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Digital Services Gain Ground After Post-COVID Online Surge

After the 2020 rush to get as much of government online as quickly as possible, 2021 saw sustained growth of digital services as more decision-makers realized its value for both staff and citizens.

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To understand what 2021 meant for digital services in government, one must first understand what happened in 2020. That year, the advent of the pandemic forced government agencies to digitize as many services as they could, often as fast as they could. While many of us quarantined and stayed home to be safe, technologists in government were working overtime, fighting to quickly digitize vital services to help the public sector maintain continuity while minimizing health risks to the individuals it is designed to serve.

The idea was, simply put, to keep folks out of government buildings by putting the things they go to the buildings for — from paying taxes to renewing licenses — online. And this, of course, has been the goal of government digitization for a long while. But 2020 supercharged it all out of necessity. Suddenly the work had new buy-in, support and focus that used to come at — to put it kindly — a more leisurely pace.

As COVID-19 infection rates fluctuated throughout 2021, governments had to look at all the work that had been done and make some decisions. Physical services were able to return, along with things like in-person city council meetings and court proceedings. Yet, many agencies had new digital products or proofs of concept for ways they could be done remotely.

While the exact nature of what was done varied by region, agency and jurisdiction, quite a few decision-makers in government had to pivot from emergency response mode to figuring out what it would all look like moving forward. Would they go back to business as it was before? Would they stay with all-digital products? Would they codify those projects and make them permanent? Would they embrace a hybrid model?

One area in which government technology saw major gains was in the often-tricky work of procurement. Digital procurement companies specifically reported significant growth in 2021. While procurement — government’s process of purchasing items or services, as well as hiring contractors — is one of those things that seems like it would already be online, that’s often not the case. During the pandemic, however, e-bidding platforms for state and local government reported major client gains, with the Seattle-based company DemandStar, for example, reporting 200 new clients in the first half of the year alone.

And that’s really a big part of the story for government digital services in 2021 — areas of business that seemed like they should already be online tended to migrate online, or at least see significant movement in that direction.

Another example of this is with digital driver’s licenses and other forms of identification. State governments ranging from Florida to Utah made progress with digital licensing programs in 2021, while even more ambitious goals materialized, among them parlaying these digital licenses into a unified form of digital identification. What this means for the average person is they could not only store their driver’s license on their phone, but they wouldn’t have to go through such an elaborate registration process when they changed addresses or moved across state lines. It’s a wonderful thing to consider.

These are just a few examples of the way digital services provided by government continued to evolve in 2021, riding the wave of momentum started out of necessity by the pandemic. There are of course many more. Many agencies deployed kiosks in which residents could pay taxes or other fines, several states made major progress developing online adoption or foster care portals, and the list goes on.

So while 2020 may be the year in which a major acceleration in digitizing the public sector began, 2021 is the year in which it was sustained and moved in the direction of permanence through policy and code changes, giving us all a glimpse of what may at last be possible should this work continue with this level of buy-in and support. At this stage of the pandemic, it seems likely that it will.

The GovTech Market
In many ways, 2021 felt like the realization of many years’ work in the marketplace of gov tech vendors. After numerous entrepreneurs took the plunge and created startups, after so many governments gave those companies chances with pilot projects, after investors sank millions of dollars into them, this year saw a flurry of merger and acquisition activity. As of this writing, Government Technology has marked nearly 30 of these deals this year, and many of the companies that have been stalwarts of the GovTech 100 list have now been bought out. That includes NIC, one of the oldest and most successful gov tech companies, which Tyler Technologies acquired for more than $2 billion, bringing together a giant of state government tech with a giant of local government tech. Other notable acquisitions include CivicPlus buying Municode, mdf commerce buying Periscope Holdings for $207 million and Rekor Systems acquiring Waycare for $61 million. Join us in our January issue, where we will analyze these market trends and unveil the GovTech 100 list for 2022. - Ben Miller
Associate editor for Government Technology magazine.