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Lost in Cyberspace

David Kern

It was to have been the day when Minnesota finally unveiled its strategy for becoming a hub for the nation's booming high-tech industry. Members of the state Senate's Ad Hoc Committee on Information Technology were gathered at the Capitol to hear JoAnn Hanson, the new director of the state's Office of Technology, present the 2-year-old agency's long-awaited master plan--a legally required road map, three months overdue, for how the office would guide state info-tech policy. It didn't happen. Before writing such a plan, Hanson told the senators, her office must define its "stakeholders" and collect their input. "It's necessary to decide where we are now so we can decide where we need to be strategically," she said. "A master plan is a fairly momentous undertaking. It's something I think is going to take some time."

The senators were baffled. The office had already spent $8 million and yet what Hanson was proposing sounded as heady as an environmental-impact study for swampland development.

"I think this is unacceptable," said Sen. Larry Pogemiller, DFL-Minneapolis. "It seems to me that we have a plan to do a plan. Why does that take two years? This is crazy. What have we done in two years?"

Pogemiller's frustration is understandable. There's more riding on the master plan than a bureaucracy's proposal for running itself, more even than its plan for spending its annual $4 million budget. What's at stake, lawmakers and local high-tech business owners agree, is Minnesota's chance to reclaim the high-tech real estate it lost when mainframe-computer giants like Control Data and Univac left.

For the state to own a share of the world's burgeoning e-commerce industry could reinvent Minnesota as an international trade hub, at least according to the sunniest scenarios. That could mean high-paying jobs, maybe lots of them. It could resuscitate the state's flagging rural economy. It could make Minnesota a primary source of well-educated computer programmers and engineers, allowing Bill Gates and Co. to quit looking overseas for talent.

To be the conduit for that change is the one of the primary tasks given to the Office of Technology by its legacy-minded creator, Gov. Arne Carlson, when he launched it in 1996. The office, he wrote in a letter featured on OT's Web site, would be Minnesota's "policy navigator to ensure that our state will thrive in the age of technology and prosper in the global economy of the 21st century." Instead OT's vision, various stories put it, has been replaced with a bureaucracy; the missionaries have been supplanted by regulators.

If you believe people who were once on the inside, OT's early days were a kind of cyberspace Camelot. Less than a year ago, their story goes, OT was a marvel, led by two dozen of Minnesota's most technologically visionary minds. These were young, smart, idealistic "Silicon Prairie" people, eager to answer the governor's challenge to position Minnesota as a world leader for the digital age.

"We treated it as an adventure," says Joanne Johnson, who went back to her job as an aide to Eighth District U.S. Rep. Collin Peterson after a brief stop as head of the OT's Internet Center. "If you love this stuff, you really, really love this stuff."

With Carlson's instigation, and under the direction of his former state finance director John Gunyou, OT staffers attacked their jobs with missionary zeal. During last year's legislative session, for example, tech-savvy staffers were a force to be reckoned with. They educated computer-illiterate legislators on the fly and helped craft and draft legislation to fund $256 million in state information-technology investment. At the same time, OT workers fanned out across the state, arranging an array of private-public info-tech partnerships.

They helped develop Web sites for everyone from the state lottery to the Department of Revenue and made the state's North Star site the sixth-most visited of its kind in the country. They pursued ambitious plans to wire schools and provide them with computers and to make it possible to apply for a driver's license on-line.

With its high aspirations and intense drive, the office appeared to have the makings of a high-tech flagship for the state.

Ask around today, and the situation couldn't appear more different.

"I've hardly seen them around on anything this year," says Phyllis Kahn, DFL-Minneapolis, one of the primary movers behind state information-technology policy. "I was very upset by their change in direction."

In the span of four months beginning in November, three of the office's leaders either defected or got fired. At least two key lower-level staffers left, one reportedly in disgust. New initiatives and funding proposals slowed to a crawl.

While some of the best tech-heads in the state continue to work for OT, current and former insiders say the buzz is gone, sapped by a mix of inter-agency squabbling, institutional inertia, and political pressure.

 

The Office of Technology, Kahn says, was a long time coming. When Carlson announced its launch, she said, she was "very surprised we got to do it." Bureaucrats, she says, are a territorial breed, and the act of creating a new agency to oversee technology would necessarily mean undermining similar authority in other existing offices.

In legislative hearings that led to the agency's formation, the House interpreted the governor's OT directive to be one of legislative activism, of promotion of the Internet and accompanying telecommunications technologies. So members passed a bill creating a fairly large, high-powered new agency. They placed OT in charge of several high-level, high-tech programs, like the United Nations' global e-commerce initiative. They allocated money to help wire schools and to spur rural small-business info-technology investments. They even gave the office some regulatory authority over other agencies. The Senate applied the brakes, giving the office power to do little more than suggest program funding and legislation, and keep tabs on the state's high-tech investments.

The compromise law that was finally hammered out gave the office about $8 million over two years and stipulated that it remain an advisory agency in charge of only a few projects of its own. The governor signed on, and in 1997 the Office of Technology was officially created. (It had already been operating in an unofficial capacity for about a year.) Despite his initial enthusiasm for OT's mandate, Carlson quickly lost interest, according to Kahn: "He does have the attention span of about a seventh-grader."

