June signifies the unofficial start of summer, a vibrant season filled with sunshine and outdoor activities that can bring people together. It is also a great opportunity for reflection. And so, in this edition, we would like to share how the public sector can implement practical methods to deliver more for people. You and other government leaders worldwide are grappling with significant challenges, including inflation, budget constraints, and workforce shortages. At the same time, trust in institutions — particularly government — is near a historic low. By embracing innovation, exploring outcome-based metrics, and adopting an investor-like mindset, state and local governments can rebuild trust and confidence, and enhance their operational efficiency and effectiveness, providing superior services to the public.

Please contact us with topics you’d like us to cover, other feedback or questions.

Thank you for your service,
Tim Ward and Jess Kahn from McKinsey’s US State & Local Government Practice

• Explore how generative AI can transform state government operations and service delivery. How can state governments pilot, scale, and adopt gen AI to innovate and future-proof government operations?
• Enhancing a state’s productivity can be about improving the quality and accessibility of public services, on top of cost savings. How can governments achieve more efficient outcomes while managing limited resources effectively?
• Four ways government can serve their constituents better and catalyze innovation is based on “Stand and deliver: Three imperatives for civil servants.” Key initiatives to do so include focusing on outcomes, embracing innovation and technology, and fostering a culture of collaboration and continuous learning while emphasizing proactive approaches and constant involvement in servicing communities.
• Why has it been challenging to measure government productivity? Let us help clarify productivity and the government's roles.
• A boost in productivity for the US government can result in over $2,000 per resident. Which spending categories are best suited for operational efficiency and optimization?
  

• Labor productivity growth in the United States, Canada, and advanced economies in Western Europe and Asia has been disappointing, remaining at around 1% a year. Is this lackluster performance all we can expect for the next generation?
• An inclusive culture is important for companies aiming to achieve talent, performance, and productivity goals. Here are five bold moves leaders can take to transform their organization's culture.
  

Rethinking US productivity for a new era

It is an aspirational prospect and one with historical precedent. In 1995, five-year productivity growth averaged 1.6 percent, only for productivity to jump to 3 percent the following decade. Recent technological advances, including in AI and biotechnology as well as productivity spikes since the global COVID-19 pandemic, raised hopes that perhaps another boost may lie ahead.

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