Mind the gap: Countries should take action on uncollected revenues

We’ve all seen the headlines: Canadian government reports unprecedented deficit; U.S. elected officials clash over debt ceiling; Greece teeters on the edge of default. They all point to the monumental fiscal struggle most countries are engaging in these days. But, what if there was a way to put billions of dollars back into government coffers—money that is technically their due? That’s exactly what could happen if countries step up their efforts to address the tax gap.

Simply put, the tax gap is the difference between the tax collected and the theoretical tax liability if every taxpayer complied with the letter and spirit of the law. Take the United Kingdom. It’s been estimated that in 2010 the tax gap was US$56 billion. In Sweden in 2010 it was estimated at US$20 billion. And in the United States in 2006, it was estimated at US$385 billion. (Sources: HMRC (UK), Swedish Tax Agency, Internal Revenue Service (US))

Big ideas, little price tag

Sometimes 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.

Public sector, disrupted

The global public sector is under massive financial pressure. But that’s only one of its challenges. Citizens—the public sector’s customers—are also demanding better value for their taxes. And that includes dealing with government in new ways. With every sector of the modern economy and society changing in response to new technologies and social practices, citizens can’t help but wonder why so many government offerings remain shackled by the practices of yesterday.

These conditions indicate that the time is right to bring the principles and practices of disruptive innovation to the public sector. As a recently retired U.S. government senior executive, I am, of course, quite familiar with government’s ability to avoid change until it in fact becomes unavoidable. This persistent late adoption of new and more efficient technologies and processes costs government money, efficiencies, and, perhaps, most importantly, credibility. That’s why public sector executives everywhere need to become familiar with the concepts behind disruptive innovation and consider where in their organization they can plant the seeds of change.

The Gender Dividend: An urgent economic imperative

The biggest issue facing many of the world’s economies today is economic growth and job creation; yet it is with mixed results that governments and business are tapping into arguably the largest emerging market in the world and the greatest natural resource for knowledge, talent and investment: women. Statistics strongly demonstrate that there is in fact a gender dividend, but despite progress, there is a long way to go with respect to improving women’s economic opportunity and thereby harnessing the potential of the gender dividend.

What is needed is focused government policy and business engagement at all levels to support women at work. Sound socio-economic policies must underpin and encourage action, and governments, along with business, must innovate, support community investment, and remain committed to making the difference as it relates to women. Amongst business this means measurable, management-led policies and practices to drive female leadership across management roles and divisions, on boards, at the highest executive levels (the C-suite), and throughout the talent and supply chains. Many companies worldwide are making significant strides, but ongoing commitment is needed.

This is not just a question of the trillions of dollars of untapped consumer demand that women represent, but the potential for better, more informed decision-making in our societies, an educated and diverse source of talent for private and public institutions, and role models who can be an inspiration to billions of women and men worldwide. Government, business, and society must continue to integrate women’s experiences, perspectives and voices into the fabric of their organizations and systems. Only then will we truly benefit from the gender dividend.

For more on this issue, read the full article (PDF). Also read and download Deloitte Global Public Sector's report "The gender dividend: Making the business case for investing in women."

---

Charles Heeter is with the DTTL Global Public Policy Group and a principal in the U.S. member firm. In his role, he engages in Deloitte global public policy initiatives, is responsible for building cooperative relationships with capital markets stakeholder groups, and helps coordinate the Deloitte global regulatory network. Heeter is also Chairman of the Business and Industry Advisory Committee to the Organisation for Economic Co-operation and Development (OECD).

Mobilizing healthcare resources – TUNAJALI “We Care” program

The TUNAJALI "We Care" program is an initiative supported by the U.S. President’s Emergency Plan for AIDS Relief, through USAID, to assist the Government of Tanzania. Deloitte Tanzania implements the TUNAJALI HIV/AIDS Care and Treatment Program in collaboration with Family Health International and Cardno Emerging Markets, and this was  one of several client case studies recently highlighted in the Deloitte 2011 Annual Review.

It has been scientifically proven that the virus that causes AIDS, HIV, continuously mutates. Full adherence to HIV treatment is key to suppressing the spread of HIV. Poor adherence to HIV treatment has the dangerous potential of generating drug-resistant HIV viral strains, which could subsequently be transmitted.

People living with HIV/AIDS (PLIV) on anti-retroviral therapies (ART) must take medication daily for the rest of their lives. The TUNAJALI program experience shows that these patients are highly motivated to take medication initially, but that that changes over time. After nearly three years of treatment, some supported Care and Treatment Clinics (CTC) started experiencing notable losses of patients on ART. Some of the high volume (over 5,000 patients) at CTC sites were reporting Lost-to-Follow-up (LTF) patients between 30- to 40 percent of their enrolled PLHIV. A patient is considered LTF after two to three attempts to contact them within a three-month time period have failed. This raised serious concerns about long-term patient adherence to medication. It was clear efforts had to be made to identify the “lost” patients and to take reasonable steps to prevent “losses” of patients in the future.

The shock of the old

The Bush House Telegraph
News and views from the Deloitte Center for Strategic Leadership, Bush House, London

Forget innovation and originality, in the work of the consultant the old leadership lessons matter most.

A colleague recently complained to me that we don’t do anything new at Deloitte, just “re-visit old truths.”

