITOR-IN-CHIEF RICH COOPER ASSOCIATE EDITOR TIM LEMKE CONTRIBUTING ROLES JUSTIN HEINZ OWNER, COGENT WRITING, LLC MICHAEL HENDRIX DIRECTOR, EMERGING ISSUES AND RESEARCH JEFF LUNDY MANAGER, RESEARCH – CORPORATE CITIZENSHIP CENTER JOHN DRUGAN RESEACHER BRIAN G. MILLER SENIOR MANAGER, PRODUCTION IAN WAGREICH PHOTOGRAPHER DESIGN AND LAYOUT BY ADFERO A special thanks to the U.S. Chamber of Commerce Foundation and Chamber teams that made this publication possible through their creative contributions and hard work. Letters to the editor: BHQ@USChamber.com
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Copyright © 2014 U.S. CHAMBER OF COMMERCE FOUNDATION
TABLE OF CONTENTS
ISSUE 12 // BUsiness Horizon Quarterly 1 | Letter from the Publisher
BY J O H N R. M c K E RN A N J R.
4 | Data-Driven Innovation The U.S. Chamber of Commerce Foundation (USCCF) is the 501 (c) (3) nonpprofit affiliate of the U.S. Chamber of Commerce. It is dedicated to strengthening America’s long-term competitiveness and educating the public on how our free enterprise system improves society and the economy. The Foundation conducts research and produces events on issues facing business now and in the future. Through its initiatives, the Foundation builds skills, drives
FEATURE Data-Driven Innovation
4 | DATA AND OPPORTUNITY GROW IN THE HEARTLAND B Y M I K E L B E R G E R , P R E S I D E N T, L A FAY E T T E T EC H 8 | GOVERNMENT DATA AND THE ELEPHANT IN THE ROOM
B Y C A R O LY N PA R N E L L , C H I E F I N F O R M AT I O N O F F I C E R , S TAT E O F M I N N E S O TA
12 | RESEARCH ENTERS A NEW DATA-DRIVEN ERA OF DISCOVERY BY RAY L . WAT T S , M .D ., P RE S I D E N T, U N I V E RS I T Y O F A L A BA MA
AT BI RM I N G H A M
18 | DRIVING THE ECONOMY WITH A BIG DOSE OF DATA BY J O E K E N N E D Y, P RE S I D E N T, K E N N E D Y RE S E A RC H 24 | FOOD + DATA = GREAT OPPORTUNITIES - THE STORY OF DC CENTRAL KITCHEN B Y R I C H CO O P E R A N D J U S T I N H I E N Z , U. S . C H A M B E R O F CO M M E R C E
F O U N D AT I O N
innovation, and encourages growth.
34 | REAL WORLD DATA - THE CHALLENGE THAT CAN'T BE REFUSED
B Y K I R S T E N A X E L S E N , V I C E P R E S I D E N T I N W O R L D W I D E P O L I C Y, P F I Z E R A N D D R . M A R C B E R G E R , V I C E P R E S I D E N T, R E A L W O R L D D ATA A N D A N A LY T I C S , P F I Z E R
40 | infographic - five steps to a data-driven future
42 | OPENING BUSINESS INNOVATION WITH OPEN DATA
BY
J O E L G U R I N , F O U N D E R O F O P E N D ATA N O W.CO M
50 | AN ERA OF GAME-CHANGING INSIGHT FROM BIG DATA B Y D A N I E L S . P E L I N O, G E N E R A L M A N A G E R , G L O B A L P U B L I C S EC T O R , I B M CO R P O R AT I O N 56 | BRIDGING THE GAP BETWEEN TECHNOLOGY AND POLICY B Y D AVID CHAVE R N, E XE CUTIVE VICE PR E S ID E NT, U. S . CHAMB E R OF COMME R CE ; PRESIDENT, CENTER FOR AD VANCE D TE CHNOLOGY & INNOVATION
62 | DATA IS THE NEW GOLD - MARKETING INNOVATION AND THE U.S. ECONOMY
B Y R A C H E L N Y S W A N D E R T H O M A S , E X EC U T I V E D I R EC T O R O F T H E D ATA - D R I V E N M A R K E T I N G I N S T I T U T E AT T H E D I R EC T M A R K E T I N G A S S O C I AT I O N
68 | A DOZEN PRINCIPLES FOR DATA-DRIVEN INNOVATION U. S . C H A M B E R O F CO M M E R C E F O U N D AT I O N
72 | What You Should Know 76 | BUSINESS & data LEADERS speak! 80 | FINAL WORD
B Y R ICH COOPE R , E D ITOR -IN-CHIE F,
B US INE S S HOR IZ ON QUARTE R LY; VICE PR E S ID E NT, E ME R GING IS S UE S & R E S E AR CH, U. S . CHAMB E R OF COMME R CE FOUND ATION
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bhq@uschamber.com
data-driven innovation
BUsiness Horizon Quarterly
INNOVATION
D
ata-driven innovation isn’t constrained to a few-
educated, productive individuals, but also, a culture of
mile radius of the Golden Gate Bridge. I think
creativity and risk taking.
I’ve stumbled onto an excellent laboratory for
exploring innovative ideas in the middle of some corn
WHERE OLD MEETS NEW
fields in flyover country. I wonder if you don’t also have
I believe you can find these folks and can create this
the same thing near you—that is, a place to explore
culture right where you are. For me, that was in
ideas, not necessarily the corn.
the middle of corn fields in Lafayette, Ind., next to Purdue University.
In any business, you want to be nearest the source of your raw materials and your customers. For most new
Purdue is a world-class research institute in the science,
businesses today, their data is their most valuable raw
technology, engineering, and math fields. That means
material that they hope to turn into refined and valuable
that every year, a new crop of smart minds arrives ready
information for a paying customer. Technology advances
to learn and tackle tough problems. It also means that
have made it extremely cheap to have our data at any
there are more smart and experienced minds ready to
time, on any device, and in any place. E-commerce
teach them. Those minds can be tapped both for their
means our customers can feel like neighbors, even if we
experience and their enthusiasm. The Foundry group at
will never bump into them at the grocery store. Case in
the Purdue Research Foundation has been a lightning
point: I’m typing this article on my phone somewhere
rod for university related entrepreneurial activities for
over the Atlantic Ocean on my way to South Africa. As
us. I encourage you to reach out to your local university
soon as I land, my device will know how to connect
and ask what they have in terms of entrepreneurial and
and send these words back to Washington, DC, and
technology transfer programs.
onto you all. Also near where I live are two traditional industries:
BY MIKEL BERGER, PRESIDENT, LAFAYETTETECH
So if our raw resources—data—are everywhere, and
agriculture and manufacturing. Don’t dismiss businesses
so are our customers, then where should we locate our
not named Microsoft, Google, Facebook, or Amazon
businesses? We’re no longer constrained to be near a
as not being data-driven. I work with farms that have
port or a major interstate. What you need to be near
self-driving $250,000 vehicles: the tractors and combines
are the people to help challenge, grow, and refine ideas
need to drive themselves because the farmer is too busy
into viable businesses. That not only takes smart, well-
reading real-time yield data, coordinating coworker tasks,
FOR MOST NEW BUSINESSES TODAY, THEIR DATA IS THEIR MOST VALUABLE RAW MATERIAL THAT THEY HOPE TO TURN INTO REFINED AND VALUABLE INFORMATION FOR A PAYING CUSTOMER. // T H E B E S T P L A C E T O F A I L O N Y O U R P//A T AHR T O I C LS EU CNCAEMS ES | 5
data-driven innovation
BUsiness Horizon Quarterly
TECHNOLOGY ADVANCES HAVE MADE IT EXTREMELY CHEAP TO HAVE OUR DATA AT ANY TIME, ON ANY DEVICE, AND IN ANY PLACE.
INNOVATION
Many data-driven businesses can work in a more cost-
never figure out how to properly get the word out to
effective coworking facility. Coworking is a relatively
an addressable market that turned out to be much
new phenomenon, but these kinds of facilities are
smaller than I ever anticipated.
popping up all over. In our area, we have the studentled Anvil, and I was part of a team that created
To round out your skill area, you need to find co-
the nonprofit MatchBOX Coworking Studio. The
founders. One way to do that in our region is called
membership-based model of these types of offices can
Verge. Verge is a monthly meeting in Indianapolis and
really help a cash-strapped business while still giving it
other cities around the state. At each meeting, two
the resources and community a young business needs.
companies pitch their ideas, and a fireside chat with an experienced entrepreneur educates and encourages
Of course, not everything is perfect. One challenge
the crowd. But the real value is in the networking that
has been a fear of failure. Call it a Midwest work
happens before and after the meeting. No one should
ethic or just plain pride, but I’ve met far too many
put out a Craigslist ad for a co-founder. You have
and planning next year’s crop, all from
As in every industry, there are those who are happy
folks who have an idea and what it takes to execute
to really know someone before you go into business
an iPad. Traditional businesses can be a unique
doing business as it has always been done. I believe
on it, but they never do so. They seem content with
together. Oh, and don’t tell the software developers
source of innovation, combined with practical
they will eventually be won over by the results. I’ve
dreaming about what might have been instead of
that they are networking. They think they are just
business knowledge. Our local chamber, Greater
been most impressed by those able to add their years
seeing what could actually be. To combat this fear,
enjoying the free beer and pizza.
Lafayette Commerce, and our local mayor and
of experience to the newer data-driven technologies.
we created a group called Lafayettech. We meet
economic development director have been great
The combination of the old and new is truly the
weekly to learn and share but also just to remind
We would love to have you join us in Lafayette. It is a
supporters of new data-driven businesses in more
most powerful.
ourselves that we aren’t the only crazy ones in town.
great place to fail (and succeed) at business. But I bet
This entrepreneur support group (it does feel like
if you look around wherever you are, you can find
an addiction at times) is vital. If you don’t have
some smart minds, a place to call home, and a
One such company in our area is 360 Yield Center.
LEVERAGING THE ENTREPRENEURIAL NETWORK
something like this in your area, start one just by
community of other folks just as crazy as yourself.
The company’s story began more than six years
Many businesses that ultimately fail do so not
scheduling a monthly lunch where a few people each
And when you do, reach out and let me know how it
ago, when Daryl Starr developed a data model
because of the quality of the idea or the quality of the
give a two minute pitch of their latest idea.
is going. I’m only a few keystrokes away. ■
for predicting corn yields using seed, soil, and
people but because of simple cash flow. Running out
weather data. This cloud-based solution, named
of money before the idea can be fully completed, or
I’ve personally seen a lot of my ideas fail when
Commander, helps farmers use seed, nutrients,
just simply running out of money before the market
I tried to do too much by myself. I’m a pretty
and water more efficiently while maximizing crop
is ready, is the killer for many. This means you need
decent software developer, but I’m not that good
production. Starr started Commander with nothing
to maximize the little capital you do have. A lower
at marketing, sales, and understanding a particular
more than a spreadsheet and his 10-plus years of
cost of living combined with lower commercial real
industry deeply. More than 10 years ago, I came
experience in his traditional crop scouting and
estate options have been a big help to my businesses.
up with an idea for a statistics app for high school
agronomy consulting business. Earlier this year,
The lower cost of living means that employees can do
basketball coaches. (Remember, I’m from Indiana.
Starr’s company was acquired by 360 Yield Center,
things that are unthinkable in more expensive locals.
I’m required to mention corn and basketball to
which was founded by leaders in the precision
You know, crazy stuff, like own a home or raise a
round out the stereotype.) While I’ve had more
agriculture industry.
family.
than 300 teams pay for and use the software, I never
traditional industries.
took the basketball world over because I could just
6 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
Mikel Berger is partner & software developer at DelMar, president of Lafayettech, and cofounder of MatchBOX. In 2004, Berger partnered with one of his former Purdue University professors to start DelMar Software Development, LLC, which provides softwaredevelopment services to startup companies. DelMar has developed Web and mobile data driven applications for startups in agriculture, education, manufacturing, real estate, athletics, and government.
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GOVERNMENT DATA AND
THE ELEPHANT
IN THE ROOM
GOVERNMENT
T
here is a lot of buzz going around these days
potential fraud in public programs by identifying
about data. Unfortunately, terms like “Big Data”
anomalies that call for further investigation.
can serve to obscure the practical potential
of data-driven innovation as much as they generate
By breaking down data barriers, we can begin to
excitement and interest in the topic. In the end, though,
better understand the nature of societal challenges
data is data is data, and no matter the volume or velocity
that cannot be fully grasped or addressed within
at which this data is being accumulated, the critical
the confines of a single government agency or line
element in deriving value is how we cultivate and
of business. To combat challenges such as poverty,
manage that data as an organizational asset worthy of
homelessness, high rates of suicide among veterans,
our attention and stewardship. In the state of Minnesota,
and the persistent achievement gap faced by
we are working to instill a culture shift wherein data
students of color, we must begin to understand these
is understood not simply as an input or output of an
challenges holistically. By cultivating trustworthy and
agency’s daily work, but rather as an enterprise asset of
standardized data across agency lines, government
the state and of the citizens whose tax dollars support it.
can more fully leverage the power of analytics and Big Data to address the big challenges of our time.
The challenges faced by states across the country demand that we adopt a new view of data as an
A helpful image for understanding how Big Data can
enterprise asset. For decades, silos have been built
help us address big problems in society is the parable
within the walls of government to deliver a specific set
of the blind men and the elephant. It is a story about
of services to the public, each with its own function
a group of blind men who are touching an elephant,
for collecting, managing, and analyzing data in order
attempting to learn what it is that they are encountering.
to direct its work and measure results and outcomes.
Each of the men is touching a different part of the
This decentralized approach to data management
elephant, such as the tusk or the tail. Without the benefit
puts state governments (and the public sector in
of each other’s sensory information, they find themselves
general) at a disadvantage in terms of harnessing the
in complete disagreement about what is in fact before
power of data analysis tools to promote innovation
them. The man touching the elephant’s trunk believes
and make our work more efficient and effective.
he is touching a snake. The man touching the elephant’s tail believes he is handling a rope. It is only through
We should all be excited for the potential of data-driven
collaboration and listening that each man’s information
innovation to improve government services and help
is brought together by the group to determine that
target dollars most effectively. Education and workforce
what is before them is, in fact, an elephant.
data can be merged to inform the development of
BY CAROLYN PARNELL CHIEF INFORMATION OFFICER – STATE OF MINNESOTA 8 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
curriculum and post-secondary programs that match
The promise of Big Data for the public sector is the
changing workforce demands. Predictive analysis can
potential to gain real insight into the “elephants” (the
aid the public safety community in allocating police
big, complex challenges) that government wrestles
resources where crime is most likely to occur, and
with every day, helping us to better understand
data analytics tools can help governments identify
their relationship to other societal challenges, the
// A R T I C L E N A M E | 9
data-driven innovation
BUsiness Horizon Quarterly
GOVERNMENT IS, IN A SENSE, AN ENORMOUS DATA GENERATING MACHINE
WITH TREMENDOUS VARIETY, COMPLEXITY, AND VARIABILITY IN THE DATA COLLECTED AND PRODUCED.
GOVERNMENT
lay a foundation from which robust data analysis
mobile application for use on smart phones,
can occur. In Minnesota, we are working to lay
called MSPBus. After adding bike-sharing and
the foundation for data-driven innovation by
car-sharing service data, the team was able to
implementing an enterprise-level data governance
provide real-time information about transit as a
program with a strategy for the definition and
whole, and in late 2013, OMG Transit was born.
management of enterprise Open Data.
The company now provides real-time transit apps for android and iPhone in Minneapolis-St. Paul,
Government is, in a sense, an enormous data-
Chicago, Portland (Oregon), and San Francisco.
generating machine with tremendous variety, complexity, and variability in the data collected
There is great potential in leveraging modern data
factors that contribute to positive and negative
in screening of Medicaid providers to identify
and produced. By recognizing data as an enterprise
tools to reap value from government data, be it social
outcomes, and the interventions that are most
potential fraud using open source technology.
asset, we begin to understand data as something that
or economic value, value in the form of more efficient
should be managed and maintained, not just for a
government operations, or the value of insight gained
Looking beyond the potential for Open Data to
specific program goal but for the benefit and use of
from a broader understanding of complex challenges.
