The potential benefits of enhancing government efficiency are immense. According to a global study spanning 42 countries, achieving productivity levels comparable to top performers within peer groups could yield an estimated annual gain of $3.5 trillion. With increased spending on public services during the pandemic and accounting for inflation, this gap could exceed $5 trillion by 2024. This additional funding could be redirected towards improving public services, addressing long-term needs like aging populations, or mitigating fiscal challenges. Despite efforts, productivity in the public sector has stagnated, putting pressure on budgets and service quality. However, through strategic approaches, governments can bridge this gap and significantly enhance public outcomes.

Public sector productivity has faced significant challenges over the past few decades. In the United Kingdom, for instance, productivity has been declining since 1995, with a 20% decrease overall. Meanwhile, private sector productivity has surged, highlighting a widening disparity. The advent of new technologies, such as generative AI, may further exacerbate this gap unless proactive measures are taken. Only 37% of UK government bodies have adopted AI, compared to 65% of private sector companies that report regular usage across multiple functions. This discrepancy underscores the urgent need for a systematic approach to boost public sector productivity.

To address these issues, it's crucial to understand the mindset barriers that hinder progress. Many believe that improving productivity equates to budget cuts, which would inevitably degrade services. However, this assumption is flawed. Agencies often operate far from optimal efficiency levels, meaning there are opportunities to deliver more with existing resources. Another misconception is that automating services would alienate customers unaccustomed to digital tools. By segmenting users and providing tailored options, both efficiency and customer satisfaction can improve. Additionally, many struggle to realize the full benefits of investments due to unclear accountability and inadequate business cases. Ensuring rigorous evaluation and clear responsibility for delivering expected outcomes is essential.

Creating a system that fosters productivity growth requires leadership at both central and departmental levels. Central governments should set clear aspirations for service quality and commit to multiyear resource allocation. Encouraging innovative proposals and holding departments accountable for delivering on commitments are key. Departments must review current activities, identifying legacy initiatives that no longer align with priorities. Targeted services, efficient asset management, and organizational restructuring can all contribute to significant improvements. For example, a Nordic country streamlined its care home application process, reducing processing time by 70%, while a British bank enhanced customer experience and saved billions through organizational transformation.

Implementing this agenda effectively involves understanding the full potential for improvement, setting ambitious goals, and prioritizing initiatives with clear investment and benefit cases. Moving to implementation requires accountability for delivering benefits and a focus on scaling successful solutions. The case for enhancing public sector productivity has never been stronger. By adopting a holistic, systemwide approach, governments can create the conditions for sustainable productivity gains, ultimately delivering better services and value to the public.