The electronic bureaucrat - Economist.com

Putting their services online should allow governments to serve their citizens much more effectively. But despite heavy spending, progress has been patchy, says Edward Lucas (interviewed here)

AT 6.15AM on a December morning the streets of central London are cold, dark and offer little for the omnipresent CCTV cameras to record. But outside the Indian High Commission 109 people are sleepily waiting for the visa section to open. David Robb and his friend are first in line, huddled in sleeping bags behind a windbreak since 3am, to ensure visas for a planned holiday in Goa. Nearly all his fellow-sufferers in the queue have booked their air tickets and sometimes their entire holiday on the internet, paying with a credit card. Those electronic signals move information almost at the speed of light—billions of times faster than the shuffling, shivering humans in the visa queue. “In this day and age? Bleeding disgusting,” is Mr Robb's pithy comment on the Indian visa system.

It is not just that the passport and its owner must be physically present. The £30 ($60) fee must be in cash; the visa form must be filled in by hand and authenticated with a signature and a photograph (a hard copy, not a digital file). The procedure has scarcely changed in 60 years. The 500 people waiting at 8.30am, when the visa office opens, should get their visas by noon, though on busy days stragglers may be told to collect it the next day. Applying by post is possible, but may take weeks.

Compare that with another queue forming in Grosvenor Square, a brisk 20-minute walk across London. Procedures at America's fortress-like embassy are even more stringent, requiring all visa applicants to present themselves in person, with no postal option. But here the procedure is backed up by intelligent use of electrons. Applications must be submitted online, accompanied by a non-refundable $131, paid electronically. In return, the applicant receives a confirmation e-mail, which includes a barcode with the information from the completed form. Printed out, it is also the entry ticket to the embassy, controlling outsiders' access to one of the main terrorist targets in London.

Inside, the barcode is scanned, putting the data onto the visa officer's computer. Fingerprints are digitally recorded. The visa itself, collected shortly afterwards, has banknote-style security features, plus a scanned picture of the applicant.

In some ways the differences are smaller than they seem. Under both systems, absurd questions are asked but the answers are never verified. India wants to know if you have relatives in Pakistan; America wants to know whether you were ever arrested for anything anywhere, and if so, why (your correspondent, detained several times by communist-era secret police, brazenly fibbed).

But in a few nutshells, visa services also illustrate some of the big issues about technology and government. First, processing power and good software can make government more user-friendly and sometimes also more efficient, but technology on its own cannot compensate for the mistakes of bureaucrats and politicians. Second, the state has to balance convenience against effectiveness, the outsider's time versus the taxpayer's money and the bureaucrat's effort. Technology may sharpen these problems or ease them, but it cannot eliminate them altogether.

Believers in technology's potential in public administration often speak of e-government, or of “transformation”. The practicalities are sometimes vague, but the big picture is clear: government not only puts its services online, but in doing so changes the way it works.

Most countries have got at least somewhere on this, chiefly in what might be called i-government: the provision of information. India's downloadable visa application form represents that stage. Progress is also being made on using the internet's potential for interaction. America's visa system goes some of the way by getting the applicant to key in the data.

The internet is also being used inside government to share data among departments. That is easier to do with non-citizens than with voters, who may be touchy about their privacy being invaded. The next stage will be to provide the whole service online. For visas, that would mean something printed out by the applicant, downloaded onto a smart card or even stored in a mobile phone (an example of “m-government”—same service, different delivery). At the same time, technology should also make it easier for politicians to connect with their voters (“e-democracy”).

George Markellos of PA Consulting, a British-based consultancy, says that government needs to start by making three big changes. First, it needs to personalise what it offers, rather like online shopping services which record customers' preferences, making their next visit easier. Second, it has to provide round-the-clock access. People want to deal with government not only in office hours, but also in the evenings and at weekends. And lastly, public services have to be as easy to use as anything the private sector offers. In the online world, government is competing for users' time and attention with beautifully designed sites that are fun to use. The government's offering, says Mr Markellos, “has to be massively attractive”.

Yet comparisons with the private sector get you only so far. Government rarely faces competition and public services seldom come at market prices. More often they are “free” or subsidised, and their use needs to be policed or rationed. The state provides its “customers” with defence, justice and roads, and usually some public services such as health care, education, pensions and transport, plus some support for the poor. But it is also the steward of scarce public resources and the preserver of public goods such as law and order. In keeping track of wrongdoers, actual and potential, being user-friendly is not crucial. New technology makes it easier to collect taxes but it does not make them any more welcome.