“Would you prefer it if we re-visited old lies?” I replied—in an authoritative, yet avuncular way.

“Hmmm…” she murmured and returned, flat-footed, to her desk.

Had she been in the mood—and had I more time—I’d probably have treated her to a few “old truths” about consultants. But her loss, dear reader, is your gain.

The fact is we seldom trade in new things. Scientists offer discoveries and breakthroughs; consultants, generally, experience and insight.

In my field, leadership, a subject anatomized for thousands of years—think of the Tao Te Ching and The Republic—there’s little we can come up with that hasn’t been thought of before. Our job is not to re-invent the wheel but to add new value to those old truths—and help clients apply the lessons of leadership in ways that will benefit their organizations. We’re about practical solutions for old problems—transformations, possibly; revolutions, no.

Why do old problems keep recurring? Why can’t leadership lessons just be learned once?

Deep diving for innovation

You work for the government and you have to build from scratch a dashboard that measures innovation in your agency. Never mind that your government probably hasn’t even developed a comprehensive system of innovation. Oh, did we mention that you have less than a day to do it?

Welcome to the 2011 Victoria Public Service (VPS) DeepDive^TM innovation workshop. Here, innovators from the Victoria Public Service (VPS)—and earlier in the week the Australian federal government--gathered to design systems that gauge whether their innovation efforts were delivering results. And with that one-day timeframe, it wasn’t going to be easy.

That’s where Deloitte’s DeepDive^TM comes in. An approach for rapid brainstorming and problem solving, DeepDive^TM has been used hundreds of times by Deloitte to help companies, governments, and nonprofits innovate. DeepDive^TM enables teams to create breakthrough solutions in a dramatically shorter time than conventional problem-solving approaches.

The shuttle may be grounded, but NASA's relevance lives on

On Thursday 21 July the space shuttle Atlantis safely landed at the Kennedy Space Center in Florida—and so ended a 30-year window into the wonders of space for thousands of technophiles throughout the world.

But with NASA’s whole-hearted embrace of social media, the journey may not be over by a long shot. Yes, the future of U.S. manned space missions remains uncertain. But for those who follow NASA on Twitter—and have been lucky enough to be a part of NASA’s recent in-person “tweetups”—the agency’s use of social media presents a whole new way to access the inner world of space exploration—and create a new generation of space enthusiasts.

NASA currently administers over 100 Twitter accounts.  Last year, it updated its iPhone application with new connections to social media sites and access to more than 125,000 photos from its image collection.  And by a wide margin, NASA placed first in a recent study that ranked 100 public sector organizations in the effectiveness of their websites, digital outreach, social media use, and mobile sites.

But what could possibly be the significance of an astronaut tweeting from outer space (except that it’s really cool)? It all comes down to access.

Why WEP matters: The UN Women’s Empowerment Principles – one year later

It is a universal maxim that there is strength in numbers. While it’s great when one company commits to investing in women—it’s even better when that number is 170. That’s how many CEOs have now signed the United Nation’s Women’s Empowerment Principles (WEP). And as evidenced by the UN’s one-year commemoration of the launch of WEP last month, that number seems likely to grow.

This event, where I participated as a panelist, took the importance of WEP to a new level. More than 150 executives attended the conference, from such well-known companies as Banco de Brasil, Calvert Asset Management, and Novo Nordisk. The UN Secretary-General, Ban Ki-moon, himself opened the meeting—and there were nearly as many men as women in attendance.

All of this underscored a palpable sense of urgency that seemed to pervade the conference. An urgency that the time to invest in women is now. Not in a year or two when the economy recovers. Not when the dust settles after various laws and regulations take effect, but now. If you want to grow your economy or business and stay competitive, you need to start taking the role of women in organizations and in leadership roles more seriously—and focus on intentional change.

Not business as usual: Realities for professional women

In the past year I have co-authored two reports on women—Paths to power: Advancing women in government and The Gender Dividend: Making the business case for investing in women—and participated in many events, including a symposium at the Harvard Kennedy School, discussing how investing in women can help organizations and countries reap a gender dividend. Yet even with all the attention this issue is attracting, it still seems that change is slow in coming.

Statistics bear out that there is awareness of the potential that women represent. There is movement to change the rules around equal pay, equal access, and equal opportunity as well as a resetting of norms to acknowledge the importance of women’s advancement and economic access.  In many cases, these concepts are validated through legislation and policy.  

But the results are not yet there, the change is not entirely embraced, and the “systems” are not acting in concert with the rules. Working women are still limited by a lack of support networks and mentors as well as near -impossible demands in terms of work-life balance. Yes, there are organizations that value women and choosing to work at one might be the single most important decision a woman can make to ensure her career has longevity and advancement.

But if you are waiting for an organization to drive the new behaviors that will allow it to reap the gender dividend, you may miss important windows of opportunity. So what can you do right now? You can build a personal business case for yourself.

The business case concept put forth in The Gender Dividend was built to argue for an organization’s targeted investment in women. But if we morph the concept ever so slightly, it can also be applied directly to an individual. We are at a moment in history when both top-down and grass-roots approaches can coexist and you, the individual change agent, can serve as a powerful element in the current state of play.  Enough individuals taking action can and will have a significant impact.

As you mentally consider your business case, there are two realities to keep in mind: