When it comes to Nesta’s work on government innovation, one of the core challenges that occupies our thoughts is how to help governments and the wider public sector respond to rising demand for services in the face of ever tighter budgets.

We tend to think about potential solutions in terms of three core approaches: making smarter use of people, smarter use of data, and smarter use of technology. In this article, I want to explain why the order of those approaches is not accidental. Moreover, the fact that many attempts at public service reform have conducted them out of sequence may be precisely the problem.

The digital government narrative

The potential of technology to reform government (‘digital government’) is often expressed in something like the following terms:

Today, we are fortunate to live at a time when a number of game-changing technologies have reached a state of maturity. We have cloud, mobile, apps, big data tools, the internet of things, and so on.

If we can just get the right technology into our public sector organisations, it will unleash a wave of data from sources old and new that can be analysed to give us new insights.

With those insights, we can design new, smarter ways of working that deliver more and better with less.

It’s compelling stuff.

It’s also completely flawed. For if we start our conversations about public sector reform with the technology, three negative consequences typically follow.

First, it’s the most disempowering message we could give to politicians, public sector leaders, service managers and frontline staff. It says to them: your expertise and experience isn’t relevant here. You need the tech specialists to find the solutions for you.

Second, many public sector organisations who take the idea of ‘digital’ government at face value believe it’s something that should be led by their digital or IT teams. Let’s be clear about this: public sector reform cannot be delegated to the IT department.

Third, if the primary focus is on technology, then we often end up bolting on new digital tools to the same old ways of working. It would be nice if we could just procure our problems away with a new IT solution. But the level of funding pressure is such that this simply isn’t sufficient.

Government Innovation starts with smarter ways of working

So what should we do? Our advice: reverse the order.

The first question should be: how do you want to work? Put differently, how can you make smarter use of people?

The second question is: what data do you need in order to be able to work in those ways? 

The third question – the final question – is: what technology do you need to give you that data so you can work in those ways? The wonder of living today is not that a specific set of technologies is now viable. It’s that we can broadly take for granted that technology can do whatever we want it to do.

Smarter ways of involving people

So let’s start in the right place and address the question of how we want to work. How will we make smarter use of people?

There are many different potential sources of inspiration. But we could start by observing some of the most disruptive and scalable digital businesses of recent years. In some places they are loved, in others they are loathed, but it’s hard to dispute that sharing economy companies like Airbnb have made a significant impact in their chosen fields.

For our purposes, what’s interesting about them is not just that they are digital businesses, but that they have used technology to change the business model – change the way people are involved – in the industries in which they operate.

Should these business models be the preserve of a handful of profit-driven Silicon Valley firms? We think not. That’s why Nesta has created the ShareLab Fund, which aims to support organisations to develop and test​ new operating models that can make an impact on addressing social issues. We are currently supporting eight early-stage organisations, but let me mention two by way of example.

Social Value Exchange brings together suppliers who need to create community benefits (due to the provisions of the Social Value Act) with community-based organisations who already are - but who lack resources. An 'eBay for community donations’, if you will.

Share Somewhere is a venue finder for community spaces, making it easy for voluntary organisations and community groups to find low cost and under-used spaces and to rent them out.

Our hope is that collectively, these organisations will help reveal how business models and platforms that involve people in interesting new ways can help address real social needs.

Augmenting the power of public services

Most of the organisations supported by the ShareLab Fund will complement but operate outside of the public sector. But a similar approach has been shown to work as a partnership with public sector bodies.

GoodSAM is a perfect example. When somebody calls the emergency services to report that an individual has had a cardiac arrest, as well as dispatching an ambulance, many ambulance trusts are now able to send out an alert to GoodSAM. The GoodSAM app alerts qualified first aiders in the vicinity of the victim, highlighting their location and that of the nearest defibrillator so they can hurry to the scene. When every second counts, those volunteers can make the difference between life and death. Indeed, they have already been proven to do so.

To emphasise: this is not an app that’s just been bolted on to the same business model. Instead, it uses digital technology to augment the capacity of a public service by tapping into a volunteer network. In short, it makes smarter use of people.

Where do government innovators come from?

When thinking about public sector reform, we should also think about making smarter use of people in terms of generating new ideas. In many cases, the people with the best understanding of the problems and likely solutions are those working within the public sector itself – and especially frontline staff.

Acknowledging this, the Innovate to Save programme is a £5m initiative that will back government staff and third sector organisations to test new ideas. If they are successful, they can then be issued with a loan to scale their work, which can be repaid over time as the public sector reaps cashable savings from the new way of working. The programme also recognises an important truth: we can’t expect to determine what will succeed a priori – we need to run experiments in the real world. So let’s enable those closest to the problem run those experiments for themselves.

Conversely, some problems lend themselves to entirely new thinking and fresh perspectives, especially from people outside the system. That’s one of the reasons why Nesta believes so strongly in the power of challenges prizes, as led by our Challenge Prize Centre. Challenge prizes can be a highly effective tool for problem areas where we can answer ‘yes’ to the following questions:

1. Can you define a clear goal and how to measure whether it’s been met?
2. Would better solutions be generated by a wider pool of innovators?
3. Could a prize motivate innovators?
4. Could a prize accelerate progress?
5. Could solutions be adopted/taken to market?

These techniques are currently being deployed in areas as diverse as finding solutions to antibiotic resistance (the Longitude Prize) to providing new data driven tools to help increase the productivity of small farmers (Data Driven Farming Prize).

The challenge prize method can also be usefully applied to the realms of public sector procurement, an area not normally associated with innovation. All too often, public sector bodies specify to the nth degree the means as well as the ends of what they want, preventing them from being exposed to entirely different but potentially better ways of solving the problem they are aiming to address.

To improve this, Citymart uses a ‘problem-based procurement’ approach, helping cities to access the ideas of citizens and entrepreneurs to provide innovative solutions by specifying the problem they are trying to solve instead of the product they want to buy. They frame the process by asking innovators three questions: “What is your idea for solving the problem, how ready is your solution, and how can we measure its success?” To date it has already worked with 63 cities to open up procurement in areas as diverse as smart street lighting to improving pedestrian safety at road crossings.

Your most valuable asset?

Nearly all the examples above involve some combination of making smarter use of people, data and technology. But the key point is that the order of thinking matters: people must come first - the technology is the enabler, not the driver. Without operational excellence, no amount of data or technology will help extract the public sector from its current financial hole.

Nesta has been arguing for people powered public services for the past 10 years, from our People Powered Health programme to People Helping People. But there remains much to be done.

So let’s start thinking much more seriously about how we can make smarter use of individuals both inside and outside the public sector - harnessing their time, ideas and products to deliver real government innovation.

Find Eddie on Twitter

Image Credit: Pixabay eak_kkk CC0 Public Domain