David Rothkopf is chairman of Intellibridge, which provides intelligence and analysis for the government, and author of the upcoming Running the World: The Inside Story of the NSC and the Architects of American Power.

The recently enacted intelligence reform bill was the best Washington could do, probably. That’s the bad news. The good news is that the marketplace knows that intelligence reform is much too important to be left to politicians and bureaucrats.

The new legislation seeks to improve intelligence coördination through the appointment of a new layer of management. This alone can be a formula for failure. However, the chances of real reform are poor for other reasons as well.

The U.S. intelligence bureaucracy remains, unfortunately, convoluted and full of conflicting interests. The government’s answer to September 11 has been to create new bureaucracies: the office of the national intelligence director is only one example. The response to management failures and communications breakdowns has been to make the system more complex, not simpler. In fact, a number of the steps taken or proposed have not even been necessary. The United States already has legislation calling for centralized control of its intelligence community. It’s called the National Security Act of 1947. The current administration failed to manage the system as it should have.

The real problems within the intelligence community are much deeper and more ingrained. One way a technology audience might view them is as a failure to build an effective knowledge management system to support U.S. government policymakers. That perspective reveals an abundance of obvious flaws. There is a government culture that values secrecy and hoards knowledge rather than sharing it with those who need it most. Secrecy is important, but while emerging technologies – like quantum encryption, which will prevent eavesdropping – make it ever easier to protect information you want to hold close, they should be used to increase, not decrease, opportunities for openness. One senior military commander told me that perhaps 95 percent of what is now deemed secret is available via open sources, thanks to the Internet. Unnecessary secrecy costs billions and impedes the flow of vital information. It is also an exercise in futility. I’ve seen instances where Web-harvested information was received by the government and immediately classified.

As detrimental are the cultural biases institutionalized through a system of “stovepipes” that forces information to go up one management chain, across at the top, and down another before it can get to the people who need it the most. Furthermore, information producers within the intelligence community have too much control over who gets to see what – when every other new knowledge-based system in the world is being designed otherwise.

It is well within our power to create a flatter, more distributed knowledge management system that makes all data within the government available to users in real time regardless of agency affiliation, simply based on privileges assigned to them. But we don’t have it yet.

Nonetheless, the existing system can be enhanced via a few key steps. Unbelievably, many in the national-security community don’t have full access to the Web – because counterintelligence specialists worry that that would permit spies to hack into U.S. systems. Furthermore, much of what is out there is uninterpret­able even to those who see it: the United States lacks specialized analysts, and those it does have don’t have the linguistic skill to translate important data. But outsourcing the analysis and translation of open-source information to the private sector would enhance U.S. capabilities. In addition, the advent of the Semantic Web (which adds definition tags to information in Web pages so that computers can interact more productively) will further empower end users of information and make the Web a much more efficient tool.

If the government stopped spending billions producing what was already available for free or at low cost on the Web, then it could devote more money to the new technologies that will truly transform intelligence. These include everything from unmanned reconnaissance vehicles to the long-envisioned ubiquitous-­sensing networks that deploy vast quantities of microsensors to capture live data. Learning to better massage, intelligently search, interpret, and use the resulting information and to get good analysis to users is the ultimate challenge for U.S. intelligence – not adding new bosses to the system.

Getting intelligence to the field in real time and moving analysts closer to end users – and out of the echo chambers of intelligence institutions – are achievable ends. It is the larger marketplace and technological innovators like the readers of this magazine who will produce the intelli­gence reforms we urgently need – reforms that the recent bill, for all the fanfare around it, largely ignored.