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States’ Antiquated IT Infrastructure

Posted by: Mark Marich on March 10, 2010 Source: Policy Dialogue on Entrepreneurship

Vivek Wadhwa, senior research associate at the Labor & Worklife Program at Harvard Law School and executive in residence at Duke University, has a new article on BusinessWeek. In “States, Innovate in IT or Else,” Wadhwa looks at the way antiquated and expensive IT systems used in some states hinders innovation.

“The public sector is effectively walled off from the innovation that has made Web 2.0 a rich, contextually relevant environment,” explains Wadhwa. He argues that many government agencies and corporations are still entrusting critical tasks to antiquated computer systems that cost a fortune to operate and maintain.

The problem is particularly acute at the state level. Each U.S. state has its own unique computer systems to process the same types of information and provide the same services as every other state. Worse, even within states, each division or agency has its own IT department and maintains its own computer systems. We're talking about hundreds of billions of dollars of IT spending every year—on clunky old infrastructure.

This, he argues, has implications for data sharing and updating and for adjusting to regulatory changes. “Simple changes cost tens of millions of dollars and can take years. When President Obama signed legislation extending benefits for unemployed workers in November, out-of-work Californians had to wait as long as two months because the systems couldn't be updated.” In contrast, social networking sites like Facebook or Twitter process more transactions in a day than many financial companies and states process in a month.

What’s the solution? “We need to open the bidding to new players, loosen opaque requirements written under the false guise of security and compatibility, and retool our way of thinking about IT for the public sector.”

Read Vivek Wadhwa’s entire report on the issue, here.

Category:  Physical Infrastructure 

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