But innovation using government data shouldn’t
promote public sector innovation, the recognition
the state and its people. Within this perspective, we
As these analytical tools advance and more data is
be limited to efforts made within the walls of
of data as an asset should lead governments to more
can see the importance of aligning data management
generated and stored, our ability to gain insight and
government. The potential for crowdsourcing as
openly share and distribute their data publicly, out
practices under an accepted set of policies and
promote innovation will increase, but so too will the
a tool to promote both public and private sector
of a recognition that the asset ultimately belongs to
standards that allow for data sharing, data
potential for misuse and mishandling of data, which
innovation should lead all states to take action
the citizens they serve. By making this data available
mashups, the application of modern data analytics
is of particular concern related to personal data.
around Open Data—a growing movement that
to private businesses, non-profits, engaged citizens,
tools, and ultimately data-driven innovation.
is calling on government to make public data
and government can help stimulate innovation
available online through application programming
and economic development across the board. To
Of course, the governance and management of data
adopt policies that secure and protect private data in
interfaces (APIs) that allow citizens and businesses
understand how the opening up of government
is the boring stuff—a discipline that is critically
the interests of personal privacy. At the same time, we
to access data in a raw, standardized form.
data can stimulate economic growth, one need only
important but not citizen-facing nor engaging
should recognize the power and potential of data in
By making data conveniently available and
turn on the Weather Channel—one part of a $1.5
of the public. That’s why we are also working
the information age and liberate public data as a
usable, we can provide resources for innovation
billion private weather industry that was built on a
to develop connections with the community of
resource for innovation and the betterment of society
and empower citizens to help government
foundation of freely available government data from
developers and self-dubbed “civic hackers” here in
as a whole. ■
address the big challenges of our time.
the National Weather Service. For another example,
Minnesota. Beginning in 2013, we partnered with
we can look to the prevalence of GPS-based
local governments and organizations like Open
That’s why Minnesota is acting as the lead state
products and services. By making global positioning
Twin Cities, part of the national Code for America
partner in the Provider Screening Innovator
data available in the 1980s, the federal government
brigade, to host Hack for MN. Participant teams
Challenge, a partnership with NASA, the Harvard
helped spur the creation of a new mobile mapping
were assembled to address a particular problem
Business School, the Centers for Medicaid Services,
services industry, the total economic value of
or issue facing government by applying existing
and TopCoder. TopCoder hosts online, competitive
which is now estimated at $90 billion annually.
technologies or building new applications using
effective in addressing these challenges.
It is incumbent upon government to pursue and
their knowledge, ideas, and publicly available data.
crowdsourcing programming competitions in software design and development, and the goal
If we are to bring government data together
of the partnership is to leverage the skills and
in a meaningful way—a way that will help us
One of the products of the first Hack for MN
expertise of the TopCoder community to develop
gain insight into the problems and potential
was a prototype for a real-time bus tracking
a shared service solution that will assist states
solutions of our time—then our first job is to
10 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
Carolyn Parnell was appointed by Gov. Mark Dayton (D-MN) to serve as chief information officer (CIO) for the state of Minnesota. Among her leadership roles as State CIO, she is the commissioner of MN.IT Services, the state agency that provides effective information technology to Minnesota’s government. Before joining the Governor’s Cabinet, Parnell was the chief operating officer for Information Technology Services for the Minnesota System of Colleges and Universities (MnSCU), the fifth-largest system of two- and four-year colleges and universities in the nation.
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RESEARCH
I
n classical research, an investigator generates a question or hypothesis and then collects information in a systematic way to answer that question or test
the hypothesis. In the past few years, however, several technological innovations have converged to open a completely new way to approach scientific questions: datadriven research. Some of these advances have become familiar to the world at large, such as the rise of Big Data and cloud computing. Others, including the development of next-generation gene sequencing machines, are less widely known. Taken together, they are launching the University of Alabama at Birmingham (UAB) and other leading research centers into a new era of discovery. In data-driven research, you don’t start with a narrow question. Instead, you collect a huge amount of data and then look for emerging patterns in those data. At UAB, data-driven research is generating fresh understanding in how to treat and prevent disease. It is also leading directly to the creation of new products and businesses, and by training a new generation of innovation-savvy students, we are enabling the United States to maintain its global leadership role in research and development.
RESEARCH ENTERS A NEW DATA-DRIVEN ERA OF DISCOVERY
BY RAY L. WATTS, M.D., PRESIDENT, UNIVERSITY OF ALABAMA AT BIRMINGHAM
PHOTOS: COURTESY, UNIVERSITY OF ALABAMA AT BIRMINGHAM.
12 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
Photo left: Ray L. Watts, M.D., president of the University of Alabama at Birmingham and a renowned researcher and clinician specializing in Parkinson’s disease, with UAB scientist Andrew West, Ph.D. West is developing a potentially revolutionary new treatment for Parkinson’s through the Alabama Drug Discovery Alliance (ADDA), a partnership between UAB and Southern Research Institute. The ADDA currently has 17 potential new treatments in its development pipeline.
data-driven innovation
BUsiness Horizon Quarterly
ASKING CRITICAL QUESTIONS A hypothesis-driven researcher might say, “I know there is a gene related to cancer in the European population; is the same true for those of African descent?” The data-driven researcher will be more open-ended, saying, “I’ll bet something in the genetic makeup of these populations is related to cancer.” Both approaches are valid, but it is clear that the latter offers the possibility of making surprising new discoveries. And the history of science shows that breakthroughs often emerge from unexpected directions.
IN DATA-DRIVEN RESEARCH, YOU DON’T START WITH A NARROW QUESTION. INSTEAD, YOU COLLECT A HUGE AMOUNT OF DATA AND THEN LOOK FOR EMERGING PATTERNS IN THOSE DATA.
Genetics is a leading example of a field that is being transformed by data-driven science. While it took more than 10 years for the Human Genome Project to produce the first complete map of human DNA, the next-generation sequencing machines now used by researchers at UAB and other institutions can do that work in a matter of days. Illumina, a leading maker of DNA sequencing machines, estimates that 228,000
RESEARCH
We believe that we must first invest in our own
HudsonAlpha’s key contribution to the UAB-
strategic priorities before asking others to partner
HudsonAlpha partnership is capacity. While
with us. That is why UAB leadership plans to
UAB has four next-generation genetic sequencers,
dedicate $200 million over the next five years
HudsonAlpha has 12. But human genomics research
toward accelerating research, with support from
also requires large populations of patients and
The Campaign for UAB: Give Something, Change
investigators who specialize in clinical studies. That
Everything, the institution’s largest-ever fundraising
is what UAB brings to the synergy, as it is one of the
campaign, with a goal of $1 billion. A significant part
largest public academic medical centers in the United
of these funds will be used to recruit accomplished
States, with more than 1 million patient visits a year
investigators who are national and international
and annual research funding of more than $450
leaders in genomics, personalized medicine, and
million.
informatics. You can imagine an outcome from UAB’s investment UAB is tackling several important health problems
in this research: novel potential biological targets
for our area of the country through this accelerated
that can be used as the starting point to develop
effort. Data-driven discovery promises to identify
new molecular therapies. A partnership with
new approaches to tackle the high rates of cancer,
Birmingham-based Southern Research Institute
diabetes, obesity, and stroke seen in the South. Our
is already fueling rapid progress in this area. UAB
research will also specifically address the significant
has expertise at both the front and back ends of the
health disparities along socioeconomic and racial
drug discovery pipeline: the initial identification
lines.
of potential targets through data-driven basic and clinical research and, at the back end, human clinical
THE POWER OF PARTNERSHIPS
trials. Southern Research—which has discovered
human genomes will be sequenced in 2014—a number
To achieve these goals, we are forming new strategic
projected to double every 12 months. With the critical
research partnerships. This year, we created the
mass of genetic data currently available, researchers are
UAB-HudsonAlpha Center for Genomic Medicine,
uncovering new links between DNA patterns and the
which links UAB with the HudsonAlpha Institute
onset and progression of disease.
for Biotechnology in Huntsville. HudsonAlpha
seven FDA-approved cancer drugs—excels in the middle pipeline steps, including high-throughput screening, medicinal chemistry, pharmacokinetics, toxicology, and initial safety and efficacy testing. This Alabama Drug Discovery Alliance already has 17 active potential drugs in its pipeline, and as a measure
was created by two entrepreneurs who raised
of discovery rigor, 11 more have been paused or
At UAB, we are making a major investment in genomic
$130 million in private and state funds to build a
medicine and two related fields: personalized medicine
270,000-square-foot institute on a newly created
and informatics. Personalized medicine seeks to
150-acre biotechnology park. In 2007, they recruited
understand how individual genetic variations affect a
Richard Myers, Ph.D., former chair of genetics at the
person’s susceptibility to disease or response to treatment.
Stanford University School of Medicine and a major
At UAB, we have long recognized that innovation
Informatics powers both genomics and personalized
researcher in the Human Genome Project. Myers
happens when researchers from different disciplines
medicine by enabling researchers to manage and analyze
serves as HudsonAlpha president, leading more than
interact. This viewpoint, that UAB is an “institution
the large datasets generated in this work.
100 scientists.
without walls,” becomes even more important in
terminated.
TOWARDS TEAM-BASED SCIENCE
the era of data-driven research, which requires close
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INNOVATIONS IN CYBERSECURITY
available cloud computing technology to process millions
Data Research and Analytics Laboratory, for example,
American businesses have another pressing data
each e-mail, the system can create a constantly updated
engineers, physicians, computer scientists and
concern: how to keep their information safe.
blacklist to prevent innocent users from visiting malicious
statisticians have joined forces to develop new ways
Cybercrime now costs the U.S. economy an
websites.
to manage, analyze, and visualize large datasets. In
estimated $100 billion per year, with theft of
addition to serving as a central facility to process data
intellectual property accounting for the largest share
generated through research across campus, the lab
of those losses. But here too, data-driven research
is pioneering new hardware and software designs to
is providing fresh solutions. Investigators in UAB’s
evaluate those data faster and more efficiently.
Center for Information Assurance and Joint Forensics
collaboration between investigators from a wide variety of traditional specialties. In the UAB Big
Research are developing new ways to convert the One particularly exciting study in the lab is using
torrents of data flowing through the Internet into
data-driven research methods to develop new ways
actionable intelligence.
of detecting Parkinson’s disease. The investigators started with a large collection of MRI brain scans
Led by UAB Director of Research in Computer
from patients with Parkinson’s and a similar number
Forensics Gary Warner, UAB cybercrime researchers
of scans from healthy patients. Then they designed
began by creating a vast database of spam e-mails
algorithms to look for patterns that distinguish one
and malicious software that now holds more than 1
type of brain from the other. Their software found
billion e-mails and 11 million malware samples. Then
subtle changes that occur in the early stages of
they developed new methods to rapidly analyze that
Parkinson’s, suggesting that MRI images collected
data and compare it with the 1 million new messages
in clinical practice may be able to be used to assist
arriving in the database each day. Within minutes,
in diagnosing the disease. Because the technique
their algorithms can identify patterns that point to
works with MRI scans that can be produced by
major new cyberattacks—and identify the sources of
any community hospital (rather than relying on
these assaults. Just as important, the data are securely
specialized machines available only at major medical
tracked so they are admissible as legal evidence,
centers), it has great potential for widespread use.
which allows law enforcement officials to prosecute
The researchers recently launched a new project
the criminals responsible.
that will use the same approach to study autism. Their ultimate goal is to extend the work to improve
UAB efforts have assisted the FBI and other law
diagnosis of Alzheimer’s and other brain diseases.
enforcement agencies in cases that have led to the
Innovations developed in the Big Data Research and
arrest of more than 100 cybercriminals. In one high-
Analytics Lab also benefit businesses throughout
profile case, Warner and his students helped the FBI
our region. The lab’s scientists are already assisting
identify 17 foreign nationals who had participated
several Alabama companies as they embark on data-
in a massive online fraud ring that stole $70 million
driven initiatives. And as more businesses seek the
from hundreds of American companies.
competitive advantage offered by Big Data analysis,
Center researchers are continually investigating new
these partnerships will continue to grow.
approaches to curb cybercrime. One recent example, led by Dr. Ragib Hasan, leverages commercially
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of spam e-mails each hour. By rapidly testing the links in
DATA-DRIVEN ENTREPRENEURS This leading-edge research has tremendous commercial potential. Last year, UAB launched Malcovery Security, a
UAB’S ROBUST R&D ENTERPRISE
spin-off company that helps businesses protect themselves against cyberattacks. Its customers include Facebook,
• Economic impact on Alabama: $5 billion annually
Visa, IBM, LinkedIn, eBay, and Citi. Malcovery is now housed at Innovation Depot, a Birmingham business incubator and public/private economic development effort that operates in partnership with UAB. Innovation Depot focuses on emerging biotechnology/life science, information technology, engineering and service businesses. There are currently 95 companies operating out of the facility, and over the past five years, Innovation Depot has had a $1.25 billion economic impact on the
• Alabama’s largest single employer (23,000+ employees) • $454 million in research funding • 25th in federal research funding, 11th in NIH funding among public universities • Institute for innovation and Entrepreneurship: $64 million in revenues, 58 start-ups • UAB Hospital: 3rd largest public hospital in the U.S.
Birmingham metropolitan area. The UAB Institute for Innovation and Entrepreneurship, which launched last year, is designed to amplify our economic impact. It identifies high-potential intellectual property developed at UAB, and provides an entry point for industry collaborations—partnerships that play an essential role in supporting and accelerating our research programs. The Institute has another vital mission: to enhance academic programs in entrepreneurship and innovation that will inspire the next generation of American businesses. New opportunities for data-driven breakthroughs are continually emerging throughout our campus. These are tremendously exciting times that bode well for the future prosperity of Birmingham and Alabama, and for America’s global competitiveness in research and development. ■
Ray L. Watts, M.D., is the seventh president of the University of Alabama at Birmingham. A Birmingham native, Dr. Watts graduated from Washington University School of Medicine in St. Louis and completed a neurology residency, medical internship, and clinical fellowships at Harvard Medical School and Massachusetts General Hospital, followed by a two-year medical staff fellowship at the National Institutes of Health. At UAB, Dr. Watts served as the John N. Whitaker Professor and Chairman of the Department of Neurology. There he played a key role in establishing the UAB Comprehensive Neuroscience Center, and he also was named president CONTENT of the University of Alabama Health AVAILABLE Services Foundation.
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K
nowledge has always played a crucial role in economic activity and higher living standards. Fortunately, our capacities are about to radically improve as new technologies and greater access to more and better data makes it possible to understand, control, and change much
more of the world. This will have significant effects on the economy and living standards. Big Data is best understood as a tremendous resource that new technology finally allows us to transform into actionable information. The benefits of this resource, but not its
DRIVING THE ECONOMY WITH A BIG DOSE OF
DA T A
costs, increase rapidly as data is shared. Just as the builders of the first oil well in Titusville, Penn., could not have envisioned the combustion engine and airplanes, we cannot foresee all the uses of cheap, abundant data. Yet, a number of studies have recently tried to estimate at least some of the impact of better use of data. All predict large gains. There is little doubt that Big Data is having a significant impact on the economy. Yet, that impact is difficult to measure. One reason is that the domestic use and international exchanges of data do not always show up in economic statistics. If access to large amounts of data is used to build a new business that sells consumer data to advertisers, the fees advertisers pay for the information will be counted in national income. But if better data allows hotels to meet the individual preferences of their guests without charging them more, all of the benefit will be captured as consumer surplus. The customer is better off, but because the price of economic transactions remains the same, national income is unchanged. If improved visibility into its supply chains lets a retailer cut its prices in half, national income and perhaps employment would actually fall, at least until customers spent the savings on other items.
