Public Administration in an E-economy William H. Melody Managing Director, LIRNE.NET and WDR Professor, Technical University of Denmark, London School of Economics, & University of Witwatersrand Executive Seminar SLIDA, Sri Lanka, 20 September 2004

Characteristics of 21 st 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 Manufacturing Media & Cultural Sectors Health/Medical Government Services Education/Training Applications Electronic Services (Pay TV, VAS, Internet) Multimedia, etc. (Public, User group, Private) Content Broadcast Media Film Libraries Software etc Interactivity (Instant & Delayed) Voice Data Sound Graphics Video Telecommunication 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 Transactional Services

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 Tools Assessment ToolPurpose 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 LevelMaturity 0Business as usual 1Online information services (publishing) 2Online interactivity 3Online transactions 4Service integration 5Organizational transformation

Levels of Readiness for E-Government LevelCapability 5Government wide transformation 4Online Service integration 3Online transactions 2Online and interactive communications 1Online information publishing OBusiness as usual