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Big ideas, little price tag

By Laura Baker - March 08, 2012

Laura_blogSometimes it’s the little things that make life better. Like the DVD envelop buried beneath my pile of mail—a reminder that for a low monthly cost I can enjoy unlimited movies with no late fees. Or the way my MP3 player untethered my favorite tunes from a growing avalanche of CDs and forever changed the way I think about buying, sharing, and listening to music. Or how a free phone app lets me quickly pay my parking meter without a frantic search for spare change.

As a modern consumer, I’ve grown to expect new technologies and services that help me get things done in new and different ways. It's a simple progression: technology advances, prices drop, and over time performance generally improves.

But one major sector of the economy has struggled to embrace the type of innovation that will achieve more for less—government. In an era of increasing commoditization, consumers want quality and convenience, all for a small price tag. Governments have certainly leveraged technology to improve the performance of cumbersome processes in the past 10 years but often at a high cost.

So, despite concerted efforts to improve performance, why does the public sector seem to struggle to attain the same results as so many private sector organizations have accomplished with innovative thinking in recent years?

The reason for this difference may be the absence of a phenomenon called disruptive innovation. First articulated by Harvard business professor Clayton Christensen, disruptive innovation, “describes a process by which a product or service takes root in simple applications at the bottom of a market and then relentlessly moves ‘up market’ capturing greater market share and displacing established competitors along the way.”

It’s not that governments do not innovate—on the contrary, innovations in government happen every day, from apps that deliver real-time data to defense-related technology that ensures the safety of soldiers. But the real challenge that the public sector faces is how to move from sustaining innovation to disruptive innovation. And it just so happens, that, while government may have been reluctant to embrace disruption in the past, it actually has certain built-in advantages it can use to encourage and shape disruptive innovation today.

Most governments are the largest procurer of goods and services in their country—putting them in a unique position to shape and create markets. In dozens of economic sectors, from K-12 education to defense to health care, a government can deliberately foster disruptive innovation by steering support toward disruptive approaches and opening up market to new, low-cost providers.

But to get more for less requires doing things differently. What is needed in government are innovations that break traditional correlations between higher performance and even higher costs. Disruptive innovation describes a philosophy to accomplish this goal and in the process transform public services. What would this transformation look like? Well, it may mean a better educational experience for my family, increased health and safety for my neighbors, lower costs for the government and, in turn, lower costs for me. Based on the way I now rent movies, listen to music, or park my car, I can only look forward to the impact disruptive innovation may hold for the public sector.

You can learn more about disruptive innovation and its potential impact on the public sector in the featured article below that highlights the latest report from GovLab, Public sector, disrupted: How disruptive innovation can help government achieve more for less.


Laura_BakerLaura Baker is a GovLab fellow and senior consultant in Deloitte Consulting LLP’s Federal Tecnology practice, where she has served multiple clients within the Health segment. Laura graduated from the University of Virginia with a BA in Economics and a BA in Foreign Affairs.

GovLab is a think tank in the Deloitte Federal practice that focuses on innovation in the public sector. It works closely with senior government executives and thought leaders from across the globe. GovLab Fellows conduct research into key issues and emerging ideas shaping the public, private and non-profit sectors.

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