Former Lt. Gov. Davis seeks support for Model Indiana

Former Lt. Gov. Kathy Davis is attempting to build a virtual version of Indiana for policymakers to wander. If successful, the new IT system could help shape Statehouse debate on a host of subjects.

"What we have is a great tool that was developed in Indiana that could be applied to our biggest and most complex systems to our mutual good," Davis said. "We're trying to figure out what is the best way to bring it to bear."

Purdue University created the computer technology that's the basis of Davis' not-for-profit project. Though the effort doesn't yet have a formal office or even a name, it likely will be based in Indianapolis.

Originally used by the U.S. military for sophisticated war games, the technology more recently has been employed to forecast the outcome of business scenarios for major corporations like Eli Lilly and Co. and Lockheed Martin.

Using the system, companies can glimpse their industries' landscape as it will likely look years from now. Even more dramatically, it can show where firms will stand against their competitors, given their choices today.

Now Davis, a Democrat, believes the technology can be harnessed to anticipate future outcomes of current state policies–and their unintended consequences.

She envisions using the so-called Model Indiana system to predict long-term results of lawmakers' choices about everything from education and health care to taxes and economic development.

"What I suspect is, [this] will help us understand and visualize the factors that have a great effect over time," Davis said. "Having a model doesn't replace decision-making. What it does is help us optimize the design when we decide to do something different."

But before Davis can build her virtual model of Indiana, she must raise $1.5 million to license the technology from Purdue. And for skeptical legislators to trust its results, she'll need to convince them Model Indiana is more than science fiction.

Alok Chaturvedi, a Purdue professor in the Krannert Graduate School of Management, conceived the system in the early 1990s when he worked for the U.S. Department of Defense.

Over the years, he developed the Synthetic Environments for Advanced Simulations, or SEAS, technology. It has been used by the military to predict battle outcomes in Iraq, to replicate domestic terrorist attacks, and to envision the long-term implications of troop recruitment efforts.

In 1999, Chaturvedi created Simulex Inc. on the SEAS system. Now in Purdue's Research Park with 35 employees, Simulex offers virtual reproductions of whole industries. Large companies, including Lilly, use them to explore future strengths relative to competition.

Chaturvedi said the system does much more than calculate the direct impact of users' choices. It also foretells how those choices will influence the rest of the virtual environment.

For example, input a query about a change in state Medicaid policy, he said, and Model Indiana will spit back reports about how it will eventually shape population levels, educational demands, business productivity, the tax rolls and more.

"It gives you second- and third-order effects you don't get in any simple analysis," Chaturvedi said. "When people start using it, they realize how powerful this whole technology is. The reason why we get the results we get is because we collect huge amounts of data [before beginning simulations]. We go in excruciating detail, and we're painstaking with the data."

Davis, 50, has seen how Model Indiana could help the state from the front lines. She served as lieutenant governor under Joe Kernan from 2003 to 2005, and earlier was state budget director, state transportation commissioner and secretary of the Indiana Family and Social Services Administration.

Educated as a mechanical engineer at the Massachusetts Institute of Technology and Harvard Business School, Davis began her career at Columbus-based diesel-engine-maker Cummins Inc. After leaving state government, she returned to the private sector, serving until recently as CEO of the South Bend-based telecommunications firm Global Access Point.

Davis has already enlisted a partner in her new effort–John Dickerson, executive director of Arc of Indiana, an Indianapolis-based not-for-profit serving disabled children.

When Dickerson, 52, saw Simulex demonstrated, he said he immediately recognized it could help Indiana make better choices. He believes a virtual Model Indiana could help shape state policy for the handicapped.

"I'm excited. Back in the '70s, when they first developed spreadsheets, you could change one cell and change the whole spreadsheet," Dickerson said. "I look at Simulex as a living spreadsheet that tells if we've got precious resources, where do we invest those to have the greatest impact?"

Because the IT system is already complete, the upfront cost isn't for software development. Dickerson and Davis must instead raise the $1.5 million to pay for the process of data-gathering necessary to construct the virtual version of the state.

Even though legislators would be the immediate beneficiaries, Davis and Dickerson aren't aiming for a state appropriation. Instead, they aim to raise the cash from corporations and other donors.

Although the project sounds cutting-edge, scenario planning is a science with a long history. Kraft Bell, a vice president with technology analysis firm Gartner Inc., said the key to scenario planning, no matter how sophisticated, is the quality of the data used in the model.

"It's a little bit of the garbage in, garbage out," Bell said. "And when policymakers start to use these things, if they're not really clear about their assumptions and how and where the tools will be used, it's really easy to misuse [them]."

No matter how robust its results, a state simulation won't succeed in the General Assembly if its members disagree about the assumptions.

Consider the national debate on global warming, Bell said. No matter how terrible the climactic catastrophe scientists predict, it doesn't sway skeptics into action. Instead, they debate whether the phenomenon is real.

"The tools are very helpful if they enrich the discussion, but they don't replace the discussion," Bell said. "There's no tool that can give you the answer."

To prove the system's accuracy, Indiana Fiscal Policy Institute President Steve Johnson suggested running simulations from a specific point in the past, using only the data available then. That way, the accuracy could be easily compared to real-world history.

"For instance, you could test some of the issues around tax restructuring in 2002 and see whether the model would accurately show what has actually happened," Johnson said. "If you can back-test, for lack of a better term, you have a better chance of being accurate going forward."

That's the beauty of the SEAS system, Chaturvedi said. It is designed to improve as the database grows.

"We're not saying for that million and a half [dollars], we'll have the perfect system. It will be a continually evolving system," he said. "The more we work with it, the better it will keep on getting."

Legislators are likely to keep an open mind about the project, said State Rep. Jeff Espich, R-Uniondale, chairman of the House Ways and Means Committee.

In time, he said, it could become simply one more helpful service that nobody questions, much like the Legislative Services Agency, which projects the fiscal impact of bills on the state.

Model Indiana would conduct far more sophisticated analyses than does LSA. What's more, Indiana would be the first state to have such a high-tech tool, Davis said, giving it a competitive advantage.

If Davis can deliver on Model Indiana's promise, even Republicans might embrace it.

"Obviously, she's a talented lady and I wouldn't worry about gross partisanship. Any tool that might give us a better understanding of what might result from our actions is a good thing," Espich said.

"The only thing I'd caution … is there are still always going to be subjective decisions to enter certain data, or enter it in certain fashions. Somebody's going to make judgment calls."

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.