Modular Government: An Industry Perspective on Public Innovation

Abstract

Multinational corporations used to be about ownership and control. In the face of increasing worldwide competition and enabled by recent advances in information technology, some global enterprises have begun to cede ownership and control in favour of more flexible and responsive forms of governance. Instead of divisions and hierarchies, modules are the building blocks of these businesses. Decomposition into modules allows companies to use their own assets more effectively, to access unique external skills, to become more responsive to their customers and to lower their costs. Government, similarly faced by threats of commoditisation and competition as well as rising costs, can adopt a strategy of modularisation as well. Modularisation allows governments to bundle their skills, access external know-how found in NGOs, commercial companies and even other governments, interact more deeply with their citizens and lower their costs. As a result of these strategies of decomposition, the worlds of government and enterprise will come together and form new combinations.