Local policymakers scrutinize ShotSpotter's ambiguous return on investment

On July 4, 2011, an 11-year-old girl in Kansas City, Missouri, was tragically killed by celebratory gunfire. This tragedy gave rise to a local annual tradition: every Independence Day, the girl's mother and the Kansas City Police Department (KCPD) go door-to-door sharing stories to educate residents about gun hazards. The neighborhoods they choose to visit are based on the locations of gunfire detected by ShotSpotter, a gunshot detection technology company, on the previous Independence Day.

According to Jake Becchina, Public Information Officer for the KCPD, this annual community outreach may have saved lives, as no shootings have occurred in any of the visited neighborhoods since. This effect could theoretically benefit the more than 100 U.S. cities currently using ShotSpotter.

Despite tight municipal budgets in 2020 or nationwide calls to defund the police—factors that were once seen as potential obstacles to ShotSpotter's growth—the company appears to have stood out. In addition to claiming contract renewals with 95% of its customers in 2020, the company also reported a 12% year-over-year increase in revenue during its fourth-quarter 2020 earnings call on Thursday.

However, even as ShotSpotter experienced a year of financial growth, most major cities using its technology saw an average 30% rise in homicides in 2020. Given the rising crime rates, some experts and local leaders have begun to question ShotSpotter's effectiveness in reducing gun violence, especially considering the typically high cost of the technology.

Kansas City: Small but Established

ShotSpotter technology uses wirelessly connected acoustic sensors to help determine when and where gunfire occurs. The relevant information is sent to 911 call centers, and dispatchers, upon receiving the system alert, send officers with the same priority as a 911 call reporting gunfire.

Becchina said, "Essentially, ShotSpotter is calling for the residents, rather than the residents calling for themselves."

According to Becchina, Kansas City began using ShotSpotter in 2012, covering about 3.5 square miles (1% of the city's area), with annual maintenance or subscription renewal costs up to approximately $200,000. The technology is currently funded by the city's police department and was initially supported by a grant.

Becchina noted that although the technology has brought some positive results, its cost has been criticized by several local leaders and safety advocates because its return on investment (ROI) is difficult to quantify. He said, "It's almost impossible for an agency to say ShotSpotter reduced crime by X percent." But he mentioned other benefits, including helping the police department become aware of outdoor shootings nearly 100% of the time. Without the technology, residents report less than 30% of shootings.

Becchina believes that comprehensive gunfire information ultimately helps increase police presence and community trust. However, according to The Sacramento Bee, activists have also pointed out that increased police interaction could make Black residents more vulnerable to violence.

Becchina said whether the technology is worth its cost depends on the city and its budget. But ultimately, he believes having ShotSpotter's gunfire data is better than not having it.

Examining the Technology's ROI

Despite ShotSpotter's successful fiscal year in 2020, there have been reports that some cities have terminated or reconsidered contracts due to financial concerns.

For example, Charlotte, North Carolina, first installed ShotSpotter technology in 2012 in preparation for the Democratic National Convention. According to Crystal Cody, Charlotte's Director of Public Safety Technology, the technology was used as an "extra layer of security" for the event and was seen as an additional safety benefit for areas with a growing nightlife scene. However, the city terminated the contract shortly after, around 2016. Cody said the technology did not provide the police department with any new information, as residents typically called 911 to report the same shootings ShotSpotter detected. She said, "I can see it being helpful for cities where citizens don't call 911 when a shooting occurs. Our city doesn't have that problem." When deciding whether to keep the technology, she said Charlotte local officials asked themselves, "What are we actually getting out of this program? What is our ROI?"

Canton, Ohio, also recently terminated its ShotSpotter contract due to cost issues and chose to install a more affordable alternative. The city had used ShotSpotter since 2013 and spent $148,838 at a discounted rate in 2019. According to CantonRep.com, its new system is expected to save the city about $158,181 over three years.

The Sacramento County Sheriff's Office in California also decided to stop using the technology because the department faced a $4 million budget shortfall.

