Other parts of this series:
Einstein said that we cannot solve problems with the tools we used to create them. For public services across Europe, this couldn’t be more true. Macroeconomic trends are putting pressure on European governments to meet the skyrocketing demand for more and better services. Some trends signal an urgent need for change:
- An aging population. By 2050, the ratio of working-age individuals to retirees will reach 2:1, compared to 4:1 today.
- Rising youth poverty. Youth displaced the elderly as the largest at-risk poverty group in the EU – 7.8% of the under 24-year-old population is at-risk.
- Rapid increase in cybercrimes. Businesses can expect the cost of cybercrime to reach $8 trillion over the next five years.
- Skill shortages. 59% of agencies report having trouble finding people with the right skills.
- Retirement and leadership gaps. 26% of EU central government employees will reach retirement age in the next ten years, with spikes in Italy at 45% and Spain at 35%. Additionally, 43% of those retiring are senior managers, with spikes over 60% in the Netherlands and Italy.
For senior leaders, this feels like the perfect storm – one that will fundamentally reshape public services delivery. Our research concludes that two key strategic principles will guide the next generation of public services: preventative vs. reactive services and citizen-centric vs. internal administration.
For example, in one European country, the tax office developed a predictive model to identify businesses at risk of bankruptcy. Using thousands of indicators, that model is predicting over 60% accuracy. This tool can help public services organisations plan assistance for those businesses on the brink of bankruptcy or even identify the boundary pushers that use this approach to avoid their tax duties.
While meeting citizen expectations for convenience is not yet a key objective for tax agencies, many are concluding that helping taxpayers get it right is a win-win situation. A taxpayer that gets it right will avoid agencies spending valuable time and resources to correct errors and will ease citizens’ fears of making a mistake and being audited.
Another European tax office is even working on a transparent compliance score to be used as a Facebook “like”, identifying companies that are good business partners. This business compliance score may even pave the way for a future where tax audits become irrelevant.
But to act on those two strategic principles, public services leaders must create new fiscal and operating models that respond to the policy context in which they operate. Those models need to be:
- Digitally-driven: Optimize the use of electronic channels of communication to create “living services” with fluid and effective cycles of interaction.
- Insight-oriented: Use iterative discovery and exploration to better understand and react to citizen needs and achieve the lowest possible time-to-value.
- Innovative: Foster a capability within the organization to continually produce creative solutions and respond to the toughest social challenges.
In my next blog, I will delve deeper into what this new operating model looks like and how to capitalise on four key change enablers.
I’d love to hear your thoughts and comments, so please reach out to me on LinkedIn or send me an email.
 Chen, Tingyun, et al. January 2018. Inequality and Poverty across Generations in the European Union. IMF Staff Discussion Notes No. 18/01. Available from https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2018/01/23/Inequality-and-Poverty-across-Generations-in-the-European-Union-45137?cid=em-COM-123-36520.
 Juniper Research. 2017, May 30. Cybercrime to cost global business over $8 trillion in the next 5 years. [Press Release]. Available from https://www.juniperresearch.com/press/press-releases/cybercrime-to-cost-global-business-over-$8-trn.
 OECD, Government at a Glance 2017.
 OECD, Government at a Glance 2017.