March 2018 InnOvation Newsletter
Welcome to the inaugural edition of InnOvation, bringing you news about innovations to improve services and operations in the public sector, sponsored by the American Council for Technology and Industry Advisory Council Institute for Innovation. The Institute’s mission is “to provide an objective and non-partisan forum for strategic thought leadership to advance government missions through the innovative application and management of information technology” and we hope this newsletter will help promote that mission. Each newsletter will feature stories, upcoming events, and opportunities for you to engage with a growing community of innovators. Learn more about ACT-IAC here and the Institute for Innovation here.
free to government and academia!
On May 11th, talk with 40 competitively selected innovators who improved services to citizens and government operations. Now a full scale conference, this year's event at the Renaissance Washington DC Hotel, will be bigger and better than ever featuring keynotes by senior government officials, “Lightning Talks” by experienced innovators, and an interactive human-centered design session. Don’t miss this great opportunity to see what’s happening on the cutting edge of innovation and take what you learn back to your own organization. Read More
Having your identity stolen is headache enough. But after the shock of discovering someone has gotten a tax refund using your Social Security number or opened credit cards in your name and ordered champagne at the Ritz, the real frustration begins: wading through reports and records that need to be untangled to reclaim your identity.
Nat Wood and his team at the Federal Trade Commission earned an Igniting Innovation award in 2016 for the creation of IdentityTheft.gov, a one-stop online resource for anyone who has been a victim of identity theft. Instead of trekking to the police station to file a report, figuring out how to stop more fraudulent accounts from being opened and then thinking up what to write in letters to creditors, consumers now can find all the information they need on the FTC site. By entering details of how their identity was stolen, users can get a complete plan listing what they need to do next.
“We know that identity theft is really damaging to people, both financially and emotionally,” said Wood, associate director of the Division of Consumer and Business Education in FTC’s Bureau of Consumer Protection. “Anything we can do to improve that, to reassure people it’s going to be okay and they’ve got some control, makes a big difference.”
Although the FTC has long worked to address the identity theft issue, Wood’s approach to look at the information from the viewpoint of the consumer, to put it into plain English and design a user-friendly website that provides user-specific recovery plans is new. The site is available in Spanish as well.
“It went from a system of good advice to a system of actual self-help, where people could use the tool to create the things that they would need to resolve their problem,” said Monica Vaca, the acting associate director of the FTC’s Division of Consumer Responsibility and Operations.
“It went from being fairly passive to being a true service to the American public. For someone who didn’t know what the next step was, it guides you through every step of the way,” Vaca said.
The website, launched in January 2016, is already getting good reviews from consumers like this unnamed victim: “Thank you for providing this service. It’s scary when someone steals your SS #, and this helps to provide a sense of security. It also helps show that our government can do positive things!”
“Anything that helps regular people get over this problem and cuts down the amount of time that bad people can be stealing from them…it feels good to be doing that,” said Wood.
In April, 2016, IdentityTheft.gov won the “Impacter” award at ACT-IAC’s annual Igniting Innovation Showcase and Awards event for the innovation with the “greatest magnitude of innovation results and benefits”. Content repurposed from: Samuel J. Heyman Service to America Medals program: https://servicetoamericamedals.org/honorees/view_profile.php?profile=483
Have you ever wanted to connect, learn, and share innovation challenges, insights, and successes with kindred spirits? We have some tools that can help. ACT-IAC’s Institute for Innovation established a LinkedIn Showcase (bit.ly/Ins4Innov), a Government Innovators LinkedIn Group (bit.ly/GovInnovators), and a Twitter community #GovInnovators open to government and industry where you can engage in online dialogue and collaboration.
In an effort to improve government innovation awareness, education, collaboration, and public value; the ACT-IAC Institute for Innovation compiled an inventory of “innovation pockets” within the U.S. federal government. The purpose of the inventory is to highlight the great, innovative work that today’s public servants are doing for our country.
Public sector innovation is and has been happening for years however it is not all that well known or publicized. The US Federal Government has been a part of some of the most significant innovations throughout our nation’s history. Probably the most obvious example of this is the creation and development of the Internet. The internet is comprised of interconnected worldwide computer networks. The first network was called the ARPANET (Advanced Research Projects Agency Network) which originated in the US military in the 1960s. Did you also know that Global Positioning Systems (GPS navigation systems) were developed by the Department of Defense (DOD) in the late 1970s to follow the exact locations of nuclear missiles to track calculate their proper trajectories?
