This is a pretty important speech from OMB Director Peter Orszag. I suggest reading the whole thing, but here’s a key section:

Public sector productivity growth matched the private sector’s until about 1987. But something changed in the late 1980s. From 1987 until 1995, private sector productivity rose by an average of 1.5 percent a year. Meanwhile, the public sector’s productivity rose by only 0.4 percent per year – or about one-third as much – over roughly the same period. …

…I believe that the biggest driver of this productivity divide is the information technology gap.

At one time, a federal worker went to the office and had access to the most cutting-edge computer power and programs. Now, he often has more of both in a device clipped to his belt.

Closing the IT gap is perhaps the single most important step we can take in creating a more efficient and responsive government.

Indeed, the IT gap is the key differentiator between our effort to modernize and reform government and those that have come before. …

How big is this IT gap?

It is hard to quantify, but anecdotally the data are telling.

Let’s consider the divergence in data center usage. In the private sector, IBM has reduced the number of data centers it uses from 235 to 12. Hewlett-Packard has consolidated 14 data centers into one, reducing energy usage by 40 percent.

What about the federal government?

Since 1998, we have gone from 432 data centers to more than 1100.