BY JOE KENNEDY PRESIDENT, KENNEDY RESEARCH 18 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
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BIG DATA REPRESENTS ONE OF THE LARGEST UNTAPPED RESOURCES YET.
As data becomes more accessible, it will affect the economy in a number of ways, all of which can
• Faster research and development, which shortens the trial and error process of innovation.
be loosely encompassed as being part of the data-
data-driven decision making achieve output and
services, creating employment for about 676,000 people.
productivity that is 5% to 6% higher than what
The implication is that the buyers of this information
would be expected given their other investments and
derived at least this much value from it. Importantly, it
driven economy. According to a recent Organization
A recent McKinsey report estimates that improved
use of information technology. This advantage also
found that roughly 70% of this value and employment
for Economic Co-operation and Development
use of data could generate $3 trillion in additional
applies to other business measures, including asset
depended upon moving data between firms.
(OECD) report, these impacts include:
value each year in seven industries. Of this, $1.3
utilization, return on equity, and market value. The study found that the main benefit of the DDME
trillion would benefit the United States. McKinsey • Generating new goods and services, such as
also estimates that more than half of this value will
Big Data is also having an enormous impact on
was that it made marketing more efficient by allowing
GM’s OnStar or custom-tailored clothing,
go directly to consumers in the form of things like
international trade. Data flows are the fastest growing
companies to avoid sending solicitations to individuals
in which information is either the product
shorter wait times in traffic, improved ability to
component of international trade. Another McKinsey
who were unlikely to buy their products and to
itself or it contributes significantly to
comparison shop, and better matching between
report found that global flows of trade, finance,
target prospective customers with offers that better
the quality of another product;
schools and students. The rest will go to companies
people, and data increased world GDP by between
matched their needs and interests. A second benefit
that either create new products centered around the
$250 billion and $450 billion each year. Economies
was that, by matching specific marketing efforts with
use of data or use data to gain an edge over their
with more international connections received up to
results, sellers were able to improve their effectiveness.
supply chains, such as what Walmart
competitors. Walmart, GM, and other companies
40% more benefit than less connected economies.
The DDME also reduced the barriers to entry for
has done with its stores;
are already using Big Data to offer new products,
• Optimizing production processes and
small manufacturers because it lowered the cost of
improve their margins, and take market share from
Big Data will have a disproportionate impact on many
obtaining and using high-quality consumer data.
• Targeted marketing, including the integration
their rivals. Walmart’s use of Big Data to streamline
industries. A 2013 report commissioned by the Direct
This benefit would not be available unless a robust
of customer feedback into product design;
and improve its supply chain, for example, has led to
Marketers Association measured the size of the data-
market was allowed to exist in consumer data.
a 16% increase in revenue over the last four years.
driven marketing economy (DDME), defined as the set of firms that produce marketing services focused
Because of their increased importance as an economic
A study led by Erik Brynjolfsson at the Massachusetts
on individual-level consumer data for marketing firms.
resource, restricting data flows can seriously hurt
Institute of Technology found that firms that adopt
In 2012, producers spent about $156 billion on these
national welfare. A study by the European Centre
• Improved organizational management, often in the form of using data to make better decisions; and
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for International Political Economy and the
by $700 billion to $950 billion. Significantly, the
Still, the McKinsey studies point to a serious shortage
U.S. Chamber of Commerce concludes that
benefits come in a wide variety of forms, including
of managerial talent capable of understanding
implementation of the European Union’s proposed
reducing corruption, improved workplace conditions,
and acting on Big Data. Most visible are the data
General Data Privacy Regulation would reduce
better energy efficiency, and a reduction in the
experts with advanced degrees in statistics, computer
EU exports to the United states by between
regulatory costs associated with international trade.
engineering, and other applied fields. McKinsey estimates a national shortage of 140,000 to 190,000
0.6% and 1%, undoing much of the potential impact from the proposed Transatlantic Trade
The quest to gather and use consumer data has also
people. But just as serious is the shortage of 1.5 million
and Investment Partnership. The negative results
generated a large increase in Internet advertising.
managers and analysts in traditional jobs who are
were reduced because the regulation would replace
A recent McKinsey study found that these ads
capable of asking the right questions about the data
national data restrictions that are already in effect
underwrote the delivery of a range of free Internet
and acting on the answers. Also important are the
and would allow for workarounds, such as model
services that delivered significant benefits to Internet
line employees who must properly implement data
contract clauses and binding corporate rules to
users. The study estimated that in 2010, these
strategies. In fact, the inability to find and keep workers
substitute for direct regulation. Eliminating these
services generated a social surplus (the excess of
with even moderate math and statistics skills is already
workarounds would have an even larger effect,
benefits over costs) of €120 billion. Significantly,
placing limits on business profitability. The demands
reducing EU exports to the United States by 4.6%
80% of this surplus went to consumers. Consumers
of the data-driven economy will only exacerbate
to 6.7% and EU GDP between 0.8% and 1.3%.
will only continue receiving these benefits so long
the current shortage of well-educated workers.
as advertisers get value from funding them. Further emphasizing the importance of data mobility,
Big Data represents one of the largest untapped
the Omidyar Network recently released an economic
Then there is the impact on the labor market. Data
resources yet. Thanks to continued advancements in
analysis of governments adopting Open Data policies.
analysis has been labeled “the sexiest job of the 21st
information technology, it is finally being tapped.
The study concludes that implementation of these
century.” One estimate finds that there are already
Together with the rise of the Internet of Things, it
policies could boost annual income within the G20
around 500,000 Big Data jobs in the United States.
constitutes a general purpose technology. Such technologies have broad impacts on the economy and society. The full impact from Big Data and related technologies will be spread out over several decades. This is partially because the use of any new resource or technology often requires a significant transformation of the status quo. It takes time for people to think of new ways to use the resource and
AS DATA BECOMES MORE ACCESSIBLE, IT WILL AFFECT THE ECONOMY IN A NUMBER OF WAYS, ALL OF WHICH CAN BE LOOSELY ENCOMPASSED AS BEING PART OF THE DATA-DRIVEN ECONOMY. 22 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
implement the necessary transformations. Nevertheless, the promise of Big Data is transformative and its economic impact expansive, cascading and world changing. ■
Dr. Joseph Kennedy is president of Kennedy Research, LLC and a senior fellow at the Information Technology and Innovation Foundation. His main areas of experience include the impact of technology on society, macroeconomic policy, and finance. Previous positions include general counsel of the U.S. Senate Permanent Subcommittee on Investigations and chief economist for the Department of Commerce. REFERENCES 1 Committee for Information, Computer and Communications Policy, Exploring Data-Driven Innovation as a New Source of Growth: Mapping the Policy Issues Raised by “Big Data,” Organization for Economic Cooperation and Development, June 2013, 14. 2 McKinsey Global Institute, McKinsey Center for Government, and McKinsey Business Technology Office, Open Data: Unlocking Innovation and Performance with Liquid Information, October 2013. The seven industries are education, transportation, consumer products, electricity, oil and gas, health care, and consumer finance. 3 Erik Brynjolfsson, Lorin M. Hitt, and Heekyung Hellen Kim, “Strength in Numbers: How Does Data-Driven Decisionmaking Affect Firm Performance?” (April 22, 2011). 4 McKinsey Global Institute, Global Flows in a Digital Age; How Trade, Finance, People, and Data Connect the World Economy, April 2014, 5. 5 John Deighton and Peter A. Johnson, The Value of Data: Consequences for Insight, Innovation & Efficiency in the U.S. Economy, Direct Marketing Association, 2013. 6 U.S. Chamber of Commerce, European Centre for International Political Economy, The Economic Importance of Getting Data Protection Right: Protecting Privacy, Transmitting Data, Moving Commerce, March 2013, at 13. 7 Lateral Economics, Open for Business: How Open Data Can Help Achieve the G20 Growth Target, Omidyar Network, June 2014. 8 McKinsey& Company, Consumers Driving the Digital Uptake: The Economic Value of Online Advertising-Based Services for Consumers, IAB Europe, September 2010.
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O
n a muggy July afternoon in downtown
basement of a temporary emergency housing
Washington, DC, families and
building nestled between the White House and
friends gathered at an auditorium at
the Capitol Building has all the sights and smells
the Navy Memorial and Heritage Center for
of a professional kitchen. It is the controlled
a ceremony celebrating the graduation of a
chaos of any culinary operation, with dozens of
cohort of aspiring chefs. Camera lights flashed
chefs, students, and volunteers moving fast to
as people in the crowd snapped photos, and
cook and prepare the 5,000 meals delivered every
there was a consistent murmur of thankfulness,
day to schools, homeless shelters, transitional
hope, and pride in the audience. “God bless
homes, and other organizations around the city.
you,” voices said; “I feel blessed,” others said. In one room, a master chef coached a training Clad in white chef ’s coats, graduates of the DC
program participant in how to make a sauce
Central Kitchen Training Program gathered
(it needed more salt). In another room, a
just out of sight in a doorway at the top of the
team of grade school student volunteers tore
auditorium. You would be forgiven for assuming
through a mountain of bread to create the
these chefs would march to the stage to Edward
crumbs and stuffing for any number of dishes.
Elgar’s oft-played graduation tune, “Pomp and
Stacked boxes of produce; hot grills and the
Circumstance No. 1.” This was not your usual
“chop-chop” of knives on a prep table; and the
graduation. Instead, Kelly Price’s “It’s My Time”
constant “behind!” barked as people squeezed
erupted from speakers, and the line of chefs began
past one another in the cramped quarters.
a two-step shuffle dance down the side aisle. “We did not set out just to feed people,” Curtin It's my time to rise
said. “We are not a feeding organization. We are
It's my time to shine
an empowerment organization. We use food to
It's my time to live
provide people with the opportunity to make a
It's my time to fly
change in their lives and in our community.”
The crowd clapped to the rhythm, and their
How do they do it? In Curtin’s words, through
elation was contagious. The message was, in a
“relentless incrimentalism.” Step by step, he,
word, empowerment, and that’s what DC Central
his predecessor and DC Central Kitchen
Kitchen is all about. CEO Michael Curtin said
founder Robert Egger, a team of hyper-focused
to the crowd, “What we do is business. It’s not
professionals, and legions of volunteers have created
THE STORY OF DC CENTRAL KITCHEN
simply charity or good will. It’s just good business,
a multi-pronged approach to addressing core social
and the product we sell is empowerment.”
challenges that are (tragically) not unique to the
BY RICH COOPER AND JUSTIN HIENZ U.S. CHAMBER OF COMMERCE FOUNDATION
DC Central Kitchen is a unique blend of non-
FOOD + DATA =
GREAT OPPORTUNITIES PHOTOS BY IAN WAGREICH
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nation’s capital. profit and social enterprise. Their facility in the
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THE PIECES OF THIS VIRTUOUS ENDEAVOR WORK TOGETHER TOWARD THE CORE MISSION OF HELPING PEOPLE HELP THEMSELVES.
The pieces of this virtuous endeavor work together toward
Yet, the aim was to do more than make better use of
the core mission of helping people help themselves.
available resources. Katherine Eklund, Partnerships
But as any entrepreneur will attest, good ideas are not
and Planning Coordinator, said the goal is to give
sufficient to grow an enterprise. It takes facts, strategy,
in a systemic way, “not just to give out food but
and tireless dedication—which is the very architecture
to help people be able to feed themselves.”
of how DC Central Kitchen has grown from a good local idea into a global model for how to address a
Part of that means helping Washingtonians build skills
range of social issues, hunger being but one of them.
and experience that can help them land a job, succeed at it, and break the cycle of poverty, homelessness, and
FROM THESE HUMBLE BEGINNINGS
hunger. With that idea, DC Central Kitchen began offering on-the-job training (helping prepare the meals
The idea that launched DC Central Kitchen in 1989 was
for the Recovery and Distribution Program), networking
simple: restaurants, supermarkets, and other kitchens
opportunities for participants, self-empowerment sessions
have food left over at the end of the day that cannot
with a dedicated life-skills coach, and later, internships.
be sold but still has great nutritional value. Founder Robert Egger, at the time a young night club owner,
As Father Gregory Boyle (founder of a highly successful
realized that this unsellable food could be prepared
gang intervention program) has said—and as Curtin
for the many organizations struggling to feed people
cited—"nothing stops a bullet like a job." In the case of
in need. So began DC Central Kitchen and its Food
DC Central Kitchen, this phrase might be amended to:
Recovery and Distribution program. It consolidated
nothing ends chronic hunger, homelessness, and criminal
the untouched but otherwise wasted food and turned
proclivity like marketable skills and hope for the future.
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WHILE THE FOOD THE JOBSEEKERS AND VOLUNTEERS PREPARE IS DELIVERED TO SCHOOLS, SHELTERS, AND OTHER ORGANIZATIONS, THERE IS A LARGER SOCIETAL NEED TO OFFER NUTRITIOUS OPTIONS FOR ALL COMMUNITIES.
“It was important for us to think about how we go
independent farms in Virginia, Maryland, and elsewhere
the country, there is a phenomenon of “food deserts;”
The notion of measuring value is critical, as it is one
beyond treating symptoms and instead get at root
nearby that can help. Some 40% to 60% of all food
that is, geographic areas that do not have immediate
way DC Central Kitchen is improving and expanding
causes,” Alexander Moore, DC Central Kitchen Chief
grown never leaves a farm, Curtin said. Size, shape,
access to fresh fruits, vegetables, and other core food
its efforts. That requires, however, a strategic analytical
Development Officer said. “Instead of seeing charity as a
and color impact commercial value, and that which
groups. DC Central Kitchen has wedded its produce
approach based on data.
safety net, how do we see it as a process that structurally
is imperfect is used for seeding or fertilizer, effectively
buying and food preparation efforts with a focused
guides people towards lives of self-sufficiency?”
burying money, effort, and the potential for change.
program to bring fresh food to corner stores in these
DATA DRIVING CHANGE
food deserts. The program, called Healthy Corners, was Moore, Curtin and others at DC Central Kitchen made the
DC Central Kitchen began working with local farmers,
initially funded with philanthropic grants, but in seeing
This is a data-driven era, and all organizations have an
point that there is a real, monetary cost to unemployment,
ultimately purchasing the available produce. While
success (only one of the initial 30 stores dropped out of
opportunity to use new technology and a greater capacity
poverty, and homelessness. These issues, which span
the price they pay is 40% to 50% less than wholesale
the program), they transitioned to having stores purchase
to collect and store data to foster innovation and growth.
generations, demand ongoing taxpayer investment, to say
value, it is 100% more profit for the farms that
the fresh produce, creating a new, sustainable revenue
DC Central Kitchen is no exception.
nothing of the cost of illicit activities borne of extreme
would otherwise see all that food go to waste. This is
stream that can fund more and larger programs for DC
need and a hopeless disposition. Remedying this is not a
the unique blend of innovation, philanthropy, and
Central Kitchen. The program is already in 60 stores in
“These aren’t just numbers,” Eklund said. “These are
simple fix. It demands an innovative, holistic approach
good business, thoughtfully pieced together to help
the DC area, with sales growing 45% in May and June.
people’s lives. Data helps us ask the right questions on how
to not just helping people but amassing the resources
multiple stakeholders. It’s good for the farmers, for
necessary to do so and on a perpetually tight budget.
the jobseekers, for the organizations that receive DC
“The money that we earn is unrestricted, so we can make
Central Kitchen food, and for society as a whole.
investments as business people,” Moore said, contrasting
There are two parts to this. First, data gives DC Central
earned revenue with donations. “We don’t need to write
Kitchen a way to measure success and prove effectiveness,
Several years ago, DC Central Kitchen realized some of
to improve what we do.”
its produce was being grown thousands of miles away
While the food the jobseekers and volunteers prepare is
a grant. We can just do it because it’s smart business. We
showing donors what their dollars have achieved and
(like in Belgium); it was an inefficient method, and
delivered to schools, shelters, and other organizations,
still measure value, but we do it for ourselves. Having
attracting new interest from other philanthropic giving.
for a group striving to stretch every dollar, it did not
there is a larger societal need to offer nutritious options for
that independence allows us to be much more agile.”
