Data Flood Bring­ing Pros, Cons

The Bond Buyer - - Front Page - By Paul Bur­ton

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 ini­ti­aNew

tive 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. It 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.” ◽

For more con­tent about this re­gion, visit the Re­gional News tab on BondBuyer.com.

MTA / Patrick Cashin

Rachael Haot leads the Tran­sit Tech Lab, an ac­cel­er­a­tor pro­gram for pub­lic trans­porta­tion so­lu­tions in New York City.

An­thony Sabino, an at­tor­ney and pro­fes­sor at St. John’s Univer­sity.

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