The Business of Voting
Market Structure and Innovation in the Election Technology Industry
Although it has been over sixteen years since the 2000 election, the pandemonium that emerged out of Florida that year still stands as a vivid reminder of what can happen when election systems falter. That election experience invigorated efforts by technologists, academics, policy experts, and dedicated civil servants to improve election administration and shore up public confidence in the voting process. Enhancing the quality of election technology—the software and hardware upon which voting machines and other election administration equipment rely—has been a central part of that effort. One silver lining in the 2000 election was that it galvanized support for investing in the deployment of new electronic voting machines across the country.
But, as documented by the Brennan Center for Justice at New York University in their 2015 study, America’s Voting Machines at Risk, a new “impending crisis” in election technology is at hand. The voting machines purchased after the 2000 election are literally falling apart in jurisdictions in almost every state, many of which no longer have the funds necessary to purchase new ones. In many localities, the outmoded systems remain in place, despite the recognized dangers they pose to the integrity of the electoral process.
The question remains, then, of how to move forward with modernizing our election systems. While much of the discussion about the ills of our election technology have focused on the need for policy changes, this industry report approaches the topic from a different perspective, as a business problem. The findings here suggest that the impending crisis in America’s election technology has not emerged solely from ineffective government action or insufficient public funding, but also from core attributes of the election technology industry itself.
Very little has been written previously about this industry, despite how critical it is to the functioning of our democratic processes. As this study initially got underway, it became clear that one of the most significant boundaries to conducting a useful analysis was the dearth and inaccessibility of industry data. The first goal of this report therefore is to compile a current set of facts about the election technology industry, including the market players, industry revenue and profitability, and the competitive dynamics among the relatively few vendors that manufacture and sell election systems.
The gathering of the industry facts facilitates the second purpose of the report: to provide an original analysis of the industry dynamics that can shed light on what has prevented the election technology industry from enjoying the robust level of innovation seen in other technology sectors. In the process, it also describes strategies that some election officials are pursuing to cope with the shortcomings of the current market:
- Buyer coalitions, which can give jurisdictions greater bargaining power for getting vendors to provide systems that are both better priced and more customized to their needs;
- Open source technology, which proponents believe may catalyze the development of new competitive markets in voting systems solutions;
- Modified certification processes, to support a move to modular voting systems built from less expensive commercial off-the-shelf components.
As the report explicates in detail, the real effects (and possible pitfalls) of these strategies are not yet fully known. But they are nevertheless reflective of the report’s key contention: that a long-term solution to the election technology crisis is unlikely to be had until policymakers and market actors address the underlying business issues and take steps that catalyze changes in the structure of the election technology industry.