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The COVID-19 crisis has ramped up the demands on governments to deliver for citizens, at a speed and scale not seen in peacetime. In this article, we shine the spotlight on ten fundamental opportunities to shape more resilient societies, build more resilient governments, and revitalize the core capabilities of the public sector, highlighting cutting-edge “best practices” and suggesting several transformational “next practices” that leaders can embrace to reimagine government for the long term (exhibit).
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McKinsey_Website_Accessibility@mckinsey.com Shaping more resilient societies
Based on our experience, four approaches could help governments create more resilient societies:
1. Hone virus control and reimagine healthcare. The COVID-19 pandemic has affected all stakeholders in the healthcare ecosystem. Examples of effective responses to this crisis abound, such as using digital technology to support containment and preparation to accelerate supply of personal protective equipment (PPE) and healthcare capacity to meet the surge in demand and navigate the road to recovery. Governments can unlock the potential in the digital and telehealth sector to make these services the first choice for patients and globally accessible.
2. Unleash a learning revolution. Governments have been forced to rethink learning and education systems to combat the effects of school and university closures and spikes in unemployment. Best practices include adopting hybrid learning models, building skills-based learning modules, funding continuous learning courses, and creating virtual resource centers. A “next practice” could include making the world’s top teachers accessible to students anywhere and focusing in-person instructional time on exercises that contribute to a holistic education. Governments and employers can also foster an effective reskilling ecosystem that includes micro-credentialing for lifelong learning.
3. Shape resilient trade and supply chains. Countries have responded to global-trade and supply-chain disruptions due to COVID-19 by protecting their own supplies. In the longer term, companies will need to adopt several next practices to make their supply chains more resilient—for example, by reducing the number of unique parts, building in redundancy across suppliers, nearshoring, and regionalizing supply chains. In addition to securing health equipment and essential food supplies, governments can help companies increase their resilience. At the same time, governments may need to consider the policy implications of remote working in the knowledge economy: as exports of highly skilled services grow, these skills will become increasingly mobile and unshackled from the location of their employers or clients.
4. Distribute effective stimulus measures. The COVID-19 crisis saw governments implement unprecedented economic responses, allocating more than $16 trillion through the end of September 2020. To support household welfare and help businesses survive the crisis, governments have used both quickacting and innovative delivery mechanisms. Potential next practices for governments include targeting stimulus in areas that achieve the broader objectives of a more resilient society, such as expanding green energy and energy efficiency; accelerating government digitization and offering companies incentives to adopt new technologies; and shaping the workforce of the future to increase resilience in the face of rising automation.
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Building more resilient governments
Three key opportunities could make government operations more resilient:
5. Deliver contactless government. The COVID-19 pandemic has made digital transformation a priority—digital channels have become more important, and citizens and customers increasingly prefer them. Examples of best practices include automating daily data collection from key operators to closely monitor and support decision making about critical food items at risk, as well as the use of “express digitization”—rapid development of automated online platforms—to cope with the substantial spike in demand for government assistance, such as for grant claims. For governments to implement technology-enabled change initiatives that address citizens’ needs faster and at a lower cost than the current, manually processed approach, they need to understand the end-to-end customer journey in services, spanning both public- and private-sector touchpoints. Governments can also enable contactless transactions beyond public services by facilitating adoption of cross-cutting enablers such as digital identities.
6. Manage sovereign balance sheets with an investor mindset. Global government deficits could reach $9 trillion to $11 trillion in 2020 and as much as $30 trillion by 2023. Many countries have applied traditional debt issuance, revenue optimization, and expenditure control to address the immediate challenge, all of which can be further optimized. Over the medium term—one to three years—governments could monetize the assets on their balance sheets, a strategy that represents a largely untapped and potentially greater opportunity to raise additional revenue and reduce deficits, as worldwide public assets are worth more than 200 percent of global GDP and capable of generating revenue of 2 to 3 percent of GDP annually.
7. Institutionalize best-practice crisis response to prepare for the next crisis. The COVID-19 crisis has pushed many countries to identify and start creating the elements of an effective local outbreak response. Several governments have established crisis nerve centers, enabling coordination of multiple work streams across existing crisis-response structures in government and society for greater response efficacy and agility. An important best practice in crisis management is to establish a plan-ahead crisis unit—a cross-functional team freed from day-to-day crisis management that looks ahead and considers simulations of various scenarios. Next practices require that top management in government, supported by a resilience team, think ahead and make investments to build resilience and preparedness for future potential crises.
Closing the $30 trillion gap: Acting now to manage fiscal deficits during and beyond the COVID-19 crisis
Revitalizing the core capabilities of the public sector
Three key opportunities could reinvigorate the core capabilities of the public sector and the way it works:
8. Ensure faster, better decision making that harnesses data and analytics. Governments have acted with exceptional speed to save lives and livelihoods in the COVID-19 crisis. Several countries have quickly deployed dashboards that are constantly updated, visually rendering data to easily share statistics and give citizens greater transparency into government efforts and responses. Many organizations have assembled cross-functional teams to develop analytics solutions for faster responses to changing situations and emerging risks and issues. Next practices might include applying advanced use cases in data and analytics, such as nowcasting—forecasting the near future, present, and even the recent past using frequently measured indicators—to inform policy and decision making.
9. Cultivate smarter, more productive ways for public servants to work. The COVID-19 crisis has required public servants to improvise and adapt to a rapidly evolving situation. A series of enforced “natural experiments” has reset ideas about what is essential and what is possible. Governments have redeployed staff to respond to changing demand for services. Looking ahead, automation could strengthen public-service productivity and move significant numbers of public servants from back-office jobs into more valuable and meaningful citizen-facing roles—provided governments focus on the citizen experience and effective change management, including building the capabilities required to make the necessary changes.
10. Foster new forms of partnership with the private sector. By partnering with the private sector and multinational institutions to design and implement well-structured stimulus measures, governments could help prepare workforces for a technology-focused future and improve the long-term competitiveness and resilience of key industries. Best practices have largely been limited to mandated public requests to the private sector, with some examples of proactive partnerships and innovation to produce critical supplies and drugs and scale up the distribution of social-protection payments to households. The public sector can take partnerships with the private sector to the next level to enhance service delivery—recognizing that there is a natural intersection between the role of governments and that of companies’ broader societal purpose—by clarifying its role and considering the long-term view.