Created by Meta AI

Digital products in the public sector

Krishna Kumar K
6 min readAug 3, 2024

--

Governments across the world have successfully launched digital products used by millions of users. We use email from Google and social networks from Meta. However we use digital payment infrastructure from the Govt in many countries. What are the digital products and services that make sense for the public sector and why ?

Government activities as defined by economists are:

  • Providing a legal system for a market economy to function & intervening during market failures
  • Producing certain goods — defence (public good), education
  • Affecting what the private sector produces, through subsidies, taxes, credit, and regulation
  • Purchasing goods and services from the private sector, which are then supplied by the government to firms and households
  • Redistributing income

A specific case of market failure is the case of ‘public goods

Source: Economics of the Public Sector — fourth edition

Some goods either will not be supplied by the market or, if supplied, will be supplied in insufficient quantity. An example on a large scale is national defense; on a small scale, navigational aids (such as buoys). These are called pure public goods. They have two critical properties. First, it costs nothing for an additional individual to enjoy their benefits: formally, there is zero marginal cost for the additional individual enjoying the good. It costs no more to defend a country of one million and one individuals than to defend a country of one million. Second, it is, in general, difficult or impossible to exclude individuals from the enjoyment of a pure public good. If I put a lighthouse in a rocky channel to enable my ships to navigate safely, it is difficult or impossible for me to exclude other ships entering the channel from its navigational benefits. — Economics of the Public Sector

This gives us certain scenarios where Govt interventions make sense. In the current world, almost all Govt activities have a digital presence. The term Digital Government is ubiquitous.

A framework by Effective Altruism to choose the right problem to work on looks at the following factors:

https://80000hours.org/career-guide/most-pressing-problems/

There is some similarity with economic theory of public sector. Certain problems are ‘Neglected’ by private sector because of ‘Market Failure’ conditions. There is no incentive to provide good medical facilities in rural areas where the population might not be able to afford free market rates. However Governments will also have to put their weight on problems that are not immediately solvable — cancer, climate change for example

Digital Strategy

If we examine Digital Strategy from Governments from across the world, we see emphasis on on the following

  • Public digital services
  • Cybersecurity or trustworthiness of cyberspace
  • Digital infrastructure & digital skills
Source: https://mkm.ee/media/6970/download

Public digital services

Any service offered by the public sector is bound to have a digital component. Digitalisation of the external touch points and internal workflows of public services is a de-facto standard maintained by most progressive governments.

Eg. Income Tax filing, Application for licenses, Application for visa, passport etc.

Maintaining a trustworthy cyberspace

Cyber crimes could have an economic motive or a non economic motive. Cyber warfare by state and non-state actors is no longer a topic for science fiction.

The Center for Strategic and International Studies (CSIS), in partnership with McAfee, present Economic Impact of Cybercrime — No Slowing Down, a global report that focuses on the significant impact that cybercrime has on economies worldwide. The report concludes that close to $600 billion, nearly one percent of global GDP, is lost to cybercrime each year, which is up from a 2014 study that put global losses at about $445 billion.

Maintaining a safe and trustworthy cyberspace for residents becomes the responsibility of the Govt as the provider of public goods.

https://www.un.org/en/content/digital-cooperation-roadmap/assets/pdf/Roadmap_for_Digital_Cooperation_EN.pdf

Digital Infrastructure

Examples where govt provides digital infrastructure (similar to highways and railroads in the physical realm)

Digital Identity & Authentication
Singpass is the Singapore Govt’s official digital identity. It offers a delightful authentication experience across multiple Govt Applications.

Payments

UPI: Unified Payments Interface from India has crossed 13 billion transactions monthly as on June 2024. The future projections are astronomical.

Digital Public Goods Alliance

https://digitalpublicgoods.net/

The Digital Public Goods Alliance is a multi-stakeholder initiative that accelerates the attainment of the sustainable development goals by facilitating the discovery, development, use of, and investment in digital public goods.

According to the UN Secretary General’s Roadmap for Digital Cooperation, digital public goods are open-source software, open standards, open data, open AI systems, and open content collections that adhere to privacy and other applicable best practices, do no harm, and are of high relevance for attainment of the United Nations 2030 Sustainable Development Goals (SDGs).

Digital Inclusion and Capacity building

Even when ostensibly available, access to digital technologies remains uneven.Digital divides reflect and amplify existing social, cultural and economic inequalities. The gender gap in global Internet use is a stark example — in two out of every three countries, more men use the Internet than women. This gender gap has been growing rather than narrowing, standing at 17 per cent in 2019, and was even larger in the least developed countries, at 43 per cent. Similar challenges affect migrants, refugees, internally displaced persons, older persons, young people, children, persons with disabilities, rural populations and indigenous peoples. (source)

The need for digital capacity-building is substantial. Achieving real and sustained progress in the various dimensions of digitalisation requires skills development and effective training, in particular in developing countries. This is necessary to unlock the benefits of technology, including the more effective use of emerging technologies and ensuring that individuals stay safe, protected and productive online. For example, it is estimated that there will be 230 million “digital jobs” in sub-Saharan Africa by 2030 that could generate nearly $120 billion in revenue, but this would require some 650 million training opportunities by 2030. (source)

Ethics and Digital Human Rights

Effective due diligence is required to ensure that technology products, policies, practices and terms of service comply with human rights principles and standards.

Effective personal data protection and the protection of the right to privacy in line with internationally agreed standards are imperative. Human rights-based domestic laws and practices for the protection of data privacy, including enforcement mechanisms such as access to judicial review, or fully independent and well-resourced data protection authorities, are needed to address the use of data by private companies or Governments.

https://www.un.org/en/content/digital-cooperation-roadmap/assets/pdf/Roadmap_for_Digital_Cooperation_EN.pdf

The world has moved to digital. Governments cannot afford to stay behind!

--

--

Krishna Kumar K
Krishna Kumar K

Written by Krishna Kumar K

Product Guy. (Worked at Indeed, Microsoft ...). I write about product management, startups, analytics and machine learning. Occasionally I digress...

No responses yet