When fast gets very fast: the dizzying pace of technology in the private sector and what this means for the public sector

In recent blogs I described why I think organisations are compelled to introduce new business models due to intense competition. And this competition is accelerating because of global markets and the introduction of new technology.

Contrast this with the system that is supposed to drive innovation and service improvement in public services.  Innovation in a global market does not – and cannot – rely upon a best practice circular. Yet our mindset in government and across the public sector is that this is precisely how we expect innovation and continuous improvement to be stimulated and reproduced.

We still have a distinctly top down system based on sucking in best practice to some central agency.  There it is checked, audited and inspected.  Then it is spat out over the next five years to a reluctant audience on the front line.  The manager in the local hospital or council has neither the incentive nor the inclination to accept what a ‘colleague’ down the road is doing because, as you would have heard many times, ‘it might work there but we are different’.

This mechanism is clumsy and ineffectual. Yet in the private sector, we appear to have found a different way to share best practice – we pinch it.

The intense pressure from competition forces the best companies to copy and refine whatever they can from their competitors to become best in class.  And the rate of innovation and adoption will continue to accelerate. Take, for example, the smartphone technology that gave rise to Uber (despite their recent problems in London) and how, before the world figures out how to regulate ride-sharing, self-driving cars will have made those regulations obsolete.

It is in that vein that I am increasingly struck by the dichotomy of language that describes the difference between the public and private sphere. It is not uncommon to hear the Government, when talking about the economy, to constantly emphasise the challenge to improve private sector productivity and to create a more entrepreneurial society.

Yet, when it comes to reforming the public sector, the emphasis tends to default to centralised controls.  There is unease and opposition in some quarters to flexibility and change, with insistence on preserving structures and centralised systems.  These two worlds, public and private, which you and I inhabit daily, cannot remain artificially divided forever because, contrary to popular belief, these two worlds are not made up of fundamentally different people.

Nor are the pressures on the public and private sectors completely different.

Both face the challenge of becoming more responsive and accountable to their customers or service users, their employees and wider society.  Also, if we are to remain true to concepts of the welfare state, universal provision, social justice and equity in the delivery of public services, we need to address the pressures of global markets and the challenge to representative government.

Why?  Because these pressures are calling into question the ability of traditional tools and levers – such as the way the Government exercises legitimacy, ownership and control – to respond to modern needs and pressures.

Our challenge is to construct new tools and levers that stimulates public services to find a way of promoting practitioners whose experience and reputation gives them the self-confidence to lead others to innovate. And for the system to develop a set of incentives, and the institutions a set of capacities, to continuously reinvent themselves in ways that align individual interest with the wider public realm.  I am not saying the private sector has all the answers, but it is certainly worth exchanging ideas.

If you enjoyed this, you might also enjoy another recent post inspired by the innovation demonstrated by Apple.

I future blogs I plan to dig deeper into how public services can be reformed and the role of competition and choice in public service supply chains. As always, I’d be grateful for your thoughts and comments – please get in touch.