Even as DC Central Kitchen generates some of its own
make much sense. Instead, there are many small and
all communities. In some places in DC, as well as around
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THERE ARE SUBSTANTIAL, CHRONIC PROBLEMS THAT ARE HOLDING COMMUNITIES BACK, AND AS THE BABY BOOMER GENERATION CONTINUES TO AGE, THERE WILL BE NEW CHALLENGES IN THE NEAR FUTURE. of how the organization is able to strive after its ambitious
ourselves that we’re failing in some ways, and then we use
goals and critical mission. With the economic downturn
that data to do a better job and have a greater impact.”
and ensuing recession, the need for philanthropic funds
NEW CHALLENGES AND NEW SOLUTIONS
infrastructure to meet the rapidly growing need among America’s aging population. DC Central Kitchen
Over its 25 years of operation, DC Central Kitchen has
is uniquely positioned to help satisfy this need,
skyrocketed. Unemployment taxed an already limited
For example, looking at the data, DC Central
come a long way, and so have its staff, its leaders and of
adjusting and expanding its programs to continue
number of dollars, forcing all philanthropic endeavors
Kitchen realized that there was a trend in the job
course, its participants; but more work remains. There are
empowering individuals and building communities.
to compete even more aggressively for grants. In the
training program, with some participants dropping
substantial, chronic problems that are holding communities
philanthropic world, tracking results is critical to
out towards the end of the 14-week course. Having
back, and as the Baby Boomer generation continues to
For example, DC Central Kitchen is applying its
capturing and retaining grants.
realized this, they launched an internship program to
age, there will be new challenges in the near future.
innovative approach to a new endeavor, the Campus
keep job training participants engaged and help ease “For the last decade, nonprofits have counted
the transition from training into the workplace.
outputs,” Moore said. “We operate in a philanthropic cycle where people fund things on an annual
“The more data we collected, the more we understood
basis and want to see an end of year report.”
our role as an inflection point in the arc of people’s lives,”
Kitchens Project. Partnering with high schools, colleges, “We are looking at the future of senior meals,” Curtin said.
and universities to share kitchen space, the project relies
“Dietary specific, fresh, locally sourced and pre-packaged,
on volunteerism to bring food (and empowerment) to
we want to revolutionize the Meals on Wheels concept.”
communities across the country. The idea is to recover extra food from cafeterias and local sources and then
Moore said. “We wanted to invest in understanding
Senior hunger has grown dramatically in the last
leverage existing infrastructure (school kitchens) to reach
But DC Central Kitchen is less focused on checking
what’s going on in the lives of the people we’re serving.
decade. In 2013, 1.1 million households of seniors
ever farther into challenged communities. The project
philanthropic boxes than it is on making programs
Our first evaluation hire was a graduate of our job
living alone faced food insecurity, according to the
is currently in 40 schools in nearly two dozen states,
more effective and helping empower people.
training program who could develop a rapport with fellow
U.S. Department of Agriculture. This is particularly
with student volunteers flocking to the opportunity.
Thus, the second part of the data equation is that
grads to understand what happens after graduation.”
troubling as food insecurity raises the risk of chronic health conditions (which not only threatens life and
"There’s already a school in every community,"
The evaluator calls graduates to see what kinds of
wellbeing but also contributes substantially to the
Moore said. "Students are desperate for service that
successes and challenges they face in the job market.
nation’s enormous and unsustainable healthcare costs).
means something. This is a huge opportunity for a
granular, consolidated information is helping DC Central Kitchen make its programs better.
nonprofit that will never need a fundraising effort."
“The plural of anecdote is not data,” Curtin said. “With
This gives DC Central Kitchen insight into how its
data, we can see clearly and objectively and admit to
efforts can more directly address real-world challenges
As Moore said, there simply is not enough time
and help graduates be successful in the long term.
(or dollars) to scale up the existing food supply
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// F O O D + D A T A = G R E A T O P P O R T U N I T I E S | 31
data-driven innovation
BUsiness Horizon Quarterly
Here again, the DC Central Kitchen model shows
BUSINESS
PROVING THE IMPACT
its capacity to simultaneously offer value to multiple stakeholders. The meals prepared at participating
By definition, Big Data is too voluminous
In the past, philanthropic efforts were not
schools help people in need (including seniors), and
to be comprehended and analyzed by brain
always tracked and measured in the same
student volunteers gain critical experience in organizing
power alone. Rapid advances in technology,
way for-profit enterprises monitor inputs and
and managing a complex project, to say nothing
however, help unleash the power of data,
results. As philanthropists today look for more
of the chance to support to their community.
and are opening a new world of potential in
evidence of results, non-profits themselves are
terms of analysis, insight, and innovation.
also recognizing the value of integrating data tracking and analysis into their operations.
Ultimately, this story is not about DC Central Kitchen. It is an innovative, data-driven, genuinely
For non-profit organizations like DC Central
altruistic group, but the focus isn’t about them. Indeed,
Kitchen, tracking results is essential. It is not
“Many non-profits were previously
they would like to put themselves out of business,
just important for internal operations; it is
technophobic,” Engelhardt-Cronk said. “People
though such a prospect remains elusive, for now.
often a condition of grants and philanthropic
didn’t care about technology. Today, they are
donations. The challenge is that many of the
technology-embracing…I see an awareness that
“I do this because I’m selfish,” Curtin said. “While we [as
tools available for collecting and analyzing data
the impact matters. They don’t want to just
a country] have a lot to be thankful for, we are looking
are geared towards for-profit organizations
give food away and count it. They want to be
at a dim future. I don’t want my kids to grow up in a
(and often come with a for-profit price tag).
able to provide information to learn about all the impact they have so [the people they serve]
country of haves and have-nots. I want to do everything I can to create a more equitable future for all of us.”
Enter Community Techknowledge (CTK). It
can someday stop coming to their facility.”
was founded by Kathryn Engelhardt-Cronk, That’s not just an honorable sentiment. It’s
who spent a career working in the non-profit
This is the cross-cutting, cascading impact
the foundation for good business. ■
arena. After running funds allocations for
of the data-driven era. It is changing what is
United Way in Central Texas, she recognized
possible across all industries, and it is sparking
that there were no good technological solutions
innovation in the form of new products and
for non-profits that needed to track, synthesize,
services that propel new businesses. Currently,
and present the results of their efforts. Like
DC Central Kitchen uses CTK software not
the relentless entrepreneurship at DC Central
just to provide end-of-year reports to funders,
Kitchen, Engelhardt-Cronk threw everything
but to continually investigate and measure
behind her idea to build software that did
how their programs are performing and by
three basic things: allow non-profits to track
consequence, better deliver on their mission.
Rich Cooper is vice president of emerging issues and research at the U.S. Chamber of Commerce Foundation and editor-in-chief of Business Horizon Quarterly.
Justin Hienz is the founder and owner of Cogent Writing, LLC, a Washington, DC-based strategic communications company.
what matters to them; collaborate across geography or causes; and prove impact.
Engelhardt-Cronk said of the non-profit world: “You get up every day because
DIGITAL
“The training and tools we’ve developed
you care about what you’re doing. You’re
support the process to go from strict service
not making as much money but you care
AVAILABLE
provision to evidence-based performance
and want to make a difference. Now you
tracking and analysis,” Engelhardt-Cronk
need to prove you make a difference.”
CONTENT FROM THESE STORES: Amazon, iTunes, and Google Play
said. “More and more funders these days are really demanding that a non-profit be able to show results or they can’t get any money.”
32 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
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data-driven innovation
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HEALTHCARE
Opening access to
REAL WORLD DATA could foster better health and a more effective and efficient healthcare system.
R
esearchers rely on data. For the life sciences industry, “real world” data (which are data collected outside of the highly controlled clinical trial setting) present an opportunity: to increase the efficiency of the
process of developing new medicines; to improve the way healthcare is delivered; and to monitor the safety of existing treatments on a broader scale, as well as better track and monitor the spread of disease. Opening access to real world data could foster better health and a more effective and efficient healthcare system. It isn’t easy (or obvious) how to best use real world data to achieve their promise to improve healthcare. Many datasets are incomplete, not connected to important
REAL WORLD DATA THE CHALLENGE THAT CAN’T BE REFUSED
BY KIRSTEN AXELSEN, VICE PRESIDENT IN WORLDWIDE POLICY, PFIZER AND DR. MARC BERGER, VICE PRESIDENT, REAL WORLD DATA AND ANALYTICS, PFIZER
information, or are otherwise not accessible for analysis. There is no generally accepted gold standard for using real world data the way there is with a clinical trial. Privacy concerns are real and valid, particularly when datasets include highly detailed information. Furthermore, the same analysis conducted on two different real world datasets can yield different answers. In a world where we are all living longer, developing new treatments is getting harder and more expensive, but the promise is too great to not rise to the challenge. There is a new future ahead, and we are just starting to see what is possible with this information. For example, as of the early 2000s, there were no treatments for Hypereosinophilic Syndrome (HES), a rare white blood cell disease that can lead to fatal organ damage. Physicians attempted to treat HES with Gleevec® (imatinib mesylate), a medicine
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data-driven innovation
BUsiness Horizon Quarterly
Research based on these real world patient-level datasets can produce evidence that is
CRITICAL to optimizing healthcare delivery and health outcomes.
HEALTHCARE
Real world data could help in the design of healthcare
its ability to prevent abnormal cell growth. By collecting
benefits so they are more value based. We have increasingly
and sharing healthcare data that demonstrated a marked
seen health plans manage costs by limiting access to
improvement in patient outcomes, physicians and the
specialty medicines. For patients with some of the
innovator company were able to build the evidence base
highest burden of disease, this poses a serious problem
When providing access to healthcare data to
that ultimately led to Food and Drug Administration
because there are often no alternative treatments for
researchers and other healthcare professionals, clear
(FDA) approval of Gleevec® for HES. This treatment
their conditions. By using real world healthcare data,
standards around appropriate mechanisms for the
was thus approved and available to reduce patients’
health benefits could be tailored to provide access to the
de-identification, encryption, and transmission of
suffering much faster than if it had gone through
patients mostly likely to benefit from the treatment. This
patient-level data should be in place. In addition,
the standard clinical trial process for this indication.
could result in better allocation of healthcare resources
all research proposals to use healthcare data should
This is but one example of how the dissemination of
through the development of sophisticated benefit
clearly identify how patient identities will be protected
healthcare data permits the discovery and approval of
designs that would allow for more targeted access to
in compliance with established regulations.
new therapies that may address an unmet patient need.
treatments for patients who are most likely to benefit. use of our country’s significant investment in healthcare.
Enhance data connection across data sources.
For patient-level healthcare-related data to reach
Most patients receive care from a variety of healthcare
their full potential, the following issues all need
providers and in a variety of care settings. Moreover, as
to be considered and appropriately addressed.
patients undergo employment changes or move residences,
This ultimately leads to more cost-effective and efficient Federal and state entities produce some of the richest and most robust real world data sets. Valuable sources of publicly developed data for research include: • Centers for Medicare & Medicaid Services (CMS) Medicare databases; • Federally, regionally, or state-funded health information exchanges (HIEs), or all-payer claims
Provide timely access to publicly funded data for all stakeholders with a valid research question.
databases (APCD); • Veterans Administration datasets; and • In the future, data captured from the plans run through the public health insurance exchanges.
they may change health plans or providers. To better understand how patients experience and respond to healthcare, it is important to be able to track patients across time and across these different locations or settings of care. As such, improved connection, or “interoperability,”
To accelerate research and care improvement in the United
would allow researchers to better assess the patient care
States, all stakeholders with a valid research question
journey, which will promote a better understanding
should be able to access and use publicly funded data. To
of how to intervene to improve patient outcomes.
ensure that the data are used appropriately, researchers interested in accessing the data should be required to provide a well-defined research proposal and explicitly
36 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
Advance privacy standards that balance risk and benefit of real world data research.
approved for chronic myeloid leukemia and recognized for
Research based on these real world patient-level datasets
identify planned uses of the data through an open,
can produce evidence that is critical to optimizing
transparent, and well-defined process. Given the value that
healthcare delivery and health outcomes. In turn, this
all researchers can provide in advancing the quality of care
evidence can ensure the adoption of best practices in care
through greater access to healthcare data, access should not
delivery, improve patient outcomes, spur the innovation
be limited based on the “commercial interests” of an entity.
of new technologies and treatments, facilitate medication
Access could be rendered meaningless, however, if the
safety monitoring, and promote medication adherence.
process for gaining access is not expeditious and efficient.
By using real world healthcare data, health benefits could be tailored to provide access to the patients mostly likely to benefit from the treatment.
// R E A L W O R L D D A T A | 37
data-driven innovation
BUsiness Horizon Quarterly
HEALTHCARE
By expanding permitted uses of health exchange data, researchers would be able to track and measure care delivered through these new plans and ensure that patients in diverse locations have access to high-quality care in a cost-effective manner. Promote transparency around the sources and methods used to collect data.
Healthcare Research and Quality, the National Institutes of Health, PCORI) could assist with identifying and disseminating these best practices for research. In
Expand access to government sponsored health claims data for research.
patient privacy and ensure appropriate application. Given that health insurance exchanges are still under development, the ability for stakeholders to be engaged around their formation may be particularly timely.
addition, pre-registration of studies that are intended For data to be useful to researchers, healthcare
as key evidence to inform health policy decisions in
The elderly are the costliest and highest users of healthcare
professionals, and other stakeholders, they will need
programs that receive significant federal or state funding
services; however, large Medicare datasets are out of
The challenge is there, but given what is at stake, isn’t the
to be able to ensure that the data are of a high quality,
should be required. The study design and analytic plan
reach to many qualified researchers. Entities should
only choice to rise up to meet it? ■
complete, reliable, and were collected using standardized
should be posted on a publicly available website prior to
not be arbitrarily excluded from requesting access
procedures. Establishing clear and uniform standards
beginning the research. If a study is not pre-registered,
to these data because they are commercial in nature,
to report what has and has not been collected will
it should be considered hypothesis generating, and
provided such entities can prove that they are qualified
enable stakeholders to perform analyses and make
findings should be corroborated in a study that is pre-
to perform the research, have a clearly defined research
recommendations confidently based on their research.
registered. This standard should apply to everyone.
proposal, and have agreed to abide by requirements for
federal health policy affect Pfizer, healthcare
using the data. This would provide commercial entities
providers and their patients, and offers
Develop clear methodological standards for analysis of the data.
Establish appropriate communication and dissemination practices.
(including pharmaceutical companies, healthcare data companies, device manufacturers and other healthcare providers) better tools for developing treatments.
All stakeholders performing assessments using the data
Kirsten Axelsen is Vice President of Worldwide Policy at Pfizer, leading the U.S. Policy team. The team analyzes how changes in state and
strategic guidance based on the analysis. Kirsten began her career at Pfizer in 2000. Kirsten also led the International Policy team and serves on Pfizer’s Real World Data Steering Committee. Kirsten has published studies on medication adherence and the effect of co-pay and access restrictions on utilization of prescription drugs and other healthcare services.
should do so in a manner that is robust, valid, and
Analyses based on healthcare data must be broadly
Similarly, as the Affordable Care Act’s health insurance
reliable. Given that evidence produced using healthcare
and appropriately communicated. Wide distribution
exchange plans become more established, it will be
datasets will inform delivery and payment decisions, it is
of research can lead to greater awareness of novel
important to collect their data and provide access to
important to prevent the development and use of poor,
healthcare research ideas and promote further research
qualified researchers. By expanding permitted uses
low-quality evidence, which would ultimately put patients’
and data sharing. To ensure optimal use of research, it
of health exchange data, researchers would be able to
and Merck. His professional activities included
health at risk. This means ensuring that appropriate and
will be important for communication of evidence to
track and measure care delivered through these new
serving on the CMS MedCAC, the board of ISPOR,
clear methodological standards for performing research
be unbiased and clearly evidence-based. Government
plans and ensure that patients in diverse locations have
using healthcare data are established, communicated,
funded agencies, such as PCORI, may be good
access to high-quality care in a cost-effective manner.
and broadly used. The research standards established
organizations to help outline best practices for clear,
This would allow benchmarking of care to examine the
ISPOR Good Practices Taskforces.
by the Patient-Centered Outcomes Research Institute
consistent, and reliable dissemination of healthcare data.
benefits provided across states and to address disparities.