The state's role as a watchdog is something that the grumbling queues outside embassies have to bear in mind. Tough visa procedures undoubtedly deter businessmen and tourists from visiting, but the visa is the way that the state protects its citizens from undesirable outsiders. Similarly, issuing passports and driving licences is never going to be as easy as getting a loyalty card from a retailer.

This report will argue that technology can give politicians and officials a better idea of what the public wants and how to provide it, just as it has done in the private sector. But just as the private sector's adoption of new technology involved a number of pitfalls, some e-government ventures have been ill-starred. Citizens are right to be suspicious about technology that can make government all-encompassing, and they should demand a lot more of government as a monopoly provider of public services.

Technology on its own will not bring reform, but it can make changes easier, cheaper and more effective. The learning curve has not been nearly steep enough, but governments are getting better at buying and using computers and software. The benefits are mounting and the costs are coming down.

The benefits will be biggest in countries where officials and politicians are open to pressure and where the citizens are public-spirited to start with. E-government is no magic bullet, but it gives citizens and lobby groups more power to scrutinise government and highlight waste and dishonesty.

It's everywhere

Although hopes have been high and the investment has been huge, so far the results have mostly been disappointing. That reflects a big difficulty in e-government (and in writing about it): it touches on so many other things. What exactly is it that public organisations are trying to maximise, and how can it be measured? Ask the economists. What motivates officials and politicians to make government honest and competent? Bring in the political philosophers. And who decides on the highly contested trade-offs between privacy and security, efficiency and equity?

This report will explain that gloom, fear and optimism are all justified. It will look at the return on investment so far, the hoped-for gains and the neglected drawbacks of e-government. It will show how good leadership, openness and competition can bring spectacular gains, and how bad planning and political interference can make technology in government an expensive disaster. It will look at the dangers of government-run databanks and how to lessen them, and the way in which poor countries such as India may be able to leapfrog rich ones in their use of technology. It concludes by asking if e-democracy makes politics more participatory, or merely noisier. But it starts with an incontestable success: i-government.

Getting serious - The Economist

Computing: Virtual worlds are being put to serious real-world uses—and are starting to encounter some real-world problems

IT IS a typical example of the colonisation of a new frontier. A few intrepid explorers stake out some new, unexplored territory. Before long the first settlers move in and start to look for ways to make a quick buck. Their success attracts more settlers, and an unruly bonanza ensues; finally the policemen, lawyers and tax collectors show up. But the territory in question is not a new continent: it is the realm of cyberspace, where two developments suggest that virtual worlds are coming of age. The first is the emergence of commercial uses for virtual environments; the second is the advent of litigation and regulation.

Many of the serious uses of virtual worlds were on show at a conference held in September at Coventry University in England. Aptly, people could also take part in the conference by visiting an online re-creation of the university's Serious Games Institute, where they could chat with other participants and watch presentations. David Wortley, the institute's director, says half those attending did so this way. The focus of the conference was the application of computer-game technologies and virtual environments to real-world business problems.

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With the popularity of virtual worlds such as Second Life and games such as “World of Warcraft” and “Sims Online”, companies, academics, health-care providers and the military are evaluating virtual environments for use in training, management and collaboration. Superficially, such uses look a lot like playing a video game. “The thing that distinguishes them from games is the outcome,” says Mr Wortley. Rather than catering to virtual thrill-seekers, the aim is to find new ways for people to learn or work together.

Blitz Games, for example, the firm behind “Karaoke Revolution” and other games, has applied its technology in a rather more serious field: the development of a medical-triage simulator. The idea is to use it to train paramedics, doctors and firefighters in prioritising care immediately after a disaster. “We are simulating the scene of an explosion on a high street,” says Mary Matthews of Blitz's TruSim division. Players observe the virtual patients and gauge their respiration, pallor, bleeding and level of distress; then they use this information to determine which of them is in greatest need, all against the clock. Each player's performance is scored according to an industry-recognised training protocol. Real-life exercises could achieve the same objective, but the simulated environment cuts costs and improves access.

The same technology can also be used to simulate the more mundane environment of an office. PIXELearning, a British company based in Coventry, has developed a simulator for a big international accounting firm in order to train interns who are fresh out of university. The role-playing simulator lets them develop their skills by interacting, for example, with a difficult client who is being aggressive on pricing. This is invaluable, says Kevin Corti, PIXELearning's boss, because it allows them to make mistakes before being unleashed on a client. Similarly, a big American bank is using PIXELearning's simulator for “diversity and inclusion” training.

