| Government in collaboration with business can accelerate regional wealth in the knowledge-based regional economies. One critical element to understanding the importance of local municipal government is that it can contribute to business competitiveness through reducing the time it takes to get facilities built, permits approved, and inspections scheduled and completed. In high tech, time is money because being the first to market is an advantage for business. Because high-tech companies have offices and plants across municipal jurisdictions, it is also important that these government innovations happen on a regional basis. It would be far less useful if it were being implemented in only one town. In Silicon Valley the story of how local jurisdictions have collaborated to upgrade, standardize, and link new Internet-based solutions for building permits is both unique and exemplary for illustrating how government can be part of the solution for creating regional wealth and advantage. The permitting process should lead to new collaborations in land use and infrastructure planning; this is critical to Silicon Valley continuing as a competitive regional magnet for high-tech businesses. The adaptation of computerized geographic information systems (GIS) will enable this regional analysis and information sharing to progress in regional planning development. Jumping Through Hoops One of the lesser-known factors in the success of Silicon Valley is the degree to which local government works in partnership with industry for regional advantage. Ask any business person about his or her opinion of local government; your replies will usually be neutral at best and antagonistic at worst. Complexity, inefficiency, inertia, and just plain inability to move quickly and be flexible seem to be the norm. Of course corruption, cronyism, and worse are always suspect. The authors have frequently polled graduate business students in the U.S. and Europe about what factors are necessary for regional advantage in high technology, and local government working in concert with business is almost never identified as a significant factor. Yet, when government partners in a vibrant collaboration with industry, a region can create amazing innovation and competitive advantage in areas many people consider a weak link. A good example of this is the development of the Smart Permit process. The Smart Permit's roots are in streamlining of government processes. In 1993 the cities in Silicon Valley started out to reengineer government, and focused on transforming the architectural, engineering, and construction (AEC) industry and the delivery of public services. Government can be an enabler or a roadblock to transforming the AEC industry because its communications infrastructure and systems must be in place for the users to complete the transformation and actually use these streamlined services. Permits and inspections are normally a point of contention . Because permit applications and inspections delay construction, this process is usually an annoying bottleneck for rapidly expanding businesses. Facilities managers liken this process to jumping through hoops, which compares what they are required to do to get municipal approvals with what animals do in a circus performance to entertain audiences. The facilities managers responsible for the process on the company side are usually in conflict with city managers and planning departments for approvals of complex construction projects. Government Collaborating with Business to Work in a Mutually Beneficial Partnership The Smart Permit process that has been created and adopted in Silicon Valley is a great example of such collaboration. Several important developments influenced the creation and enabled Smart Permit's progression in Silicon Valley: -
Exponential growth in the acceptance and use of the Internet -
Technology advancements in networking, software, and desktop tools -
Successful completion of several permit process improvement projects by Joint Venture's Regulatory Streamlining Council, the Silicon Valley Manufacturing Group, and Silicon Valley cities -
Publishing of a series of Permitting Best Practices by the Silicon Valley Manufacturing Group -
Creation of the Silicon Valley Uniform Building Code Program and adoption of Uniform Local Amendments and Interpretations by building officials from 29 Silicon Valley jurisdictions [1] What Is Smart Permit? The mission of the Joint Venture's Smart Permit project is to "bring together the public and private sectors, civic entrepreneurs, and community resources to electronically optimize building permit and community development processes within Silicon Valley." Smart Permit is a free, standard, online application form for filing simple permits and, just as importantly, getting changes approved quickly along the course of a project. It is available to users 24 hours a day. Besides filing for permits, the system allows people to track their permit applications and to submit drawings electronically along with digital signatures. In Silicon Valley the cities of Sunnyvale, Mountain View, San Carlos, Fremont, Santa Clara, Palo Alto, San Jose, and Milpitas participate in the project. The project receives corporate support from well-known companies such as Autodesk, Carta, Microsoft, Open Data Systems, and Tidemark Systems. Silicon Valley businesses highly value time-to-market . Product life cycles have shortened , and are reduced to times as little as six to nine months in some instances. Facility managers feel that the Smart Permit, along with other streamlining processes, will enable them to obtain permits faster and thus let them contribute directly to the company's competitive advantage. With the traditional permit process, it could cost a manufacturer hundreds of thousands of dollars per day to wait for the approval of the building permit. Smart Permit has enabled cities in Silicon Valley to better serve the needs of high-tech companies and thus make the area a very attractive place to do business. In turn , it benefits the region, as it ensures the growth of the local economy. The automated permit process enables the issuing offices to dramatically increase their productivity, while becoming much more cost effective. It used to take an average of $10,000 in company employee time to process the paperwork for a traditional permit application for a new commercial building. Now the time is sharply reduced, leaving time and money for other issues. The widespread use of the electronic permitting system is not instantaneous or guaranteed , since it changes the way an entire industry, including government, does business. And everybody resists change. One of the lessons learned from this process was that you have to market, train, demonstrate , and service this system in order for each of the parties involved in permitting to adopt it as standard procedure. It also takes time for the private sector to drive demand for usage of the system. Since it is not off-the-shelf software, there is also a great amount of time needed to adapt this software for individual use. Here is the story from three people who were involved in this effort from its inception. Bob Kraiss, director of facilities management at Adaptec in Milpitas; Mike Garvey, San Carlos city manager; and Brian Moura, San Carlos assistant city manager. These excerpts from their discussion provide insight into the dynamics of how initiatives can work and the role individuals, who often sit across the table from each other in contention, have in making the extraordinary happen. Bob Kraiss, Mike Garvey, and Brian Moura Bob Kraiss: There was a reason to do this back in 1993. Milpitas had a lousy interaction with the industry. Permits took three months and if you don't like it, tough! I supervised the construction of a campus for Solectron, a two time Malcolm Baldridge winner (international business excellence award). We used great productivity techniques with ISO 2000 and Malcolm Baldrige principles, and the city just kept doing what it had been doing, with no improvement. So I invited the top 15 facilities managers whose companies represent about 85% of the jobs in Milpitas to lunch and we talked. We talked about the stuff the city did wrong, but also the stuff that we did wrong that made it tough on the city. We used to be forced to get serial permits (one process approval at a time). We needed to institute parallel processing, so multiple aspects could be applied for at one time and with ongoing changes you could apply for approval in real time. So that was the beginning. Milpitas became cooperative. It was a partnership of mutual benefits as opposed to us screaming about how bad they were. And I took that concept to the Silicon Valley Manufacturing Group. Simultaneously, Joint Venture Silicon Valley was setting up a regulatory streamlining effort. So, Joint Venture and Silicon Valley Manufacturing Group began the relationship-building efforts that took place, which I think is a key. Brian Moura: Right, so that was the original issue. And the first question that we heard from a gentleman from I believe IBM, was, "Why don't you just put it on the Internet?" I said, "Well, that could be done, but what is it that would happen if it was on the Internet? If we don't change anything else, what have we achieved?" And so we began talking and people started to conceive of what this project could be and what it would cost. And there was a person from one of the chambers of commerce who said, "All of this should be done by the cities for business and it shouldn't cost any more than it already does." And one of the high-tech folk interrupted this person and said, "Excuse me, you are not from my city, and who cares what it costs? I will pay more for a permit in a city that has its act together, that is streamlined, and is on the Web. That is a value-added service. Frankly, in the scheme of things, the difference of paying $300 and $325 for some permit is trivial compared with the fact that if my plant gets up a month sooner, I stand to make a $1 million! So let's not argue over $25 or $50!" Why the collaboration for Smart Permit worked in Silicon Valley Bob Kraiss: The top four or five guys in city government and industry liked each other. The first time we got together at the Silicon Valley Manufacturing Group, we tried to identify best practices, which is a management process to improve quality. Within that one-month time frame, they took the best ideas from the ideas presented, implemented them, and presented them to us. By the time we went through a series of these best practices questions and answers, every city that was involved became significantly better in the way it conducted business. They were talking to each other and figuring out ways to do things in a cooperative manner as opposed to operating in isolation. If the city and government officials got together on their own and asked, "How can we do things better for our customers?," it might work, but it's doubtful. We, the customers, were in the room. We had 20 industries sitting there, listening to 11 cities present and that made a difference. They would ask, "By the way, if I do this, will it help you?" So, we created a relationship between industry and city, between industry and industry, between city and city. Suddenly, as opposed to looking out for our own interests, all of us were saying, "How can we, collectively, do it better?" And we no longer used the term "the city," we didn't say those words anymore; they were immaterial. It was, "How is Ron going to solve this problem? How is Ron going to help? I see, Ron's IS department isn't strong enough to figure this one out, let's go to San Carlos or Sunnyvale, because they have got a really strong IS department and they will be able to put this into words that technologists can understand." Brian Moura: In the beginning, the driving force behind Joint Venture was the concern about the economy being down (during a recession in California during 1990 “1994). Our economy was down because the federal government was downsizing the defense industry, we were transitioning to a new economy, and there was a high cost of living in Silicon Valley. So both the industry and the local government had an incentive to fix that. And that was the reason that they thought, "Well, gee, if we streamlined things or if we made it better, our business can expand faster and we will get those