E-BUSINESS: Public policy can drive or inhibit technological innovation, and governments with thoughtful public policy will win out economically and socially, says Ms Kathleen Kingscott

Shifting a government towards conducting its operations online is generally seen as a laudable step towards achieving the elusive information society.

But it also is a necessary move on behalf of a nation's economic health, argues Ms Kathleen Kingscott, because governments are, through their spending, a key part of a national economy. The US government, for example, is responsible for about 17 to 20 per cent of the money that flows into the US economy.

"It's important for governments, as anchor tenants in their own economy, to be able to transact with the businesses they wish to attract," she says.

In other words, if governments are not moving to conduct their business online, they won't lure international investment from companies that expect suppliers, customers and trading partners to handle queries, orders and invoices electronically.

Ms Kingscott, IBM's director of public affairs for innovation and networked society policy, offers her company as an example.

"We used to have about five million paper invoices a year and now we have almost zero."

She says IBM saves about 70 to 80 per cent of the cost of a transaction, be it with a customer or supplier, by moving it online. Companies want to be able to carry on business with governments in the same way, she says.

But governments are tradition-bound and slow-moving entities. While most corporations are, at the very least, in the phase of moving many of their internal operations online, or already conducting business externally through the internet, governments tend to be stuck at the phase of just having informational websites, says Ms Kingscott.

Increasingly, that won't cut it in the business world, where companies will look to countries "that are making the same sort of transition we're seeing in the e-business space. They're going to look to places where government is most innovative," she argues.

It's a somewhat startling view of e-government for those who think of its benefits as being considerably more mundane - being able to apply for a passport on the Web, or file taxes. But Ms Kingscott, who has worked in technology with IBM for 28 years, from the mainframe era to the PC, likes looking at a much bigger picture.

From a base in Washington, DC, her role within IBM is to talk to national governments and industry, and advise them on ways of constructively meshing their objectives. She was in Dublin this week to speak on an e-government discussion panel, part of a joint Irish-American government e-Logistics Forum, held at Farmleigh House.

Which countries, then, does she see as e-government leaders?

"Definitely, some places are better than others," she says. The US, Australia, Singapore and Canada, for example.

There are "clusters of innovation" within the US - Silicon Valley, of course, and cities such as Boston, Atlanta and Fairfax in Virginia.

She thinks Britain has made great efforts. And the Republic? This is a country that is "getting it right. Ireland is on the cusp. The next phase - which Ireland has been doing - is getting ready for an e-culture."

Those often nebulous 'e's were clearly in the ascendant, as they always are at such gatherings, but beneath the digital-age shorthand lie some serious challenges, she believes.

"Economic growth and well-being are on a technology driven march," she says.

Public policy can either drive or inhibit technological innovation within a society. Governments with thoughtful public policy will win out economically as well as socially, she believes.

But policy needs two crucial ingredients in order to be successful. The first is strong leadership from the very top: "committed leadership that demands results".

She credits successful US e-government initiatives to staunch support from Presidents Clinton and Bush. If e-government projects are only seen as experimental or voluntary, they will fall apart when the hard challenges inevitably come, she says.

Equally important is for governments to adopt open technological standards, because they allow for various computer systems to operate smoothly together.

If a proprietary technology is chosen, chances are it will become obsolete, along with an entire project.

The Republic, which has a technology-driven economy heavily based on trade and services, should also ensure it is part of European Union and international negotiations on areas such as the taxation of goods provided over the internet.

In general, she thinks the Irish Government has shown itself to be one "that is very thoughtful about how it approaches its relationships with business". But if Ms Kingscott is right, perspectives may now shift. Businesses in future will perhaps be eying up how thoughtful the Government is in its electronic relationships with its citizens.