Why data mining is a two-sided coin for states and cities

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New York's burgeoning tech presence extends well beyond Amazon Inc.'s choice of Long Island City in Queens for half of its additional world headquarters.

While the retail behemoth cited New York region's deep talent pool, among other attributes, the city itself has thrown down some other markers, including the hiring of a data analytics officer.

And — reflecting the flip side of data proliferation — New York budgeted $41 million in its fiscal 2019 spending plan on cybersecurity.

Meanwhile, the state-run Metropolitan Transportation Authority, which operates the city's aging, delay-prone mass transit system amid chronic political jousts over funding, is launching a tech lab.

Executive director of the Tech Transit Lab is Rachel Haot, the former chief digital officer for both New York City and New York State. Its advisory board consists of civic and business leaders, with Alan Fishman of Ladder Capital Finance its chairman.

“Response has been very positive,” Haot said in an interview. “We have had a number of very exciting applications.”.

The MTA is one of the largest municipal bond issuers with roughly $40 billion in debt.

Technologies that could improve transit, she said, include predictive modeling, customer engagement programs, computer vision to improve transit speeds, connected infrastructure and route analysis.

For the subway challenge, the lab seeks technologies to better predict delay times, how they will affect trains and lines across the system, and how quickly to communicate information to customers. The bus challenge seeks technologies to enhance efficiency. MTA officials and private sector experts will review lab proposals.

According to Haot, the initiative combines the scale of large agencies with the innovation of startups. She hopes startups can begin to find agencies such as the MTA less cumbersome and intimidating.

“When they work together, some exciting things can happen,” she said. “Streamlining the process can result in more innovative solutions that have not been available in the past.”

As state and local governments increasingly mine data for policymaking, risks accompany benefits.

In March, Mayor Bill de Blasio launched NYC Secure, which aims to defend New Yorkers from malicious cyber activity on mobile devices and across public Wi-Fi networks. And throughout November, the New York City Housing Authority joined with the U.S. Department of Homeland Security to promote the 15th annual National Cybersecurity Awareness Month.

“Certainly, there are things to be gained by being better informed regarding citizens, their usage and needs for municipal services, and so forth,” said Anthony Sabino, a Mineola, N.Y., attorney and a St. John’s University professor. “But are there drawbacks? You bet.”

Too much information is as bad as too little, according to Sabino, a white-collar defense lawyer and former prosecutor.

“Data mining produces precisely that — data,” he said. “But like a gentle rain that turns into a ravaging flood, it can be too much. A sheer overload of data will mislead and confuse government users, and lead to bad decision-making.

“Does local government know how to best use new data? Don’t automatically say ‘yes,’” Sabino added. “Unlike the private sector, which tends to be more focused and efficient in mining data, governments are new to this. They might be better informed, but can they translate data into beneficial policy?”

Kelly Jin began in October as the city's chief analytics officer. She will direct the Mayor’s Office of Data Analytics. The office, which functions under the Mayor’s Office of Operations, is the city’s civic intelligence center.

Its personnel helps manage the city’s open-data program.

“Our data analytics team is a crucial part of bringing important city initiatives to life, tracking their progress, and finding new ways to understand the city through data,” de Blasio said.

Jin previously worked at the White House as a policy advisor to the U.S. chief technology officer and has held multiple related roles in the public and private sectors.

Data mining falls under the larger "smart cities" umbrella.

“Smart cities is not just about tech. It's about making smart decisions across a range of areas,” Richard Voith, principal and president of Philadelphia-based Econsult and its ESI Thought Lab, said during a workshop at the New York Center for Architecture, which the center organized with think tank Regional Plan Association and the Consulate General of Sweden.

Pillars of smart cities, Voith said, include finance, infrastructure, public health and safety, and mobility. “All of these affect the economy,” he said. “As smart cities mature, concerns change.”

Olga Kordes, program director for Viable Cities initiative out of Stockholm, sees both sides of the data buildup.

“We believe technology can change the world. But we also see a lot of risks,” she said, citing privacy and other concerns.

According to Sabino, government has even more power than the private sector to delve into private lives -- where people live, the taxes they pay and even what products they buy through tracking sales taxes.

“Are we ready for government to have that close a look into our personal lives? After all, you can decide not to patronize a particular business,” Sabino said. “But how can you avoid interacting with your local government?”

That leads to the biggest problem, data security. Research firm Cybersecurity Ventures predicted cybercrime will cost $6 trillion worldwide annually by 2021.

Related costs, it said, include data damage and destruction; stolen money; lost productivity; theft of intellectual property and personal and financial data; fraud, post-attack disruption to normal business; forensic investigation and reputational harm.

“Hackers already routinely break into the databases of major companies that spend tremendous amounts of money, time, and effort on data security,” Sabino said.

“Will state and local government do the same? Do they have the money? Do they have the capability? And … do they have the will to do so? Serious questions.”

Academia can provide some of the answers, according to Villanova School of Business professor David Fiorenza.

“Cities can partner with universities that offer analytics in their curriculum,” he said. “Analytics and data mining is no longer reserved for the sports industry. Data mining can steer a city towards their goals of strategic planning.”

According to Fiorenza, budgeting in public safety, at least at the municipal level, has had an easier time obtaining public support and elected boards’ approval, as long as the dollars “are for the safety and security of the citizens.”

Some Pennsylvania departments, he said, such as the Department of Human Services, are exploring data mining to improve efficiencies and detect fraud and waste patterns.

Fiorenza, though, warned about “data bureaucracy” proliferation.

“The risks are chasing the next wave of public-safety technology to fight crime,” he said. “Sometimes the vendors are fueling the fire with their new products.”

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