Berger currently serves on the editorial
(PCORI) could be a good foundation. Moreover,
The data could be aggregated and de-identified, with
board of the Journal of Comparative
existing research organizations (e.g., the Agency for
specific regulations for data access and use to protect
38 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
Dr. Marc Berger is Vice President, Real World Data and Analytics at Pfizer. During his career, he has held leadership positions at OptumInsight, Eli Lilly,
and the steering committee for the AHRQ CERTs. He has chaired and/or served on multiple
Effectiveness Research and Advisory Council for North America of the DIA.
DIGITAL
CONTENT AVAILABLE
FROM THESE STORES: Amazon, iTunes, and Google Play
// R E A L W O R L D D A T A | 39
Five Steps to
3
LEVERAGE OPEN DATA
What actions can we take today to maximize value from tomorrow’s digital data? Data-driven innovation is a force for social and economic good, appearing in unexpected places and unexpected ways. The Future of Data-Driven Innovation, a report by the U.S. Chamber of Commerce Foundation, explores this and other key policy questions and includes contributions from some of the top minds in business, tech, and economics. Here are some of their key recommendations for harnessing data value and increasing data education.
1
Source: Joel Gurin
Open Data is a major driver for innovation. Governments at all levels need to develop policies and processes to release relevant, accessible, and useful Open Data sources to enable innovation, foster a betterinformed public, and create economic opportunity.
4
Sources: Dr. Joseph Kennedy & John Raidt
Source: Dr. Matthew Harding
MAKE SMART INVESTMENTS
MAKE GOOD PUBLIC POLICY
The data-driven economy is broader than we realize and is growing in impact. Policy makers in the U.S. should support the data-driven economy with targeted investments toward greater competitiveness, including:
The economic value of data is significantly increased if it is shared. Policy makers should strongly encourage the movement of data between functions and institutions while ensuring that ownership, security, and privacy concerns are met.
• building a vibrant and dynamic STEM workforce; • expanding a robust broadband infrastructure; and • boosting publicly funded R&D to better develop data capabilities and public-private collaboration.
2
Source: Leslie Bradshaw & Rich Cooper
RECOGNIZE THE IMPORTANCE OF HUMAN INGENUITY The human brain is still the most valuable data analytics tool, and thus an indispensable part of the data movement. Core mathematics curriculum—beginning in primary school—should emphasize not only algebra and calculus but also critical reasoning and data visualization.
5
Sources: Benjamin Wittes & Wells C. Bennett
AVOID DATABUSE Companies must be reasonable and honest data custodians, handling data in a forthright and secure fashion, that does not injure consumers and gives them reasonable information about and control over what is being done with their data.
Check out the full Data-Driven Innovation Report at WWW.USCHAMBERFOUNDATION.ORG/FUTURE-DATA-DRIVEN-INNOVATION
data-driven innovation
BUsiness Horizon Quarterly
OPEN DATA
L
ast year, the Los Altos, California Historical
My own attempt at a definition was that “Big
Commission officially designated a new
Data describes datasets that are so large, complex,
historic site: the garage where Steve
or rapidly changing that they push the very limits
Jobs and Steve Wozniak built the first Apple
of our analytical capability. It’s a subjective term:
computers. At this writing, a motherboard from
What seems ‘big’ today may seem modest in a few
one of those machines, slated to go to auction in
years when our analytic capacity has improved.”
late October, is expected to fetch about $400,000.1
OPENING
BUSINESS INNOVATION WITH
OPEN DATA
Tech aficionados are fascinated by the artifacts left
Whatever definition you choose, the use of Big Data
behind by the tinkering geniuses who launched
depends on two basic factors: who owns it and how
the computer revolution late in the last century.
they control it. Large retailers may collect Big Data on their customers, and government agencies collect
But many of today’s innovators won’t leave behind
data related to national security, but these kinds of
such physical traces. They’re working with less
Big Data are not available for public use. While these
tangible but equally powerful resources. Rather than
kinds of data can help the organizations that collect
motherboards and CRT screens, their raw material
it develop new products, strategies, and insights,
is data—pure information, housed invisibly in the
they are not tools for widespread innovation.
cloud, but able to have a real impact in the real world. In contrast, Open Data—a different but related While everyone knows by now that we’re living
resource—can be used by innovators of all kinds.
in the midst of a data revolution, even the experts
Unlike Big Data, Open Data is characterized
are finding it hard to figure out what it means.
simply by the fact that it is available to all. In
The most widely discussed trend has been Big
my book, Open Data Now, I described it as
Data, a concept that elicits a range of reactions.
“accessible public data that people, companies,
To some, Big Data means a world that looks like
and organizations can use to launch new ventures,
George Orwell’s 1984 on steroids: a world where
analyze patterns and trends, make data-driven
every citizen’s activities, finances, movements, and
decisions, and solve complex problems.”3
private conversations are tracked and analyzed by governments, large corporations, or both. To others, Big Data is a boon, an explosion of information that can be mined for commercial applications, marketing insights, and rapid scientific progress. Beyond reconciling these two worldviews—which are not necessarily incompatible—even defining what Big Data is can be difficult. A recent informal survey for the University of California, Berkeley School of Information came up with 43 different definitions from experts in different aspects of data science.2
BY JOEL GURIN FOUNDER OF OPENDATANOW.COM 42 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
UNLIKE BIG DATA, OPEN DATA IS CHARACTERIZED SIMPLY BY THE FACT THAT IT IS AVAILABLE TO ALL.
data-driven innovation
BUsiness Horizon Quarterly
OPEN DATA 25 OPEN DATA COMPANIES
57 THE GREAT DATA DISPUTE
BIG DATA
OPEN DATA
OPEN GOVT
1. NON-PUBLIC DATA for marketing, business analysis, national security
5
2. CITIZEN ENGAGEMENT PROGRAMS not based on data (e.g., petition websites) 3. LARGE DATASETS from scientific research, social media, or other non-govt. sources
3
4 6
4. PUBLIC DATA from state, local, federal govt. (e.g., budget data) 5. BUSINESS REPORTING (e.g., ESG data); other business data (e.g., consumer complaints)
1
2
6. LARGE PUBLIC GOVERNMENT DATASETS (e.g., weather, GPS, Census, SEC, healthcare)
Credit: USCCF Report, The Future of Data-Driven Innovation, Chapter 5
Personal Data Governments at the federal, and local level No one is suggesting thatstate, personal data onare health, finances, or other individual data should making scientific, demographic, financial, healthcare, be publicly available. There is increasing interest, and environmental data, among other kinds, available at however, in making each person’s individual littlemore or no available charge for the andorthe public data andprivate opensector to him her. New applications helping Lab people download to use. At theare Governance (GovLab) at Newtheir York health records, tax forms, energy usage history, University, where I am a senior advisor, I direct the Open and more. The model is the Blue Button program Data 500—a comprehensive studytotohelp identify, categorize, that was originally developed veterans download their medical histories from the Veterans and analyze more than 500 U.S.-based companies Administration. The private sector has now adapted use Openmedical Data as arecords key business resource. it that to provide to about 150They’re million 4 A similar program for personal Americans. demonstrating a business paradox: this free resourceenergy usage data, the Green Button program, was can be used to launch companies that develop millions developed through government collaboration or even hundreds of millions of dollars in value. with utilities.
Market Development — Opportunities TheUsing Open Data 500 includes for Public Data companies across
business sectors, andand theirother numbers are growing The United States national governments have committed themselves to making rapidly. The table to the right shows a samplegovernment of 25 data “open by default;” that is, to make it open of Open Data companies that wereprivacy, founded toexamples the public unless there are security, orinother reasons not tocategory. do so. But 2010 compelling or later, organized by business datasets won’t open themselves, and it is not possible to make a country’s entire supply of 44public | B U S I Ndata E S S Havailable O R I Z O N Qovernight. U A R T E R L Y Since // I S S it U Ewill 1 2 take considerable time, money, and work to turn
national government datasets into usable Open The largest in the 500, interestingly Data, it is category important toOpen try toData evaluate the ROI for this effort. Over the last few years, policy analysts enough, includes companies that are not focused on have made several high-level attempts to estimate any one specific area but are in the business of making the economic value of these different kinds of data, it easierData for other businesses to use Open Data. These Open in particular.
“data/technology” companies provide platforms and
The aforementioned GovLab is studying the same services that make open government data easier to find, issue in a more granular way. The GovLab now runs understand, and access. Companies like thistowill have a the Open Data 500 study, a project find and study roughly 500 U.S.-based companies that multiplier effect: their success will help make many otheruse open government data as a key business resource. 5 data-driven as well. Some of the While the companies study hassuccessful not yet collected systematic financial onfor these it has provided most activedata sectors Opencompanies, Data companies include: a basic map of the territory, showing the categories of companies that use open government data, Business Legal which federaland agencies theyServices: draw on as data suppliers, basic information about business Companies are managing, analyzing, andtheir providing Open models, and what kinds of open government data Data for business intelligence and business operations, have the greatest potential for use.
including the use of patent data, data for competitive
The Open Data 500 companiestrade. across intelligence, and data to includes facilitate international business sectors. Several companies are built on two classic examples of open government data: weather data, first released in the 1970s, which has fueled companies like the Weather Channel; and GPS data, made available more recently, which is used by companies ranging from OnStar to Uber. But a look at companies started in the last
COMPANY NAME
URL
YEAR FOUNDED
COMPANY CATEGORY
Appallicious
appallicious.com
2010
Data/Technology
Junar, Inc.
www.Junar.com
2010
Data/Technology
Captricity
captricity.com
2011
Data/Technology
Enigma.io
enigma.io
2011
Data/Technology
College Abacus
collegeabacus.com
2012
Education
Ranku
goranku.com
2013
Education
Recargo
www.recargo.com
2010
Energy
Capital Cube
www.capitalcube.com
2010
Finance & Investment
Credit Sesame
creditsesame.com
2010
Finance & Investment
TagniFi
tagnifi.com
2012
Finance & Investment
Rank and Filed
rankandfiled.com
2013
Finance & Investment
FarmLogs
farmlogs.com
2011
Food & Agriculture
Mercaris
www.mercaris.com
2012
Food & Agriculture
Geofeedia
geofeedia.com
2011
Geospatial/Mapping
MapBox
mapbox.com
2011
Geospatial/Mapping
Govini
www.govini.com
2011
Governance
OpenGov
opengov.com
2012
Governance
Propeller Health
propellerhealth.com
2010
Healthcare
Aidin
www.myAidin.com
2011
Healthcare
Predilytics
www.predilytics.com
2012
Healthcare
Evidera
www.evidera.com
2013
Healthcare
Iodine
www.iodine.com
2013
Healthcare
Honest Buildings
www.honestbuildings.com
2011
Housing/Real Estate
Roadify Transit
www.roadify.com
2010
Transportation
Keychain Logistics Corp.
www.keychainlogistics.com
2012
Transportation // A R T I C L E N A M E | 45
data-driven innovation
BUsiness Horizon Quarterly
OPEN DATA REVENUE SOURCES FOR OPEN DATA COMPANIES
THE USE OF BIG DATA DEPENDS ON TWO BASIC FACTORS: WHO OWNS IT AND HOW THEY CONTROL IT. Education:
Food and Agriculture:
Several startups are using data about the cost and value
Several companies are practicing “precision agriculture”—
of educational institutions. Most colleges are now
using Open Data to help farmers adapt to climate
required to disclose the amount an individual student is
change and increase the profitability of their farms. The
likely to pay after the college’s financial aid options are
Climate Corporation, which was sold to Monsanto
taken into account. New education websites are using
in the fall of 2013 for about $1 billion, has become a
this kind of data to help students assess their options.
leading example of a successful Open Data company.
Energy:
Governance:
Data-driven companies are helping improve energy
Companies are springing up to help local
efficiency in commercial buildings, making solar
governments organize and publish data on finances,
energy and other forms of renewable energy more
city operations, and more with easy-to-use software
practical, and allowing homeowners to monitor
that helps their residents understand city programs
and reduce their energy consumption.
and helps city managers assess their success.
Finance and Investment:
Healthcare:
Data from the Securities and Exchange Commission (SEC)
The diverse uses of Open Data in healthcare may transform
has powered investment firms for decades, and some new
the entire healthcare system. Open Data companies
companies are combining SEC data with other data sources
are helping individuals find low-cost, high-quality care
for faster, more accurate, and more usable analysis. Others
and manage their health better with access to their
use different kinds of data to evaluate pension plans, offer
medical records. Beyond these practical applications,
comparisons of credit cards and financial services, or help
data will enable new approaches to diagnosis and
consumers avoid fraudulent charges. And some are helping
treatment, using predictive analytics to determine which
small- and medium-size enterprises (SMEs) get the capital
kinds of patients will respond best to which medical
they need by using Open Data to do due diligence on
interventions and under what circumstances. New
those SMEs for potential lenders.
companies are launching to put all this data to work.
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ADVERTISING
LICENSING
EXAMPLE: Most weather forecast services rely on data from observation stations operated or sponsored by the National Weather Service and gain revenue through geographically targeted advertising.
EXAMPLE: (Leg)Cyte functions like a "Google Docs" for drafting legislation and comes equipped with sophisticated open data analytics tools for Congressional staffers, lobbyists, and policy wonks.
CONSULTING FEES EXAMPLE: Data-driven firms like Booz Allen and McKinsey analyze both open and proprietary data to advise their corporate clients on business opportunities.
SUBSCRIPTION MODELS REVENUE SOURCES FOR OPEN DATA COMPANIES
EXAMPLE: OpenGov.com offers a subscription service to state and local governments to access the company's web-based program, which can effectively manage, analyze, and visualize financial data.
LEAD GENERATION
ANAYLTICS FEES
EXAMPLE: BuildZoom collects and analyzes data on the construction industry, including publicly available reports for licensed government contractors. Users are able to request project bids from contractors.
EXAMPLE: Panjiva created a sophisticated search engine for global commerce—including shipping information and customer lists—using customs datasets and other forms of government data.
Credit: USCCF Report, The Future of Data-Driven Innovation, Chapter 5
with businesses, governments, or both. Several Venture capitalists reportedly invested more than $2 companies now help government agencies 4 billion and in digital healththeir startups in data—or the first half of 2014. manage analyze own even sell agencies’ data back to them in an improved form, as Panjiva does with customs data from the federal Housing and Real Estate: government.
