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A Sad Day for Canadian Democracy
The analogy I always think of are post it notes.
3M (whose employees created the product) did not see market value in the product until one of it's creators gave packs of post it notes to the secretaries of senior managers.
After trying the product internally, the secretaries decided they could not live without them and pressured management to market the product. The success of the product is history.
Similarly if we can introduce social networking an collaboration tools to public servants they will both become proficient in their use (over time) and understand how and when they can b deployed externally for maximum value.
So the next question becomes, how do government departments overcome any internal issues that restrict the use of internal web 2.0 tools?
Such as management disinterest, fear of loss of control, restrictive IT policies and budgets and lack of internal expertise?
It seems that one of the greatest challenges right now is the fear of failure within public circles brought on by the political implications of public 'innovation' and the level of scrutiny delivered by media organizations. Right now, there's a disproportionate level of attack aimed at any government efforts to change how they do things. Look at the gun registry at the federal level or the eHealth issues that dog the Ontario government.
It's because of this that I think it will be a long time before public institutions are comfortable using an array of social tools, but I think user CraigThomler is right: a good part of the evolution will have to come internally. However, any government would be prudent to advise their employees and managers on 'best practices' to avoid getting into embarrassing situations.
Following that, public demand for such services will (hopefully and) inevitably force governments to work with open-source tools and products.