Select Committee on European Union Minutes of Evidence

Memorandum by The Honorable Donald W Upson, Secretary of Technology, Commonwealth of Virginia

  I appreciate having the opportunity to speak before you on the Commonwealth of Virginia's electronic commerce and Web-enabling initiatives, as well as the work we are doing to improve electronic government. While I have been invited to provide information, based on Virginia's experience, on how governments can improve electronic service delivery, in all candor, we continue to learn from each other.

  The new information age is upon us. Citizens and businesses are doing things in a much different fashion than our parents and grandparents did in the past. The Internet has provided our society with the ability to pass through the barriers of time and space. Underlying all the newly emerging technologies is a profound social and economic transformation. Every sector of our society, not only on both sides of the Atlantic, but across the globe, is challenged to adapt to the new Internet economy. Business is being conducted differently. Business models are changing. Companies are more efficient and productivity per employee is increasing exponentially. The same transformations are occurring in education, in the way Americans and citizens of the United Kingdom live, obtain information and conduct their own lives. Fundamentally, this technology empowers. It empowers businesses, business leaders, employees, educators, and mostly it empowers each individual citizen.

  As the Governor of Virginia, James S Gilmore III, recently stated, "All of this evidence validates the maxim: The Internet changes everything. More to the point, the Internet changes everything including government." Old rules do not work well in this new borderless economy. Sometimes they do not work at all. Regardless, change is everywhere, and government has to change as well.

  In the Internet economy, government at all levels must change its policies as well as the way it operates. Government at all levels must harness the capabilities of the Internet to become more productive in the delivery of government services. The result should be a dividend to taxpayers through lower-cost, more efficient government. We are striving to accomplish these goals in Virginia, and through our unabashed embrace of technology and innovative thinking, we are achieving results.

  As we vigorously pursue such innovation, we must not be afraid to borrow the best ideas from all levels of government. On more than one occasion, in both Washington and in Richmond, I have invited federal leaders in electronic government to visit with my multi-agency advisory body, the Council on Technology Services (COTS). We have particularly benefited from lessons learned in federal efforts at procurement reform and electronic purchasing, and we're implementing many of those lessons literally as I speak to you today.

  I'd like to highlight for you what we in Virginia regard as the critical success factors in the e-government accomplishments we've enjoyed to date and are continuing to achieve. I will tell you up front that there is really no secret to what we've attained. It simply takes three things: high-level commitment, stakeholder support, and focus.

  In Virginia, commitment begins at the top. From the day of his inauguration in January 1998, Governor Jim Gilmore committed Virginia to be a leader in technology—within state government operations, in attracting high tech industry, and in affording all its citizens access to the benefits of the Information Age. The Governor's Commission on Information Technology, which I had the privilege of chairing, not only recommended what became the nation's first Internet Policy Act, but it also provided us with an excellent set of recommendations on Web-enabled Government. Governor Gilmore formalized those recommendations as charges to state government in his July 1999 Executive Order 51. I am providing to the Committee today copies of that report and three others the Commission submitted, much of which is being used as a model in other States and the Federal government.

  As part of that Executive Order, all Executive Branch agencies will submit to my office by 1 June comprehensive plans for Web enabling their interactions with citizens. Further, all forms from those agencies used by our citizens will be available for downloading from the Internet by 31 December of this year.

  As directed by that Executive Order, workgroups of my Council on Technology Services, along with the agencies with my Secretariat, are also engaged in demonstrating digital signature applications, establishing e-commerce consumer education programs, and standardizing statewide privacy and security policies and practices. Our date-certain milestones demonstrate that we are committed to leading by example, and the active participation of over 100 individuals from agencies in all branches of state government (and from local government as well) in COTS workgroups equally exhibits our commitment to stakeholder involvement.

  The Governor's leadership in setting these "e-targets", coupled with the stakeholder-driven processes we've established to implement them, are producing impressive results. Leadership, however, is not a one-time event, and operating in "Internet Time" is becoming as much a requirement for government as it is for business and industry. So, while we are in the process of wrapping up our Executive Order 51 assignments, the Governor has already told us he is raising the bar on his e-government expectations.

