I had a great chance this week to run a completely unscripted interview with Bill Gates on stage for about 45 minutes at Microsoft's Government Leaders Forum - Americas.

Reg Alcock, President of the Treasury Board of Canada and HPG member, was also there, giving a keynote speech along with the Governor of Kentucky and the Governor of Puerto Rico. Reg did the HPG proud and had the best-received keynote. He was the only one to talk directly rather than read a speech.

The video of the Gates interview is linked below and runs a tad over an hour. Again, the questions were made up on the fly, so he was answering spontaneously. Here's an approximate map of the timing of what evolved:

Minutes
0:00 Gates speech
17:30 Your views are optimistic. What's the down side?
21:20 Some paying less attention to e-gov than before. How keep properly visible?
23:30 You say you learn from complaints. What biggest gov complaints to Microsoft?
26:00 What are Microsoft complaints about gov? What should governments do better?
28:00 "Partnership" a widely used, ambiguous word. Can we do real risk-sharing?
31:10 From audience: What is your 20-year view?
34:50 From audience: what 'next big thing' and what Microsoft doing about spyware and I.E. problems?
40:30 Has government put nearly enough redundancy into systems for adequate security?
42:30 Will security patches erode openness in a dangerous way?
45:00 From audience: Latin America is poor. Why not use free software like Linux?
48:50 From audience: Will you put Blackberry capability into Pocket PC PDA's?
50:45 From audience: What Microsoft doing to expand educational accessibility?
54:00 From audience: Shouldn't Microsoft work harder to stop piracy in developing countries?
58:10 What can foundations and non-profits do to create more 'social venture capital'?
1:03:30 Conclusion

The link below brings you first to the text of the Gates speech. The link to the video is in a box near the top to the right, where you select a download speed appropriate for your system.

Here it is: http://www.microsoft.com/billgates/speeches/2005/04-27GLFAmericas.asp

Gates is clearly an important leader of our community. Where's he right? Where's he wrong?

Cesar Brea and I had breakfast a couple of weeks ago with our SAP friends Peg Culotta and Russ Lefevre. Their folks have been thinking about how investments get prioritized in government, and particularly about how politics and what economists call 'externalities' get factored into the process. Under a concept they've labeled 'Public ROI', they've been trying to understand how public-sector leaders could make a better case for technology investments.

With our research at Harvard focused heavily on the 'politics of cross-boundary initiatives,' SAP's ideas seemed particularly interesting.

Working these ideas over a few eggs, Cesar suggested a simple '3x5' card calculus to fuel the debate. The goal is a framework to better evaluate different opportunities against each other (snapshot view), and/or to better track and manage an initiative over time.

On Cesar's card, 'Public ROI' = R x S x P, where

R = Rational ROI -- more or less the traditional business case based on direct, measurable benefits and costs . In most settings, this is the analysis that justifies the budget you need. If an agency wants to do something badly enough to self-fund it, this analysis may stay internal. If new money is required, however, this is typically sent forward as a proposal for budget negotiation.

S = Social ROI -- more or less the indirect and difficult-to-measure 'public good' benefits and costs. These may be benefits and costs to citizens or to institutions in the value chain other than the institution proposing the project. They often include uncertain costs such as the reallocation of already budgeted staff (which usually dwarfs the new money budget request) and/or benefits captured not as cost reductions, but rather in the form of improved service or distributional equity (e.g., government's role in providing a safety net for have-nots). In Cesar's model, Social ROI would be expressed as a 'multiplier' factor. In a world of serious external effects, Social ROI might range from .5 - 2, with the precise number based on a descriptive listing of effects that are then subjectively quantified. While simple and rough, including Social ROI would be better than excluding it, as is often the de facto situation today.

P = Political ROI -- more or less the motivational feasibility of the project, or the benefits and costs for interested parties (champions, opponents, decision-makers). This could be expressed as another adjustment factor, with values ranging from 0.5-1.5. It would be based on a subjective evaluation of elements such as the confusion and conflict to be overcome during implementation, and the timing, sponsorship, and concentration/diffusion of benefits and costs among relevant parties. For example, concentrated benefits with diffused costs would increase motivational feasibility, while concentrated costs and diffused benefits would do the opposite. Timing is another element, with the Political ROI higher for a project that can show results by the next election and lower once lame duck territory has been reached.

