Blockchain is able to transform the public sector, the ways it operates and provides services while creating more trust.

Distributed Ledger Technologies (DLTs) such as blockchain have created hope and hype with the opportunities in transforming the public sector, the ways it operates and provides services while creating more trust. DLT is claimed to improve three areas of the digital public services: privacy, transparency and efficiency. While these areas are central in utilizing DLT, at TOKEN we suggest that to grasp the opportunities of DLT, the public sector should focus on three shifts when implementing and utilizing DLT-solutions: from privacy-by-design to data empowerment, from transparency to accountability, and from efficiency to a purpose-driven public sector.

By Marilene Jokinen, Katariina Viljamaa and Johannes Mikkonen

The consumer needs and fiscal constraints put pressure on governments to produce public services more efficiently. Distributed ledger technology has provided promising solutions to these growing needs, while also tackling the ever-increasing complexity and heterogeneity of public service users. DLT-based solutions bring opportunities to increase efficiency and accuracy of the public organization’s processes and to remove excess bureaucracy, leading to faster and cheaper services and freeing up human resources for more complex and qualitative tasks. Despite the slow and sometimes unsuccessful introduction of DLT in the public sector, stories about the possibilities of DLT are popping up. For example, in Estonia, the government has implemented DLT in healthcare and Georgia has successfully used blockchain to record land titles.

However, with blockchain breaches and privacy issues, efficiency should not be the only value that 21st-century governments strive for. Instead of a primary focus on efficiency, emphasis must be putto redefine the purpose of the public services and operationsand putting purpose in the core of developing. It could mean identifying and developing pro-active, digital services based on the life- and business-events of citizens and organizations.

What does this mean in terms of action? As defined in the TOKEN vision paper, we believe that to create a purpose-driven public sector, governments have to:

1- Co-create services with users for digital services based on their life events

As digital public services are created for people, it is their needs that should be prioritized in the developing processes — not the government’s needs. Practices of developing services together with users combined with the opportunities of emerging technology would help the public sector in creating the most value for the people. User involvement and co-creation should be part of all innovation projects that involve services.

2- Streamline communications and collaboration both internally within the government and with external actors

The Scottish Government investigated the benefits of DLT for the public sector, concluding that to utilize DLT successfully, the government needs to be active both in the domestic and the international DLT ecosystem. Openness and collaboration could be achieved through, e.g., developing cross-sectoral visions related to DLT, initiating small-scale projects in the public sector and sharing the learnings internationally.

3- Strengthen the capabilities of using data – and leading service production with it

Creating purpose-driven public services requires utilizing high-quality data in a diverse, yet scrutinized manner. That means developing systematic and cross-sectoral capabilities to use and produce diverse and reliable data. In practice, this can refer to e.g. opening public data resources, improving the interoperability and standardization of data and improving cross-sectoral collaboration for enabling new ways of using data in service production.

4- Widen opportunities for voting, participation and interaction between the public sector and people via DLT platforms

One concrete way of bringing people closer to the public sector is to utilize DLT in the activities of voting, participation and interaction. DLT platforms could offer a secure and transparent way of participating. One the Token use cases pilots citizen participation within the DLT-based procurement system.

A public sector capable of leading the transformation

Governments shouldn’t seek to replace efficiency when implementing DLT but to enrich it with purpose. As the only democratically elected drivers of change, governments can broaden the use of technology and offer a visionary framework through which efficiency can be increased in a meaningful way. Only by putting purpose in the center of developing and utilizing technologies are we able to foster a trustful relationship between citizens and the public sector – bringing them closer to co-create, collaborate, and participate in a 21st-century democracy.