4 ways governments can serve their constituents better and catalyse innovation

Effective governments have the power to spark scientific innovation, enable economic growth and provide individuals with hope when they need it most. None of this has ever been easy, but today’s civil servants face even more difficulties, including declining trust in government, technological disruption, climate change and political tensions. Meeting such varied expectations is, to put it mildly, challenging.

Growth. Sustainability. Equity. Efficiency. Getting the trains to run on time. The demands on government are big, and getting bigger. New technologies and practices, however, present opportunities for governments to accomplish their mission of serving the public.

The good news is that some governments are meeting these rising and diverse expectations.

Here are four ways that public-sector agencies can improve how they deliver the services their constituents expect — and deserve.

People’s expectations are high when it comes to service, and too often governments can fall short. In the US, people are often dissatisfied with their experience interacting with government officials. Making services more accessible, faster and easier to use enhances trust in government and can also reduce costs. Every percentage-point increase in customer satisfaction with a US federal agency increases trust in that agency by as much as two percentage points.

Two steps are critical. First, establish a link to value, whether that is defined as increasing trust, reducing wait times, or improving access. Second, identify bottlenecks and reimagine the user journey to address them.

Technology platforms can be a key enabler, including redesigning processes that take advantage of digital, analytics and Artificial Intelligence (AI). Historically, however, governments have under-invested in their technology infrastructure, or not invested well. McKinsey research, conducted with Oxford University, found that fewer than one in 200 IT projects delivers the intended benefits on time and within budget.

To do better, there are six critical capabilities: align top leadership and agencies on a business-led roadmap, fine-tune existing processes to acquire the right digital talent, create and deploy agile teams, develop technology for speed and distributed innovation, make interoperable and connected data a priority and scale digital solutions across government departments.

Government productivity can be difficult to measure because inputs and outputs often cannot be readily quantified. That said, measuring cost efficiency, outcomes and quality of service is often possible. The fact that government has a different set of priorities than the private sector can be an added challenge, but it is not an insurmountable roadblock to increasing performance.

Real-time data, predictive modeling and performance monitoring can support sound decision-making — something that the pandemic accelerated. Australia , for example, linked spending patterns derived from anonymized credit- and debit-card spending to receipt of stimulus funds. This allowed it to understand, state by state, the real-time efficacy of the stimulus packages.

In addition to gathering information, there are a number of no-regrets moves that can improve efficiency. Among them: deploy digitization and automation; optimize organizational structure and governance; invest in talent; enhance process efficiency; manage customer demand; and consolidate support services. When McKinsey surveyed 50 leaders last year, however, implementation in these areas was spotty, with fewer than 10% saying they had implemented ways to manage demand and source smarter, for example.

As in the private sector, most transformation efforts fall short — only about one in five for government. But difficult does not mean impossible. Singapore’s Smart Nation Initiative successfully established online platforms that improved productivity. By 2020, 94% of government services had been digitized, and outcomes improved, with 85% of residents reporting that they were satisfied and 80% of businesses noting a reduction in transaction times.

Governments can play an important role in creating a stable environment to enable private companies to compete and thrive. In addition, many governments are stepping up efforts to actively encourage key sectors. Both the US and the EU, for example, have enacted legislation to support their manufacturing and semiconductor industries, while in the UAE, leaders are evaluating ways to promote “promising economic sectors.”

For these efforts to succeed, there needs to be an investor mindset. This means placing shrewd bets on future strategic opportunities; knowing where the sources of competitive advantage are; gathering information; and establishing performance indicators to monitor progress.

There may also be ways to integrate private-sector capital, ideas and expertise, by improving collaborations through rotations, secondments and formal and informal engagement. Public-private partnerships (PPPs), for example, have been used to deliver major infrastructure projects in many countries. With their strong capabilities in risk management, private contractors can generate efficiency gains. PPPs can also spread a project’s cost, freeing up public funds for other projects.

There is a public-sector talent shortage in many countries, the effects of which are amplified by the digital skills gap. In February 2024, the US had 8.7 million job openings. However, only 6% of hires were in government — leaving almost 900,000 government jobs unfilled. The UK estimated last year that the number of digital, data and technology professionals in the civil service is 4.5%, less than half the number it needs.

What is needed is a talent agenda that matches demand, starting with a coherent strategic workforce plan that ensures that the right capabilities are matched to the strategic goals of the organization. Rather than the traditional career ladder, a more diverse set of career pathways could allow staff to develop greater breadth of expertise. And finally, operating models can be established that measure how agencies and personnel are meeting public expectations.

Scott Blackburn is a senior partner in McKinsey & Company’s Washington, DC, office; Andrew Pickersgill is global leader of the Public Sector practice and a senior partner in Toronto; Jörg Schubert is a Partner in McKinsey & Company’s Dubai office.