Innovation through integration

Successful public innovation puts citizens and businesses at the centre. It requires deep integration across different public sectors and levels of administration, including harmonising concept definitions and regulations. 

Hans Christian Holte, Director General for the Norwegian Tax Administration is part of the Norwegian delegation at the Northern Future Forum this week, invited to share his insights about delivering excellent public sector innovation. The seminar being held in Reykjavik gathers the Prime Ministers of the Nordic countries, the Baltic countries and the United Kingdom to discuss future trends in northern Europe, including how governments can deliver better, more efficient services. Holte will outline how putting the user at the centre creates coherent, simple public services which address individual and business life events. To achieve this, cross-agency integration is necessary both at an IT and reporting level, but also in the harmonisation of defining concepts and regulations. This deeper level of integration is more challenging and requires leaders to choose coordinated development and action instead of working independently. Holte outlines how the approach has been a success in the recent roll-out of the Employers Dialogue in Norway, with three public agencies working together to replace separate complex systems by creating a single simplified channel for employers reporting.

Employers Dialogue
Statistics Norway (SSB), the Labour and Welfare Administration (NAV) and Tax Administration (Skatteetaten) together introduced a new single «Employers Dialogue» for reporting salary and other employer information betweeen 220 000 employers and the three public agencies. This dialogue replaced the old system which required employers to report the same information using five different forms, at different times, with different frequencies to the different agencies. Now, reporting takes place through one electronic channel, once monthly. We estimate the change will save employers 600 million Norwegian kroner a year and it has also increased efficiency for government services.

How did we do it?
The new Employers Dialogue is mostly about technological integration. The IT systems need to speak to each other and reporting processes have to be harmonised. Coordination across different sectors of government sometimes stops there. But it’s not enough. We also need to harmonise definitions and regulations. This is the really hard part but it was crucial for allowing five to blend into one electronic channel in the case of the Employers Dialogue.
To illustrate, at the core of the Employers Dialogue is the concept of «revenue». This may sound simple, but all three agencies had their own definitions, sometimes several depending on the context. The Labour and Welfare Administration alone used 52 different definitions of «revenue». Someone wrote an entire Ph.D. thesis about it. And there are many other examples.
The future of integrated services like the Employers Dialogue presents us with two roads to follow. The easy way would be to go back to «business as usual» where each sector and agency continues its own independent development of laws and regulation. Harmonisation will probably deteriorate, making it difficult to maintain simplified services such as the Employers Dialogue.
The other route leads to politicians, ministries and agencies maintaining a holistic perspective when regulations need to be changed. Common definitions of concepts such as «revenue» or «cohabiting couples» gain authority and legitimacy, leading to more widespread use in other areas and sectors. This raod paves the way for more integrated services and simpler regulations in the future.

Successful public innovation puts citizens and businesses at the centre. It requires deep integration across different public sectors and levels of administration, including harmonising concept definitions and regulations. It is hard work to develop and maintain this type of integration and it requires political leadership to consciously choose the path of coordinated development, coordinated action.