The next 100 years of the Finnish public sector

The essence of the need to reform

The increasing indebtedness of the state and municipalities must be stopped. The road of increasing taxes and payments has almost reached its end. As for population structure, we are now one of the oldest nations in the world. Statistics concerning demographic renewal show that no change is in sight, either. Less than 60,000 babies are born in Finland annually, which is not enough for demographic renewal. The care of the elderly must be organized in a high-quality and cost-effective way. Urbanization is accelerating, due to which the few growth centres are struggling with an increased need for services. In the increasingly empty rural areas, decision-makers are contemplating how to be able to provide services for the diminishing population in some kind of sustainable way. The government is under constant cost pressure.

At the same time, it is known that even if the entire annual labour cost of EUR 4.3 billion (Government personnel 2016 publication) were to be cut, which is not, of course, even possible, the problem would not be solved. Instead of the examples given above, the focus should be strongly on a positive future. How can the public sector continue to be a driver of societal success and growth in its own role?

Placing the focus on residents and customers

Customer satisfaction is a very extensively used phrase. At the same time, it is so worn out that its organizations and production of services often falls under the ‘basic issues’ category. Measuring, monitoring, and developing. The development trend is, however, that over the next hundred years, the focus will be strongly on residents and customers in organization and production of services in the public sector. More emphasis will be put on service needs, service use behaviour, acting as an active resident and customer, and freedom of choice.

Consumer behavior regarding the use of public sector services is changing. Residents and customers will make even more choices, in which one of the most significant criteria is customer experience. Residents and customers and their service needs must be recognized better than before, and the services must be targeted and personalized. The services must be available 24/7. When examining the current services, it can be noted that in surprisingly many fields this is, in fact, already reality. How can this be realized in the future with the best possible resident and customer experience, in a competitive multichannel service environment, and with lower costs?

Modernization of service processes

When it comes to the public sector service processes, we are living in times of change. The segregation of the roles of organizer and producer is a growing trend, and networking and various multi-producer models are becoming increasingly popular. The increase in disruption and digital services in the public sector enables a great leap in the production and organization of services in a new way. Software robotics and the use of artificial intelligence are issues that will shape service processes more than anyone can even predict. All of this together brings great potential for the development of service processes.

At the same time, there must be ways to find potential. During the modernization of service processes, one can surprisingly easily be overwhelmed by the various opportunities and advantages and benefits brought by them. Usually, the benefits of the different development areas are not considered thoroughly enough. How does, for instance, the resident or customer truly benefit from the digitalization of service processes, and what is the amount of savings gained in the long run? Lean digital thinking, for instance, could provide a beneficial direction. With what kind of development work can short-term benefits be generated for the development of expert and service processes? How can capacity be built, at the same time, for more strongly digitalized services, software robotics, and artificial intelligence? Lean digital thinking can provide the answers to these questions.

Modern management

Successful management has a great effect on employee and customer experience, and thus on the success of the company or organization. At the beginning of the new century, the public sector is faced with a significant leadership challenge. The leaders and managers in the public sector will guide large reforms where possibly tens or even hundreds of thousands of employees switch employers, and all this should be accomplished quickly without causing any inconvenience in the organization or production of services. The importance of good leadership and management will be highlighted. As members of the work community, employees may assume a stronger role in setting objectives, succeeding in operations, and innovating. All this requires the capacity to increase the level of competence in leadership and management in addition to increasing individual competence. These can be developed with the aid of modern leadership.

The heavy burden of balancing the economy

The government debt of Finland has doubled since 2006. Many cities and municipalities have been struggling to balance their economies for years. At the time of writing this, one cannot help but notice the news concerning economic growth. It remains to be seen how long growth will last, but, in any case, the need to balance the national economy will continue. The issues described above, i.e., placing focus on residents and customers, the modernization of service processes, and modern management all support the notion that the challenges of balancing the public sector economy will be overcome.

At the same time, we ought to be exploring possible means of balancing the economy even more innovatively. Such means could be, for instance, private funds in property investments, social impact fund type solutions in the development of the diabetes care chain, or other similar non-traditional ways of funding services or investing. Innovative options must be introduced to decision making in a constructive way. They must be thoroughly considered and justified from the perspective of both the political and official entities. The public sector also has a good chance of succeeding on the threshold of the new century. Steering through the period of change will require joint effort, courage, and a great deal of open-mindedness and innovativeness.