Travelling abroad can often spur bouts of “e-envy” — or jealousy over the digital ease of life elsewhere. Whether it is the ability to file a tax form in a click or to renew a passport via a smartphone, business leaders and tourists get an insight into how their government might drain less of their time back home. Immense pressures on the public sector, however, come not only from disgruntled citizens. With debts elevated and demands on public spending growing, governments across the world must work out how they can deliver more, with less.
The public sector already plays a prominent role in advanced economies. It employs around one in five workers while general government spending accounts for 40 per cent of gross domestic product on average. This gives it a significant bearing on national productivity. Ageing populations, climate change, and national security challenges are meanwhile bringing additional burdens on the state. Indeed, with tight budgets and rising debt interest payments, it is now even more essential that tax and spend decisions are not wasteful, and that governments find ways to become more productive.
Defining what public sector productivity means is part of the challenge. It is often equated with cutting jobs or shifting resources from lower priority departments. But this comes at a cost — dilapidated infrastructure, longer healthcare waiting lists, and administrative blunders. Instead, governments need to work smarter, both in identifying and eliminating waste, and also by extracting more — and higher quality — from their existing resources. For measure, research by McKinsey estimates that operational improvements could save the US government $750bn per annum, without reducing the effectiveness of services.