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We'd be interested in what you think about this Public ROI framework and its 'multipliers' -- do they work for you? Have you seen or used a better approach for prioritizing investments? If Public ROI, which is intended to improve analysis, itself needs improving, what does it need? Who has the best methodology out there for analyzing and prioritizing IT-related investments?

What, in any case, is YOUR methodology, and how well does it fit for 'cross-boundary' investments?

The ideas below are from Neal Pierce (of the Washington Post Writer's Group and formerly on the Board of the KSG's Innovations program) with contributions by Angus King (former Maine governor and the initiator, among other things, of Maine's laptop computer program for every 7th grader - but that's another story)

What about "bottom up" cross-boundary work, with integration across local jurisdictions? 1) To what degree is this an issue for you? 2) How well or poorly are you handling it? 3) What exactly are you doing?

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By Neal Peirce

AUGUSTA, Maine -- Call it, if you will, the American way: thousands of tiny little governments, each with its own council, each in command of its own tax collector, police and fire chiefs, emergency call center, road crews, park and library staffs -- and more.

In a simpler age, amateur local government worked well enough. Neighbors helped neighbors, services were personal and often volunteer-manned, and the costs weren’t high.

Even today, many people leave urban areas in search of small towns where they expect the old, informal culture -- and low costs.

But the system has veered off the tracks, with escalating costs and rising frustrations. And what’s the top culprit? Sprawl, says Angus King, Maine’s immediate past governor. King’s planning director, Evan Richert, found that when a small town in the path of suburbanization passes the 3,500-person mark, citizens start demanding a town manager, more police and professionalized services -- and budgets start to soar.

Though they’ve added jobs since 1980, Maine’s cities and regional centers have simultaneously lost residents to outlying towns within commuting reach. Smaller town populations -- and duplicated government services -- have risen fast. King’s economic development director drew a 20-mile circle around Augusta and found 91 fire trucks serving 95,000 people. Not one of the monster trucks -- priced from $100,000-$500,000 and up -- was jointly owned.

Hit by rising costs, the towns end up competing furiously for property taxes and development. And with suburban spread, Maine has spent close to $750 million on new schools since 1980, even though the state’s total student enrollment has actually declined.

"We pay due respect to local control but it comes at a high cost," says King. "We have 205,000 school kids in 186 school districts, each with its own superintendent, curriculum, purchasing office -- about one superintendent for each 1,200 kids."

Result: the competing values of fiercely guarded home rule and Yankee love of frugal government are rubbing together like tectonic plates -- in "full collision," says John Baldacci, Maine’s present governor. A spirited tax revolt is underway and the state has started to impose caps on local spending -- which it subsidizes through a major share of the state sales tax.

But Maine is now going a step further with a "regionalization" program of cash incentives for localities that agree to curb local tax rates through systems of shared services between towns or school districts.

Maine’s current high government costs just can’t be sustained, says Charles Colgan, an economist at the University of Southern Maine: "It’s going to be collaborate or collapse."

Indeed, the test may be whether the small 18th-century town government form so popular in New England and other parts of the Northeast and Midwest, indeed reflected in smaller town and county governments nationwide, can survive at all without dramatic increases in joint service districts and shared tax bases.

But without state goading, it won’t happen fast. State governments need to pierce the veil of each town or school district’s bookkeeping and insist: "We need to know how state grants are being spent. Understandable and comparable numbers -- real transparency -- that’s our price for continued support."

The good news is that standard accounting programs, rapid advances in digitized data processing and Internet dissemination make data comparison infinitely easier than it used to be. It makes political sense, as Colgan suggests, to give local governments a major role in devising details of the new transparency-- different towns define services differently, and they’d know best how to harmonize systems.

But once that’s done, we can expect a sea change in accessibility. Citizens, the media, governors and legislators will be able to make accurate comparisons of performance for individual town and school districts and start pressing for radically increased collaboration and budget economies.

In Maine last week, I did discover that the twinned cities of Lewiston and Auburn, facing each other across the Androscoggin River, have hit on close collaboration as a way to rebuild economies devastated by the loss of textile and shoe factories.

Old downtown mill buildings are being handsomely restored, arts, culture and health care are playing a big role, and new industries have been coming (along with a massive Wal-Mart distribution center).

But what’s most amazing is how the citizen leaders of these historic rival cities hurry to tell visitors of their new civic government collaboration. Twenty-three intercity agreements have been negotiated, encompassing multiple "joints" - the airport, economic growth council, 911 center, recycling, purchasing and more.

