Digitizing licensing and permitting a win-win for local governments and constituents

The COVID-19 pandemic has been the catalyst for an overnight digital transformation for many government services historically completed in-person, including unemployment benefits and public health services. As state and local governments begin to stabilize digital operations and adapt to working in the new normal, public-sector leaders have a tremendous opportunity to capitalize on this momentum and identify new ways to infuse more robust digital tools into their operations.

The digitization of licensing, permitting and inspection services, which account for a substantial percentage of state budgets, represents the next phase of digital transformation in the public sector. Digital LPI services will help governments address immediate issues associated with the pandemic, and it will provide longer-term dividends for employees and constituents.

LPI services support the 25% of U.S. workers dependent on occupational licensing for their livelihoods. All constituents -- both individuals and businesses -- rely on this system, covering activities such as acquiring driver's licenses, business permits and building inspections.

Unfortunately, obtaining the proper licenses and permits traditionally has not been a pleasant experience for either constituents or public-sector employees. According to estimates made before the pandemic by the Institute for Justice on the economic costs of occupational licensing, annual issues with licensing may cost the national economy upwards of 1.8 million jobs, $6.2 billion in lost output and $183.9 billion in misallocated resources.

The issues around LPI have been exacerbated by the protocols required to operate safely during the ongoing pandemic. There is a heightened need for businesses and citizens to acquire new licenses and permits at a time when many government employees are being sent home or working limited in-person hours.

This past summer, restaurants became reliant on outdoor seating to keep their doors open, creating an overnight need for new permits. Many businesses, like hair salons, were applying for similar permits that would allow them to provide services along sidewalks.

A survey released by the Golden Gate Restaurant Association, which represents restaurants in the San Francisco Bay Area, found that 60.8% of restaurant respondents did not have a permit for outdoor seating at the onset of the pandemic. Many of these restaurants needed to wait for the local government to approve their permits before adapting their operations. In today's climate, delays like this drive businesses to close down.

The problem is that most state and local agencies that handle the application submission, review and granting processes for licenses and permits still conduct these functions manually, using paper forms. Outdated methods like these can be challenging for the public to navigate even in the best of times.

Furthermore, public-sector employees are left to engage constituents through asynchronous communications, via traditional methods like in-person meetings or by phone or mail, which can significantly delay the time it takes to process an application. As the overall number of requests for licenses and permits increases during this crisis, the government issuers have fallen behind, costing local economies real money.

Digitizing the licensing and permitting processes is the answer to problems created by outdated systems. Using digital-first solutions can boost local governments' revenue, foster community development and improve overall user experience. These improvements will allow constituents to apply for the appropriate license or permit seamlessly and track their application’s progress in real-time.

Integrated digital platforms can also help public-sector employees work more efficiently and effectively. Instead of guessing at the next steps, employees receive step-by-step directions, a comprehensive view of all tasks and complete visibility into the license or permit request, including account information.

Digitization also enables seamless hand-offs across departments with real-time collaboration tools. Inspectors in the field can access all the information they need from a mobile device. In short, public sector employee productivity increases as workers spend less time looking for forms and chasing down missing details on applications, and instead spend more time serving constituents.

A better experience for public servants makes for a better experience for constituents. A streamlined digital LPI process saves residents from standing in line, meeting with multiple employees and filling out duplicate forms, and it ensures that applications will be processed more efficiently.

The COVID-19 pandemic has forced the public sector to accelerate the adoption of digital tools. In turn, that opening has created an opportunity for states and local governments to improve the constituent experience.

ur ability to digitize legacy systems and processes to meet changing needs will be critical to sustaining the economy throughout the pandemic and post-COVID world. Now is the time to use this momentum to make the LPI process easier for constituents and public sector employees alike.