Almost fifteen years ago, in 2006, when design thinking was only emerging as a trend, one of the initial projects developed was “The Wallet”. Workshop participants learned the practical aspects of design thinking by imagining new ways to carry cards, cash, and ID.
If you tried to run this exercise in 2020, you would confuse a lot of participants. Many of us do not carry cards or cash anymore. The world has moved on. Unless you live in U.S., where it is considered rude not to hand out one-dollar bills to everyone in a service role, you don’t need cash or even plastic cards. You can pay for lunch, bus tickets, and even wallets, by waving your phone or your watch, in front of a terminal.
Cash and cards are gone. But there is still one wallet inhabitant left to deal with: IDs. Unless you live in one of very few jurisdictions around the world, you still need to carry your plastic (or paper) license when driving a car. You still need to carry a physical document to cross a border, buy alcohol, or enter a nightclub.
The wallet exercise is a litmus test of government innovation. The world outside the public sector has moved on and fully digitalized. Innovation inertia in public sector is the reason why we still need wallets.
The good news, though, is that many governments around the world become aware of this growing digital divide. The conversation about innovation and the future of public services is shifting from exploring opportunities (the ‘nice-to-haves’) to ensuring the public sector is not left behind in the twentieth century, unable to serve its twenty-first century citizens.
The five stages of evolution
One of the challenges of digital transformation in the public sector is a lack of clear benchmarks and reference points. While there are many technology maturity models, there are no accepted frameworks for assessing the maturity of public sector services in the digital age.
Since 2015, our team at the QUT Centre for the Digital Economy has worked with local, state and federal governments in Australia, helping the public sector reimagine, design, and deploy their services. We have jointly designed, re-designed, and deployed services that impact the lives of millions of Australians. Through the application of academic research, design mindset, and practical implementation, we have been able to understand and distinctly describe five levels of maturity of public services, resulting in the “Government 5.0” framework. Our framework helps understand the possible paths that government services can take. It also reflects the typical evolution trends in public services.
In Government 1.0, new individual services are offered. This often follows a particular social need, triggered by social, business, or digital trends. For instance, in early 2019, the Reserve Bank of India launched an ombudsman service for digital payments (Bhakta, 2019), a move in response to a dramatic growth in cashless transactions in India, due to the introduction of Unified Payments Interface. In this stage of the evolution, public service providers recognize the uniqueness of the services they can offer and start to focus on providing consistent access to them.
While selective, these individual services pave a way for new value propositions in the public sector. Service design teams play an important role in deploying such new services, focusing on ensuring proper access, through various channels, and quality of experience for service users.
In Government 2.0, the focus shifts toward creating an ecosystem of partners to allow for scaling the volume and variety of services. Scaling the volume allows the public sector to reach higher numbers of service users, cost effectively. This may require partnering with other organizations to jointly deliver the services or developing efficient internal service delivery models (Deloitte, 2015). The Digital Brisbane 2.0 strategy provides examples of a government scaling their service delivery, not only via partnerships services but also in the roles as an advocate, facilitator, and funder, as well as the traditional roles of regulator or provider (Brisbane Marketing, 2017). While services in Government 1.0 may not be used by some citizen groups, Government 2.0’s attention to equitability compels providers to design additional varieties of a service to make it available to other potentially under-served groups.
Effective scaling of services, both in volume and variety, requires a focus on the value chain, as well as continued focus on service experience. Service designers remain critical in this stage to ensure scaling the variety, and operating officers join them in enabling volume scaling.
As the volume and variety of service delivery reach satisfactory levels, the focus shifts toward the efficiency of the delivery. The operating model becomes the focus, and efficiency gains are sought, allowing for a more efficient allocation of public funds (Australian Productivity Commission and New Zealand Productivity Commission, 2019). The ability to deliver services at a “reasonable” cost becomes the KPI in this stage of evolution. Government 3.0 focuses on the automation of its activities — seeking productivity gains, improving efficiency and throughput, and cutting cost and waste (Australian Productivity Commission and New Zealand Productivity Commission, 2019). This might lead to a reduction in the delivery of some services developed in Government 2.0, due to purely economic considerations.