In the world of mathematics, throughout the 1980s and early 1990s the National Science Foundation (NSF) funded mathematical research that resulted in an algorithm that helps reduce costs and improve efficiencies in distributing assets. This research resulted in the concept of a “reverse auction” when sellers compete to get business from buyers by accepting lower bids. And NASA originally created infant formula for newborns to 12 months of age as a nutritional supplement. These are just a few of countless examples of how the government is and has been innovating for years.
In an effort to improve government innovation awareness, education, collaboration, and public value, the ACT-IAC Institute for Innovation compiled an inventory of “innovation pockets” within the US federal government. The purpose of the inventory is to highlight all of the great, innovative work that today’s public servants are working on for the betterment of society. We’ve identified federal agency innovation labs, innovative agency departments, and government programs and projects that have resulted in an innovation contribution to our government or society at large. All in all, we’ve identified over 300 “innovation pockets” within government and we are sure that this list only scratches the surface.
While innovation is and has been happening within government, a culture of innovation within must be expanded across all of government to unleash the full potential of the entire federal workforce. Now is the right time to aggressively accelerate government innovation – the Presidential Executive Order entitled “A Comprehensive Plan for Reorganizing the Executive Branch” charges every agency “…to improve the efficiency, effectiveness, and accountability of the executive branch” by identifying new and better ways of operating and managing their programs. Making innovation a persistent capability and part of every agency’s culture could directly support achieving those goals. Our hope is that this innovation inventory will help these efforts along by creating greater awareness and visibility around government innovation. We encourage you to review it, use it, and contribute to it through the web form on the site. The more we use it, the better it will get. Check out the inventory here.
This is the first of a series of articles the ACT-IAC Institute for Innovation has launched to explore emerging technologies and techniques relevant to government. After some analysis and discussion of varying frameworks, we settled on the example shown below. It reflects the viewpoints Jeff Bezos might apply at Amazon. The vertical axis includes considerations with respect to decisions a CIO would make about how to operate the IT function to better support the evolving mission. The horizontal axis reflects the decisions the same CIO might make as the provider of shared services to a wider community. Look for future articles here about emerging technologies and techniques. In consideration of your time, we'll do our best to cover each topic in 500 words or less. In the next edition, we will explore serverless computing.
Michael Conlin, Institute for Innovation, Innovators Circle Initiative Leader, DXC Technology.
Chris Haley and Dr. Michael ‘Whit’ Whitaker
Another day, another article extolling blockchain’s untapped potential. It will give rise to the new internet era and transform the financial system. It is the disruptor of every industry and could change the world. Its touted benefits may include lower cost, risk, and capital requirements, faster transactions, more transparency and reliability, improved privacy, and unparalleled security, to name a few. In fact, my colleagues recently laid out their thoughts on unlocking the blockchain’s potential value for the public sector. Not bad for an idea that’s only eight years old.
By way of definition, blockchains are distributed, immutable ledgers of economic transactions. Each blockchain platform (e.g., Bitcoin, Ethereum, Hyperledger) has a so-called scheme for verifying and recording transactions (e.g., Proof of Work, Proof of Stake, Proof of Time and Space, etc.). These schemes help to ensure the security and immutability of every entry. Blockchains can be public, permissioned, or private, each of which has distinct advantages and constraints.)
For comparison, the traditional method of managing data (and the primary alternative to blockchain) is the centralized database. These can be relational (e.g., Oracle, SQL Server) or unstructured (e.g., Hadoop, MongoDB). Both types are capable, robust, and scalable, and in the near-term should be the default choice for many enterprise data management use cases.
To be sure, blockchain may indeed impact all manner of industries. Many of the benefits ascribed to it may be realized, but those benefits bring important limitations that cannot be ignored. It is crucial to recognize that blockchain is not the ideal solution to every data problem; it is a differentrather than a better way to address data or transaction management. Under the right circumstances, blockchain could be transformative, but without careful planning it could also become a costly misadventure.
As with most technology decisions, the blockchain question introduces a series of trade-offs. As to whether blockchain is needed at all, a number of journalists, academics, and platform providershave begun to address the issue, and we will avoid retreading this ground. Instead, we evaluate the criteria that matter for enterprise data or transaction management, as they are key factors when weighing blockchain against other alternatives. These are the key trade-offs organizations should pay attention to when evaluating Blockchain against centralized databases:
No Guarantees on Better Enterprise Security
Blockchain’s structural security and immutability have been discussed at length, and appear to offer real advantages over traditional datastores. High-profile hacks of blockchain systems have been attributed to the applications running on the blockchain rather than the architecture itself. Hybrid architectures, utilizing blockchain in combination with robust relational databases, appear even more promising, such as the keyless signature infrastructure used by the Estonian government.
