For government productivity to flourish, culture and technology must both be prioritised.
This was a key finding in a new Economist Impact report, sponsored by data and AI leader SAS, that examines the opportunities and obstacles of public sector productivity reform.
The report, Reimagining the Future of Public Sector Productivity comes at a time when AI is already changing the nature of work and productivity across the commercial sector. Will public sector organizations be able to seize that opportunity to reach new levels of productivity and citizen service?
“Amid fiscal constraints and rising demands for public services to address complex challenges like aging populations, climate change and economic uncertainty, governments must act decisively to implement productivity reforms. For instance, the fiscal response to the Covid-19 pandemic in select high-income countries amounted to 21% of GDP, underscoring the critical role of government intervention in times of crisis. Our research finds that while digital transformation is essential, it is not enough on its own. Success depends on adaptive organisational structures that overcome resistance to change and involve employees in the design and implementation of new technologies. Artificial intelligence offers the public sector the chance to transform how it serves citizens and enhance the experience of employees”, says Jonathan Birdwell, Head of Policy & Insights at Economist Impact.
Key findings of the report, which is based on a survey of more than 1,550 government and public health care employees in 26 countries across the Americas, Europe, Asia Pacific and the Middle East, include:
- The critical role of digital transformation and organisational redesign in boosting public sector productivity.
- The top AI use cases explored by governments, including predictive analytics and cybersecurity/fraud prevention.
- The importance of incremental productivity reforms and the challenges posed by budget constraints.
- The significance of partnerships with external suppliers to streamline and improve processes, increase response speed and enhance delivery.
- The need for greater engagement with public sector employees in designing and implementing productivity reforms.
Culture and technology go hand-in-hand
The report found governments are realising significant gains from investments in e-government, data-driven services and AI, but these alone are not enough to deliver change. The survey reveals that adaptive organisational design and digital transformation are the most important strategies to boost productivity – and nearly equally so. Additionally, the survey indicates that agencies that have embarked on digital transformation were more likely to have successfully implemented organisational reform.
Unfortunately, almost a third (31%) of respondents cite no current attempts to design adaptive organisational structures, nor to make investments in digital transformation, which could seriously hinder productivity improvement efforts.
“SAS Viya empowers the public sector with a unified platform that caters to diverse user types, from data scientists to business analysts. Its intuitive, no-code, drag-and-drop interface enables users to innovate faster. However, technology alone can’t unlock productivity. Organisations need a culture that fosters innovation and enables continuous improvements, leading to a substantial difference over time”, says Mikhail Knyazhev, Customer Advisory Director, SAS Middle East.
Governments are understandably cautious about risk-taking, with 70% of survey respondents agreeing that their organisation is adopting new technologies only after they have been proven effective in other organisations. In the UAE, this percentage is even higher at 84%. Additionally, governments have limited budgets and may lack the capacity to absorb new technologies. Data privacy concerns in country are crucial for 79% of responders, for points above the average, while 61% of surveyed responders consider budget constraints as major challenges to successful technology adoption, compared to 64% on a global level. Also, half of the responders in UAE cited an inability to measure productivity as an obstacle to productivity reform.
While respondents acknowledged these barriers, an overwhelming majority of the respondents in the UAE, 98%, see digital technologies as offering more benefits than risks to their organization, while the global average is at 90%.
AI takes centre stage
More than two thirds (70%) of respondents in the country believe that AI will have a significant/critical impact in improving productivity within their organisation over the next three years. The number is much higher than the global average where only half believes in such a significant impact. The report explores the most promising uses of AI in government and includes real-world case studies from agencies around the world. The survey revealed that predictive analytics was the top current use case for AI, selected by 64% of respondents, alongside Cybersecurity and fraud prevention. The ability to predict and plan for risks is one of the most appealing use cases of AI given its power at simulating scenarios.
Looking to suppliers to spark productivity
The research suggests that the procurement model for AI may need rethinking. AI often requires customisation and ongoing updates, as opposed to traditional procurement models focused on a single off-the-shelf product or project. Additionally, procurement departments often manage multiple domains and may struggle to assess the quality of new technologies. Public sector hesitancy to adopt technologies has been further driven by unfamiliarity with software-as-a-service models and the complexity of managing data-intensive technologies
Technology providers can be valuable partners in this process. Half of the survey respondents (50%) in Emirates cited outsourcing to external suppliers as one of the most effective strategies to improve productivity.
Getting employees on board
Productivity reforms are doomed to fail if employees do not buy in, yet the survey shows the need for greater engagement. A minority of survey respondents said that employees and managers are primarily involved in determining needs (15%), selecting the type of technology (19%), and implementing the technology (34%). Public sector workers need to understand the benefits of new technologies, supported by training, and need to be empowered to provide feedback for continuous improvement.
Productivity reforms are most effective when framed as enhancing the impact of government services on society, while improving employees’ experience. In fact, survey respondents cited employee satisfaction (50%) as one metric used within their organisation to measure productivity, followed by citizen satisfaction (45%), 9 percent points lower than the global average.
Productivity reforms can enhance the delivery of services via faster response time, streamlined communication and improved processes. These improvements enhance employee satisfaction by reducing backlogs and burnout and improve the citizen experience through quicker and easier access to services.
Reimagining the Future of Public Sector Productivity draws on a global survey of public sector employees, including in public healthcare and hospitals, and is supported by in-depth interviews with experts from academic institutions, government bodies, non-governmental organisations and international multilateral institutions. The report presents survey findings and qualitative insights, with recommendations to help stakeholders pursue ambitious but realistic productivity reform in central and local government.
Image Credit: SAS
