At the crossroads of Silicon Valley, Sacramento

At the crossroads of Silicon Valley, Sacramento

California is pursuing an IT Strategic Plan, the official state blueprint for improving citizen and internal services through technology investments. Though launched with good intentions, the plan could benefit from some revision and more input from Silicon Valley.

Historically, government officials have struggled to effectively manage the state’s massive, decentralized $3 billion IT network, exposing taxpayer investments to potential abuse. In recent years, Gov. Arnold Schwarzenegger has pursued a starkly different direction, using the plan as a guiding document to streamline operations and improve efficiencies and accountability across dozens of state agencies.

Whether this effort will prove fruitful is unknown. According to “California Disconnect: A Critical Assessment of California’s IT Strategic Plan,” a report released last month by the Pacific Research Institute, more than $471 million in new high-tech capital projects has already been rubber-stamped under the plan with few safeguards for cost controls.

The plan makes scant mention of ironclad budget and procurement reforms that, if properly implemented, can save millions of taxpayer dollars. “California Disconnect” identifies a few cost savings, but these were outweighed by higher capital spending and the threat that political factors will override procurement decisions, reducing job creation and state productivity.

Currently, public employee unions are fighting in Sacramento to close the door on outsourcing IT services, a process that previous studies indicate will save taxpayer dollars, improve core business functions and free agencies from the unnecessary risk of continuous technology investments.

Last fall, state energy officials ignored protests from consumer and business groups and passed new “green” restrictions on electricity usage, which would effectively phase out new purchases of large plasma-screen televisions by 2011, costing California approximately $50 million annually in lost tax revenue and more than 4,600 jobs. And in February, San Francisco’s municipal government adopted a new policy mandating that city agencies consider politically popular open-source software for all software purchases in excess of $100,000.

Procurement policies that prohibit open competition or establish software preferences are bad public policy, arbitrarily forcing product uniformity and vendor lock-in, making agencies dependent on a sole or reduced number of providers of IT products and services.

Legislators should also remember that Sacramento, as one of the largest purchasers of IT products and services in the country, has a significant impact on the pace of innovation and job opportunities in Silicon Valley, which lately has been abysmal. Fostering job creation and innovation in Silicon Valley today requires fundamentally rethinking how the state engages this vital economic sector and meets the needs of a growing populace.

State lawmakers are now scrambling to close a budget gap of around $20 billion, and workers in the San Jose metropolitan area are suffering under a 12.3 percent unemployment rate. Therefore, it’s critical that the state structure future procurement decisions on sound public policy, and maintain the goal of providing the best value for taxpayers.

High-tech innovation is a generator of prosperity in California, but when government officials pick winners and losers in the IT marketplace, high-tech innovation will lose every time. High-tech entrepreneurs should be welcome mentors at the state capital. Working together, Silicon Valley firms and California officials can build a public network that’s cutting edge, accountable to taxpayers and sustainable for the benefit of future generations.

Vince Vasquez is a public policy analyst formerly with the Pacific Research Institute and co-author of “California Disconnect: A Critical Assessment of California’s IT Strategic Plan.”

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.