Editor’s note: Nicole Cook is the director of strategic partnerships at Dwolla, where she leads the company’s government programs.
In many ways, the technology industry and government couldn’t be more different: one is brash, aggressive and risky; the other is rightfully thoughtful, slow-moving and cautious. But as demonstrated recently by events like the White House Cybersecurity Summit at Stanford and through continued collaboration efforts across the public health and banking spaces, both sectors can learn a lot from each other. The key is to embrace our differences – not run from them.
Why we need to work together
As much as we in technology like to think we’re the ones changing the world, the public sector still impacts more people on a daily basis than most technology companies will over the course of a year.
Government’s ability to execute on a large scale is admirable (though, like the tech industry, it’s not infallible) as is its capacity to drive consensus around traditionally thorny issues. A great example of this is the recent debate around net neutrality, a contentious issue that exemplified the very notion of public dialogue. By bringing together a range of opinions, in a variety settings the FCC was able to come to an informed opinion that in my opinion ultimately benefited the American public.
But for all the things that government can do well, the public sector is simply not built to innovate as quickly or aggressively as a nimble technology company can. Development cycles in government take years, whereas some companies in Silicon Valley are doing four-week iterations.
Playing to each other’s strengths
Expecting government to develop technology as quickly as the private sector is unrealistic, but it is in the catbird seat when it comes to identifying the broad challenges that technology should be helping to solve. The challenge is especially true at the state and local levels, where the need for innovation is felt most and the budgets are tightest. Using my home state of Iowa as an example, this is also where the most interesting collaboration is happening.
<span class="il">Government</span>’s ability to execute on a large scale is admirable as is its capacity to drive consensus around traditionally thorny issues.
For instance, last year the Hawkeye State became one of the first in the nation to trial digital driver’s licenses, a bold move that will explore the benefits (like streamlined processes and cost reductions) and challenges (such as privacy and logistics) that the program will present to taxpayers. To make this program possible, the Iowa statehouse recognized that it would need private-sector partners to make it happen. It’s early days still, but the effort is already starting to see some success.
Likewise, Iowa has been a leader in the area of electronic payments, recognizing more than three years ago that its citizens wanted a more streamlined approach to pay for government services. Today, the state processes thousands of payments, saving taxpayers thousands of dollars while removing sensitive financial data from the transaction. Moreover, by proving the technology out in a relatively small market, it has allowed the federal government to recently start deploying this approach on a national scale.
Technology has the power to fundamentally change the way we govern. At a purely functional level, processes as routine as storing and accessing government data are already being modernized by programs like Microsoft’s Azure, which is providing one of the first truly secure cloud platforms for local, state and federal government.
And at the infrastructure level, local governments from Seattle to New York City are working with leading technology leaders to deploy ultra-fast gigabit Internet. Neither of these programs could be achieved without input from both public- and private-sector players.
Another promising example of collaboration is the federal government’s application of Cooperative Research and Development Agreements, or CRADAs to fund innovation across the private sector. CRADAs enable private companies to work closely with government agencies like the National Institutes of Health and Department of Defense to develop technology with initial application within the public space, but with long-term commercial viability.
CRADAs are working to cure cancer, analyze big data from satellites and develop lightweight, super-efficient batteries that could one day power our electric cars. Once again, none of this would be possible if the public and private sectors hadn’t realized their own limitations and sought assistance from the other.
The opportunity ahead in the financial sector
No other initiative is perhaps more emblematic of these ideals than the Federal Reserve’s Faster Payment Initiative, where the nascency and openness of today’s technology must combine with the trusted and conservative approach of 40-year-old institutions and processes to make change a reality.
Right now, our financial network is based on technology designed in the 1970s, relying on security measures that are far less sophisticated than those that wish to do it harm and processes that seem Kafkaesque even to insiders. But for first time decades, there’s debate at the highest levels of the public and private sector about how to change this.
Technology has the power to fundamentally change the way we govern.
But actually making this happen will take true leadership and collaboration, as there are hundreds of millions of Americans relying on its smooth operation every day. From small businesses to multinational corporations, and everything and everybody in between, streamlining the U.S. payments network will impact everyone, which is exactly why this effort deserves the attention of the country’s best and brightest, not just those directly affected.
By working with hundreds of partners from across the private and public sectors, academia and the international community, the Fed is hoping to meld the best of what each has to offer. (In full disclosure, Dwolla hopes to play a part in this ecosystem.) The government realizes that real structural change takes a combination of skills, including vision and technology prowess, but also large-scale deployment expertise and the ability to execute with minimum risk.
Like any relationship, time will tell whether tech and government will play nicely together on this and other initiatives, but the opportunity is huge. Using each other’s strengths will allow each to focus on areas that they can show the most value, while enabling them to sideline activities that don’t. Doesn’t that sound nice?