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Can Big Data Make Government Cheaper to Run?

Government agencies are increasingly using big data to operate more efficiently and effectively for the citizens and organizations they serve.

gov bigdata 150x150 Can Big Data Make Government Cheaper to Run?Indeed, big data and analytics offer government tremendous opportunities to streamline operations and slash costs in light of tax revenue uncertainties. But government agencies are only scratching the surface of what’s possible with big data analytics.

For instance, the US government spends hundreds of billions of dollars on social welfare programs from Social Security to food stamps to public housing, as Robin Harris notes in a recent post for ZDNet.

“But which of these programs actually works?” Harris asks. “We don’t know – but we could if we collected and analyzed the data.”

Without question, opportunities are ripe for government entities to use big data and analytics to operate more effectively. Governments in the developed economies of Europe could save more than $149 billion in operational efficiency improvements by using big data, according to McKinsey Global Institute.

Key to maximizing the use of big data in government is sharing information about big data projects and lessons learned that could potentially be applied by other agencies.

In a recent interview, Stephen Goldsmith speaks about an initiative he’s spearheading called Data-Smart City Solutions, which is a website dedicated to studying and publicizing big data projects that are making municipal governments smarter and more efficient.

The former mayor of Indianapolis and deputy mayor of New York, Goldsmith currently directs the Innovations in Government Program at Harvard University’s Kennedy School of Government.

Goldsmith notes that big data projects in government are often done on a one-off basis, which means decision makers in other cities or agencies are slow to learn about them.

His hope is that initiatives such as Data-Smart City Solutions can be used to connect government leaders and help them learn about emerging big data efforts being tackled by other cities and government agencies.

To help promote the use of big data at the federal level, the White House has announced plans by six federal departments and agencies to invest $200 million in the Big Data Research and Development Initiative to “help accelerate the pace of discovery in science and engineering, strengthen our national security, and transform teaching and learning.”

One federal agency that’s a significant user of big data is the Internal Revenue Service. As part of its services, the IRS regularly conducts programs to identify non-compliant taxpayers. This includes requirements by citizens to pay taxes on international income, not just income earned in the US.

To help support these efforts, the IRS uses analytics to help identify citizens who are using offshore credit cards to avoid paying taxes. With 12 million offshore credit card accounts to analyze, it’s no easy feat.

However, using an innovative analytical process that extracts high quality, audit-worthy accounts from credit card transaction data – then analyzes those accounts – the IRS has identified thousands of suspicious cardholders, many of whom have been prosecuted.

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