jobs back and the economy will wrap up sooner, so it is in everybody's interest to do that." At the first meetings, there was some finger pointing going on, but people began to roll up their sleeves and ask, "How are we going to fix this?" We put all the issues on the table. Now let's talk about how it actually might happen. And I think what is interesting about this is that when we began talking about improving the process, improving software, and outing it on the Internet, originally there were a lot of cities competing to be first. They thought, "We will get better businesses coming into town, we will have our name in lights." But once we actually started spelling out what it all actually meant , there was a bit of a pullback. Everybody said, "We want to be involved and see where it is going, but I'm not sure that we are necessarily ready to put our toe in the water." In some cities, as Bob suggested, we had some enlightened building officials. The reason we were able to reduce the number of amendments (procedures) from 400 to 11 for all the cities and regions is because we had three building officials get together and they came up with something. They took everybody's amendments and spread them out and went back to all the building officials in the region and negotiated and basically said, "Look, a lot of this could be reduced." Collaboration is driven by personalities and enlightened businesses Bob Kraiss: I give Becky Morgan (former executive director of Joint Venture Silicon Valley) credit for being the queen of collaboration. She taught people what collaboration really means and she promoted it in every instance. She is a former state senator and understood government; she was well regarded, the wife of the CEO of Applied Materials (John Morgan), so she had a good industry link. People listened to her. The second element was that we have in this region access to companies that virtually no other region has access to. One of the most important facts to make this thing work was that Autodesk, who owns the CAD (computer-assisted design) market and whose software all the architectural drawings are developed with, created some software to allow us to do online checking. It had never been made before. It had to be user friendly and they offered to give it away free. Where else in the world could we build a project based on an attitude of cooperation and generosity like this? You need that entrepreneurial and collaborative spirit in your community to make this work. If you don't, it doesn't work. If you have this collaborative spirit, then you are going to do smart programming whether we assist you or not. It is true we had access to technology at this location that the others would not get. But in terms of the spirit that businesses are ready to pitch in, that potential exists in all areas, mostly in metropolitan areas, but even in rural areas if the local businesses want to go to work on it, it can happen. Mike Garvey: We simply didn't have the software to mark up the CAD drawings electronically. Also, with the slow modems we had back then (this was five or six years ago), it would have taken four weeks to upload a drawing. But with the current paper process, we required six sets of drawings, so that we could hand them in to different departments at the same time to speed up the process. But if changes needed to be made, the revised six sets had to be handed in again. And it was especially complicated if different departments required different changes to be made on the same project. So, some of this old process was really hard to coordinate. I had to get sign-off from five different departments. We formed a committee of 12 employees who had several department heads. And they worked for 18 months with one of the TQM (total quality management) consultants provided by Joint Venture and were provided with lots of donated time from private industry professionals. The rule was that they could do whatever they wanted to, but there was confidentiality. They wouldn't even report back to me. They would just clean up the system. Later, some of the stories drifted out and it was embarrassing to think I was the chief executive of a city like that. It doesn't take just high- powered experts. It also takes people at the street level to get them thinking. Early interest in the Smart Permit process . . . marketing is essential Bob Kraiss: We used one of the meetings of the SV chapter of the Facilities Managers Association to create a venue called Smart Permit Presentation. We had 500 people show up both from the industry and from the cities. Then we hosted a second presentation and had 800 people attend . So it was a great momentum builder. Many people were now hearing about it. We had people from all over the country attending these meetings. The third one we did, two years later, we did at the San Jose Tech Museum. We had little booths for all our partners, such as Autodesk, to let them show how they participated and to demonstrate their products. So there was a lot of marketing going on. Mike Garvey: Marketing was a good lesson, too. I think some of the cities thought they just needed to put the Smart Permit system up on their Web sites and expected people would discover it somehow. One of the things we did in San Carlos, was that every time we had a major piece of this to unveil, we went to the city council, we had press releases, and really made it a big deal. You have to market this system to the users of the permitting system. Brian Moura: There needs to be a warning for governments that want to move to Web-enabled capabilities. You may introduce new services, new ways of doing things. But you are not necessarily streamlining government, because there is an expectation by your customers that the old way, the legacy systems, are still in place. So, even though there are changes that we are seeing, such as that 60% of our routine permits are coming in over fax, and once we go to the Web, we see similar numbers . So we free up time. But we also are going to have to have the old way as well for those who don't have a computer. Even if we change the way that government works, some people may not notice or it may not be the format they want. | |
