Data-rich businesses are positioned to help their communities. It's an opportunity for data philanthropy.
Recent advances in data analytics have revolutionized the way many companies do business. Starbucks, for example, rolls out new beverages and chooses its store locations by analyzing customer, economic and other data. And as Amazon's customers know so well, the company makes purchase recommendations to them in real time based on items they've viewed or bought. So why aren't more of our cities leveraging data in the same way to improve services for their residents?
According to a recent report by Bloomberg Philanthropies' What Works Cities initiative, city officials say they simply lack the capacity to do so. Nearly half pointed to a shortage of staff and financial resources dedicated to gathering and evaluating data.
This gap between companies' and cities' ability to use data is not surprising. Businesses have invested heavily in data and analytics in recent years, and they are spending an average of $7 million annually per company on data-related activities. These investments are made with the understanding that they will improve the companies' bottom line, and they have started paying off.
City halls, on the other hand, find themselves hamstrung when it comes to investing in data and analytics. Despite recent growth, city revenues remain below pre-recession levels, with spending demands on the rise. Furthermore, many cities face the need to balance long-term opportunity with real short-term needs. Do you hire a data scientist -- who may command a salary north of $200,000 -- to research strategies to reduce crime in the long run, or do you hire more police officers to keep neighborhoods safe today?
Despite these challenges, some larger cities have made investments in data a priority and are reaping substantial benefits. In 2013, for example, New York City created the Mayor's Office of Data Analytics to aggregate data from city agencies, analyze it and turn it into actionable solutions for improving public services. And Chicago recently launched its Array of Things, a citywide sensor network to gather data on everything from pedestrian traffic to air quality. Other cities, including mid-sized and smaller ones like Jackson, Miss., and Mesa, Ariz., are just beginning to use sophisticated data aggregation and analytics.
Whether big or mid-sized, however, most cities continue to face substantial challenges in their efforts to make better use of data. But there's a rich resource that remains largely untapped: Many data-rich companies are well positioned to help cities close the data gap.
One way companies can help is through data philanthropy, leveraging their data analytics and capabilities to advance social progress. A step beyond conventional philanthropy and traditional corporate social-responsibility initiatives, data philanthropy is a new kind of response to social issues.
There are a number of ways cities could employ data philanthropy. For starters, they could partner with relevant apps to help ameliorate deteriorating roads. In Oklahoma City, for example, potholes are a particularly serious problem. Data from Waze, the community-based mapping and navigation app, could be leveraged to build a system through which residents could report potholes, allowing city services to efficiently fill them in.
Some data-philanthropy projects are already underway. Uber, for example, recently partnered with the city of Boston in the hopes that its data could help the city improve traffic congestion and community planning. Uber donates anonymized trip data by Zip code, allowing city officials to see the date and time of a trip, its duration and distance traveled. Boston's transportation, neighborhood development and redevelopment agencies will have access to the data, equipping them with a new tool for more-effective policymaking.
While there is demonstrated enthusiasm from cities for more effective use of data to improve their residents' lives, cities won't be able to close the data gap on their own. Private-sector companies must answer the call. Helped in part by the better use of data, cities can create improved, more inclusive and stronger business environments. Who would argue with that goal?
This story was originally published by Governing.
Shamina Singh is the president of the MasterCard Center for Inclusive Growth.