Eye on the States

States Scurry to Embrace the Internet

Thomas Davies

By Thomas Davies

Just how fast can state governments move to the Internet? We are about to see.

State and local governments across the country are jump-starting Internet initiatives, with many setting ambitious goals for getting to a fully online government. Georgia and Maryland, for example, have declared publicly that they will Web-enable most, if not all, of their services over the next three to five years. Cities such as Dallas recently have made similar proclamations.

One factor fueling this rapid escalation is a state government leadership emboldened by success in navigating the year 2000 software glitch. Now armed with resources and energy that were consumed by Y2K remediation work, the states are turning their attention to the Internet. And they are doing so confident that their information technology infrastructure is in the best shape ever, thanks in part to their $6 billion Y2K investment during the past several years.

Another driver is an awakened leadership. One unanticipated benefit of Y2K is that it elevated IT awareness. Policy-makers, long accustomed to viewing IT as a backwater, woke up not only to how critical it is to delivering state services but also to how much is being spent. Information technology now is on the radar screen of top state officials and certain to stay there.

A third reason is the progress that some states have made already in moving to the Internet. Rarely a day goes by without some announcement by a state regarding its most recent initiative to bring services to the Internet. Unlike previous efforts to automate state and local government, progress in moving services to the Internet is visible to all. One announcement precipitates additional ones, leading to a bandwagon effect.

Hawaii, for example, recently joined the state portal parade. The state announced an ambitious effort in partnership with the National Information Consortium of Overland Park, Kan., which builds Web sites and applications for states to conduct e-business, to migrate its government services to the Internet.

Competition among the states for a skilled work force, a quality education system and economic growth also is fueling Internet fever. The Internet represents more than just a means of delivering state services more efficiently; it is the tip of the iceberg as states jockey for economic and political power in the information age.

It is now riskier to do nothing than to do something. Politics has inflection points just as technology does, but political inflection points are governed by perceived risk. In technology's case, it is the risk of getting too far out front vs. the risk of being perceived as falling behind.

All this is leading to significant new investments in Internet-related technologies and services. The states are as well-off financially as they have ever been.

The state economies' drivers, such as population growth, housing starts, retail sales and capital gains, continue to be strong. In addition, federal grants, which are responsible for over a third of state IT spending, are no longer being allocated to Y2K initiatives.

All these factors will allow the states, which historically have spent about 3 percent of their operating budgets on IT, to increase this investment, resulting in double-digit growth in infotech expenditures.

We can also expect to see governors continue to reach out to new state leadership to help lead the charge. The governors will turn to IT leaders who demonstrate an executive understanding of policy and business goals and how to achieve them.

The internal power base of state IT leadership will begin to shift. Many senior managers, who have been instrumental in encouraging their states to focus on e-government, will soon find their influence eclipsed by higher-level officials, staff and the private sector. Program officials at the departmental level also will begin to exert their influence over the direction of Internet-based state services.

Issues of top concern to state leaders ? security, taxation and privacy ? will take their rightful place on the leadership agenda. And policy issues, such as the role of advertising and the commercialization of government, will also become important.

Very little has taken place to prepare the states for the Internet race. Awards and press coverage handed out to those that were first to Web-enable their initiatives are reliable predictors of who will lead in the years ahead. State leaders with bold Internet visions and the endurance to stay the course will get to the top first.

Thomas Davies is senior vice president at Current Analysis, a business intelligence and analysis company in Sterling, Va. His e-mail address is tdavies@currentanalysis.com.

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