Eye on the States: With the bubble burst, what comes next for states?

Thomas Davies

What's in store for state government after the fall elections? How about new leadership, new priorities and new ways of viewing the world, for starters. In short, welcome to the era of the post-technology bubble in state government.

The new class of governors soon will shake up technology priorities, arriving neither with technology stars in their eyes nor irrational exuberance in their hearts. As the first class of state leaders following the burst of the bubble, they have a very different perspective on technology than the outgoing governors.

Regardless of political party or size of the state, many governors will share at least one belief: spending more on technology is not the way out of the hole the states have dug for themselves. In most cases, they are not likely to even feel technology is one of the top ways to respond to critical needs. And as soon as they can put their stamp on state budgets, their skepticism of the magic of technology will become evident.

Many people hope that as soon as the economic recovery gains momentum, technology will again rise to the top of the state's shopping list. But this next generation of governors isn't giving signs that it's going on a technology shopping binge any time soon.

The new governors are quite aware that what seemed important, if not urgent, just a year or so ago is now passe. Visionary goals, such as moving all state services online by a specific date, pale in comparison to protecting the homeland, insurance reform, reducing classroom size, creating jobs and closing budget gaps.

Another reason the incoming class will not be cheerleaders for technology is the fiscal realities in the states. Unlike earlier economic recoveries, the recovery this time around will not bail out the states from structural imbalances in revenue and spending. The states squandered a once-in-a generation opportunity to address this imbalance when they failed to take advantage of the real growth in tax revenue during the latter half of the 1990s.

The primary hope for technology companies is to help the new governors see technology through a different lens -- not as a panacea for transforming government, jump-starting the economy and generating campaign contributions, but as a tool and a resource that can contribute to new priorities.

One need facing the states is to build new capabilities, most obviously in the homeland security area. Surveillance management is a good example. State and local governments are on the front lines of homeland security, but their ability to carry out new missions using advanced surveillance capabilities is rudimentary. Over the next few years, they will need to design, deploy, operate and manage sophisticated sensor systems that reach into all aspects of civic life.

Integrated city and countywide surveillance is just on the horizon in many metropolitan areas. State and local governments soon will be following in the footsteps of the intelligence community. They will need capabilities that will enable them to fuse tactical and operational data and images from the hundreds of touch points of state and local government, including intelligent transportation systems, video cameras and records of motor vehicles, sales tax, property, courts, criminal history, licensing and health care.

For the past few years, the states have been running on the exhaust fumes of the Internet and telecommunications bubble. The day of reckoning for many is just around the corner. The same is true for technology companies who have been living off the same fumes. *

Thomas Davies is senior vice president at Current Analysis Inc., Sterling, Va. His e-mail address is tdavies@currentanalysis.com.

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