Mr. WATERS. Thank you, Mr. Chairman. That is all. Senator LONG. Thank you, Mr. Zwick. Your statement has been very helpful to us. Thank you, Mr. Bowman, for being with us. I am sorry we did not ask Mr. Zwick hard enough questions to get some assistance in answering from you. But he did very well. Mr. ZwICK. Thank you very much. Senator LONG. Our next witness was to have been Mr. D. Reid Ross, Vice President, Regional Industrial Development Corporation of St. Louis. But I am informed he will be unable to appear this morning due to the fact that he is presently recovering from an operation. He has asked permission to submit his statement and some accompanying material and have it placed in the record at the appropriate time. Without objection that will be done. (The documents referred to follow :) ST. LOUIS REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION, Hon. EDWARD V. LONG United States Senate, 3107 New Senate Office Building, Washington, D.C. DEAR SENATOR LONG: Mr. Reid Ross is currently hospitalized and will not be available to testify as scheduled before the Subcommittee on Administrative Practice and Procedure on March 14 as presently planned. Mr. Ross has asked that his letter to you, dated February 2, 1967, and the proposed, entitled "A Phased Plan for a Regional Economic Data Bank for the St. Louis Region" be entered into the record as a part of his testimony. He would also appreciate the record being held open so that he might submit additional testimony within the next three weeks. Thank you very much for your courtesy and consideration in this matter. Very truly yours, LEROY J. GROSSMAN, Director of Economic Research. ST. LOUIS REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION, Hon. EDWARD V. LONG, DEAR SENATOR LONG: Because of your concern that the creation of data banks may result in an invasion of personal privacy, it occurs to me that the enclosed report on the nature of the proposed Regional Data Bank that we are now establishing for the St. Louis region should be called to your attention. Attached to this report is an appendix itemizing the source and the nature of the economic data we propose to collect, store and retrieve for economic research purposes. Let me assure you that we share your views regarding protection of individual privacy and will build adequate safeguards into our information system to protect individual and corporate information. Briefly stated, most of the economic data we will utilize will come from published sources and will be so aggregated as to be identifiable only by geographic location and not by the name of the individual or the firm that provided the information. Further, the data on individuals that we would collect would (1) be limited to such items as transportation patterns, income and occupation, (2) be obtained on a voluntary basis since we have no governmental powers; and (3) be combined to provide only totals by some geographic unit (such as a traffic Zone), thereby avoiding individual disclosure. Additionally, information obtained by us on individual firms would, of course, be voluntary and not be published except by some geographic or industry aggregation. Further, this information will come in large measure, from our membership and financial supporters, whose interests we obviously would not violate. The maximum value to be obtained from data we collect in the fashion just described can be realized only if data collected by various federal agencies are also obtainable after aggregation in the same geographic or industrial categories we have indicated we will be utilizing. We are certain that suitable safeguards are being employed now by federal data collecting agencies such as the Census Bureau so that any published data obviates possible disclosure of individual or firm information, and is usually aggregated in a manner suitable to us. I would deeply appreciate your comments concerning the nature and purpose of the data we seek to collect and utilize. I would also welcome your observations as to our concern about rights and methods guaranteeing individual privacy. Additionally, I would like to make some observations about the proposed national data center. I have read the Ruggles Report, The Dunn Report and the Kaysen Report recommending creation of such an agency which would establish safeguards against intruding upon the privacy of individuals, and concur in these recommendations. As you know, the task force established by the Bureau of the Budget to study this matter was asked to consider "measures which should be taken to improve the storage of and access to U.S. Government Statistics." RIDC is a large user of government statistics in the preparation of its industry studies. We attempt to identify products that can be made profitably in the St. Louis region and to measure the size of the market for these products that could be served by a St. Louis facility. To conduct such studies within our limited financial resources, we must have access to all published data, to avoid duplication and to minimize the time and expense of identifying data gaps and collecting and analyzing new data that we must generate. Therefore, we have built extensive files of various U.S. governmental statistical reports and tables. Nevertheless, we are periodically amazed to learn that extremely useful data is often obtainable from various federal agencies. We learn about the data only after extensive efforts on our part, for no one