Just as technology is rapidly changing citizens’ lives and corporate business models, it is transforming the way government does its business, even if many of the changes are not particularly visible to the public.

So argued Sonny Bhagowalia, CIO of the Treasury Department, at last month’s FedTalks.

“We in government are looking at how to serve our customers better,” Bhagowalia said, how to “share everything [and] protect what you must.”

Microsoft has estimated that creating an information economy will produce “a $1.6 trillion dividend,” he said, based in part on the utter explosion of data generation. While everyone in the IT world is familiar with Moore’s Law – the idea that computing power roughly doubles every two years – “even that is changing,” Bhagowalia said.

“Data is increasing tenfold every five years, 80% [of it] unstructured data,” he said. “We in government have about 15,000 websites or more … The Internet of Things is here – what used to be 3.5 billion devices, we’re now talking about 26 billion units by 2020.”

The government is working to adapt to a ubiquitous wireless world. It is looking at using quantum computing devices in the next 20 years. And it is “trying to move from customers waiting in line to our serving them online,” he said.

Bhagowalia pointed to a number of federal efforts that show how the government is changing, both in how it does business and how it empowers individuals and businesses. For instance, when the Defense Department released satellite data to enable the use of GPS in the private sector, companies created affordable GPS devices.

Another program, Data.gov, focuses in how to make more data available to individuals and businesses, so they can find innovative ways to use the information. Bhagowalia said he believes the next big innovation will be Big Data plus next-generation geographic information systems plus analytics, “to take data to information to knowledge, to wisdom.”

The Obama Administrations Open Government initiative fosters transparency, participation, and collaboration, he said.

To achieve these, innovation is needed, and there are three dimensions to innovating – changing the way the government does business, its processes; incorporating new technologies; and changing the culture.

“The organizational culture is the big challenge here,” Bhagowalia said. “It’s not the CIO’s job, or chief innovation officers. It’s everybody’s job.”