• by Masha Geller , July 28, 2003

When it comes to the Internet, the private sector, having survived the dot-com bust of the late nineties, is on its way to effectively using the medium to its full potential. But what about the public sector? In its latest report, Government Online, eMarketer pulls together estimates from leading research firms and international government agencies and according to Brown University's Taubman Center for Public Policy, just 12% of the nearly 1,200 websites surveyed by around the world offer fully executable services online.

"As most people in the private sector are well aware, technology alone does not solve a large organization's problems," says eMarketer Senior Analyst Dr. Noah Elkin. "However, the process of implementing new technology does open up the door to significant institutional change, which may go a long way toward making government agencies much more efficient."

The report shows that among world regions, government websites in North America (which include Canada, Mexico and the US) offer the highest percentage of fully executable online services. By far the most frequently offered service was the ability to order publications.

According to "Government Online," a 31-country study of nearly 29,000 people from the international market research firm Taylor Nelson Sofres, 30% of the adult population around the world now accesses some aspect of government on the Internet. eMarketer says that although this 30% figure is significant, the service adoption curve has displayed little variation; information searches and form downloads show fairly widespread and growing (albeit moderately) usage, while the percentage of users providing personal information to their governments over the Internet and those paying for government services online have remained largely static.

The percentage of Internet users engaged in transactions with public administrations is equal to the share making purchases online, indicating that Internet users who are comfortable with buying goods over the Internet are likely to be willing to pay their parking tickets online as well. Although the perceived safety of providing governments with personal information increased from 2001 to 2002, people of both genders and all ages around the world continue to harbor serious reservations about interacting with their governments over the Internet.

According to the report, government IT budgets are expected to increase steadily over the next three years, with IT services absorbing the vast majority of spending. In terms of compound annual growth rates (CAGR) from 2000 to 2005, software will see the steepest growth, at 15.0%, followed by services at 13.0%, networking equipment at 9.3% and hardware at 5.3%, according to Gartner research.

According to Accenture, improving customer satisfaction with online government services is the leading factor driving e-government initiatives around the world, closely followed by customer demands for new or better services. Moreover, 92% of the government executives in the Accenture study rate superior service as a business imperative for online government initiatives. "Clearly, the techniques and strategies of the private sector have begun to rub off on the public sector," Elkin says.