In Development

I leave my position as Government CIO tomorrow, and this is my last post on InDevelopment.  Over the last five years,  it has become crystal clear that we are in a single, globally connected world - both through the widespread use of internet based technologies by individuals everywhere, and through the common issues faced by all governments in responding to the challenges that this creates. 

The world has changed

The economics of ICT have been dealt another disruptive shock by the advent of cloud computing.  At the end of the 19^th century, each organisation made their own arrangements for power generation.  The construction of the electricity grid fundamentally changed the cost of power, and inexorably led to the decline of organisation-based power generation, although this was strongly resisted by the suppliers and managers whose positions and expertise was based on effective management of power generation equipment.  We are seeing a similar shift in the world of information processing through the advent of the “cloud computing”, well described in the book The Big Switch.  

In addition, we are seeing a levelling of person to person connectedness that bypasses traditional channels.  This creates the opportunity for groups with a common interest  to create a tight community where ideas are generated, discussed, refined and crystallised from a diversity of participants. The velocity of circulation of information, across organisation and national boundaries, is faster than interactions between people physically located in the same building. It really does not matter where you are in order to join a discussion, which has a huge impact on the economics of social production. The Wealth of Networks explains this further.

 And a third example of how the world has changed is from the Gartner Symposium analysts keynote. “Business users are reading about technology and seeing new possibilities Did you see the BBC story about streaming video through your cellphone direct to a web site? Could we use that to improve our service calls? These business leaders don’t need IT to do this for them, they can fund it themselves because: Technology is no longer scarce; Technology expertise is no longer the domain of IT; and Technology is no longer a capital expenditure”

How is government to respond to these challenges?  Two areas need priority attention, and feature high on the agenda of government CIOs around the world. 

Offshore data

What do we need to think about when making decisions on where to locate government data? SSC released guidelines for the use of offshore ICT service providers earlier this month, which were incorrectly interpreted by some as being “protectionist”.  My view is that they were the exact opposite - they recognised the economic reality of cloud computing and that government would have to make a choice between operating our computing systems in New Zealand, and using offshore data centres at 20-25% of the cost.  What are the factors that need to be weighed up, and how compelling is the case for retaining data onshore, with the consequential cost premium.  As I outlined at the start of this blog, the shift is inexorable, and NZ will never have the scale to establish a data centre at the price points available from cloud computing, so we will need to decide how much value we place on the areas of risk outlined in the guidelines.

Open up government data

We need to recognise the network effects of opening up government data in a form that means others can access it. Economic value is created by businesses building innovative new services using government data. Public value is created by enabling a richer and deeper understanding and dialogue among interested individuals about what the data tells us about our lives.

We can immediately think of reasons why it is not a good idea - there has been no demand for the data we have already published, the data quality is not up to standard, the data was only collected for a specific purpose, the data will be misinterpreted, we do not have sufficient resources to properly present the data. In my view, all these perceived problems come from a historic perspective on information and data that is not adequate for a 21^st century information economy, and does not reflect the new network economics outlined in the Wealth of Networks. 

The legal, policy, and moral position is clear  - New Zealanders own the data, having paid for its collection through taxes. These “problems” will all be solved by the community, and our role as government is to give priority to this. 

We can expect to see two other significant effects, in addition to value creation, from freeing up government data.  Firstly, we know that government acting alone cannot achieve the outcomes  - stronger economy, better education, sustainable development, safer cities, healthier communities - that New Zealand needs if we are to have affordable government in the future.  These outcomes will arise from government, individuals, NGOs, businesses, communities and whanau working together.  By opening up data, government demonstrates (by reducing information asymmetry) that they are committed to working with others parties in an equal partnership.

Secondly, the increased transparency and accessibility of government data will increase the level of trust that NZers have in government. Trust is our “bottom line” - the foundation of the democratic process, the core value espoused by the State Services, and an area for continuous investment if we are to maintain our position of world leadership.  Further insight into this can be found in the Transparency 2.0 article in Transparency and Open Government.

Where to from here?

I have been privileged to be in a leadership role for government use of ICT since I joined SSC from the private sector in March 2004. I look forward to commenting from the outside looking in, and observing these changes which are fundamental to the way governments will need to operate in the future - globally and transparently. New Zealand is well positioned to maintain our current leadership role.

Laurence Millar

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