Good afternoon. I want to thank President Reif and everyone at MIT. Dr. Reif co-chairs the Administration's Advanced Manufacturing Partnership -- housed at the Commerce Department.
I also want to thank John Podesta for his leadership on this important issue. I am pleased to be here at the first of three workshops to start a national conversation among business leaders, academic experts, and civil society advocates.
As we all know, the American economy has always been grounded in a commitment to the free flow of data and information. We believe this is good for business and good for society as a whole.
You can trace this notion all the way back to the writing of our Constitution, which called for a decennial Census.
The 1890 Census comes to mind. A statistician named Herman Hollerith invented a machine that was able to read the holes punched in paper cards used in the 1890 Census. His machine shortened the time it took to complete the Census -- not just by months, but by years. It saved the government $5 million dollars -- that is roughly $125 million in today's dollars. And, notably, his company would later be folded into an iconic American company -- IBM.
Fast forward. Today, data and data analytics are a powerful new fuel of the American economy.
Here in Massachusetts, many companies have been built on data, from large established companies that provide the backbone of the digital economy -- like cloud-computing leader Akamai; to EMC, which offers massive data storage for its customers; to companies like EnerNoc -- born in Boston -- which is using data and software to make our buildings and schools more energy efficient; to Big Belly Solar that uses data to manage its smart, internet-enabled trash receptacles -- allowing garbage trucks to pick up containers only when they are full and saving on fuel costs here in Boston and in other cities around the United States.
Simply put, each one of us here today benefits from the power of data and information -- whether we are looking for nearby restaurants on our smartphones with Yelp, or getting a cab with Uber, or the example John used about the Cancer Genome Atlas that could help treat diseases in better ways.
And yes, we are only scratching the surface. A recent McKinsey study examined the economic potential of open data in seven areas (education, transportation, consumer products, electricity, oil and gas, health care, and consumer finance). McKinsey's analysis showed that open data in these sectors could help unlock $3 trillion dollars in additional value to the global economy.
For our part at the Commerce Department, we are pushing to make more and more federal data available.
I know the power of Commerce Department data first-hand. I used Census Bureau information to launch my first business over 25 years ago. My team needed to know the right places to build senior living centers -- and the Census Bureau was critical to our decision-making.
And just a few months ago, I announced that unleashing more data for the public good would be top priority for the Department, because we know that data helps businesses make better decisions and data can launch new companies (and even new industries) -- creating good jobs.
In fact, one week ago today, we delivered on that promise by taking the first step to partner with industry to unlock more climate data collected by our National Oceanic and Atmospheric Administration -- data that already powers a billion-dollar industry including the Weather Channel and weather apps.
At almost every business roundtable, I hear from CEOs who emphasize the importance of using data to grow, compete, and innovate.
In fact, faculty here at MIT's Sloan School of Management have conducted research showing that firms which adopt data-driven decision-making have productivity gains 5 to 6 percent higher than alternatives.
Overall, what is clear to me are two things: first, the free flow of data and information is good for society as long as its respected and used properly. Second, the economic winners in the global economy will be businesses, governments, and other institutions that harness the potential of data.
And, yet all of this potential hinges on one thing: trust.
The Administration has used a number of tools to protect privacy, protect our networks, protect the free flow of information and ensure trust. We convened 300 stakeholders to develop voluntary codes of conduct for privacy disclosures affecting consumers who download apps. We worked with the nation's critical infrastructure providers to create a framework of standards and best practices in cybersecurity. We collaborate with European leaders to ensure a viable and effective framework for meeting privacy requirements in different markets. We work with law enforcement officials go after cybercriminals and deny them safe havens. We partner with other governments to ensure the free flow of information so essential to the democratic process. We work to prevent and stop data theft and piracy. And -- yes -- we protect our country from terrorism and acts of aggression that can be carried out by exploiting data.
The fact is we have made progress. But the pace of technological change is fast and we must continually evaluate the state of trust essential to reaping the benefits of data.
Let me be very clear: The Administration and the Commerce Department are using all of the diplomatic and commercial levers at our disposal to ensure trust and to show that the confidence placed in our companies remains rock solid.
As a business person myself, I understand the hesitation that some businesses might have about engaging in efforts like the ones I just listed -- or in this 90-day review, for that matter.
But what I am finding is that more and more American CEOs understand that our country's commitment to free flows of data and information is part of our competitive advantage in the 21st century.
We must protect that advantage. How? By working together to uncover the best technologies and practices that lead to enhanced trust in our relationships with stakeholders, including our customers.
In short, I believe that we must establish principles and policies that encourage and protect trust among all stakeholders. Each one of us has a role and responsibility in building a fabric of trust surrounding data and privacy issues. Governments must cooperate in a number of areas.
This includes law enforcement -- so that we can prevent and address data breaches. It includes cybersecurity and data protection so essential to trade and commerce. It includes supporting the multistakeholder process that sets the standards and norms of cyberspace. And it includes working to ensure an open, fair and free internet.
In addition, governments must also cooperate with each other in how we address and harmonize our information technology regimes.
Businesses -- like many of you in this room -- also play a crucial role in ensuring trust in open and dynamic economies such as ours. You promote trust when you reach out and explain to your customers in very simple and straightforward terms how you plan to use their data. In addition, your capacity to build trust is also affected by the many other decisions you make every day: the data management systems you choose, the investments you make in risk management, even the training standards you adopt for your employees.
And consumers and citizens themselves must actively help build a fabric of trust -- in the way they make choices to share or protect information, and the way they behave online to help ensure free and open cyberspace.
Overall, I believe that trust is absolutely necessary for any data-driven business to succeed. Without it, no business can survive.
Put another way, all of the data in the world is worthless unless consumers trust the companies they buy from, unless citizens trust their governments, and unless institutions of all kinds trust each other to play by the rules.
Like John Podesta, I believe that we must continue this "Big Data" review by asking questions -- (and I know that you have already started to do just that this morning.)
A few questions on my mind are: What are the principles of trust that businesses and governments need to adopt in the age of Big Data? How can we ensure that new technologies protect consumer data, while also supporting innovative uses of data to benefit those same consumers? How can we be more accountable and transparent in how our institutions address privacy issues? What can be done to encourage consumers to better understand what data they are sharing, with whom, and for what purposes -- in order to give them clear and consistent control? What can we all -- Government, businesses and consumers, do to address some of the more egregious and unanticipated consequences of Big Data collection and analytics? And is there consensus that some action is needed? Yes, we want to know what the government should be doing, but we also want to know what you think is the role of business, and what are the responsibilities of the consumer?
Exploring these questions is what this workshop today is all about. And the input from industry throughout this 90-day review is absolutely crucial.
We need your help to set the agenda. As members of the Big Data Working Group, our commitment is to engage with you -- to listen to your concerns and to push for answers to the questions raised.
With the help of everyone here today, I believe that we can continue to successfully apply our American values to the technologies and circumstances of our time.
And we can achieve success in unleashing the full potential of data for the benefit of society, just like Herman Hollerith did with his new machine during the 1890 Census.
Thank you again to John Podesta, and thanks to all of you for stepping up to engage in this important dialogue.