2022 Perspectives for the Public Sector

Citi Perspectives for the Public Sector 11 Why Digital Policy Is Key to the Post-COVID Recovery A s the world begins to emerge from COVID-19, many countries — having spent unprecedented sums to fight the pandemic and its economic consequences — are coming close to the limits of fiscal policy. At the same time, after well over a decade of unorthodox monetary policy, defined by successive bouts of quantitative easing and record low interest rates over a sustained period, the room to maneuver is similarly limited. Countries around the world are searching for alternative strategies to generate sustainable growth in their economies. Clearly, fiscal and monetary policy will continue to be critical tools going forward: important debates are taking place across many countries about the balance between tax and spending priorities as the recovery gathers pace, and equally the world of monetary policy continues to evolve. However, a third policy tool — digital policy — can be a supplementary mechanism to generate economic growth by providing crucial infrastructure, technology, and security standards that can encourage investment and create new opportunities for citizens, corporates and government itself. While digital policy can deliver short-term benefits to an economy, its long-term implications will be greater still. Digital policy will be essential as the world transitions to the new business models and innovations of the fourth industrial revolution, which will be defined by technologies such as artificial intelligence, big data, robotics, quantum computing, 3D printing, biotechnology and nanotechnology (the first industrial revolution was driven by water and steam power, the second by electricity and the third by electronics and information technology). What is digital policy? To some extent, all governments already have digital policies. Many have strategies for ensuring broadband rollout across their country, encouraging digital start-ups, or regulating tech giants to protect citizens’ privacy. Some countries may also have embarked on initiatives to digitize some government services, such as tax payments, or improve the way they interact with citizens and businesses. The pandemic has resulted in the rapid expansion of digital education and health services by some governments, for instance. However, only a small — though growing — number of countries around the world have brought together their various digital initiatives and strategies under a single digital policy. Most governments have fragmented policies and have never sought to conceptualize their approach to digitization under a single framework. This results in duplication of effort, multiple standards, potential confusion between government agencies and authorities, and a failure to realize the full benefits of embracing digitization across the economy. Gary Schneider Head of Public Sector North America, Citi Swati Mitra Global Practice Lead Digital Client Advisory, Treasury and Trade Solutions, Citi Matias Yemma Head of Public Sector Australia, Citi