Cisco, an American network-equipment giant, is using virtual worlds to improve internal collaboration, says Christian Renaud, the company's “chief architect of networked virtual environments”. Such environments are used to host meetings and to create virtual workspaces for employees who may be part of the same team but spread out over half a dozen countries. The hope is that the use of virtual worlds, rather than more structured forms of communication such as e-mail or conference calls, will make serendipitous meetings more likely and interpersonal networking easier. Holding business meetings in a simulated environment is not quite as glamorous as the depictions of virtual reality found in science fiction. But it makes a change from the usual drab meeting rooms.

Here comes trouble

It is not just office workers who are taking their first steps into virtual worlds. So too are lawyers, as disputes in such environments spill over into real-world lawsuits. Such disputes often concern the trade in virtual goods and services, which are bought and sold for real money. In some countries lawsuits over virtual goods are already common. Unggi Yoon, a judge in the Suwon District Court in South Korea, estimates that Korean courts have heard nearly 300 cases of fraud and more than 60 relating to hacking in virtual game-worlds. Similar fights have broken out in American courts, too. So much for escapism. “I have heard from other players that the element of fun in the game has been diminished by thinking of all these legal issues,” says Sean Kane, a virtual-worlds specialist at Drakeford & Kane, a law firm in New York.

Real-world trade in virtual items is allowed in virtual worlds that are intended to simulate reality, such as Second Life and Entropia Universe. And it has been going on for years among players of “massively multiplayer online” role-playing games such as “World of Warcraft”, “EVE Online” and “Lineage II”, even though such trading is banned in many game worlds, since it upsets the competitive balance if some players buy weapons or armour rather than earning them in the game. “We don't allow real-money trades in our games because we think it creates an unfair advantage to those who are trying to play the game as it was created to be played,” says a spokesman for NCsoft, the maker of “Lineage II”.

In practice, however, preventing trade in virtual items is difficult, and several dedicated trading platforms have emerged to enable players to buy and sell in-game items. One of the biggest, IGE, based in Hong Kong, is now being sued by a “World of Warcraft” player who claims it has spoiled his online fun. Mr Kane says the value of virtual items traded hit $1 billion in 2006. Dan Kelly, the boss of Sparter, a trading platform based in Menlo Park, California, says that figure will double this year.

With such large sums at stake, it is not surprising that other unpleasant aspects of real life are starting to appear in virtual worlds too. In May two players were banned from Second Life for depicting sexual activity between an adult and a child. Eros, a company that sells sex-related add-ons in Second Life, filed a lawsuit in July against an inhabitant of the virtual world for selling unauthorised copies of its SexGen bed, which facilitates sex between in-game characters. “When you have a community that is an extension of Newark, eventually you will have the ills of Newark going on,” says Edward Castronova, a virtual-worlds expert at Indiana University. Some people think the very nature of virtual worlds can inspire bad behaviour. Such environments provide “anonymity along with a lack of social recourse,” notes Gus Tai, a venture capitalist at Trinity Ventures in California's Silicon Valley.

Second Life
Just like the real world in some respects—but not others

Bad behaviour is not the only problem. The growing value of commerce in virtual worlds has provoked interest from the taxman, too. Governments in America, Britain and Australia have all said they are considering a new tax on real-world profits from virtual trade. Mr Castronova is aghast. “Monopoly is not a very fun game if I have to pay a tax every time I buy Boardwalk,” he says. South Korea actually imposed such a tax in July.

One way to deal with unwanted activity, in virtual worlds as in the real one, is to decriminalise and regulate it, rather than trying to outlaw it altogether. That is the approach taken by Sony Online Entertainment (SOE), the company that runs “EverQuest II”, a fantasy world of dragons and busty blondes. It found that some 30-50% of customer-service calls concerned scams relating to real-world trade in virtual items. So it divided the game world in two and made trading legal in one part but not the other; players can choose which to play in. As a result, says Greg Short of SOE, the share of calls relating to scams is now less than 10%.

Despite these problems, things are not really so bad, argues Dan Hunter of New York Law School, who is writing a book about the social significance of virtual worlds. “If you look at the numbers, there are so few events of fraud and problematic activity,” he says. Robin Harper of Linden Lab, the firm behind Second Life, agrees. “Social networks, online auctions, classifieds and even the internet itself have all encountered issues of appropriate content, taxation and the use of intellectual property,” she says. “If anything, we are proud that against this backdrop, there are relatively few disputes.”

As with any novel technology, virtual worlds bring new opportunities and new problems. The embrace of virtual worlds by companies for mundane uses on the one hand, and by scam artists to get up to no good on the other, points not to the shortcomings of such environments—but to their increasing maturity and potential. “I don't think this is the end to fun and games,” says Mr Kane. “I think it's only the beginning.”