Analysis: How to cut intell budgets smartly

Rather than applying across-the-board budget cuts to intelligence spending, federal authorities should take advantage of disruptive new technologies to decrease costs while also maintaining high quality, according to a new report from Deloitte’s GovLab research center.

The government should leverage two disruptive developments — computer analytics technologies and the availability of open-source information on the Internet — to maintain high-quality intelligence results while also reducing the $80 billion annual price tag for civilian and military intelligence, the report said.

“Given today’s budgetary environment, the meteoric rise in intelligence spending is over — in fact many intel­ligence agencies are already planning for significant budget cuts,” the report said. “The question then becomes: Can these same agencies provide critical intelligence capabilities at a lower price? The combination of two developments suggests the answer to this question may be yes.”

The report, titled “The Public Sector, Disrupted,” was produced by Deloitte GovLab, and authored by William Eggers, director for Deloitte Research and senior adviser to GovLab. It was published online at an unspecified recent date.

It covers several case studies for disruptive technologies in the public sector, including opportunities for increased use of the Internet for online education, home monitoring for law enforcement and use of military drones instead of manned aircraft.

Intelligence spending doubled between 2001 and 2010, to $80 billion a year. In fiscal 2010, the programs run by the CIA and other agencies reporting to the Director of National Intelligence cost $53 billion, while military intelligence cost another $27 billion.

The growth of Internet communications has created millions of items of open-source information, essentially for free. While the information presents great difficulties with verification and reliability, it also offers a huge opportunity for gathering intelligence through data mining, pattern, data visualization, facial recognition and other predictive modeling.

“Our everyday actions in the digital world, from posting messages on Facebook to checking a bank account balance, create “digital exhaust” — trails conveying information about behavior, preferences and interactions. Analytics can help exploit this vast sea of data, thereby turning “overload” into opportunity,” the report said.

For example, targeted analytics examining social-media discussions about the Egyptian crisis showed that there might have been some conciliation possible, without ousting Hosni Mubarak.

“Of all of the popular demands, ousting Mubarak was only the fourth most-popular, lagging behind intermediate steps such as ousting the interior minister, increasing minimum wages and ending emergency laws,” the report said.

Social sentiment analytics also make it possible to predict — to the day — when a certain country might have a significant public protest, the authors added.