The public sector is central to the recovery — and here is why

This article was first published in Forbes

One of the effects of the ongoing crisis caused by the coronavirus has been a renewed appreciation of the state. After years of largely accepting the argument that government is bad for you, people around the world appear to be acknowledging that it can in fact be the difference between life and death, between financial destitution and survival. With millions of individuals and businesses on their governments’ payrolls, it is hard to see that Ronald Reagan’s famous quip from the mid-1980s that “The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help’” would have the same resonance today.

But this change of heart has come at a tremendous price. Governments around the globe are going to be burdened with debts that — were it not for the fact that interest rates are historically low — would be crippling. And dealing with this will require a fresh approach, rather than a commitment to reduce the deficit and get back to “normal” as soon as possible. Just as businesses and individuals are pledging that they will not be returning to how things used to be, the public sector has a rare opportunity to reset, revive ingenuity and reshape its role in society.

A blueprint for how it might achieve this is contained in a white paper just published by PA Consulting, the global innovation and transformation consultancy known for its practical expertise and commitment to innovation and ingenuity. Although focused on Britain, A Renewed Imperative is also relevant for other economies that will be grappling with similar challenges. The firm accepts that responding to the crisis in the ways it suggests will not be easy. “The change required is complex and difficult,” it says. But it also insists that now is the time to “think big and act with bold ambition.” To guide the sector’s leaders it has identified four practical ways in which they can respond — speak and act with greater collective impact; radically rethink to meet evolving priorities; unlock efficiencies and harness new talent; encourage and incentivise greater collaboration.

In an interview earlier this week, Panos Kakoullis, who joined the firm just as the pandemic was taking hold, admitted that after a career focused on private-sector clients, he had a slightly jaundiced view of the public sector. But he said his early exposure to PA’s work had opened his eyes “to what the public sector could be.” In particular, the project in which PA collaborated with industry and others to deliver ventilators to the National Health Service at a critical period in the pandemic showed what was possible when people work together to bring ingenuity to life, he said. At the heart of the document, which argues that now is an opportune moment to enact long-lasting change that can benefit central and local government, business and society, is the notion of ingenuity. Kakoullis, who has joined the firm after a 30-year career with Deloitte, pointed out that this was a central element in PA’s mission and stemmed from the firm’s origins more than 75 years ago, when it helped organise the procurement of supplies and increased national productivity in the Second World War. 

Essentially, Kakoullis is calling for the public sector to make a clearer commitment to purpose, which has become something of a buzzword in business circles of late but has always been a central tenet for it. Actions, such as the government being prepared to shape markets rather than just repair them when things have gone wrong, would help cement this notion in the public’s mind and pave the way for the other actions.

The Rethink element is really about agility — as Kakoullis said, putting citizens at the heart of everything and regarding them as customers, building on the experiment in going digital created by the virus and coming up with a smarter measure of value and what value is. As far as unlocking efficiency goes, the public sector has recently proven it can work at speed when required. In addition to the ventilator project, the building of the “Nightingale hospitals” in days demonstrated that. But there needed to be more co-operation, although not of the sort that involved the state loading risk of building schools, hospitals and other infrastructure projects on to the private sector as was the case with public/private partnerships. Rather, it needed to extend to real collaboration. The crisis had show the benefits of finding “people with the right skills wherever they might be,” said Kakoullis. It was now a question of incentivising those behaviours so that such collaboration continued into the future. 

PA is, of course, not the only organization plotting a path to a future beyond the virus. The design consultancy IDEO, for example, marked the first anniversary of the launch of its IDEO Journal by asking contributors to examine whether design had a role to play in dealing with the crisis created by the coronavirus. Their view, perhaps unsurprisingly, was a resounding yes, with one writer almost echoing the PA paper’s theme: “This is a time for leaders to rework their pact with society. We must be bold.” 

As the PA paper puts it, there is a need to reset rather than restart. And, remembering that government played a bigger role in the origins of Silicon Valley than some of its current inhabitants like to admit, it is for politicians and policymakers to be what Kakoullis calls “the big economic driver”. They need to push technology hard in order to build skill levels as a way of improving productivity rather than relying on cheap labour. 

With many people around the world saying they do not want a return to the old ways of doing things, governments are uniquely well-placed to push the “green agenda” through such means as linking relief to industries affected by the virus to a commitment to climate change goals. But they could go even further by carrying on the emergency collaboration seen in recent months to tackle the even larger issues of climate change, food security, widespread structural unemployment associated with globalization and the rest.