  The Governor's next e-government Executive Order, to be issued imminently, formally establishes an Electronic Government Implementation Initiative within my Secretariat. This initiative will provide a clear, top-level focus for implementing electronic government initiatives just underway, in the planning stages, and even some yet-to-be-defined. It will expedite and facilitate statewide electronic procurement. Web-based processes for such common administrative procedures as employee leave and travel, and statewide rollout of electronic signatures. It will also identify and prioritize funding needs for other e-governance strategies and initiatives, with an emphasis on crossing traditional program and agency boundaries to deliver "seamless" service to the citizen.

  Governor Gilmore firmly believes, however, that his commitment to e-governance is not totally fulfilled if it only addresses the delivery of services. True e-governance must encompass efforts to ensure that all citizens can access and utilize those services. The Governor envisions a comprehensive public/private initiative—positively named "Digital Opportunities". Its objective is no less than creating a community-based infrastructure to ensure access to computers and the Internet for all citizens without barriers of race, income, education, geography, or disability—and the ability to use this technology effectively to fully participate in the Commonwealth's economic, political, and social life.

  The Governor will therefore also task this new E-Government Implementation Initiative with establishing and supporting a Digital Opportunities Task Force, comprised of energetic representatives directly involved in addressing this issue from private industry as well as state and local government and community groups. This Task Force will both coordinate implementation of Digital Opportunity initiatives and promote best practices in developing and executing such programs.

  It is critical that government, in promoting opportunities for all its citizens, also provides the best quality service within its own boundaries in order to better serve the people. Bandwidth—fast, accessible, and inexpensive—is essential to providing that service. Three years ago, our state established Network Virginia, an innovative arrangement with key telecommunications providers to make affordable high bandwidth access available to public agencies and educational institutions anywhere in the state. Last year, via Virginia Link, we took that same model and made it available to businesses across the entire Commonwealth.

  But we're not done yet. We continue to press the envelope in providing a supportive electronic commerce infrastructure for both state government and the citizenry of Virginia. Just this month, we announced a new contract with MCIWorld Com for COVANET, the latest incarnation of our statewide government telecommunications network. COVANET increases our available bandwidth several times over at rates up to 52 per cent cheaper than its predecessor. By this summer, we will have statewide contracts in place for Seat Management, outsourcing all aspects of desktop computers—hardware, software, maintenance, and helpdesk support—for a predictable, economical annual fee. Seat Management turns the basic internal platform for e-government into what it should be—a utility—freeing resources and management attention for more value-added e-government activities.

  You may note that all of these initiatives share one common approach that I can highly recommend to you: We don't hesitate to challenge technology vendors to do some envelope pressing on their side. Thus far, they have proven up to the challenge, creating "win/win" situations for all parties concerned.

  Complementing these internal improvements, a comprehensive e-communities initiative is also being formulated. We want to assist small- to medium-size Virginia businesses in becoming "clicks-to-mortar" enterprises, Web-savvy and e-commerce competitive—not just in their home state, but around the world. We are also working on the concept of establishing templates for installing high bandwidth capacity in smaller communities, so that Virginia's less populated cities and towns will not have to reinvent the wheel in promoting such bandwidth for their constituents.

  While I am proud of the citizen-centric focus Virginia is striving to achieve, I suggest to you that all levels of government have much farther to go in this regard. A survey of state CIOs released just this month indicates that one of the biggest barriers they see to implementing Web-enabled government is government's "stovepipe" mentality—the maze of single purpose programs we've created and the entrenched organizations, funding mechanisms, and legacy computer systems we've built to support them.

  Today's Web-savvy user knows that "one-stop shopping" based on the customer's needs is the de facto standard of service in commercial Web sites. Tomorrow's Web-savvy citizen will accept nothing less from government sites. If I can leave you with but one bit of advice today, it would be that the most important thing you can do to promote electronic government is to break down these barriers to true customer-centric service—programmatic, financial, and system-based alike—in both government agency operations and in the programs that impact your local governments.

