Public Entrepreneurship Turns IT Resources Into Revenue
- By Michael Silverstein
- Jan 31, 1997
All levels of American government are in the throes of being "reinvented." This complex and frequently unnerving phenomenon encompasses changes as diverse as privatization, the creation of public/private partnerships to deliver services and maintain infrastructure, and a far stronger emphasis on empowering-rather than servicing-local communities.
One of the more fascinating aspects of the reinvention process is "public entrepreneurship," or PE. While many contemporary modes of government operation have a distinctly entrepreneurial edge, PE is most often applied to activities that bring new dollars into general or departmental coffers by using publicly owned assets in ways not associated with their primary functions. Advertising in transportation systems is among the best known forms of PE. Other common forms include charges to operate food and amusement concessions in public parks, licensing fees paid by private companies to use government logos and space rentals for private functions in government facilities.
Do comparable PE opportunities exist for state and local government information technology managers? Certainly. Local government IT entrepreneurs who can visualize a use others might have for data they have generated, and who can appropriately package and market this data, are increasingly contributing to the bottom lines of their own departments and the general funds of their jurisdictions.
Los Angeles County-the nation's largest, and a government that has experienced some serious financial difficulties in recent years-illustrates how public entrepreneurship with an IT twist can be used to bring in new revenue.
In early 1995, the county began selling computer software it had developed for its food stamp verification program to other local governments in California. Another software package that aims to prevent welfare fraud by checking the fingerprints of recipients is generating more than $40,000 a month in royalties for the county's Public Social Services Department. In late 1995, the county also announced plans to sell electronic data produced by its court system to local law firms, with actual marketing handled by a private company. The county's share of revenue from this arrangement is projected at $1.2 million to $1.8 million annually.
How can IT managers and planners across the country tap their own local PE potential? The first step often is to conduct a PE audit. Just as management audits have become a widely accepted tool to help public officials better exploit their administrative resources, PE audits are an effective way to locate and evaluate data and technology assets created in-house that might have wide commercial appeal.
A typical PE audit seeks to:
* Identify and characterize categories of data and other computer-based technology that a jurisdiction or department has brought into being.
* Single out unique or exceptional items in this mix for which an outside market-another government entity or outside parties-might exist.
* Assess whether this market can best be tapped with in-house resources and personnel or in partnership with an outside party.
After a PE audit has pinpointed opportunities, the next step is to weigh these against possible problems. Would new PE projects represent unfair competition with private product or service providers? Does the projected cost involved seem excessive for the revenue likely to be generated? Would a large or politically powerful element in the community find a given project unsuitable?
Ultimately, what reinventing government means is that old boundary lines between the respective roles and responsibilities of the public and private sectors are vanishing. Within this context, it is vital for local officials-including IT managers-to cultivate skills that allow them to squeeze every dollar possible from the assets they bring into being and administer. It is equally important for these managers to do this in ways that lessen the need for higher taxes while enriching the marketplace with appealing and useful publicly created goods and services.
Michael Silverstein is the author of The Public Entrepreneurship Manual (How Local Governments Generate Billions of Dollars Annually Through Enterprising Use of Publicly-Owned Assets), Diane Publishing, libra.wcupa.edu:70/1/diane.