How online business platforms could improve citizen services

We live in a platform economy. We have seen the Ubers and Airbnbs of this world bringing together a network of service providers to meet customer needs - online, in real time, anytime. What if we used this model for government-issued citizen services in sectors like healthcare, education or employment?

By building business platforms online, governments can provide a stage for entrepreneurs to offer their services directly to citizens. More service models would move from the classical linear way of working (“you ask, you may get”) to a platform model (“you order yourself”) that allows the citizen to search from a pre-populated catalogue of approved vendors. Citizens could then use a personalized budget provided by the government to order more services directly from the right company - a fully self-service solution.

After exploring platform strategy as part of my MBA research at the Antwerp Management School, I developed the following six pointers to help make government/business platform models successful:

1) A government/business platform must provide entrepreneurs with a way to advertise, distribute and sell products to make a profit.

While governments must regulate the pricing of services on the platform, they should also allow freedom to compete. This may not be an easy task for governments because they often see value in terms of other parameters such as citizen satisfaction or quality of service. For this kind of platform model to be successful, governments must foster a relationship of trust with industry, acknowledging these different success criteria.

2) An online business platform is not a static catalogue - new or updated services will come to market.

Governments must plan for continuous adaptation of the services on the platform. This requires constant contact with entrepreneurs and swift reactions to developments in the environment, including changes to citizen needs. Governments must actively collaborate with entrepreneurs in adapting the services available to citizens, based on revised offers from the industry.

3) Governments will need a matching algorithm that allows a personalized and even proactive approach to offering certain services via online platform.

We all know matching algorithms from online platforms. They claim to provide personalized advice based on previous behaviour, including tracking your movements on the internet. For governments, the use of such rules and algorithms must be fair, clear, and transparent. Government and industry must find a middle ground to link data originating from platform transactions and agencies’ back-office systems. Further, the algorithm that gives citizens suggestions about other relevant government services must not be triggered by financial targets (i.e., sell more), but by genuine interest to improve citizens’ lives.

4) Entrepreneurs and governments must learn to trust each other as business partners.

This means governments need full access to pricing details, volumes and associated tax declarations via transaction logs. As the government would be the regulator of trade – i.e., setting rules for corporate governance and oversight – as well as the operator of the platform, governance rules must become clearer and fairer. Today, many governments are only starting to define rules for these platforms.

5) Profit must be a consideration.

Government/business platform models are often based on services currently executed by social or non-profit organizations, which aim to take care of people in need without making a profit. Governments will have to allow profits to be made on these services via their platform if regular entrepreneurs are to participate, however. In the case of a homeless shelter, for example, governments can either provide a budget to citizens using the service or pay the organization delivering the service directly, based on transaction details.

6) The technology is important.

Business platforms operate on technology that is available 24/7. Governments must ensure the security and integrity of all components of the online platform because private data and transactions are being processed. Entrepreneurs will have to work with government to ensure data is protected from cyberattacks and other security risks.

Success so far

There are already some great examples of government agencies aligning with the industry to establish a unique platform approach, but few are driven by a top-down strategy from the political level. They are more likely to be based on the enthusiasm of the agency and its local leadership team.

The Belgium VDAB Matching platform of the public employment service of Flanders (BE) is one such example. Since 2015, VDAB has used the business platform model to establish an ecosystem of commercial partners that can match unemployed citizens with job offers.

The citizens remain in control; when they get offers, they decide whether to engage or not. The commercial partners also win by getting free and fast access to data and functionality. And VDAB wins by allowing its partners to do the matching, creating efficiency and reducing its own costs. The partners also provide data about speed of processing and other parameters to optimize VDAB’s matching algorithms.

Collaborating on online platform models

There is still a lot of work to be done by governments to make this kind of model a success. The priority is to design a platform model that allows entrepreneurs to make a profit while citizens are guaranteed a decent service at a competitive price point. Learning to trust each other will be an ongoing journey for both sides. Acceptance is needed that the key drivers – profit versus quality – will be different for each side. Entrepreneurs will also require political leadership and a decent set of regulations to enable fair trade within a well-defined corporate governance structure.

If governments and entrepreneurs accelerate collaboration efforts in this area, success could ultimately mean better services for all of us in areas including healthcare, education and employment.