The confusion gave people inside the agency some latitude--invited or otherwise--to devise their own mission. Gunyou and then-Deputy Director Michael Norton (formerly a Skip Humphrey staffer) treated the office as an "agency that would make things happen," as one former OT staffer put it. "It was designed to be lean and mean, not getting bogged down in the operational aspects of government." Soon, the office was firing in all directions, laying the foundation for a number of projects its leaders said would put Minnesota on the global technology map. Their backing for the United Nations' Trade Point initiative helped make Minnesota one of only three hubs worldwide for a global, secure electronic commerce network. Staffers set up a program to have inmates at Stillwater Prison refurbish used terminals for schools, and created an Internet Center to help small towns connect to the Web. Virtual U Minnesota, a $2 million public-private partnership that will one day develop and offer college courses online, was conceived with OT's guidance.

Gunyou, who as state finance director orchestrated the bailouts of both Northwest Airlines and, in 1991, the financially shell-shocked Carlson administration, says he believed this rapid-fire approach was in line with the governor's. "Michael [Norton] and I definitely had an activist philosophy," says Gunyou. "That was one of the charges the governor gave us, that he wanted us to get things done. He said we had two years left in his term and he was afraid the state was falling behind on technology."

Lawmakers, however, had a different vision. "I think [Gunyou] had very grand ideas of what he was going to do that weren't the understanding of the governor or the Legislature," says Sen. Martha Robertson, R-Minnetonka, who sits on the Senate's Ad Hoc Committee on Information Technology. "We wanted them to be an advisory group, to help us understand technology without the ability to make rules or have power over other agencies."

The other agencies, meanwhile, bristled, according to lawmakers Kahn and Kelly. Not only were some of their best info-tech workers defecting to the OT, it was encroaching on some of their sexiest projects. Some of their leaders, including Elaine Hanson at the Department of Administration and Kris Sanda at the Department of Public Service, repeatedly rejected Gunyou's proposed master plan, according to a former staffer. Other former OT employees say the other administrators supposedly spread word that Gunyou was fashioning himself as a reckless boot-stomper intent on increasing his own power base. They allegedly raised Carlson's hackles by pointing out that OT was staffed heavily by DFLers.

By late 1997, the governor was supposedly pressuring Gunyou to shape up his office, or ship on out. "The governor started losing patience with John," one former OT staffer recalls. "[Carlson] said, 'I didn't hire you to fight with my commissioners.' That's when the political stuff started."

Gunyou quit last December supposedly because, in the words of one source close to him, "Camelot was destroyed." To replace him, the governor chose Hanson, the head of the Department of Public Service's telecommunications division. Carlson lauded her expertise as a regulator, her understanding of telecommunications and of government policy. But critics say that purely bureaucratic background is hardly suited to OT's mission.

 

"That brought some concern," says Dave Carlson, a contractor for MetroNet (an online service that links libraries and media centers) and a member of the Technology and Information Policy Roundtable (TIPR), a loose confederation of info-tech professionals that meets informally each month. "It was more of an opinion like, 'Is this the type of person who's going to dissolve OT's function and turn it all back over to the other state agencies?'"

Others have similar questions. Former OT Internet Center chief Johnson argues that the new director's cautious, quiet approach is exactly what the state does not need from the OT. "Speed is the essence of this arena," she says. "The only states that have been able to make significant movement toward improved technology have been those that have created agencies with no baggage. If you're going to take the speed away, you're going to take away the effectiveness of doing this in the public sector.

"The point is, if you involve politics and bureaucracy, you can't get it done."

Politics and bureaucratic turf wars have, by many accounts, weighed heavily on the original Office of Technology. Now it looks like the war is over.

The bureaucrats won.

Of course, there's another version of this story. This one comes from inside the current OT and from the governor's office. Carlson's press officer, Jackie Renner, says there was no leadership exodus sparked by interagency bickering and political pressure. "They chose to leave for different opportunities," says Renner. "Gunyou left for other opportunities. I don't think it unusual that if you have a CEO that leaves that others who worked close to him would want to leave as well. I don't think it's unusual to see in business community." Gunyou, for his part, says a position as chief of Minnesota's largest Internet service provider, MRNet, was too good to pass up. "This was just the right thing and the right time," he says, adding that he won't second-guess Hanson, who needs a chance to succeed without outside interference.

As for intimations that she is skippering a vessel of mutineers, Hanson says that is "simply untrue." "I don't know that it's an exodus," she says. "I'd suggest that's just mythology."

Still, it's a matter of record that the required agency master plan is more than two months late in arriving and now isn't expected to be finished until October. As a result, DFL state Sen. Steve Kelley says, the office lost the opportunity to scare up funding for any key projects in 1998, including a needed initiative to help complete the Internet-networking of the state's schools.

OT's Hanson is sure her slower approach will pay off in the end. "You have to have a goal," she says. "I think [Gunyou's OT] had no plan for how it was going to do the things it had undertaken, nor did it have a focus for what it wanted to achieve. That may be characteristic of a very young agency. But you have to reach a point where you step back and say, 'How did that work?'"

Sen. Kelley doesn't speak as pointedly as, say, Joanne Johnson, in assessing Hanson. He gives her the benefit of the doubt, but makes it clear he has concerns. "If the office isn't as successful as we'd like it to be," Kelley says, "other states and localities might get an edge on us," says Kelley. "We'd have a hard time making that up."

"I believe in prudence," he adds. "But sometimes prudence requires moving quickly to grasp an opportunity. I hope Director Hanson will find the right balance between prudence and speed."


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