Ensuring the efficiency of service delivery is the goal of operating officers, and Government 3.0 is driven by the ambition to create a very efficient, lean, public service delivery operation. The cost of service (the lower, the better) and the efficiency (the higher, the better) become the strategic differentiators in this third stage of evolution.
The fourth stage of evolution is digitalization. Beyond simple automation (where some aspects of the Government are merely digitized), digitalization explores completely new business models and new types of customer engagement (Kowalkiewicz, 2017).
In Government 4.0, institutions focus on their business model and try to become attractive to their customers. Since ‘value proposition’ is an important component of a business model, Government 4.0 initiatives introduce new and unique value propositions for citizens. These novel value propositions are often only possible due to improvements achieved in Government 2.0 and 3.0. With new value propositions, new and better business models emerge in this stage. Service delivery shifts from individual departments to whole-of-government orchestrators. The new strategic differentiator in Government 4.0 is the connectivity of services provided.
The fifth stage of evolution recognizes the core role of citizens and flips the government’s operational model. It is a mindset shift: from ‘citizen relationship management’ to ‘citizen managed relationships’. Or, as the Future of Public Sector Outsourcing puts it, “from governing for citizens to governing with citizens” (ISS, 2014, p. 11). Such an approach is based on higher levels of citizen engagement and requires a shift in public service skills towards flexibility, co-creation, and co-venturing (PwC, 2013).
The Government 5.0 stage of the evolution goes well beyond citizen-centric services, or whole-of-government approaches to service delivery and gravitates toward whole-of-life service delivery. Understanding the citizen model, not through a government lens, but holistically, is the focus. To achieve this, public service providers are asking where they can fit into their customers’ lives, rather than the other way around of “where do citizens fit in providers’ processes?”.
The strategic attention introduced in Government 5.0 is desirability, expressed as focus on ensuring the wellbeing of the customers and seamless interactions with the public sector. Desirability from design thinking asks strategic questions, such as: will the solution fill a need, fit into people’s lives, appeal to them, and will they want it? (Lamp, 2014).
Government 5.0 cannot be achieved by individual institutions (departments or government levels) but can only result from overcoming the barriers between them. Cross-government teams, and partnerships with other participants in the ecosystem that impact citizens’ lives, are critical. Participants of the ecosystem will move away from just delivering services, to maintaining lifelong partnerships with citizens, where government interventions are an exception rather than the norm
The gradual disappearance of cash and cards from our lives was not a result of one or two organizations pushing for change in this direction. It has been a result of many changes coming together: new technologies (such as RFID), new business models (such as microtransactions, and in-app purchases), and new social expectations (payment in the background, such as when using ridesharing services). While all of these new trends started emerging as early as the late 1990s, only the massive scaling of the past years has turned them mainstream. Likewise, the future of public services is already here. It’s just not evenly distributed. All it needs now is even distribution and scaling. Otherwise, public services will remain the only aspect of our lives that keeps us in the past. Like the IDs in our wallets.
This article appeared in the March 2020 issue of Helvetas Mosaic.
As Professor and Director of the QUT Centre for the Digital Economy, Prof. Marek Kowalkiewicz leads the digital transformation research agenda at Queensland University of Technology (QUT) in Australia.
Dr Paula Dootson is a Senior Lecturer in the School of Management and QUT Centre for the Digital Economy at the QUT Business School. Her research focuses on providing businesses and policymakers with evidence-based solutions to real world problems.
Australian Productivity Commission and New Zealand Productivity Commission. (2019). Growing the digital economy in Australia and New Zealand.
Bhakta, P. (2019). Ombudsman for Digital Payments is Now Live.
Deloitte. (2015). Gov2020: A Journey into the Future of Government.
Brisbane Marketing. (2017). Digital Brisbane 2.0.
Kowalkiewicz, M. (2017). The Transformational Difference Between Digitisation and Digitalisation.
Lamp, A. (2014). The Value of Balancing Desirability, Feasibility, and Viability.
Subscribe to Helvetas Mosaic
Helvetas Mosaic is a quarterly published by Helvetas Eastern European team for our email subscribers and website visitors. Our articles explore new trends and fresh ideas of international development work in Southeast Europe.
Get inspired with our insights.