Public Administration in an E-economy

William H. MelodyManaging Director, LIRNE.NET and WDR

Professor, Technical University of Denmark, London School of Economics, & University of Witwatersrand

Executive SeminarSLIDA, Sri Lanka, 20 September 2004

Characteristics of 21st Century Network Economies & Information

Societies

• Driven by the services sectors• Founded on info/communication networks• Dependent on effective reforms in the telecom

sector- information infrastructure• Strengthening links among local, national, regional,

international networks and markets

INFORMATION INFRASTRUCTURE

Regional Development

Finance/ Banking

Disaster Management

Travel & Tourism ManufacturingMedia & Cultural Sectors

Health/Medical Government Services Education/Training

Applications

Electronic Services(Pay TV, VAS, Internet)

Multimedia, etc.(Public, User group, Private)

ContentBroadcast

MediaFilm

LibrariesSoftware

etc

Interactivity(Instant & Delayed)

VoiceData

SoundGraphics

VideoTelecommunication

Facilities Network(Information Superhighway)

Computing / Information Technology

Telecommunication Equipment Manufacturing

Global Economy and Information Societies

Founded on Integrated E-ICT/Services

• Converged ICT- Major Economic Sector• Resource Input to Production – all sectors• Provides – efficiency, opportunities for

innovation• Extends the limits of markets – national,

regional, global

Major Forces Driving Change in the Shape of E-economy Markets

• New technological opportunities - e-applications• Liberalization and upgrading of telecom networks

and services – national policy• Liberalization internationally in many sectors –

WTO• Intellectual property protection – content – WIPO• Rationalizing markets in human capital –

liberalization, outsourcing, restrictions on movement

The E-economy: Hope and Hype

• Applications everywhere for productivity improvements and greater wealth for everyone

• Information and knowledge as the engine of economic growth-human development

• Dramatically reduce the digital divide and the wealth divide

• Policies and programs for e-applications everywhere, E-commerce, E-gov’t, E-education, E-everything

Applications of ICT Services: Specifics

• Reduce costs• Improve services• Justify new services/products• Expand markets• Restructure organisations• Restructure industries and sectors

(convergence)

Why Not Adopt Applications ASAP?

• Big investments required• Training and retraining• Depends on others in networks – suppliers,

customers, competitors• Order of magnitude changes required• Uncertain benefits• Could make things worse

Levels of Application

• Task or activity specific• Organisation specific• Industry specific• Supply chain specific• Sector specific• Generic activity specific, eg. e-payments

Application Examples

• SWIFT-Funds transfer among big banks• EDI-Data Interchange through supply chain

for an industry• JIT-Data flows to cut inventory and

sometimes speed-up service time• Point of sale terminals and communication

networks (payment and credit check)• ATM-faster access to cash, slower for service• Intranets and Internet

Organisational Models

• Trade/Commerce –B2B and B2C• What about SMB2SMB, B and C?• Government – national, provincial, local• Education – K-12, training, universities• NGOs• Other

Sector Example: Banking & Finance

• B2B – SWIFT• Credit authorisation – Pt of sale terminals• ATMs – access to cash• E-payments – B2B; some B2C and C2B• E-purchases – authorisation• Internet funds transfers – B2B; B2C; C2C • Note: Each step is for a very specific activity

Generic Trade Activities (E-commerce)

• Authorisation – eg digital signatures• Logistics (Transport) – delivery• Secure payment –greater risk• Contract enforcement – legal support• Protection from fraud• Assessing and establishing trust

Steps in Application of E-services

• Preparation – E-readiness• What specific activities?• Precisely how?• When?• With whom in supply chain?• With what possible short and long term

consequences – financial and human resources

E-Readiness Assessments

• Information Infrastructure – access• VANS and Internet• ICT skills and capabilities• Transport/Logistics Infrastructure• Flexible organisational structures –eg outsourcing• Innovation & competitiveness in ICT sector and in

business generally• Policy and regulation in ICT sector and in specific

applications sectors

Actual Implementation of E-services

• Began with bottom-up, organisation specific applications

• Extended to supply chains and corporate networks and shift to top-down applications

