Chicken Little has flapped her way into the 21st century, and this updated chicken is clucking a new message: "Budgets are crashing, and I must tell the governor!" She is echoing headlines common to the first few months of the year, which foretold an end to IT spending and perhaps digital government itself.

The truth about government's continued investment in technology bears little resemblance to Ms. Little's alarm. Yes, state and local governments are reprioritizing spending to address shortfalls, which have hit the majority of states. When a $50 billion multistate deficit is bandied about, it is important to remember that California's estimated

$35 billion shortfall accounts for almost 70 percent of the total.

Even in periods of fiscal pain, government remains one of the healthiest sectors of the nation's economy. Consider that while approximately 900 dot-coms failed since technology's heyday in 2000, the stability of this nation's federated system of government is one of its hallmarks.

As further proof that "the sky is not falling," the Center for Digital Government logged 1,117 RFPs between Jan. 1, 2003, and Jan. 27, 2003. Also, all states rank in the Fortune 500, with 17 making the Fortune 100.

That said, governments are looking for ways to maximize their IT investments. Applications and services that generate revenues or produce measurable return on investment will be welcome over the next 18 months as public officials try to turn the economic ship around. In addition, government appreciates applications that can serve multiple functions and interface with existing systems.

Shifting priorities will include solutions that create efficiencies. For example, some states planned consolidation projects to eliminate redundancy in both technologies and expenditures. Over the past few months, some states have conducted assessments that produced startling results -- Virginia discovered it owned 2,997 servers. North Carolina, Michigan and Pennsylvania also recognized the efficacy of consolidation.

Standardization also becomes a tool in tough times. New York launched an effort to create standards to underpin its dispersed government model. Having multiple, independent agencies making IT decisions can lead to serious problems with interoperability and redundancy. Implementing standards is a way to maintain agency identity while building a common technology platform that saves time, labor and money.

Of course, a major motivator for government IT investment is the homeland security effort. Solutions that not only run daily operations, but can also be called to action in an emergency provide the kind of double-duty that will help governments under pressure produce more with less. This touches many sectors, such as law enforcement, health, justice, transportation, planning, communications and emergency management.

In reality, we are in the midst of a scenario where the glass is either half empty or half full. Yes, state and local governments have tremendous fiscal challenges. No, they are not lowering their flags and moving off shore. There is a great deal of wisdom -- stretching back thousands of years -- that suggests we operate more creatively and keenly in a crisis. It forces us to disregard what, under normal circumstances, might have been limits or barriers. Governors, CIOs and technology managers are looking for new ideas and options that will help them through the current crisis, positioning them to lead digital government into the next generation.

Industry, with its speed of innovation and human talent, is ideally suited to support government as a partner in tough times. Technology leaders are inviting the private sector to step forward during this impermanent state of deficit and prove what Horace -- the poet of Rome's Golden Age -- said more than 2,000 years ago; "Adversity has the effect of eliciting talents, which in prosperous circumstances would have lain dormant."

We live in a time brimming with opportunity, and may therefore drink from glasses half-filled with the elixir of innovation.

Darby Patterson  |  Editor in Chief