However, vulnerabilities at the application and user levels can diminish blockchain’s security improvements. In many organizations, the biggest vulnerabilities may be poorly-designed applications, phishing attacks against untrained users, or unpatched firmware on edge devices (picture medical devices in hospitals or smart sensors on an electrical grid). In these cases, blockchain may provide advantages without improving the security of the system as a whole. After all, the strongest lock does nothing if a window is left open or a thief is handed the key.
Advantage: Blockchain has structural security advantages, but may or may not improve overall security.
Improved Transaction Speed is Not a Given
Blockchain has been proposed for many use cases with real-time transaction requirements, from IoT applications to battlefield communications. Yet many of today’s public blockchains running Proof of Work (PoW) or Proof of Stake (PoS) consensus schemes, such as Bitcoin or Ethereum, support far fewer transactions per second than legacy financial systems. Permissioned / private blockchains may be faster than public options, but often slower than what enterprise databases can achieve.
On the other hand, digital contracts in blockchain could offer order-of-magnitude improvements in the speed of complex, multi-stakeholder transactions. Faster transactions would not be enabled by the technology per se, but by new processes that make use of blockchain’s architecture and features (e.g., transparency, immutability, traceability, etc.). Prime examples are real estate and intellectual property transfers and some financial transactions, where changes must be verified by numerous parties across siloed systems, thus taking a long time to execute. But digital contracts will depend on trusted, online proof of assets changing hands, and on the ability to support claims through the legal system. This requires that assets be identifiable (for instance, a house on a plot of land or a patent number for intellectual property).
Smart contracts could further improve transaction speeds for programmable, rules-based interactions. In addition to the caveats above, however, the inputs for the rules must be trusted by all parties and accessible online. This could be a source of time, weather information, or sensor data (showing a certain amount of electricity being delivered to a house, or a car arriving at a particular location). This introduces another third-party source of data that must be trusted by all parties, and adds another vulnerability to the system. Nonetheless, if these caveats can be addressed, smart contracts could be a significant opportunity in the future.
Advantage: Centralized databases are faster from a technical perspective, but new frameworks and processes that leverage blockchain’s features could offer improvements for certain types of transactions.
Stewardship and Governance Still Matter
One important question an enterprise must ask before implementing blockchain is who will steward the solution over time. The nascent blockchain industry remains fragmented, with a wide array of platforms and vendors. Even early leaders such as Bitcoin and Ethereum remain in flux, with bitter disagreements over design decisions and the direction of the platform. This creates inherent risks that must be taken into account.
Governance is another critical issue, particularly if control over the platform and its underlying data are held by a broader set of stakeholders or the general public. The flowcharts provided by the IEEE, IACR, and others are helpful for determining whether a blockchain is needed at all based on trust and access requirements. But even if one is needed, many questions remain: Who will fund and own the platform as well as the data? Who will ensure that it continues to meet evolving requirements? Who will be responsible for upgrades and maintenance? It is not a given that the parties responsible for writing to the blockchain and validating transactions will also ensure its continued relevance.
Advantage: Stewardship and governance remain important even if responsibilities will be transitioned to trusted third-parties or the general public. In many cases relational databases will be the safer choice
Maintenance and Supportability Cannot Be Ignored
Related to the question of stewardship, organizations must consider maintenance as they evaluate the viability of any technology. For blockchain, the fragmented platform landscape means there is limited support for any particular platform, and no guarantee that the provider will exist in the future. There has also been less time for the support landscape to develop, including strategic advisors, systems integrators, and managed service providers. In-house talent will be hard to find, and all the more important given blockchain’s inherent complexity. Contrast this with the decades of experience of traditional database vendors such as Oracle and Microsoft, and the dichotomy becomes apparent.
Advantage: Centralized databases, both structured and unstructured, appear to hold far lower maintenance risk than even the most mature blockchain solutions.
Scalability is a Crucial Challenge to Address
Today’s centralized databases can scale almost limitlessly as cloud computing and virtualization become commonplace. For many blockchain platforms, scaling remains a daunting challenge. Much has been written about the tremendous energy requirements of Bitcoin, and even Proof of Stake schemes may be problematic at scale, as blockchains grow larger with every subsequent transaction. This would be exacerbated if new data types such as images were added, which might necessitate much greater block sizes than those that are predominant today. Storage, networking, and computing limitations would be amplified as block sizes and transaction volumes increase.
Permissioned blockchains with alternate consensus mechanisms and lower computing requirements may address this problem in part, though this will have implications for trust and transparency and may diminish some of blockchain’s most compelling features. The Hyperledger Performance and Scalability Working Group announced in June shows that the scalability challenge has yet to be solved.