  As I mentioned previously, the reason governments must change is due to the same pressures that the business community is under to deliver better, faster, more improved services to our citizenry. However, the 21st century customer-base that business is catering to today is not the same as it was in the previous century. The Internet has acted as a catalyst to actualize the global economy and interdependent market envisioned by President Woodrow Wilson and Prime Minister David Lloyd George at the conclusion of the First World War. While the wealth and prosperity of such an economy is obvious to even the smallest of main street retailers, what is not as clear to most entrepreneurs in the private sector or leaders in government is what the role of government should be in the 21st century. Once again, Governor Gilmore and Virginia have set the standard for government and public policy in the world of e-commerce which can be defined in one word: facilitator.

  We feel it is government's role to improve the environment that gave birth to this new economy, not only by staying out of the way, but to enhance the opportunities for those who consider entering the global digital-market for the first time, as well as those conventional businesses that are creating and adapting e-commerce strategies to their traditional business models. This may be achieved through passage of uniform laws that protect web-users from criminals, theft, copyright infringement, as well as laws that help facilitate e-commerce like uniform digital signatures and reductions or elimination of new taxes on the Internet. Recent measures we have passed in the Virginia General Assembly include an Internet Policy Act, the Uniform Computer Information Transactions Act (UCITA), and the Uniform Electronic Transactions Act (UETA). These laws provide a framework for online transactions, and those transactions involving intangible goods, such as computer software and the licensing of software. Pending legislation in the United States Congress will reduce the federal telecommunications tax, extend the moratorium on new Internet taxes and provide a uniform set of national standards for the use of digital signatures. The first two federal proposals originate from the national Advisory Commission on Electronic Commerce, which was established by the US Congress to study e-commerce issues and chaired by Governor Gilmore. The digital signature law is based upon Virginia's law, and its subsequent modifications, including the preemption clause for the recently adopted UETA. All these initiatives make online transactions between businesses or between businesses and consumers a much more defined and pleasurable experience while providing protection to each party and ensuring the flexibility required in the new economy. Virginia's success is clear. According to a soon-to-be-released study conducted by the American Electronics Association, Virginia's high-technology industry added over 50,000 jobs to its economic base between 1993 and 1998, making it the third fastest growing high-tech state. We are ranked fourth nationwide in high-tech average wage with venture capital investments of $751 million in 1999 and $2.1 billion in high-tech exports the same year. We are proud that many of our initiatives have been embraced at the national level, and we continue to work closely with the federal government on ways to improve the economic climate for the technology industry and e-commerce.

  Uniform laws and standardized practices may only be achieved through cooperation among governments and people. It took our National Conference of Commissioners on Uniform State Laws 10 years to finalize and present UCITA and UETA to the individual states for consideration this year. The same way our state governments cooperate with each other and with the federal government, so too must international organizations, such as the United Nations Commission on International Trade Law (UNCITRAL), work together to create a framework for our businesses and citizenry to transact online in a safe, yet uninhibited manner. Dialogue between government officials with open lines of communication to industry leaders in public forums like the recent Global Internet Summit, hosted by Governor Gilmore and Chairman Tom Bliley of the United States House of Representatives Committee on Commerce, or the First Worldwide Forum on Electronic Democracy sponsored by the European Internet Foundation, is critical to increasing our understanding and developing a legal framework for this new economy. Our law enforcement communities are showing us the way and have already extended their existing relationship into the cyberworld. Last February, with the cooperation of the United States Federal Trade Commission, the largest ever international law enforcement project to fight fraud on the Internet, 150 organizations in 28 countries, including seven US Federal agencies, 49 state and local consumer protection agencies, including 34 Attorneys General, and 39 Better Business Bureaus swept the Internet targeting phony get-rich-quick schemes. More recently, a member of the Federal Republic of Germany's law enforcement provided Virginia's Attorney General with information that led to the arrest of an online child pornographer based in Northern Virginia. These are positive results from a new era of cooperation.

  On behalf of the Commonwealth, I sincerely thank you for the opportunity to speak to you today. We must continue this dialogue on improving e-government and e-commerce via this and other venues. As they increasingly sample the capabilities of the Web, our mutual customers' expectations of adequate seamless service levels will inevitably and understandably increase. We must increase their confidence in the new economy and show them by continual improvement in the electronic government services that we collectively provide, that we can and will be responsive.

24 May 2000

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