D3.6: Study on ID Documents

Title: COST PROJECTION ELEMENTS (OF SYSTEMIC ECONOMIC COMPLEXITY)

Cost Projection Elements (of Systemic Economic Complexity)

As analysed above, the elements that can be more easily modelled for the cost-projection of an eID scheme conform to the systemic economic complexity. Some of the proxies that should be considered for cost-projection are individually discussed below:

1. Enrolment cost-projection for staff: The proxy for the cost-projection here does not include the types of cards to be used. While estimating the cost of enrolment there are sub-proxies that need to be considered. Enrolment staff needs to be hired for the initial roll-out of the system and the staff also needs to be trained to use the systems that will be commissioned for the enrolment phase. Due to the sensitivity of the task of identity and the risk for potential fraud there needs to be a careful vetting process of the employees to be involved in the scheme of the enrolment phase. Such a vetting process can itself be considerably differentiated and hence constitutes one of the many cost-elements that need to be carefully considered. Depending on the depth of the vetting process, considerable costs can be further incurred (i.e. companies specialising in the vetting process can carry out standard checks or carry out extensive research on employees’ backgrounds involving university diplomas, references, working experience, certificates, criminal records, and a variety of other elements). Furthermore, staff that will be involved in the enrolment phase need to be trained on security aspects for potential cases of fraudsters that would try to manipulate the system to their benefit and/or colleagues that try to willingly jeopardise the enrolment. Finally, the involvement of enrolment staff in the enrolment phase needs to be properly managed and managerial processes need to be carefully developed and considered within the specific characteristics of the context of implementation.

2. National Identity Register Staff: Independently from the staff that would participate in the enrolment phase, similar elements for cost-projection could be considered (with a few modifications) for the personnel working in the national identity register. Personnel in the National Identity Register would perhaps need to go through a more detailed vetting process than those in the enrolment centre. The need for such a detailed vetting process could be justified once one considers the variety of operations that can be carried out on identities from those that have access to the National Identity Register (NIR hereinafter). Depending on the level of security that would be required – typically security in the NIR would have to be of the highest possible standards – then different processes will be have to be setup and scrutinised. Security training of the employees, high-level security procedures for verification of changes to the register and assistance in case of problems will all have to be factored into the cost-estimates. Considerable costs might incur from handling complaints, several issues that might require face-to-face meetings and verification of changes to the register will have to be dealt with and so on. An example from the US comes with the implementation of the no-fly list for terrorist suspects, administered by the department of Transportation Security Administration. The Department of Transportation had paid $2million just to handle complaints but it swiftly proved that this allocation was insufficient, as a quarter of that money was used to handle voicemail backlog a situation that quickly escalated as people were leaving numerous messages to the automated service and in some occasions it took up to nine months before people could be cleared off the list (Singel 2005) (i.e. like the head of Catholic Education in the US, Sister McPhee that was mistakenly identified as a terrorist suspect). It is therefore important to realise that such positive systemic feedback generates economic costs for the scheme and that it has to be swiftly identified, monitored and managed before further costs incur. It could prove that integration of an eID into day-to-day operations (like financial transactions) could cause much more severe disruptions as a problem in the verification of a person’s identity would have to be dealt with efficiently, effectively and consistently, without jeopardising security.

3. Equipment & surrounding issues: A good percentage of the amount of money for rolling out an eID scheme goes to the purchasing of the devices themselves (i.e. biometric smart cards) for the entire population. However there is a variety of other cost elements related to the cards themselves like printing, renewing the cards or re-issuing cards. Carrying out effective auditing and setting up appropriate policies and procedures prior to the issuing of the cards is also something that needs to be considered and factored into the estimations while purchasing readers for the public sector (at selected points of use), including secure communications to the National Register are also a considerable cost. The problem that remains to be examined with technological equipment is that new technologies (ultimately both hardware and software changes) may render parts of the broader system obsolete and would therefore signal the need for replacing the technology and/or upgrading parts of the system to cope with more elaborate security requirements. When one considers the scale that these replacements need to be carried out then we have a considerable and significant additional cost for which we can only speculate.

The scale and complexity of such schemes is one of the major reasons behind differences in cost-projections. Below is an estimate for the UK example of introducing biometrically equipped ID-cards; the estimate was carried out by the London School of Economics and at the time caused a series of debates as the cost-projection was three-times higher than that of government’s estimations. According to the research findings, the lowest possible estimation for the proposed eID scheme of the UK government came to be £10.6billion with a maximum estimation close to £19.2billion (these figures refer to the cost-projections during operation of the first ten years of the scheme).

Figure : Costs for the issuing of the eID card in UK

(Source of : The LSE Identity Project report, June 2005)

Differences between the low, median or high cost-projections relate to a variety of elements that can be accounted for individually within each broader category but depending on uncertainty differences the estimations vary.  

An analytic breakdown of the cost-projections from the study carried out by the LSE Identity Project for the UK eID scheme involving biometrics is shown below. The analytic breakdown can serve as a sample for cost-projections for similar eID schemes, extrapolating categories and considering the variety of issues that should be accounted for whilst performing similar estimations:

Figure : Cost projection of the eID card in UK (1/3)

Figure : Cost projection of the eID card in UK (2/3)

Figure : Cost projection of the eID card in UK (3/3)

(Source of the figures: The LSE Identity Project (2005))