The Critical Role IT Plays in Local Economies

Michael Vizard

Like politics, all of economics is local. It's no secret that cities and municipalities everywhere are trying to save money. Unfortunately, decades of bureaucratic malaise have resulted in redundant systems that all too often work at cross purposes.


Worse yet, many of these systems are jealously guarded by government departments and agencies that, at least in the minds of the people who manage these systems, owe their very existence to the fact that a certain set of processes and procedures need to be managed. And yet, if we were building these processes over again, governments would take greater care to be more efficient in order to reduce the amount of money needed from each taxpayer to keep the government operating.


Alas, governments take on a life of their own, and it's only when some external force exerts a significant amount of pressure that we see substantial change. More often than not, that force for change has a lot more to do with economic fundamentals than any political party platform.


As the economy goes more global, cities need to compete for industries that will employ their citizenry. The companies that provide those jobs in the years ahead are going to be taking a look at how efficient the local government is before deciding where to locate their operations. Tax breaks and other incentives will still be important. But if the local government is efficient, the tax burden is going to be lower while the services being provided are actually better than what other cities and towns can provide.


None of this is lost on cities such as Corpus Christi, Texas, which is working with IBM to streamline the costs associated with delivering city services by leveraging IT. In many ways, says Steve Klepper, an administrative superintendent for Corpus Christi, his city is benefiting from only having a small number of agencies that have automated processes to any significant degree. This makes it easier for Corpus Christi to put in place a modern set of IT systems to optimize the delivery of city services.


For example, Corpus Christi has developed a centralized call center that handles 45,000 electronic work order requests. In other cities, each of those requests would have to be processed multiple times by any number of city agencies and departments. In addition, the city discovered that 33 percent of all work orders being generated relating to the treatment of waste water were actually coming from 1.4 percent of the population. By zoning in on the issues those customers were having, work orders dropped sharply. And as a side benefit of building a communications system for coordinating the activities of work crews around the city, the entire population of Corpus Christi has access to a free WiFi network.


Of course, the whole point of this effort is to reduce the cost of government in order to make Corpus Christi a more attractive place for people to live in addition to providing a place where companies want to be located.

 

This type of governmental transformation doesn't just happen overnight. In fact, larger municipalities tend to have a disadvantage when it comes to competing for business against smaller municipalities that don't have a lot of legacy systems in place. But Guru Banavara, CTO of the IBM Smarter Cities initiative, says municipalities of all sizes across the globe are starting to equate efficiency with their ability to compete for businesses, which they all recognize is critical to shoring up their tax base.



So the next time some politician starts talking about reducing government spending, remember that it's going to occur one way or another. Either the government gets more efficient and as a result more businesses start to locate their operations there, or the tax base shifts as businesses look for better places to locate. In the latter scenario, the tax base obviously gets lower eventually, but for all the wrong reasons.


The next time somebody is running for office, don't just ask them how they are going to cut taxes. That can be done with the stroke of a pen. Ask them how they are going to create a more efficient government so you don't have to move one day because the company you work for is leaving town and taking your job with them.



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Dec 21, 2010 8:37 AM Steve Klepper Steve Klepper  says:

EXCELLENT SUMMARY.  Speaking as someone working for local government, it is true that many people get "lost" in their own silo and fail to recognize broader implications of their work . . . especially with regard to economic development implications of efficiency/effectiveness (or lack of)

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