Municipal Finance: Technological Innovation

Mar 27, 2013 • Innovation, Labor, Regulation, Tech, Thinking Economically • 86 Views    No Comments

Do cities need more “big data?” NYC’s sewer story provides an answer.

NYC had a clogged sewer problem. To solve it, officials had to find the restaurants that were pouring grease down their drains. Because the city’s Office of Policy and Strategic Planning collects huge quantities of statistics ranging from the number of pedestrians on a certain street between 4 and 7 pm to the zip code with the most 311 calls (the “whine district”), they had a solution. Just identify the eating establishments that had reported compliance with the city’s grease carting mandate. Because non-complying firms were more likely to be pouring used cooking oil down their drains, the city could target the suspects. “Big data” let them replace the old method of catching a busboy dumping oil down the drain with a more effective technological detective. Less money could be spent on the sewage system and on regulatory compliance.

Our bottom line? Cities will certainly need the technological innovation that will make municipal finance more efficient. Advocated by Brookings researchers, governments at all levels need to implement technological collaboration and innovation.

Should we be concerned, though, that cities  like New York have considerable fiscal potential while others like Detroit are struggling? With more affluent municipalities investing in technological innovation, will we have a larger gap between have and have not municipalities? And finally, don’t we also have the opportunity cost of privacy?

Sources and Resources: Describing NYC’s Big Data, this NY Times article had some good stories and lots of detail. Much more scholarly, this Brookings Institute report complemented it as did this Business Insider article.

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