The solutions being proposed to scale blockchains are exceedingly complex, and well beyond the scope of this article. Suffice to say, enterprises should be cautious about building a data management infrastructure on a blockchain without a clear path to growth in the future.
Advantage: Blockchain’s energy costs and storage requirements, as well as the uncertainty that accompanies any nascent technology, make it a far less scalable solution than existing databases.
Cost is a Question Mark
The cost of blockchain relative to centralized databases appears to be contentious and ultimately unproven. Some industry-watchers believe blockchain can lower costs when compared with the hefty licensing and support fees charged by database giants such as Oracle. One notable example is the Depository Trust and Clearing Corporation (DTCC) moving its credit default swap platform to a permissioned blockchain, which is expected to save 20-30% over the existing architecture.
On the other hand, a business case for blockchain must account for a host of potential costs beyond hosting, licensing, and implementation. Hiring or outsourcing for talent to maintain the system could be significant. Energy costs may rise tremendously as the transaction volume increases. On top of all this, a buffer for unknown-unknowns and perhaps a “complexity premium” should be added. Small-scale prototypes or proof of concepts should be conducted wherever possible to validate expected cost savings relative to existing systems.
Advantage: The full cost to an enterprise of sustaining a blockchain remains an unknown.
Blockchain Bottom Line
What does this mean for decision-makers considering the future of their data or transaction architecture? Blockchain’s potential requires that leaders make an investment in understanding the technology and necessary outcomes, with a focus on evaluating the trade-offs and characteristics of their specific use case. Simply put, a clear picture of the risks and the rewards should be drawn before critical systems are moved to a blockchain. But, at the same time, new opportunities made possible by blockchain should not be dismissed.
If budgets and expertise allow for it, experimentation is an appealing way to avoid a sense of falling behind without betting the farm. Prototypes and duplicative, in-place systems may be a valuable tool in measuring trade-offs without putting critical data at risk. Participating in consortia or other partnerships may be another way to test the water. Those incremental steps may allow delay of significant investments until the technology and business environment has reached greater maturity and the potential gains become clear.
Chris Haley is a Corporate Strategy Director at ICF, a global consulting firm. Dr. Michael “Whit” Whitaker is the Vice President of Emerging Solutions at ICF. Whit is also a member of the ACT-IAC Institute for Innovation.
Innovation is a priority for ACT-IAC and its Institute for Innovation provides a focal point to help infuse this theme in every major program. The Institute leverages ACT-IAC’s considerable capabilities to connect innovators and provide tools and opportunities to accelerate learning and adoption. Innovation is important for government to achieve its mission and goals effectively and efficiently. ACT-IAC and the Institute for Innovation provide a hub to address the government’s needs through the activities and support of the Institute.
The Institute’s mission is to provide an objective and non-partisan forum for strategic thought leadership to advance government missions through the innovative application and management of information technology.
Here is a glimpse of ACT-IAC and the Institute’s important work supporting government innovation. We hope you will join us in initiatives to strengthen the innovation community. Learn more about the Institute for Innovation.
- Acquisition Excellence Conference March 27, 2018 in Washington, DC
- Igniting Innovation 2018 Conference and Awards May 11, 2018 in Washington, DC
- Participate in Innovation Zones and educational activities at Imagine Nation ELC 2018on October 14-17, 2018 in Philadelphia, PA
- Join the three different levels of Professional Development Programs
- Attend Forums on emerging topics
- Participate in the excellent courses at the ACT-IAC Academy
Link & Leverage
- Use the Government Innovation Inventory launched in 2017 to consolidate a list of federal innovations
- Join in collaborative sessions focused on innovative ideas, tools, products and services
- Engage in online innovation collaboration through our LinkedIn Showcase bit.ly/Ins4Innov; LinkedIn Group bit.ly/GovInnovators, and Twitter community: #GovInnovators
- Read and contribute to the InnOvation newsletter on innovation activities and insights
- Champion Government Innovation projects leveraging ACT-IAC members’ and partners’ expertise, tools, and resources
- Nominate innovative practices, tools, products or services for an Igniting Innovation Award
- Lead a human-centered design effort using the government-industry “Innovation Zone” process
- Join and/or advise the Innovators Circle and become part of the Institute’s governance
- Add your program to the Government Innovation Inventory
- Provide leadership and input to on-line collaboration
- Attend or host an in-person session and invite others who would benefit
On the Agenda for 2018:
- The Partners and Voyagers Joint Training Day
- Igniting Innovation Conference
- Acquisition Excellence
- Imagine Nation ELC 2018
We hope you will join us this year and help shape our contributions to strengthening government’s innovation capacity.
For more information, contact Mike Howell at email@example.com