Everything is up for discussion
Over the next few days, we’ll be sharing what makes us tick. When we launched FWD50, we put together a manifesto describing what we thought digital government could be, and how we wanted to shape the content of the event. You can read the whole thing on our About page.
North America lags the world in digital payments because North America had credit cards first.
It’s a truism of innovation that early success means you settle for the first solution, letting others leapfrog over you. China didn’t have the Web; it’s a world leader in mobile apps and payments. Africa didn’t have wired telecommunications infrastructure, so it’s able to deploy wireless today. If a new country wanted to create a power system, it might eschew the central grid in favor of rooftop solar.
The problem is simple: We consider sunk costs when evaluating future benefits, even though it’s dangerous to do so. Sometimes, it’s hard to walk back from systems we’ve built; economists call this Path Dependence.
This is one of the many reasons that governments and legislation are often playing catch-up to technology. The nature of a common law model — where the real world must happen first before we can legislate upon it — is another factor.
The technical lag of government has important, unintended consequences, however. Entrepreneurs rush in to satisfy consumer needs where the government does not, leaving the government unable to build a desirable solution. Investors love an externality, and the delay in provisioning government services generates many lucrative externalities.
The elephant in the taxroom
Tax preparation software is an excellent example of this. Companies generate billions a year in tax software aimed at simplifying the process of tax filings. Their easy-to-use interfaces removes pressure on government agencies to improve tax preparation processes. South of the Border, these services also cost the average American $200 a year—a total $12 billion each year. Those vendors’ lobbyists have no interest in simplifying the tax code.
The elephant in the room is, of course, should government be making tax preparation as easy as possible, even if that means competing with the likes of Turbotax?
Eminent domain and social media
A similar debate is happening around services like Twitter (valuable to the world as a news source and method of public discourse, but perhaps financially unsustainable.) The Atlantic recently put forward the case for a taxpayer-funded version of Facebook, arguing that public social media needs to exist to counter hermetically sealed filter bubbles that polarize right-wing voters.
In the coming years, this kind of software “eminent domain” will be more and more commonplace. Google’s transit instructions are a boon to municipalities who can’t create their own applications, making public transit more accessible than ever. But what if Google decided to charge?
What lives where?
As we redefine the role of technology in the relationship between citizens and their government, we will naturally have to tackle the question of which private sector digital platforms become public sector, despite how uncomfortable and politically volatile such discussions will be.