• Driven primarily by the big players in the value chains

• Competition becoming a more important factor between haves and have-nots

• For future – network factors are key

Developing Country Applications

• Limited success so far; more barriers and fewer short term benefits

• Pace being set primarily by value chain effects of big international players

• Selected national applications where benefits exceed the costs

• It is sometimes efficient to move at a slower pace with selective applications for priority local needs, and a focus on reducing barriers, especially access and VANS development

Barriers to International Markets for Developing Countries

• Infrastructure and services for e-economy development are important

• But artificial trade barriers in agriculture, textiles, patents, intellectual property and other sectors by largest developed economies are far more significant

• As artificial trade barriers are reduced, the benefits of e-economy development in developing countries increase dramatically

Strategies for Developing Country E-economy Development

• Expand activities in international value chains• National applications development on

activities and at pace where benefits justify• Overcome key barriers of access, VANS

development and application costs that now restrict development

• Training as a continuous activity• Experiment widely to discover areas of local

benefit

Specific Problems for Public Administration

• The fact that e-applications:– Enable core business activities makes them critical, strategic and

unavoidable in modern day organizations– Expensive to develop makes it important for organizations to do it

right the first time around– Complexity increases the risk of failure in the process

• Successful development is critically dependent on better understanding of prevailing conditions and capabilities

• Government lag private sector counterparts in embracing e-applications and are therefore under pressure from:– The business community to create an enabling environment for

global business competitiveness.– citizens for similar treatment as they receive from their private

sector counterparts.

E-government: Definitional Positions

1. Introduced as the application of new technology for delivery of public services.

– Efficient – Effective– responsive

2. The application of new technology to transform government, to make it

– Better– Cheaper– faster

3. An information age government

Categories of Applications• E-administration

– Internal administrative efficiency– Cross-agency coordination, communication and information sharing

• E-services– Information services– Transactional services

• E-business– Procurement– Disposal of government assets

• E-society– Giving citizens collective voice in the governance process– Participation in debates in public interest issues– Electronic voting

E-Government: Categories of Services

Online Information Services

Online Communication Services

Online TransactionalServices

Expected Benefits

• Simplifying governance and government service delivery.

• Integrating services– One-stop access– Multiple access options

• Increasing availability and accessibility– Anywhere– Any time – By any means

E-Readiness Assessment ToolsAssessment Tool Purpose

The CSPP Guide (1998) Community readiness for living in the networked world

The CID Readiness Guide (2000) Community readiness for e-commerce.

The APEC Readiness Guide (2000) Assist member country governments develop appropriate e-commerce policies

The WITSA International Survey (2000)

Determine issues critical to the growth of e-commerce

The McConnell Guide (2000) Determine the capacity of an economy to participate in the emerging global digital economy

CIDCM Readiness guide (2001) Advance the diffusion of ICT in developing countries.

The KPMG E-Government capacity check (2000)

Assess the e-government capabilities of Canadian government

The Accenture e-government leadership (2000)

Assess comparative state of government readiness for e-government

E-Readiness Assessment Tools

• Cover a wide variety of areas:– Network society

– E-commerce

– ICT/Internet diffusion

– Government organizations

• Only two specifically focus on government organizations

• All define e-readiness in terms of – A set of factors or capabilities factors, such as leadership,

infrastructure, access, connectivity, etc

– Hierarchical levels depending on the sophistication of these factors

Capability Maturity Levels

Level Maturity

0 Business as usual

1 Online information services (publishing)

2 Online interactivity

3 Online transactions

4 Service integration

5 Organizational transformation

Levels of Readiness for E-Government Level Capability

5 Government wide transformation

4 Online Service integration

3 Online transactions

2 Online and interactive communications

1 Online information publishing

O Business as usual