Potential and Ways traffic analyticsBarriers to help transportation planners, and to Overcome Them
safetydiscussion data to improve the trucking industry. Any of data-driven business has to deal with the issue of data privacy. Chapter 7 addresses privacy concerns surrounding the use The Open Data 500 study has found that all of proprietary Big Data, such as personal data these companies usethrough a wide variety business through Real estate websites aggregate large numbers of listings gathered online, dataofbrokers, Consulting fees yet another revenue records, or in of other ways.and Companies models, serve diverse kinds customers, earn from around theare country and do much more source. as well. They customer Some data-driven firms, like Booz Allen and driven by Open Data do not generally use this revenue in many different ways. The graphic above now offer data on schools, neighborhood “walkability,” McKinsey, analyze both open and proprietary kind of personal information, but they may need describes gives examples of six revenue models: data crime rates, and many other factors that can a data to advise their corporate clients onaffect business to accessand datasets that aggregate personal opportunities, while investment firms use and present it in a way that masks personal potential homeowner’s decisions. They can combine federal licensing, advertising, consulting fees, analytics increasingly diverse data sources to predict information. Healthcare companies, for example, fees, subscription models, and leadpatient generation. Opentrends. Data with state and local data to provide an in-depth may market want to use anonymous records in view of cities, neighborhoods, and individual houses. a way that enables them to detect patterns in Finally, licensing fees are a source of revenue for treatment outcomes, such as All these business opportunities willcorrelations expand as thebetween the kinds of companies that Deloitte calls enablers. prescription drugs, lifestyle, and therapeutic results. amount and quality of federal, state, and local Open Transportation: They can license software, tools, platforms, database services, cloud-based services,data andismore There is an ongoing debate about whether it Data improve. The Obama administration established The availability of new, usable transportation to enable new data-driven companies to build their is truly possible to anonymize data like this an Open Data Policy in May 2013 to make more transforming this sector as well. Different companies business. or whether any system of anonymization can provide detailed directions and traffic advisories,
government data available and useful, with a special focus
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OPEN DATA
THE OPEN DATA POLICY REQUIRES GOVERNMENT AGENCIES TO GET FEEDBACK ON WAYS TO IMPROVE FROM THE COMPANIES AND ORGANIZATIONS THAT USE THEIR DATA.
on business needs.5 When he announced the policy at
1. Make it easier to discover and find data, for
7. Treat data users as customers by engaging with
a technology center in Austin, Texas, President Obama
example, by publishing full inventories of the data
them and getting their input and feedback on a
said, “Starting today, we’re making even more government
that an agency has available;
regular basis.
data available online, which will help launch even more new startups. And we’re making it easier for people to
2. Improve access to data by making it easier to
All of these improvements will be needed to make open
find the data and use it, so that entrepreneurs can build
download and by providing data in different
government data as useful as it can be. The ultimate goal is
products and services we haven’t even imagined yet.”6
formats for different users’ needs;
to make all government data open by default—to set it free unless there is a specific privacy, security, or other reason
The Open Data Policy requires government agencies to get feedback on ways to improve from the companies and
3. Improve data quality by making the data more complete, valid, and accurate;
don’t know exactly how it will be used until it’s released and people start experimenting with it. That makes its uses and
organizations that use their data. To facilitate that process, The GovLab has begun a series of Open Data Roundtables
not to. One of the paradoxes of Open Data is that you
4. Collect data more frequently and from more
its value hard to predict. But for today’s data entrepreneurs,
that bring together staff and officials from federal agencies
sources, and share the data widely through
that’s also the beauty of Open Data. It presents a huge
with their diverse data “customers.” The GovLab released a
both government programs and public-private
range of possibilities to discover, develop, and explore. And
public report on the first of these roundtables, which was
partnerships;
you don’t even need a garage. ■
held with the U.S. Department of Commerce in October. The GovLab has also held a roundtable with the USDA
5. Make data interoperable, that is, make it easier to
and has events planned with the Departments of Energy,
combine and compare data from one government
Education, Labor, and Transportation, among others. The
agency with data from another.
Commerce Roundtable highlighted seven ways that that Department, as well as other federal agencies, can improve the data they provide:
6. Use new strategies to store and disseminate data, including public-private partnerships, to make it more widely available; and
Joel Gurin is a leading expert on Open Data— accessible public data that can drive new company development, business strategies, scientific innovation, and ventures for the public good. He is the author of the book Open Data Now and senior advisor at the Governance Lab at New York University, where he directs the Open Data 500 project. He previously served as chair of the White House Task Force on Smart Disclosure, as chief of the Consumer and Governmental A!airs Bureau of the U.S. Federal Communications Commission, and as editorial director and executive vice president of Consumer Reports. ENDNOTES 1 Todd Wasserman, “Rare Apple Computer from 1976 to Be Auctioned for About $400,000,” Mashable, October 7, 2014. 2 Jenna Dutcher, “What Is Big Data?”, datascience@berkeley Blog, September 3, 2014. 3 Joel Gurin, Open Data Now (New York: McGraw-Hill, 2014), 9. 4 Eric Whitney, “Power to the Health Data Geeks,” NPR Morning Edition, June 16, 2014. 5 Executive Office of the President, Office of Management and Budget, “Open Data Policy – Managing Information as an Asset” (Memorandum for the Heads of Executive Departments and Agencies), May 9, 2013. 6 The White House, Office of the Press Secretary, “Obama Administration Releases Historic Open Data Rules to Enhance Government Efficiency and Fuel Economic Growth,” White House blog, May 9, 2013.
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INSIGHTS
W
AN ERA OF
GAME-CHANGING INSIGHT
FROM BIG DATA
e face a curious challenge in our information
marketing the speeding up of globalization and the
age. We have at our fingertips a skyrocketing
acceleration of financial markets are all data driven.
variety of data. In fact, during the past two
years, the world generated a zettabyte of data, more
This is our basic challenge going forward. It’s not
information than humans created in all of history.1
that innovation is coming to a standstill. It’s that the transformations we’ve lived through make us realize
We are armed with devices, apps, sensors, and
that we’re not making the most of this goldmine
social media feeds, all gathering an endless stream
of information. Especially as we face a building
of information about the world around us. Just
data deluge. What we need are new approaches to
consider that within four short years the number
driving innovation through data. Ones that crack
of mobile and connected devices—10 billion—will
open this information to broader groups of people
dwarf the world’s population of 7.6 billion.
and organizations, that dish up transformative
2
ways of sifting through mountains of data, and that And through the sharing, publishing, and building on
create new platforms that we can use to encourage
data that we’re doing so furiously and so creatively using
more data-powered services and collaboration.
the cloud, mobile, and social media, we’re transforming industries, reshaping politics, and utterly changing
Mobile is one of the ripest areas for change. The iPad,
what it means to be connected in our daily lives.
the iPhone, and the torrent of smart gadgets that followed refashioned our daily lives as consumers.
Yet, as we amass more data, it’s becoming clear
Now it’s business’s turn to be reshaped by mobile.
that more information doesn’t automatically equal
Smart devices and Big Data analytics are being paired
more knowledge. Data, on its own, can’t provide
together to remake business and reimagine professions.
insights. As we collect an ever-more dizzying array and amount of data, we’re having a harder
This coming transformation, as big as the one that
time making sense of this treasure trove we’re
changed consumer society, is why IBM and Apple
amassing. Our society and economy have become
partnered together this summer. Our goal is to
one gigantic data feed, with information flowing
spread advanced mobile and data analysis technology
in from corporate networks, supply chains, sensor
throughout corporations. We want to bring Big Data
networks, Twitter, Facebook, apps, and texts. We’re
analytics down to the fingertips of people within
more informed than ever and more overwhelmed.
organizations. So we can spend more time at work focused on making decisions, not running around
We understand from experience the profound value
trying to find information. So that companies can
of this data and the innovation it drives. The waves
unleash the full potential of their employees, craft
of change during the past two decades, sparked
new business models, and get the right products and
initially by the Internet, then social media, then
services to customers when and where they want them.
mobile, were all propelled by this sudden access
By Daniel S. Pelino, General Manager, Global Public Sector, IBM Corporation
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to data and new ways of using and sharing that
While plenty of us inside companies are already toting
information. The rise of social media as a tool for
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INSIGHTS
ANALYTICS IS THE LINCHPIN IN MAKING THE MOST OF NEW METHODS FOR GATHERING AND SHARING DATA.
of them. We’re using them for humdrum tasks rather than
analytics and mobile powerful—the ability to pull insight
Consider how mobile and analytics could put analytics-
other products, dish up the kind of unique advice that
as decision-making tools. E-mail, including calendaring
out of data at a moment’s notice no matter where you
based fuel planning into an airline pilot’s hands. With
will keep shoppers coming back, and save a sale.
and contacts, is currently considered an organizations’
are, transforming even further how we do business.
airlines operating on razor-thin margins and high fixed
most important mobile application. And when businesses 3
costs, fuel consumption is a major variable operating
The transformations that mobile will bring about in the
create apps, they’re aimed primarily at creating stronger
As part of IBM’s partnership with Apple, we’re developing
expense. An app that analyzes fuel usage needs could be
workplace underscores how crucial analytics is in the
connections with consumers and dishing up more
more than 100 new applications that will be tailored for
very profitable. With advanced analytics, the pilot could
age of Big Data. Analytics is the linchpin in making the
customer services, not reshaping internal organizations.4
use in industries including retail, healthcare, transportation,
weigh distance, weather, and historical data about the flight
most of new methods for gathering and sharing data.
banking, insurance, and telecommunications. Paired
and airport the plane will land in to determine exactly
It’s how we manage the rising tide of data. It underpins
Analytics will be the key to unlocking mobile’s potential
together, mobile and analytics pack a punch. They will let
how much fuel to take onboard before each flight.
how we gin up novel products and services, craft new
within companies, to creating apps that make work
employees working remotely sift through their colleagues’
more efficient, productive, and smarter. Corporations
projects and expertise to tap the knowledge they need
Or think about the challenges sales people in stores grapple
have massive troves of data about their clients and
at any given moment. Analytics apps on a smart device
with these days. Showrooming—going to a store, trying
But Big Data requires more. The kind of data we’re
business processes. They’ve refashioned many of their
will help employees make sense of rapidly changing
on a jacket or pair of shoes, and then whipping out a
collecting now on everything from social networks to
operations within corporate networks using that data.
data points to make better decisions more quickly,
phone to compare prices or similar products online—is
sensors is the type of data that traditional computing
But companies haven’t used mobile to push the envelope
whether on a job site or on the way to the airport. The
second nature now to most shoppers. An app, chockfull
systems can’t easily make sense of (i.e., unstructured data).
even further, to put that data into their executives’ and
technologies will let brokers or insurance salespeople
of customers’ preferences and tastes, inventory location,
To make the most of Big Data, we also need to come
workforces’ hands when, where, and how they want it.
talking to a client at lunch or in a meeting outside of the
and the data to make real-time discounts or offers, would
up with intuitive ways for a broader group of people
Now, they can take advantage of precisely what makes
office pitch the right product at the right moment.
give salespeople the tools they need to recommend
(people who aren’t statisticians or computer scientists)
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business models, and pinpoint which markets to attack.
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INSIGHTS
make sense of and innovate around it. We need systems
2,000 professionals. In September, we launched Watson
Practically, Watson Analytics works by letting business
data. The first wave of this innovation rolled through the
that don’t simply compute data but can learn from it
Analytics, a service that puts the power of advanced analytics
professionals in departments throughout an organization
consumer market and society. Now individuals inside
and make suggestions to us about how to interpret it.
at the fingertips of virtually every employee in every business.
(whether marketing, sales, operations, or finance) type
companies are being armed with the tools to pull insights out
in questions such as, “What are the key drivers of my
of data and innovate around information. It is business’ turn
These growing demands are why IBM is investing so much
The Watson technology, which three years ago stunned
product sales?” or “Which benefits drive employee
to feel the full effects of the democratization of data within
in a new era of technology: the era of cognitive computing.
the world by beating two grand champions on the
retention the most?” and get answers based on how events
their operations and not simply in their relationships
Early this year, we launched the IBM Watson Group with
TV quiz show Jeopardy!, represents the first wave in
played out in the past and what is likely to happen in
with customers. ■
an initial investment of more than $1 billion and a staff of
the era of cognitive computing. Cognitive systems
the future. Some of Watson’s most crucial innovations
will help us make sense of Big Data. These systems
are its ability to rank results based on probabilities and
are designed to learn and react as we do. They interact
suggest actions. Using predictive analytics, it automatically
with people in ways that are more natural for us.
surfaces relevant facts and fine tunes the data based
As general manager of IBM’s public sector business, Dan Pelino leads IBM’s business in the government, education, heathcare and life sciences industries.
on past questions, helping spark new questions. A software service delivered via the cloud, Watson Analytics combines natural language processing, computer learning
Mobile and analytics inside the corporation and cognitive
capabilities, and data management behind an intuitive
computing—these are the types of innovations that we at
interface that anyone within a business can use to dig down
IBM are working on to drive innovation around data. Yet,
into their company’s data. Powerful analytics are available
data-driven innovation never rested solely (or even primarily)
today, but only a small fraction of business people use them
in our hands. Since the advent of the Internet, individuals
to make decisions. Watson Analytics expands this kind of
everywhere pushed the boundaries of creativity around what
analysis insight past the desks of in-house statisticians and
it means to share, use and pull game-changing insights out of
REFERENCES 1 Jonathan Shaw, “Why ‘Big Data’ Is a Big Deal,” Harvard Magazine, March-April 2014. 2 “Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2013–2018,” Cisco, Feb. 5, 2014. 3 “Citrix Mobility Report: A Look Ahead,” CONTENT Citrix, December 2013. AVAILABLE 4 “The Customer-activated Enterprise,” IBM 2013 C-Suite Study.
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computer scientists to a much broader set of professionals.
ANALYTICS WILL BE THE KEY TO UNLOCKING MOBILE’S POTENTIAL WITHIN COMPANIES, TO CREATING APPS THAT MAKE WORK MORE EFFICIENT, PRODUCTIVE, AND SMARTER.
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TECHNOLOGY
TECHNOLOGY IS A PLATFORM FOR A VIBRANT AND GROWING ECONOMY AND A PATHWAY TO A BRIGHT AND PROSPEROUS FUTURE.
T
oday, the technology sector and policymakers are talking right past each other, which presents serious dangers both to the tech world and to our economy as a whole. Both groups are of central importance to our
collective ability to address the major fiscal and competitiveness challenges facing
BRIDGING THE GAP BETWEEN TECHNOLOGY AND POLICY
the country. We simply can’t afford to have technologists and policymakers ignore or misunderstand each other. The stakes are too high. The technology sector can’t just assume that legal and regulatory problems will sort themselves out or that society will always make room for a cool new product. Politicians can’t afford to stay ignorant of new technologies and remain behind the curve while society continues to undergo rapid and constant changes thanks
BY DAVID CHAVERN, EXECUTIVE VICE PRESIDENT, U.S. CHAMBER OF COMMERCE; PRESIDENT, CENTER FOR ADVANCED TECHNOLOGY & INNOVATION
to new and innovative products and services. Artificial intelligence, programmable biology, the Internet of Things—the full impact of these and other technologies all bring vast public policy implications. If we ignore them, or fail to truly understand them, we do so at our own peril. In fact, we end up inviting backward regulations put in place by political, regulatory, or legal authorities who often don’t know quite what they’re dealing with. The effect of those regulations can be disruptive, misguided, and in some cases, downright dangerous.
