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 A GovLab Study
Public sector, disruptedHow disruptiveinnovation can helpgovernment achievemore or less
 
2
 
Contents
1
 
Introduction
 
4
 
Disruptive Innovation:
 
 A primer 
 
8
 
The public sector economy:
 
 A new way to think about the public sector 
12
 
Opportunities or Disruptive Innovation:
 
Five cases in the public sector 
32
 
Fostering Disruptive innovation
 
40
 
Conclusion:
 
 A path to getting more from less
 About GovLab
GovLab is a think tank in the Deloitte Federal practice that ocuses oninnovation in the public sector. It works closely with senior governmentexecutives and thought leaders rom across the globe. GovLab Fellowsconduct research into key issues and emerging ideas shaping the public,private and non-proft sectors. Through exploration and analysis ogovernment’s most pressing challenges, GovLab seeks to develop inno-vative yet practical ways that governments can transorm the way theydeliver their services and prepare or the challenges ahead.
 
Public sector, disrupted
How disruptive innovation can help government achieve more or less
1
Introduction
With governments everywhere acing a sea odebt as ar as the eye can see, taxpayers havebeen presented with a very unappetizing choicebetween higher taxes or radically curtailed publicservices — or, ever more oten, both. This paperproposes an alternative path — a way to useinnovation to make public programs radicallycheaper without slashing services; a way to breakthe seemingly unavoidable trade-o betweenpaying more or getting less. In short, a way toachieve that most elusive goal: getting more orless.Outside o the public sector, we’ve grown accus-tomed to steadily alling prices or better productsand services.Access to a car on a Saturday used to costupwards o US$100. Because most rental
 
agencieswere closed on the weekend, you had to rent orseveral days even i you only needed it or a ewhours — and then purchase insurance and gas.Car sharing companies such as Zipcar now allowurban residents to rent a car or as little as US$7an hour — insurance and gas included.Airline travel was once largely unaord-able or many business travelers and mostamilies.
1
Then along came SouthwestAirlines and other low-cost carriers andnow air travel is oten cheaper than takingthe train.
2
 The doubling o computing power every 18months, known as Moore’s Law, results inreduced computer prices o about 6 percent ayear and improved perormance o 14 percentannually.
3
The Univac I mainrame computer, rstacquired by the U.S. Census Bureau in 1951, wasthe size o a one-car garage, weighed 29,000pounds and cost US$159,000 — about US$1.4million in today’s terms.
4
Today, anyone withUS$200 can buy a smart phone with a thousandtimes as much computing power — and can useit to tap into a worldwide computing network.
5
 Many other consumer and business goods haveollowed similar paths.In one major sector o the economy, however,prices seem to just keep going up and up, andwithout a commensurate increase in perormance.And that’s government.
Public sector, disrupted
How disruptive innovation can help government achieve more or less
1
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