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Little Tech Can Have Huge Impact for State and Local Govt

Small technology companies focused on specific sectors or niche markets have more to offer than meets the eye. They can help solve problems that might be too narrow for big tech to take on.

Digital government
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State and local government is going digital. The tense is important. Digitization has been a work in progress for three decades, but it is not finished. Some changes have been incremental, some have been major pivots — and many fall in between. It is worth saying out loud that the default means of contact and transactions between residents and their government is no longer a front counter, a call center or the postal service. The default is digital.

Turning the ship of state is a long process and a heavy lift for all involved. Elected and appointed officials deserve credit for taking a chance on a new way of doing government that required purposefully shifting from atoms to bits, from paper to screens. The public-sector IT community came of age during this time, with many incumbents leading with their chins in a risk-averse environment. Many were elevated to — or, at least, rebranded as — CIOs, and have since surrounded themselves with chiefs of technology, innovation, data, security, privacy and even citizen experience.

They stood on the shoulders of large integrator firms like IBM and KPMG that built and maintained the big systems that were uniquely able to handle the workload of administering large government programs. With the migration to cloud and hybrid environments, big tech players like Google and AWS brought their compute capacity to doing the public’s business.

As governments turned to face the public with the advent of digital government, grassroots collaborators, incubators and accelerators rallied in the name of civic tech to put the “good” in public good. It was and remains a virtuous circle.

But there are gaps between what big tech could deliver, often selling products and services into government that had been developed originally for the private sector, and civic tech that addressed problems unique to government but were often unable to scale.

Enter little tech, what venture capitalist and former software engineer Marc Andreessen coined as the category name for startups. These are the smaller, more nimble technology companies that are highly specialized and often focused on specific sectors, emerging technologies, or niche markets, including serving state and local governments.

Our take on little tech is the GovTech 100, Government Technology’s annual showcase of startups that are making significant contributions to modernizing government operations, enhancing public services, and promoting digital transformation. The 10th annual survey of government’s little tech is due to be released in January. Among those hundreds are companies that have grown enormously in the government space. The largest of them, Tyler Technologies, with a market capitalization of $25.3 billion as of early October, has the resources to scale solutions but remains a fraction of the size of big tech juggernauts.

What difference does little tech make? These companies come alongside public agencies that want to do it for themselves but recognize they cannot do it by themselves. The problems to be solved may appear too small to be of interest to big tech but are perhaps more than civic tech can take on.

Little tech responded to the unique needs of government that otherwise went unmet. The deployment of a platform for secure transactions between businesses and government was an early example. In the years since, little tech has developed solutions for everything from archiving social media posts in ways that ensured compliance with public records laws to managing the public purse, court cases, public meetings and legislative processes. Little tech has also come through with purpose-built solutions for municipal permitting, licensing, inspections and code enforcement. Their services help government make documents and processes more transparent and accessible to the public. Their citizen-facing apps allow public agencies to collect pothole reports and other public works requests and act on them through an integrated workflow.

The midway point of the third decade of the 21st century presents an unparalleled opportunity to deliver on the original promise of digital government. Government is not like Amazon in that using it is not a discretionary consumer choice. Government is ultimately coercive in that it requires residents and businesses to comply with myriad regulations and reporting requirements. If government requires something, it has a duty to make compliance as easy or light to the touch as possible. With a full bench of players from little, civic and big tech, government is without excuse for making this any harder than it has to be.

This story originally appeared in the November/December 2024 issue of Government Technology magazine. Click here to view the full digital edition online.
Paul W. Taylor is the Senior Editor of e.Republic Editorial and of its flagship titles - Government Technology and Governing.