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TECHNOLOGY IMMIGRATION
For the future of a vibrant tech sector and the long-term
many of our challenges big and small. We must not allow
enforcement, and technology around pragmatic reforms
competitiveness of our economy, there needs to be a
misinformation, misunderstanding, or fear limit that
that will ultimately serve everyone’s interests.
bridge between the engineers and the politicians—to
potential. We must tell that story in the public debate
promote better understanding and drive good policy
without hesitation or apology—and in terms our leaders
The Chamber has unmatched resources and
current, broken immigration system, we’re not in a
outcomes that foster technology development, rather than
will understand and appreciate.
capabilities to get things done. We have the
position to come out ahead. Our system doesn’t serve the
impede it. The U.S. Chamber of Commerce started the Center for
America is in a global race for talent, and with our
muscle of some 3 million businesses behind us, and we
interests of our society, our economy, or the interests of
The Chamber helps bring focus and clarity to
work with 116 American Chambers of Commerce in
businesses—especially those in the tech sector who need
business and economic issues that lawmakers
103 countries, operate 11 business councils, and run a
a steady pipeline of talent. Anyone who has attempted to
Advanced Innovation and Technology to tell the story of
don’t understand or would prefer to ignore. One of the
dozen initiatives to help American companies do business
secure a visa for a high-skilled worker knows what a
technology in our economy, to help evolve the mindset of
biggest complaints I hear from tech leaders is that
around the world. We also boast some of the country’s
maddening process it can be. This spring, more than
policymakers, and to lead rational policy solutions that
policymakers are willfully ignorant of technology. Worse
foremost domestic and foreign policy experts, lawyers,
172,000 HB1 visa applications were filed for the 85,000
will drive the U.S. economy for years to come. The
still are the instances in which politicians wade into the
lobbyists, and communicators on our staff.
slots allotted by Congress—and they were ultimately
Chamber is well placed to be a part of the solution in five
tech space without truly grasping it. The Chamber is not
primary ways:
afraid to force the issue when it’s being ignored. We won’t
For more than 100 years, the Chamber has been
should be determined by the needs of the market, not by
hesitate to call out and correct our leaders when they’re
enabling growth and advancement in the private
arbitrary caps. Reform will help us attract and retain
determined by lottery. The numbers of high-skilled visas
Business is the answer, not the problem. The
wrong on policy, and we educate and advocate for the
sector. Through our work to promote policies that
global entrepreneurial talent. The Chamber has
Chamber helps our nation’s leaders understand
kinds of policies that will allow technology to flourish
nurture innovation, and by advocating for the free
supported efforts on Capitol Hill to provide green cards
and fulfill its potential in a competitive economy.
market to foster and deploy new technologies, we’ve
to immigrant entrepreneurs, and we also support reforms
proudly played a role in the successive advancements that
to secure our borders, expand visa programs for all skill
have brought us to where we are now.
levels, establish a workable and reliable national employee
how business drives productivity, growth, and hiring. When public policy holds back the private sector, it also holds back our economy and stifles opportunity and
We have an unparalleled ability to convene all the
prosperity for individuals. That’s especially true for
players, find common interests between seemingly
technology. It represents one of the largest and fastest
disparate stakeholders, and bring them together to work
growing sectors, and there’s no sector of our economy
toward shared goals. A great example is the leading role
THE TECHNOLOGY AGENDA
that it doesn’t touch. In fact, technology today makes up
the Chamber has played in building a broad coalition to
We are in an era in which the next wave of the digital
the platform on which our entire economy rests.
support immigration reform. The Chamber helps rally
revolution and the spirit of entrepreneurism are
Technology provides the capacity to drive the solutions to
business, labor, religious and ethnic groups, law
propelling our nation forward at a breathtaking pace—
verification system, and provide a pathway out of the shadows for the 11 million undocumented workers in America today.
EDUCATION REFORM
along with much of the rest of the world. This is only the
If we want to build a competitive 21st century workforce
beginning of what could be the most transformative
equipped with the skills for the jobs of the future, we
WE SIMPLY CAN’T AFFORD TO HAVE
period of technological progress in history. The Chamber
must take a hard look at what is and isn’t working in our
TECHNOLOGISTS AND POLICYMAKERS
supports policies that will allow all American businesses
system. While the United States is home to many of the
to compete and succeed in a dynamic global economy,
world’s greatest institutions of higher learning, our public
and we are helping pioneer and promote the policies
K-12 education system is failing badly. Broadly speaking,
needed to keep up with the unique challenges and
the system isn’t producing students who are proficient in
opportunities that technology brings.
science, math, and reading. Without that foundation, it’s
IGNORE OR MISUNDERSTAND EACH OTHER. THE STAKES ARE TOO HIGH.
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TECHNOLOGY FOR THE FUTURE OF A VIBRANT TECH SECTOR AND THE LONG-TERM COMPETITIVENESS OF OUR ECONOMY, THERE NEEDS TO BE A BRIDGE BETWEEN THE ENGINEERS AND THE POLITICIANS—TO PROMOTE BETTER UNDERSTANDING AND DRIVE GOOD POLICY OUTCOMES THAT FOSTER TECHNOLOGY DEVELOPMENT, RATHER THAN IMPEDE IT.
difficult to build strong skills in technology and
million jobs for Americans over the past 15 years, and the
could potentially cut off data flows or impose
and many more—collect and use data to spur sales and
engineering, as well as the problem solving and critical
Chamber is playing a leading role in the passage of all
localization requirements.
job growth, enhance productivity, enable cost savings,
thinking skills necessary for innovation. To help close the
major trade deals. Currently, we are focused on
skills gap, the Chamber is aggressively promoting high
completion of the Trans-Pacific Partnership (TPP), which
educational standards in America’s schools and effective
would grant U.S. businesses access to some of the most
workforce training systems. We’re also exploring new
vibrant markets in the world. We are also aggressively
ways the business community can help proactively build
advocating for the Transatlantic Trade and Investment
talent pipelines.
Partnership (TTIP), which would expand the commercial
TAX REFORM
relationship between the United States and Europe. And we continue to press hard for the passage of a Trade Promotion Authority (TPA) bill, which would grant the
We need a competitive tax system that creates a level
president the authority to negotiate trade deals. Without
playing field for American businesses. Yet, our current
TPA, potential trading partners will be hesitant to pursue
tangled tax code is anything but competitive, and high
agreements with the United States for fear of having to
marginal tax rates put U.S. businesses at a disadvantage in
negotiate them twice—once with the administration and
the global economy. We continue to advocate for pro-
then again with Congress.
growth, comprehensive tax reform that will lower both corporate and individual rates, broaden the tax base, and
GLOBAL REGULATORY COOPERATION
that will keep innovation humming, including a
While we pursue opportunities for stronger trade ties,
permanent extension of the R&D tax credit. We know
we’re also working toward greater global regulatory
that a smarter, simpler, streamlined tax system can
cooperation on everything from intellectual property to
help unleash the power of American businesses to expand
investment. Cross-border data flows have emerged as one
and hire, invest and innovate, and compete in a
of the major regulatory challenges. In today’s global
global economy.
economy, consumers, regulators, and businesses all benefit from a constant stream of data flowing seamlessly between countries. The Chamber’s Center for Global Regulatory Cooperation, in coordination with our
Another imperative for U.S. competitiveness is global
regional teams, is leading the business community’s
commerce. Expanding trade and investment has helped
efforts to push back against misguided policies that
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in the United States and around the world. Data-driven innovation must be fostered and encouraged. The U.S. Chamber of Commerce Foundation’s Data-Driven
On the policy challenge of keeping both data and cyber-infrastructure secure while protecting the privacy of individuals, the Chamber believes that industry selfregulation and technology-neutral best business practices are the most effective way to enhance innovation, investment, competition, and privacy. In our free market system, companies that fail to meet consumers’ privacy and security expectations can expect to face swift and decisive marketplace and reputational consequences. The Chamber also supports cybersecurity information-sharing legislation that includes robust safeguards for businesses that voluntarily exchange data with their peers and government partners. Targeted information sharing and
simplify compliance. We are also fighting for provisions
INTERNATIONAL TRADE AND INVESTMENT
improve efficiency, protect consumers, and improve lives
DATA SECURITY, CYBERSECURITY, AND PRIVACY
mitigation efforts, coupled with the right liability
Innovation Project is exploring and promoting the economic and social value of data. It’s important that we study the implications and get the policies right. Technology is a platform for a vibrant and growing economy and a pathway to a bright and prosperous future. Technology companies need to be allowed to be technology companies. They need to have the freedom and the flexibility to innovate and create, free from the burden of overregulation and unencumbered by misguided rules. Everything the Chamber does is designed to drive home the point to politicians, policymakers, and the public that business is the solution, not the problem, and that technology is an asset, not
protections, are the best ways to strengthen cyber protections for companies. These tools can coexist with important protections for individuals’ privacy.
DATA-DRIVEN INNOVATION Beyond issues of regulation and privacy, data will increasingly be a part of the policy debate. All sectors of the U.S. economy—including financial services, manufacturing, transportation, healthcare, agriculture
a threat. ■ David C. Chavern is executive vice president of the U.S. Chamber of Commerce and president of the Center for Advanced Technology & Innovation (CATI). Under Chavern’s leadership, the Chamber launched CATI in 2014 to expand engagement with high-tech industries on policy development, regulatory issues, and international opportunities and challenges and to represent the interests of technology companies. Through advocacy, research, events, and partnerships, CATI seeks to unleash entrepreneurship and technology development in high-tech centers across the nation. Before taking the helm of CATI, Chavern served as chief operating officer of the Chamber for more than seven years.
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TECHNOLOGY
O
ur world has never been more interconnected. Amazing leaps in technology have made a global community feel local in scale. The devices we carry in our pockets today have more computing power than the entire NASA space program did when we landed
on the moon. Millions of Americans connect daily on social media, shop online for products and services they love, and find new opportunities they had never even considered. Each click, like, and share creates new data in the world, much of which can be used to deliver relevant marketing information and bring increased value to consumer audiences. Put simply, data is the new gold. As the world becomes ever more data-driven, smart businesses look to fully realize the benefits of the data revolution, from streamlining internal processes and communicating more ably with current and potential customers, to lowering costs and creating jobs. Whether you realize it, all of these benefits start in one place: your marketing department. Within your business, smart and strategic use of data in marketing can make your efforts lean and agile, bringing operating costs down while giving more power and punch to your efforts. When data is shared across departments, from marketing to customer service to IT, it paints a full, rich picture of your customer base and the challenges and opportunities presented. With this data readily available right inside your business, and shared across departmental lines, you no longer need to operate with one eye closed. With the use of data-driven marketing and consumer engagement through a range of channels, businesses have never been closer to their customers. The barriers of entry for startups have also never been lower, given the ability to target and tailor messages to specific audiences.
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TECHNOLOGY
IN THE WORLD OF BUSINESS, STANDARDS ARE A CLEAR AND PRESENT CATALYST, DRIVING PRODUCTIVITY, EFFECTIVENESS, AND RESULTS THAT BENEFIT THE COMPANY, AS WELL AS ITS STAKEHOLDERS.
It goes without saying that Big Data has come with big
The economic benefits of responsible data use strengthen
as much as 15% of all revenue for American businesses
or bad, and it is up to the businesses trusted with
benefits—but it has also raised big questions about how
every sector of the American economy, but the biggest
today, according to the CMO Survey produced by
consumer data to make sure it is only used responsibly
data can and should be used. Increasingly, policymakers
winners in the DDME are innovators in the small
Duke University. By acquiring data and using it for
so that consumers can enjoy those benefits without
in Washington, across the country, and around the
business community. The exchange of data across
segmentation, targeting, and measurement, marketers
having to worry that the kind of hypothetical harms
globe are showing keen interest in understanding how
the DDME enables small businesses and startups to
reduce expenditures on non-valuable interactions and
policymakers suggest never become reality.
data is used in every aspect of American business. These
compete effectively with big players, allowing new
ensure that the expenditures they do make maximize
are important discussions to have, which is why the
market entrants to challenge mature players. Thanks
the number of valuable interactions. The efficiency
Fortunately for consumers, a strong combination
Direct Marketing Association (DMA) engages both
to data, startups and small businesses today face lower
derived from smart use of data makes the process of
of sectoral laws and strong industry self-regulation
policymakers and the business community through the
barriers to market entry than they have since the 1870s.
marketing significantly more efficient, which makes the
already provide both the ability to protect data
overall U.S. economy more efficient in how it brings
and the teeth to hold accountable those who
The DDME is also a uniquely American creation and
goods and services to market. In fact, if markets had
act outside the ethics of our industry.
has become a major source of exports for the U.S.
to operate without the ability to exchange data across
economy. DDME firms already derive a considerable
the DDME, the U.S. economy would be significantly
A wide range of sectoral laws govern whether and
DDMI turned its attention in 2013 to uncovering
portion of their revenue abroad—up to 15% in some
less efficient. U.S. companies would have to spend
how businesses can use health information, financial
the facts about the vital role of responsible data use in
cases—while employing nearly all of their workers in
more than $110 billion in additional expenditures
information, and information collected from children,
fueling innovation and economic growth. A first-of-its-
the United States. Thanks to DDME companies, the
just to maintain their current outputs, setting aside
among other categories. The strict standards to which
kind study commissioned by DDMI and undertaken by
United States leads the world in data science applied to
any room for innovation and economic growth.
data-driven marketers hold themselves are built atop
Professors John Deighton of Harvard Business School
the marketplace, making the country a stronger global
and Peter Johnson of Columbia University found that in
competitor, while continuing to grow U.S. businesses
2012, the Data-Driven Marketing Economy (DDME)
through innovation and job creation here at home.
Data-Driven Marketing Institute (DDMI), to ensure that the conversation around data policy is a valuable one.
WHAT IS THE VALUE OF DATA ANYWAY?
added $156 billion in revenue to the U.S. economy and
WITH GREAT (DATA) POWER COMES GREAT (DATA) RESPONSIBILITY
the floor that these federal and state laws form. Industry self-regulation—spearheaded by DMA and
We now have proof of what many had already guessed
its member companies—complements these laws by
fueled more than 675,000 jobs. The research described
Data-driven marketing not only revolutionizes one of
at: innovative uses of data present seemingly endless
ensuring that businesses do not just do what is legal,
in “The Value of Data: Consequences for Insight,
the most costly aspects of doing business in any industry,
opportunities for businesses in every American
but also, what is ethical. For more than four decades,
Innovation and Efficiency in the U.S. Economy” also
it has the power to make entire economic markets
industry. That does not mean, however, that consumers
DMA’s Guidelines for Ethical Business Practice have set a
showed that most of the value of data is in its exchange
more efficient. Marketing traditionally accounts for a
should have to worry that Big Data has created a
high bar for responsible marketing while still providing a
across the DDME: 70% of that value depends on the
huge portion of the cost of doing business: the cost of
new, digital version of the “Wild West.” Let’s be
framework flexible enough to address ongoing changes in
ability of firms to exchange data across the DDME.
interacting with consumers is substantial, representing
clear. Data is data is data. It can be used for good
technology, markets, consumer interest, and new business
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THE ECONOMIC BENEFITS OF RESPONSIBLE DATA USE STRENGTHEN EVERY SECTOR OF THE AMERICAN ECONOMY, BUT THE BIGGEST WINNERS IN THE DDME ARE INNOVATORS IN THE SMALL BUSINESS COMMUNITY.
TECHNOLOGY
practices. Working with its member companies, DMA
new business models for digital goods and services.
constantly develops, updates, and enforces its Guidelines
As digital entrepreneurs seek new customers through
as part of the data-driven marketing community’s public
innovative uses of customer data, data-driven
trust with regulators and consumers. When businesses
marketing will enable them to reach across established
act in violation of these Guidelines—in violation of
user communities, to better cultivate “power users”
consumer trust—DMA holds them accountable through
in their own communities, or to exchange labor in
suspension, expulsion, or referral to law enforcement.
mutually-beneficial ways—in turn providing new
PROTECTING THE DATA-DRIVEN FUTURE
sources of revenue to drive the digital economy.