Meanwhile, cities of various sizes across the country maintain ongoing contracts with the company. New York has a $28 million five-year contract through 2021; Dayton, Ohio, has a $390,000 contract through 2022; and Sacramento, California, has extended a $2.5 million five-year contract through 2025.

Interestingly, many participating cities have also been criticized by activists over the past year for their large police department budgets. For example, Chicago is ShotSpotter's largest customer, covering more than 110 square miles, with a police department budget of about $1.7 billion. New York received a $5.2 billion police budget for fiscal year 2021, but it fell far short of the drastic cuts demanded during protests.

A 'Lightning Rod for Criticism'

In Oakland, California, about 20 miles north of ShotSpotter's headquarters in Newark, the police department's annual contract was $545,297 as of 2019, averaging about $35,000 per square mile. The technology will undergo a cost-benefit assessment later this year as part of the city's annual surveillance technology review.

Brian Hofer, chair of Oakland's Privacy Advisory Commission and executive director of Secure Justice, said ShotSpotter is a "lightning rod for criticism" locally. Hofer noted that despite the high cost, the technology has benefits. In Oakland, the public has lost confidence in the police department, so they no longer report shootings. ShotSpotter can serve as a solution, alerting police to shootings that might otherwise go unreported. He said, "As a privacy activist, I'm not really pro-vendor, but of all the vendors, this is one worth supporting. We need to get guns off the street, stop gun violence... this tool might be able to do that."

Hofer believes one of the key obstacles ShotSpotter faces is proving its effectiveness. He said almost no one has established systems to track the technology. Measuring the technology's value may vary across departments. Hofer said for some departments, it might be higher conviction rates; for others, it might be increased community trust. He said, "Law enforcement has long enjoyed the privilege of 'oh, just trust us.' But elected leaders are starting to look beyond headlines and demand data to support these conclusions."

Sam Klepper, ShotSpotter's senior vice president of marketing and product strategy, said that when helping police demonstrate effectiveness, one of the first metrics ShotSpotter points to is awareness of shootings they wouldn't have known about otherwise. Being able to detect and precisely locate gunfire can also improve police response times, thereby saving lives. Klepper said results vary by city. "Ultimately, it's like a gym membership; it's about how you use it. Do you respond to every alert? Do you respond quickly? Do you follow up with investigations?"

Klepper said ShotSpotter is more than just detection; it can help solve crimes and reduce gun violence. The company is also expanding its solutions to become an "end-to-end platform for responding to, investigating, and deterring crime." These plans are reflected in the company's recent acquisition of CrimeCenter, a product that uses artificial intelligence to predict the likelihood of a shooting occurring in a specific area. Klepper said the tool aims to help officers "connect the dots with data" and assist in solving crimes after they occur.

'Technology Is Not a Quick Fix'

As cities continue to grapple with record homicides and tight budgets, some experts believe expensive gunshot detection technology may not be the solution to crime. Richard Rosenfeld, professor emeritus of criminology and criminal justice at the University of Missouri-St. Louis, said cities should invest in activities proven to reduce violence. He said, "From a cost-benefit perspective, I would direct scarce city resources elsewhere. ShotSpotter's added value in reducing violence has not been demonstrated."

Rosenfeld noted that ShotSpotter technology does generate more gunfire notifications than calls received by police departments, but these notifications often concentrate in the same areas where citizen calls originate. Moreover, in most cities with high gun violence, police cannot respond to every shooting. He believes cities should focus on two priorities to reduce high violence rates: research-based "smart policing strategies" and serious reform efforts. He said, "Cities should redouble their efforts to engage in so-called 'smart policing' strategies that research shows help reduce violence." These strategies include increasing police presence in relatively small areas where violence is concentrated, while strengthening relationships between police and communities, especially vulnerable communities of color.

Rosenfeld concluded, "In this context, technology is not a quick fix, except perhaps for police radios and maybe body cameras. What's needed now is program planning."