Business Horizon Quarterly #12

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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John R. McKernan Jr.

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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The views expressed herein are those of the author and do not necessarily state or reflect those of the U.S. Chamber of Commerce Foundation, the U.S. Chamber of Commerce, or its affiliates.

1615 H St. NW Washington, DC 20062

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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In 2012, Berger took over as president of AVAILABLE Lafayettech, a local nonprofit to encourage the tech and startup community in the Lafayette, West Lafayette, and Purdue FROM THESE STORES: regions of Central Indiana.

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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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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.

it into meals for people throughout the city.

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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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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

BUsiness Horizon Quarterly

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.

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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.

DIGITAL

FROM THESE STORES: Amazon, iTunes, and Google Play

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.