Now the cities are looking at merger of every other function, from police to public works. "Nothing’s sacred, everything’s being looked at," Auburn Mayor Normand Guay told me. And who will he be negotiating with? Lionel Guay, mayor of Lewiston -- his brother!

From historically icy independence to a new fraternalism? If it can start in turf-protective New England towns, then why not everywhere?

Teaching an e-Gov course in the tallest building in Europe, North Africa, and the Middle East, puts you in the Emirates Towers of Dubai.

You’re near the Burj El Arab, the sail-shaped hotel where you may have seen Tiger Woods hitting balls from a helipad about 300 meters up. You're virtually next door to the construction of the Burj Dubai that promises to be the tallest building in the world.

For five days I taught "Harvard-style" cases and facilitated discussions along with Viktor Mayer-Schoenberger of the Kennedy School, and Phil Bertolini, CIO and Deputy County Executive of Oakland County, Michigan. We were working with 45 participants from the United Arab Emirates, Saudi Arabia, Jordan, Palestine, Iraq, Syria, and elsewhere in the Gulf region.

What was similar to and/or different from what we see in Cambridge?

The differences - typical for travel - grabbed for attention. People complained that 75 degrees felt "cold." Camels have a remarkably long stride. I actually made it down a sand dune safely on a snow board (it was getting back up that nearly killed me…).

Other and more important differences undoubtedly went unnoticed. Not speaking Arabic, and not having much private one-on-one time, I don't have a good picture of the "unpublic" views often needed to uncover reality.

Still, I was surprised and impressed more by the similarities than the differences.

The culture supports vigorous discussion. It wasn't hard to engage them, and the case study method worked (it would be better, however, if more participants in the future would carefully read the cases…).

They are making serious investments in e-Gov. Dubai in particular compares itself to Singapore.

When they decide to move, they have the financial and political capacity to turn ideas into action. While so far they have focused more on service access and less on service reform ("online, not in line" rather than cost reduction or institutional redesign), that is very much what we see in Cambridge as well.

Their priorities for the future also look a great deal like ours. In the course, we split them into small groups to develop some priorities for the region. Here's what they came up with:

1. A well-defined approach for developing launch strategies for new projects. Successful projects need a launch, with legitimacy from senior-level sponsorship. The Dubai group felt that launches would go better if guided by a simple yet structured analysis of requirements, changes in work assignments, risks, and especially the management of expectations. Leaders must understand that success requires downstream engagement as well as the initial public announcement.
2. A single sign-on for e-Gov (and some commercial) services. Citizens should be able to access services – e-Government and some e-commerce – through a single sign-on, perhaps extending throughout the region and eventually globally. This would increase customer trust that services are secure as well as convenient and efficient. It requires a plan and certification authority for the region, but they cautioned against waiting on perfect agreement before getting started.
3. A personal medical record (PMR). The value proposition is for anytime, anywhere, secure medical information to improve care and reduce mistakes. This is proposed as an optional service, chosen by individuals and both delivered and paid for by health care institutions via smart cards. Implementation will require public/private collaboration. The vision is for industry standards, not just records for individual institutions.
4. A region-wide 'digital divide' educational campaign with visible high-level leadership. The group felt that the right scale for public communication and marketing on this issue is the region, not the individual countries. Faster penetration of technology would benefit all. The idea is for governments to lead, with visible private support. The group proposed a committee to carry the messages and provide leadership.
5. Procedures to encourage ownership and a more realistic prioritization of requested e-Government services. Governments in the region need to make sure that requested e-services are priorities in terms of ownership and the management of interdependencies among services and across departments. Huge initial lists can shrink once issues of ownership and sequencing come up.
6. An e-Gov think tank for the region. Develop a Forum for knowledge sharing and disseminating best practices for the region. Local governments and universities must be engaged, with outside institutions as relevant. Work would be focused through annual events augmented by ongoing projects. The Malaysian model is relevant here -- and the project will require very senior government leadership.

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Many thanks to Viktor and Phil for making this course happen. Thanks also for great support received from Nabil Ali Al Yousuf and his staff at the Dubai School of Government.

The "big picture" I left with: While the culture and politics of the Gulf region are clearly different than what we're dealing with in the U.S., the technology and leadership challenges look remarkably similar. There's a lot to be learned in diffusing innovations and good practice in both directions.

Does it look like that to you?

Here's more if you're interested: http://www.ameinfo.com/news/Detailed/57253.html