Innovation
Public services transformation could take Europe from austerity to 15m new jobs by 2020
By Finfacts Team
May 18, 2011 - 5:06 AM

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Public services transformation through innovation and entrepreneurship in public sectors, could take Europe from austerity to 15m new jobs by 2020, according to a report published in Brussels on Tuesday.

The study - - Driving Public Entrepreneurship: Government as a Catalyst for Innovation and Growth in Europe- - conducted by the Accenture Institute for Health & Public Service Value and Oxford Economics found that as many as 15m additional jobs could be created in the European Union by 2020 -- 7% above current 2020 employment estimates -- if governments use the economic and social policy levers at their disposal to mobilise a broad resource base, catalyze innovation and drive social progress and economic growth. The research found the European Union could potentially increase its overall Gross Domestic Product (GDP) growth rate by an additional 8% beyond current 2020 predictions, which would equate to a €1.2trn boost to the European economy.

A copy of the study which was produced for The Government of the Future Centre, a partnership of the US management consultancy firm, Accenture, College of Europe and the Lisbon Council, was presented on Tuesday to  Jean-Claude Juncker, prime minister of Luxembourg and president of the Eurogroup of Eurozone finance ministers.

The key finding from the research states that translating austerity into growth demands a profound change -- modernization and transformation of the state and its public services.  Public spending across Europe accounts for half of total GDP, with public sector employees accounting for 20% of the workforce. Governments are major consumers too: As a European average, public procurement budgets make up approximately 17% of total GDP.

The report says the sheer economic size and power of government means it must lead the charge for reform by making dramatic changes in the way it delivers healthcare and social services, uses technology in its interactions with business and citizens, fosters growth in new areas such as sustainability and Health IT, reduces waste and fraud by leveraging analytics to improve tax and benefit systems and, importantly, in the way it procures goods and services.  The report includes several examples of governments across Europe that are developing these new delivery models for employment, health and human services that showcase both cost reduction and performance improvements. 

Based on interviews with senior leaders across Europe, the report concludes that there is a burning platform for public servants to become public entrepreneurs.  It finds that: 

  • Many public service leaders are reshaping services to accommodate reduced budgets;

  • Some are beginning to embrace innovation as a means of driving public value;

  • But too few are actively considering how they can be leaders that inspire economic growth by radically adjusting the way they work around new, collaborative business models.

Research by Accenture has identified four socio-economic global trends, impacting the global economy and driving opportunities for forward-thinking governments to catalyze innovation and public entrepreneurship.

1) The graying of the population represents a major untapped growth opportunity as older people become more productive, retire later and remain active consumers of goods and services; 2) intelligent energy, green infrastructure, resource management and carbon finance and investment (alongside regulation and environmental targets at national and EU levels) are important drivers for change—for businesses, government, voluntary agencies and private households. The report shows how, through smarter procurement and better public-private partnerships, cities like Amsterdam are creating the platform for greener outcomes and new economic growth; 3) the report shows how, by tapping into the potential of open data and online services, governments can generate efficiencies and support innovation and growth in the wider economy; 4) governments must encourage collaborative learning and skills development between Europe and developing economies whilst establishing new international markets for shared public sector innovation.

“Government holds major procurement budgets. We are missing a trick if we don’t use this lever to help catalyse innovation. We can set parameters and selection criteria that will encourage private sector providers to come up with new solutions.”

Mark Bennett, Green Business Officer, Dublin City Council, Ireland

“The Government is still playing in too many fields. The competition in the innovation space from emerging countries is increasing and focus is needed.”

Dr Tim Jones, Program Director, Future Agenda, United Kingdom

“We need to be much more flexible and open-minded about change. Within public services, achieving this would require a major culture change. Public sector workers at all levels need to be encouraged to take risks and do things differently.”

Gerry Breen, Lord Mayor of Dublin, Ireland


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