seems to know anything about it. To collect this data ourselves, however is financially impossible. For example, on my recent trip to Washington, I visited the Industry Division of the Census Bureau and learned that certain statistics are available on the mining machinery industry that will be invaluable to us in analyzing the feasibility of manufacturing such equipment in St. Louis. In my fifteen years of experience in utilizing governmental statistics, I had never heard of this statistical series. It has been said that we have doubled the world's scientific knowledge in the last fifteen years. Certainly, we are doing research in most fields more rapidly than most experts in those fields can even keep track of, much less read, comprehend or utilize, and simultaneously conduct their daily professional affairs. Fortunately, we have also entered the computer age in the last fifteen years and now have the capability to record, store and retrieve results of research in many fields, by use of machines. For this reason, a federal data center becomes as much a necessity for today's researchers as the Library of Congress has been in the past. In fact, a data center is nothing more than a library of machine-readable statistics recorded on magnetic tape or punched cards instead of in books, and can and should be operated as a library. For example, even public libraries have not permitted every reader to read every book in the library, nor have they bought every book that has been printed. They charge fees and some books are not released to children. This analogy has applicability to a national data center which certainly does not have to put into machine-readable form all data collected by federal agencies. Further, it can withhold some data from some users. It can also charge fees, thereby meeting some of its costs and at the same time, discouraging unproductive, or unlawful statistical "browsing". Likewise, it does not have to have on its premises all computerized data compiled by all government agencies, provided its comprehensive indexing system noted the existence and the location of the data not physically in the center. To further prevent inappropriate disclosures, the governmental agencies responsible would aggregate information when needed and thereby maintain security. For these reasons, I am convinced that a national data center is fully in the public interest and a necessity in this age of exponetially expanding knowledge. Further, U.S. government statistics should be collected by a central agency so that we can integrate them with state and local government statistics in order to be of maximum use to the widest variety of users for economic research and government policy formulation. In this connection, I have noted Recommendation "d" in the Kaysen Report (p. 14) indicating that the national data center would be responsible for "Coordinating its activities to the greatest possible extent with those of the informa-' tion collecting of states, cities, and other governmental units. The result would be a national division of labor, a maximum integration of information, and a free flow of useful information in both directions". Also, Recommendation “k” (p. 16), suggests that universities, businesses and other groups could be utilized to assist in the research necessary to carry out this and the other recommendations in the Kaysen Report. The Federal Government it notes can begin to move in this direction by "making grants and contracts and by providing facilities and capacity" to such organizations and institutions. RIDC stands ready to cooperate to the fullest extent in conducting the necessary research to coordinate the economic data collecting functions of state and local government with the Federal Government. In my opinion this would make the data more compatible and more accessible. Hopefully, this would increase the number of potential users and decrease the unit cost of collecting and utilizing the data, by governmental and non-governmental sectors. This research could have the collateral benefit of demonstrating what individual privacy problems, if any, would emerge from the creation of a national data center that would coordinate its efforts with those of states, cities and other governmental units that collect economic information. This type of research probably could be financed under any of several federally funded programs administered by Housing and Urban Development Agency, Economic Development Administration or Bureau of Public Roads, for which money has been appropriated by Congress. However, the administrators of these programs are not authorizing projects pending the final outcome of the hearings before your committee on the possible threat to individual privacy that a national data center might create. For example, it is my understanding that applications for 701 studies that have been submitted by the States of Illinois and New York have been turned down pending the outcome of these hearings. I would appreciate your opinion as to whether it would be helpful to conduct a pilot project on how to coordinate these economic data collection functions of state and local governments with the Federal Government so as to arrive as far as possible at a national division of labor, a maximum integration of effort and a free flow of useful information in both directions without invasion of individual privacy. If you feel this approach is worth exploration, I would deeply appreciate the opportunity to assist. Yours very truly, D. REID ROSS. A PHASED PLAN FOR A REGIONAL ECONOMIC DATA BANK FOR THE ST. LOUIS REGION I. THE REVOLUTION IN INFORMATION TECHNOLOGY AND ITS IMPORTANCE TO NATIONAL AND REGIONAL OBJECTIVES 43 There is no question that an exciting revolution in information technology has been underway in the past decade or so which rivals in importance the inventions of the alphabet and the printing press. While the stored-program computer is spearheading this revolution, it encompasses much more: 1. Sensory and measuring equipment for generating information. 2. Input/output equipment for entering information into the processing system and recording or displaying the output information. 3. Compact and economical storage of data on magnetic tapes, punched cards, etc., enhancing, as well, the retrievability of information. 4. Communication systems for transmitting information especially in compacted, machine-readable form. 5. New methods of analyzing, programming, and organizing information so as to increase the efficacy of decision making (called "software" in the parlance of the new revolution). 6. New "breeds" of information specialists called computer programmers, operations researchers, management scientists, decision theorists, etc., as well as new types of employment opportunities for mathematicians, statisticians, economists, engineers and, indeed, almost every professional discipline offered by our great universities. Nor has this revolution in information technology come any too soon. It has been estimated that information in the physical sciences has been doubling every 15 years, while that of the social sciences has been doubling every 50 years.' Moreover, the competition between our free capitalistic society and communism demands that we strive to increase the productivity of our physical and human resources so as to perform well in the scientific and economic races 2 which have assumed a new urgency in the post-Sputnik era. The key concept involved here is that information is increasingly being substituted for scarce human and physical resources by increasing the latter's productivities. It is self-evident that this concept is as important to metropolitan regional developments as it is to the nation's economic and technological progress. Indeed, the linking of regional and national objectives of these sorts is readily demonstrated. By 1963 about 64% of the U.S. population resided in 212 standard metropolitan statistical areas. Accordingly, this can only mean that the effectiveness by which the metropolitan regions of the United States utilize their human and physical resources will, in large measure, determine how effectively our country utilizes its total resources. Thus, the challenge we are addressing in this paper is one of how best might the revolution in information technology be harnessed to promote regional objectives of economic development and, in so doing, contribute as well to our national objectives.* II. THE REGIONAL ECONOMIC DATA BANK CONCEPT It is herein proposed that the focal strategy in accepting the above challenge centers around the establishment of a "Regional Economic Data Bank". While the latter term is largely self explanatory it would be well to sharpen our interpretation of this concept before moving on to an explanation of why we feel such a bank is needed by the St. Louis Region; how it should be designed, by whom, etc. Let us concentrate first on the basic idea of a "data bank". The latter connotes merely a central repository of data of related significance, so organized and operated that the accessibility of the data to a wide variety of users is made easy and relatively inexpensive. A data bank differs from a library-which also centrally stores informationin that the latter chiefly deals with books and published matter while the former primarily is involved with data in its more elementary states. This is seen in the definition of the word "data" as being "something given or admitted, especially as a basis for reasoning or inference". This distinction between a library and a data bank should not be too rigid, however, since libraries of the future with the trend toward micro-filming of individual book pages and use of automated retrieval techniques will more and more take on the aspect of data banks. On the other hand, it also makes good sense, for example, to treat charts, tables and forecasts contained in industrial and economic reports as data that may be useful for "reasoning and inference" not directly related to these studies. Hence, we should like to allow for the inclusion of certain of these reports in the concept of a data bank. With regard to the qualifying terms "regional" and "economic" as these apply to the data bank concept herein proposed these, too, require elucidation. The term "region" may connote definite political boundaries of administrative units or it may take on a relatively ill-defined character such as a "marketing region," "manufacturing belt", etc. In this instance, we are proposing to deal primarily with the St. Louis RIDC Region, which in addition to the City of St. Louis includes Madison, Monroe and St. Clair Counties in Illinois as well as Franklin, Jefferson, St. Charles and St. Louis Counties in Missouri. While the proposed 1 Ellis A. Johnson. "Crisis in Science and Technology," Operations Research, Vol. 6. Jan.-Feb., 1958, p. 14. 2 This is not to say that information technology does not also play a valuable role in the humanist terms of making our communities a better place to live, work and play in. More will be said on this score throughout this paper. 3 Statistical Abstract of the United States, 1965, Bureau of the Census. p. 18. The author's recent experience in advising the Government of India on the beneficial uses of electronic data processing techniques suggests that efforts of this sort might also serve as demonstration projects of potential application to the sprawling metropolitan areas of the developing countries which are exceedingly short of physical resources as well as skilled human resources. 6 Webster's Seventh New Collegiate Dictionary. This is identical to the Standard Metropolitan Statistical Area for St. Louis as defined by the U.S. Bureau of the Census except for the inclusion of Monroe County, Illinois, which obviously has considerable potential for industrial and urban growth. data bank would primarily contain data about the St. Louis RIDC Region, it would also include selected data about other regions, including aggregate data for the U.S. These latter data would be used for comparative and analytical purposes in furtherance of the objectives of industrial and economic development of the St. Louis Region. Furthermore, while the type of data stored in the bank would be primarily "economic" data as this term is commonly understood, it would also include data relative to population, social and political factors, physical and institutional resources, etc., which have an important bearing, as discussed below, on the potential for economic and industrial development of the St. Louis Region. Thus, the test of whether data is appropriate to include in a St. Louis Regional Economic Development Bank is not whether the data is immanently economic or directly pertaining to the St. Louis Region but rather whether is is germane to assessing the potentialities for the economic development of the St. Louis Region and devising plans or taking actions to achieve these potentialities. In other words, the concept of a regional economic data bank as herein proposed is basically pragmatic and community service oriented. Moreover, it must be emphasized that a data bank is not characterized by any set degree of automation. However, experience with modern information systems would apparently dictate that as such a data bank is established in St. Louis and grows in fulfillment of its community-oriented objectives it will beneficially become more automated as well as professional in its bearing. With this trend of developments in mind, it is obviously desirable to enlist at the start the support and services of the academic community of the St. Louis Region in designing and refining the concept of a Regional Economic Data Bank as well as its subsequent implementation." Accordingly, the ideas and framework set forth in this proposal are to be viewed as unfirmed and designed to stimulate the creative contributions of others. III.—WHY THE ST. LOUIS REGION NEEDS A REGIONAL ECONOMIC DATA BANK A. THE GENERAL CASE FOR REGIONAL ECONOMIC DATA BANKS As I discussed in Section I, there is an apparent universal need of metropolitan regions to take advantage of the revolution in information technology in the furtherance of regional as well as national objectives relating to economic and technological development. Hence, in this regard the overall needs of the St. Louis Region for an economic data bank are scarcely unique. Whether for St. Louis or some other large metropolitan region of the United States, the following benefits would reasonably be expected to result from the establishment of such a data bank: There are a multiplicity of agencies and institutions both public and private whose activities contribute importantly to the economic development of a region and these often have overlapping needs for regional data to facilitate operating as well as planning or investment decisions. With such a wide variety of potential users, economies of scale are inherent in the establishment of a centralized regional economic data bank. In other words, more information could be supplied to more users at less cost and with greater response speeds for timeliness in decision making. 2. Many of these institutions are already gathering regional data at considerable expense and much of this could be shared with others through the medium of a regional economic data bank, thus eliminating wasteful duplication already occuring within the region in the preparation of data. 3. While large amounts of useful regional data exists, its presence is often unknown or inaccessible to potential users so that its full value to the region is wasted. The staff of a centralized data bank through their widening contacts with both regional users and regional generators of data would apprise users of the existence of the data and serve as a clearinghouse by which it is made available. A significant start in this direction has already been made by RIDC. A number of university professors of the Region have reviewed an earlier draft of this proposal and have given us the benefit of their advice. Several professors are among the paid consultants of RIDC, while students of local universities have been engaged to participate in regional industry surveys and other information gathering tasks. Additionally, the four universities in the Region and the two junior college districts are represented on the RIDC Board of Directors. |