President, Electronic Commerce World Institute
We are going through a revolution, and the changes we are facing have the potential to be more significant than those resulting from any previous revolution we have known.
This revolution is the result of several factors that have come together over time, due largely to that unavoidable, unstoppable, universal law of evolution, namely, that human knowledge expands, and this expansion is accompanied by change.
Change, in turn, is shaped by the knowledge that makes it possible. As we approach the beginning of the 21st century, society has attained an unprecedented level of knowledge. The real significance of this new level of knowledge is that it has led to profound changes in the way we learn and how we organize, both as individuals and as societies.
I do not intend today to provide you an exhaustive overview of this situation, but rather to acknowledge it and affirm several points:
During the 1960s and 1970s, many nations enjoyed almost uninterrupted economic growth, the exception being during the oil crisis of 1970 and subsequent minor setbacks. Then came the recession of 1981-83, followed by the 1990 recession.
One thing that clearly distinguished the previous period from the current one was the capacity of business, then, to foresee or forecast economic results, taking into account that growth. International markets experienced no or little outside competition. We mass produced and we conditioned, or even planned, consumer expectations. Not all economic sectors were taken up, which led to a certain interventionism the result of too little competition.
Today, things are different: the irreversible phenomenon of the globalization of markets and the growing closeness of these markets in real and virtual time through the new information technologies has meant increased competition in every economic sphere. There are no more private economic spheres. Free trade agreements are being negotiated and implemented the world over, while, at the same time, protectionist practices are being widely denounced. The international World Trade Organization even succeeded in having agriculture, that historically and strategically difficult topic, added to its agenda. These examples illustrate clearly to me that the coming changes are not temporary, but rather permanent ones.
This new economic direction has little place for centralization and any other form of top-heavy administrative procedures. The conjunction of the globalization of markets, their accessibility and increasing proximity through the new information technologies, the changing tastes of consumers, and the limits to market growth create a profitable environment for companies that are able to react rapidly to the changing market conditions. Management needs to reorient its organizational strategy to develop its ability to react and act rather than anticipate and plan.
Anticipation has traditionally been part of the planning process. However, in a world in constant change, it is no longer possible to predict or plan based on the premise of continual growth; rather, the capacity to react rapidly to the political, economic and social environment will become the rule for survival and success.
Governments also must work within the same imperatives. The concept of the state-driven and dominated economy is giving way to the concept of state as economic partner and facilitator. Decision making is being decentralized and is closer to the level of the taxpayers. The debt crises among most Western nations provides one explanation for this. The end to rapid, unlimited growth has had a negative impact on wealth, in the private sector as well as the public sector.
Looking towards the integrated, automated, global markets and products of the 21st century, there is no doubt that governments will have to adapt in a fast manner to respond to that global shift. This is where the alliance of personal computers, multimedia capabilities, telecommunications, and networking comes in. The strategic integration of electronic commerce technologies generally provides higher quality information, while improving speed, accuracy, flexibility, responsiveness, and cost savings. The technologies that will have the greatest impact in the government sector are already here, but it is the integration and synergy between these computer, telecommunications communications technologies and networking that will bring the greatest benefits. The digitizing, networking and processing of information will have profound impact on government's administration and services to the public. Governments that take a lead role in adopting these technologies stand a better chance of improving the quality of their services to the public by decreasing, in permanent manner, the cost-related dimension. Obviously, governments have a clear role to play in facilitating these changes and making government's applications a strategic component in view of developing a national expertise of IT that could be transferred internationally.
It is nonetheless imperative that governments undertake this transition hand in hand with the private sector, that is, in partnership with private industry, without, of course, giving up their responsibilities for the control and management of information. That public administrations occupy a role of leadership in this area is not surprising they are quite simply the largest information managers around.
This, however, leads governments to specific actions to be undertaken to open the way to the progressive implementation of electronic commerce within their respective public administrations.
The Canadian Governments OnLine (CGOL) objective is to improve government's use of online technologies through an interjurisdictional repository of services they each provide or plan to provide to the public, using new means such as the Internet, interactive TV, kiosks, electronic bulletin boards, or other innovative online means of serving the public.
The cross-country study was awarded to the Electronic Commerce World Institute (ECWI) and to the DMR Group.
The deliverables include (1) a discussion paper on issues related to interjurisdictional online services, (2) a classification scheme, (3) assessment criteria to apply to these services, (4) an online catalogue of government online services across Canada, and (5) recommendations for further action.
The potential advantages of online delivery channels for public administrations and their user communities are many: cost savings through efficiency gains, improved response times and the ability to make the right information available to more people when they need it. In addition, the role of online services and catalysts for reengineering government processes is key, and needs to be showcased.
Obviously, the implementation of online services by public administrations, either individually or cooperatively, raises a number of issues. It is our understanding that this study must provide information and recommendations for the resolution of these issues. It must also indicate how these issues are currently being addressed by Canadian governments, private industry, and the governments of other countries.
For the sake of this panel let us try to list the major questions that ought to be raised in the conduct of this study and which could also be use to provide some answers.
What are the social and economic issues associated with the delivery of online services and information?
How can separate public administrations share the same online services? What are the jurisdictional and political issues? How are they being addressed elsewhere?
How can we classify the various types of services that governments can provide online?
Once the online services are classified, the resulting catalog will inform decision-makers on the range of online services that can be provided by public administrations. It will also document challenges, difficulties and lessons learned, and provide a degree of implementation guidance.
What government services are best candidates for online delivery? For what audiences?
How can the benefits of added value of online services be measured?
Which technology (or combination of technologies) can be used to support online delivery?
What are the key technical issues associated with the implementation of online service delivery and how are they being solved?
How can governments finance online services?
What are the implications of online service delivery for government employees?
What is the impact and potential of online service delivery on government business processes?
What online services should Canadian governments offer cooperatively?
Regardless of the difficulties resulting in addressing and counteracting these issues, governments have the sole responsibility to subscribe to the improvement of efficiency and productivity. Since government spending of most western governments accounts for half or more of their gross national product, efficient reengineering of their business processes could lead to substantial increase in productivity.
For instance, and to put things in perspective, let us recall what has been accurately stressed recently by Stephen S. Roach, economist at Morgan Stanley: "Small differences in productivity add up to big changes in income over time. If the United States raises its productivity trend growth rate by just 0.5 percent a year to 1.5 percent, that increment cumulates to about $300 billion over ten years, sufficient to compensate for about three garden variety recessions."
"If the current 2 percent pace remains, national output will rise about 10 percent more than it otherwise would over the next decade. Put differently, real per capita gross domestic product (GDP) in the U.S. increased by 1.75 percent a year from 1870 to 1990 to the world's highest level from $224 to $18,258 (in 1985 dollars). Had the U.S. growth rate been just one percentage point less 0.75 percent a year, then real per capita GDP in 1990 would have been $5,519, or around Mexico's level and about $1,000 less than Portugal's," according to calculations made by Robert J. Barro, economist at Harvard University.