During the pandemic, America has experienced an acceleration in digital transformation. Companies have had to rely further on the cloud and connectivity for remote work, and new technologies like extended reality (XR), identity management, and blockchain provide significant efficiencies to the business community. However, government IT has lagged far behind the private sector. From fulfilling vaccine deployment commitments to managing supply chains and distributing financial aid to small businesses and struggling households, government stumbles during the pandemic have highlighted how outdated government IT harms both the public sector’s ability to respond to a crisis and the public’s ability to receive vital assistance. Government must fully embrace cutting-edge technology and data analytics to generate the necessary resilience against future crises

Sadly, this problem existed way before the COVID-19 pandemic. For decades, federal and state IT infrastructure has woefully lagged the private sector. In fact, during the last decade, government agencies such as the Defense, Treasury, and Veterans’ Affairs departments have continued to use legacy hardware and software from as far back as the 1950s. This lack of investment and modernization has only been exacerbated by COVID-19 disruptions. The following are examples of how underinvestment in IT at both the state and federal levels have harmed the public:

  • Recently, the Federal Communications Commission admitted it did not have the technology to effectively map and deploy broadband funding.
  • The Small Business Administration’s loan processing system crashed twice in April of 2020.
  • Health agencies are still using paper filing instead of digital, making tracking much slower.
  • Connecticut’s website could not handle more than 8,300 unemployment benefits applications, “a fraction of the applications coming in.”
  • New Jersey had to put out a request for volunteers who know programming language from the 1950s that runs the state’s employee benefits system.

This transformation and investment must take place at every level of government, as digital collaboration and communication have become essential for cities, state, and federal initiatives.

A digital transformation is enabled by different kinds of technology:


Cloud computing enables the processing and storage of data to securely deliver services via the internet.

5G Connectivity 

The COVID-19 pandemic has demonstrated how critical our connectivity infrastructure is to education, work, and many other elements of our daily lives. While policymakers have primarily, and correctly, focused on ensuring widespread broadband adoption in the United States, continued progress on advanced communications technologies such as 5G is essential to maintain U.S. global economic leadership and enable new opportunities for millions of Americans. 

Internet of Things 

Internet of Things (IoT) technology is revolutionizing how we live and do business. By some accounts, “IoT has a total potential economic impact of $3.9 trillion to $11 trillion a year by 2025.” Americans will benefit from IoT in the form of smart traffic and transit technologies, improved supply chain management, sustainable infrastructure, environmental quality, public safety, and modernized healthcare. 


Technologies such as blockchain also hold the promise of securely transmitting information. Blockchain uses cryptographic methods to support secured transactions ranging from applications such as food security in supply chains to real estate title transfer. 

IT Modernization Survey

In March, we surveyed 165 Chief Information Officers (CIOs) and Chief Technology Officers (CTOs) across mid- and large-sized U.S. corporations on the impact of outdated government IT systems.


  • Co-Chair

    Kevin Richards


  • co-chair

    Danielle Johnson-Kutch


To learn more, please contact Michael Richards at mrichards@uschamber.com

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