Public Finance

he rate of change at all levels and all sectors of government is staggering. In both theory and reality, visible both inside and outside government structures: Silos are coming down. The walls inside governments and between government agencies and between government and the private sector—all of these boundaries are increasingly being disbanded in better service to constituents.

This year’s Government Trends report highlights a vital shift with far-reaching implications. In the age of disruption,1 governments are transitioning from hierarchies to networks to enable collaboration to achieve intended outcomes. Silos are being all but eliminated in areas like data, funding, and workforce to pool resources, realizing synergies and capabilities. We are in an age of vexing challenges, so public officials, corporate leaders, and nonprofits are moving toward collaborative public-private ecosystems to leverage shared knowledge and unique strengths to drive solutions.

We agree with organizations like Deloitte who see six ongoing paradigm shifts—discontinuities—that are driving this change:

  1. Accelerated technology. Governments are using technologies such as cloud computing, data analytics, and AI to build connections between people, systems, and different government agencies.
  2. Convergence of physical and digital realms. Technologies such as Internet of Things (IoT) and digital twins enable the convergence of physical and digital realities at a rapid pace, allowing government at all levels to make informed decisions, anticipate problems, and gain reliable insights into the future.
  3. Decline of “the theory of the firm” and rise of “the theory of the ecosystem.” Most individual organizations increasingly see themselves as part of the larger community. Why labor in isolation when you can achieve win-win results through collaboration? Datafication, digitization, and connectivity are dissolving traditional boundaries.
  1. Blurring of the lines between public and private. While still focused on profits, businesses are also embracing social and environmental responsibilities, with many adopting purpose-driven business models that can help deliver public solutions.
  2. Rise of networked power. Hierarchical and centralized power structures are giving way to more networked, decentralized, and shared models of authority.
  3. From public to “network” trust. Public trust in government is near historic lows.2Complex problems often involve numerous players, and citizens are increasingly looking to businesses and nonprofits to take action on cross-cutting societal challenges. This shift is reframing the paradigm away from “government should solve X” to public leaders guiding ecosystem-driven solutions that tap into a broad network of solution providers.

These six discontinuities are reframing how governments approach their role in delivering public value. The result: Walls are coming down which will enable governments to be more effective and connected to those across and outside of government.

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