With the release of the “Value of Data” study, policymakers
The “Value of Data” study also makes it clear, however,
have the facts about the vital role of responsible data
that any well-meaning but poorly conceived regulation
use in fueling innovation and economic growth,
restricting responsible data-driven marketing could have
the benefits that the DDME provides to individual
potentially major consequences for the U.S. economy. In
businesses and the U.S. economy as a whole, and
other words, a data-driven future is not a given for
what would be lost if regulation were to impede the
businesses or consumers. Only if the data-driven
responsible exchange of data across the DDME.
marketing community continues to work together in ensuring that businesses are stewards of consumer data
Beyond quantifying the incredible economic power
used across the entire DDME can we create a bright,
that the DDME provides, the study portends that in
data-driven future for all. ■
a not-so-distant future, the phrase “data-driven” will likely describe the ways that consumers make decisions across their personal and professional work and leisure lives—anywhere that they want to better use their time, money, and attention. The ability to make datadriven decisions in every aspect of their lives may soon be regarded by consumers not as a delightful surprise but an everyday expectation, creating a new generation of equal and empowered market participants. The study showed that data-driven marketing is reviving existing business models, such as online publishing,
Rachel Nyswander Thomas is Executive Director of the Data-Driven Marketing Institute (DDMI) and Vice President of Government Affairs for the Direct Marketing Association (DMA). Thomas leads DDMI in conducting independent, academic research regarding how the responsible use of consumer data shapes industry and society. She directs DDMI efforts to engage policymakers, consumers and the media in conversations about the responsible use of data, ensuring that DDMI research informs data policy debates in Washington and beyond. As Vice President of Government Affairs, Thomas represents the data-driven marketing community’s policymaking interests on Capitol Hill, before key federal agencies and in multistakeholder policy forums.
which was at a serious disadvantage in competing with offline broadcast media for advertising dollars until the data marketplace enabled online publishers to gain insight into their audiences and create specialized segments more attractive to advertisers. It showed that digital entrepreneurship is fueling data-driven marketing innovation as well through their creation of 66 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
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A DOZEN
PRINCIPLES FOR DATA-DRIVEN INNOVATION
U.S. CHAMBER OF COMMERCE FOUNDATION
INSIGHT
I
n 2014, the U.S. Chamber of Commerce Foundation set out on a listening tour around the United States, meeting with senior leaders from industry, government, academia, think tanks, and
innovators who are working in the data-driven economy. From those conversations, we found a number of shared, common principles.
1
There are differences between government
2
To realize the full potential of a data-driven economy
3
Data literacy among the public (and particularly
4
and private sector datasets and their use and collection. They are not one and the same.
and data-driven innovation, a robust broadband infrastructure is necessary. Continued private sector investment in broadband networks must be encouraged.
among policymakers) is important for shaping the best and most informed decisions.
Science, technology, engineering, and mathematics (STEM) education, beginning at an early age and ongoing throughout a lifetime, is fundamental to shaping a competitive workforce. Data programming and coding should be considered as a second language within educational institutions.
data-driven innovation
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INSIGHT
DATA LITERACY
IS IMPORTANT FOR SHAPING THE BEST AND MOST INFORMED DECISIONS.
5
To safeguard individual and sensitive information, the first step is the application of fundamental risk management principles by
6
Open access to large, de-identified datasets with reasonable safeguards and without excessive regulation is critical for long-term data-driven
9
innovation and competitiveness.
individual citizens, consumers,
7
competitive in the data-driven economy, immigration reform (in the form of increased numbers for H1B visas
8
10
uniform federal standard for breach notification that is consistent with the best approaches in state law. To
When breaches do occur, the United States needs policies that cross state boundaries. At present, state-by-state actions and regulations
be workable and effective, it must
are adding to confusion and
recognize that both consumers and
costs, thereby making companies
U.S. businesses are victims of crimes
less competitive nationally
that give rise to a data breach. The
and internationally in the
To forge better data policies, we need
standard should contain carefully drafted
data-driven economy.
greater balance and consistency across
provisions on—but not limited to—
the board between public and private
preemption, liability, and enforcement.
corporations, and other users.
For the United States to remain
The United States should develop a
sectors and at all levels of government.
and Employment-Based green cards)
The Data Revolution is here to stay.
would enable more innovative data-
Going forward, it is paramount that
driven companies to be created in the
we seek improvements in public-
United States and allow other companies
private partnerships in areas of vital
to grow and thrive because they have
interest, such as education, talent
access to the best talent in the world.
access and development, research and development, and other issues.
11
Ethical conduct compliant with U.S. laws and regulations is fundamental to those entrusted with access and interaction with sensitive and personal data.
12
The emergence of a robust, innovative, well-regulated private sector data market does not, by itself, justify the creation of broad new government data collection programs. The government must be held to at least the same high standards as the private sector for transparency and security (absent a national security necessity). â–
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WHAT YOU SHOULD KNOW Curated from recent U.S Chamber of Commerce Foundation research, blogs and events.
ISSUE 12
uschamberfoundation.org
RESEARCH The data movement is a force for good. It is fodder for research and a catalyst for innovation. It is the bedrock of informed decision-making and better business and the key to unlocking more efficient, effective government, and other services. It unleashes economic growth, competition, profitability, and other breakthrough discoveries. And it is at once a product of an ever-more technologically sophisticated world and a tool to advance, enhance, and shape all of its domains going forward.
BLOG POSTS
http://www.uschamberfoundation.org/blog
By 2020, 65% of job openings will require at least some postsecondary education. But not all higher education is created equal: the costs, risks, and returns to education and training vary from program to program. For today’s high school graduates and a growing population of middle-age adults, deciding whether to go to college, where to go, and what to study will have enormous consequences, both their future career prospects and ability to live fully in their time. Anthony P. Carnevale, director and research professor at the Georgetown University Center on Education and the Workforce, and Andrew R. Hanson, research analyst at the Georgetown University Center on Education and the Workforce. “What Should You Study in College? Let’s Connect the Dots” | Oct. 29, 2014
From The Future of Data-Driven Innovation
Better growth would mean more income for those who already have a job but have been waiting in vain for a raise. Three percent growth would mean another $4,200 in average incomes, while 3.5% growth would boost this an additional $4,500 to nearly $9,000. Importantly, these gains in income and lifestyles would be widely shared. That is, faster economic growth would improve the future for the poor, the middle class, and the affluent alike.
Don’t be afraid to fail! I get it! The majority of us hate to fail. I mean, who wakes up and wants to feel like they wasted time, lost money, or should have made a different decision? But I tell people all the time, “I’m not afraid of failure, but I am afraid of regret!” Melissa Nixon, Founder and CEO, RedRoxx "4 Ways to Overcome Complacency in Your Career or Business” | Nov. 10, 2014
From The Growth Imperative: How Slow Growth Threatens Our Future and the American Dream
Together business, public, and nonprofit sectors can develop community wellness programs that reduce obesity and increase wellness, but it requires strategic partnerships. Companies like WellPoint and Campbell Soup Company provide great examples for how companies can collaborate with partners to move the needle on obesity, while improving overall access to nutritious food and physical activity. From Building a Healthier World: Private Sector Solutions That Save Lives
In the United States, approximately 40% of food goes to waste. These percentages mean that many resources that go into making the food also are wasted, such as water and energy. Phoenix believes it’s time to implement innovative strategies that help reduce food waste, negative environmental impacts, and costs for our communities. Betty Ilioli, Public Works Intern, City of Phoenix “Phoenix’s Ambitious Plan to End Food Waste” | Oct. 31, 2014
The data revolution has the potential to create new business opportunities across the economy. But healthcare, perhaps more than any other sector, has the potential to be revolutionized by our growing capacity to collect, release, and analyze data of all kinds. Joel Gurin, Director of the Open Data 500 project at GovLab “From Doctors to Data: The New Face of Healthcare.” | Oct. 6, 2014
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“I believe to meet the challenges of
WHAT YOU SHOULD KNOW
securing our nation and building resilience in this fast-paced, ever-changing threat environment, our mission is best served
QUOTES
as a shared responsibility—shared by federal, state, local, tribal, and territorial governments, private sector companies,
“As businesses, you need to be concerned about losing your customers’ trust if the Big Data analytics on which you rely cannot handle consumers’ private information with sensitivity and respect.” Julie Brill Commissioner of the Federal Trade Commission Oct. 7, 2014 Julie Brill, Commissioner of the Federal Trade Commission, with John R. McKernan Jr., President, U.S. Chamber of Commerce Foundation
“If you’re 18 to 24 and you’re out of work and out of school, it doesn’t bode well for you when you’re 35 and 45.” Joseph Biden Vice President of the United States Oct. 3, 2014
non-profit organizations, communities, and individual citizens.“
Jeh Johnson, United States Secretary of Homeland Security
“In healthcare, there may be really good doctors. And then there are some that are maybe not as good. Can we develop systems that allow more and more of our healthcare providers to be as good as the very best doctors?”
Joseph Biden, Vice President of the United States
“From collection to access to technology and privacy, the implications of the growing and
Jeh Johnson United States Secretary of Homeland Security Oct. 15, 2014
Robert Sutor Vice President, IBM Research Oct. 7, 2014
Robert Sutor, Vice President, IBM Research
“What we need is a talent solution for our time, not one to meet the needs of the past. We think employers can lead the way, and they can do so by applying the lessons learned from supply chain management.”
Jason Tyszko, Senior Director of Education Policy at the U.S. Chamber of Commerce Foundation Nov. 19, 2014
deepening availability and use of data impact all of us in some shape or fashion. No one is left untouched by this environment as data literally permeates everything around us.” The Honorable John R. McKernan Jr., President, U.S. Chamber of Commerce Foundation Oct. 7, 2014
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BUSINESS & data LEADERS SPEAK!
BUSINESS & data LEADERS SPEAK!
“What policy recommendation would you make to enhance the future of data-driven innovation?” “Don’t assume the worst. In many cases, the motivation for data collection is pure and the desire to protect privacy is strong. For Toyota, the collection and use of data will help us prevent crashes and reduce traffic fatalities. We are committed to doing this in a way that preserves consumer privacy. “
“A policy that establishes a central agency to coordinate data efforts across government. There must also be a requirement for agencies to share their data with the central data agency while following appropriate security and privacy requirements.”
- Hilary M. Cain Director, Technology and Innovation Policy Toyota Motor North America, Inc.
- Paul Baltzell Chief Information Officer State of Indiana
“We need to achieve the true public-private sector partnership needed to secure cyberspace. Without such collaboration, society can’t hope to protect the flow and integrity of digital data, depriving mankind of the life-improving insight and innovation that the bountiful resource of reliable Big Data can yield.”
“Policymakers should encourage ‘serendipitous’ data innovation—the kind of unexpected discoveries that lead to useful new services for consumers. The best way to do that is focus law and policy on prohibiting companies from using data to clearly and directly harm consumers.”
- John Raidt Scholar US Chamber of Commerce Foundation
- Adam Kovacevich Director, U.S. Public Policy Google
“To fully realize the potential of data-driven innovation, a combination of the right policies and the right methods are required. Current methods are as dated and clunky as the policies that govern them. Committing to the Lean methodology and related Agile model of development are critical evolutions.”
“Data-driven innovation requires responsible corporate and public policies that encourage data depth by promoting access, sharing, and linking of seemingly unrelated data resources in order to stimulate the process of creative discovery, which benefits consumers, firms, and promotes the social good.”
- Leslie Bradshaw Managing Partner Made by Many
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- Dr. Matthew Harding Assistant Professor Sanford School of Public Policy, Duke University
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BUSINESS & data LEADERS SPEAK!
BUSINESS & data LEADERS SPEAK!
“What policy recommendation would you make to enhance the future of data-driven innovation?” “We must reform our laws around government access to digital communications. People lose trust in data-driven services if they’re worried that the NSA or FBI can snoop through their information with impunity. Our nation was founded on the principle that government surveillance must adhere to a due process; our laws and practices don’t reflect that today.” - Nuala O’Connor President & CEO Center for Democracy and Technology
“Data-driven innovation is creating great market and societal opportunities, and with it, security and privacy concerns. Modernizing policies—most of which were developed in another era—to address these risks will instill customer confidence that their data is secured and used in ways that ensure privacy.” - Cheri F. McGuire Vice President, Global Government Affairs & Cybersecurity Policy Symantec Corporation
“Train senior leaders to understand how data drives innovation in their organization—and how it impacts their success and legacy. Communicate that data-streams need some investment to be user friendly. Provide leaders with a great “next step”—something they can embrace and advance.” - Mark Ritchie Secretary of State State of Minnesota
“For the United States to lead globally in data sciences, we must, as we have through history, offer the opportunity to all our graduates both U.S. and foreign-born to work here and to contribute to our society and economy.” - Dr. Gerry McCartney System CIO, Vice President for Information Technology, and Olga Oesterle England Professor of Information Technology Purdue University
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“Crisp differentiation between transparency and open data policies, and standards for their implementation by states. Policy should create and govern open analytics standards where raw data cannot be made public.” - Anudeep Parhar Chief Technology Officer Bloom Health
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FINAL WORD Human beings are (and have always been) data-driven decision makers. We see it in simple, everyday activities. Noticing it is raining, we take an umbrella to work. Recognizing a sore throat and runny nose, we eat chicken soup and go to bed early. Hearing about an accident and slow-moving traffic on the highway, we select another route to wherever we are going. Data is an essential, unavoidable part of our lives. The enormous potential and promise in the Big Data era discussed in this BHQ edition owes to more computing power, cheaper digital storage, and an exponentially growing ocean of data. Nowhere is this more important and valuable than in the private sector. Successful business is all about making the right decisions. The latest, greatest product does not easily move from concept to store shelves. Every step along the path to the marketplace is based on a decision—the product design, the type of materials, the place of manufacturing, the cost of production and the price for consumers, and much more. Armchair critics might surmise that sometimes business decisions are made with the shake of a Magic 8 Ball or putting one’s finger to the wind, but the fact is, most decisions are based on data. To be sure, decision making is hard; making the right call in the right context is a difficult, uncertain endeavor. Business leaders have long “looked to the numbers” for insight into decision making, and that is because numbers tell a story whose moral is better business. New skills, technological tools, and data science allows business leaders to not just make better decisions but realize new opportunities they had not even considered. Indeed, the data revolution helps us ask the right questions and reveals the critical decisions that need to be made.
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The power of data is cross-cutting, and its impact does not begin and end in the boardroom. The activities that constitute growing and running a business all generate data in some form, and this wealth of information can empower decision makers at all levels, from the CEO to the mail room. Bigger data yields deeper insights, informing better decisions, all of which can make a business more competitive and successful. The unfolding data revolution is an opportunity, and it is not one businesses can afford to miss. As Business Software Alliance Counselor Emery Simon said during a panel discussion for the Chamber Foundation’s "Future of Data-Driven Innovation" event, “If you’re not data-driven, you are programmed to fail.” Above all things, the private sector caters to public need and demand, and data-driven innovation and operation help businesses do a better job of that. It is why data is such an awesome force for good. It helps deliver new products to consumers—and not just the latest tablet or fashion trend. DC Central Kitchen uses data to assess and improve its operation, which in turn means more people in need can receive nourishment and job skills. As Mikel Berger wrote in his article, data is spawning new services and businesses that help the agricultural industry make more efficient use of resources while maximizing yield. That means more business opportunity, more money in the pocket of America’s farmers, and most important, more food to fill dinner tables here and around the world. There are many examples like these, and even more when considering how the data-creating Internet of Things is changing the way we work, travel, use utilities, and indeed, enjoy the innumerable amount of services and data streams that are elevating the quality of our daily lives. By every measure and across every business sector, data is inherently a force for good. Big Data holds many opportunities for improving governance, but it is America’s businesses that are the vanguard of the data revolution. This data revolution owes almost entirely to private sector leaders who recognized a new opportunity and seized on it. The public sector reacts to changes in technological capacity, but the private sector drives it. Businesses are the pioneers venturing into unknown territory. As always, there is a risk in investing time and resources in new exploration. Yet, with risk comes reward, and the awesome power of the free market has again proven its capacity to produce world-changing ideas and products. The question for business leaders now is, will your organization embrace this data revolution? It is perhaps the most important and pressing decision for businesses in the 21st century. The answer you give will say even more about your vision for the future than the day you turned on the "Open for Business" sign and unlocked the front door for your first customer to enter.
Rich Cooper Editor-in-chief 80 | B U S I N E S S H O R I Z O N Q U A R T E R L Y // I S S U E 1 2
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1615 H Street, NW | Washington, DC 20062
TalenT PiPeline ManageMenT: A New Approach to Closing the Skills Gap
T
he U.S. Chamber of Commerce Foundation (USCCF) is working with employers to close the growing skills gap by leveraging lessons learned from supply chain management. Read a new white paper and related articles at www.thetalentsupplychain.org.