The pros and cons of digital platforms in public services

The foundations of SDA Bocconi School of Management's teachings lie in the original research conducted by its faculty. From their PhD theses onward, researchers tackle issues of great importance to the management world with rigor and passion. This column presents their findings.

In a scenario marked by limited public resources and constant demographic and social changes, it’s more urgent than ever to rethink service delivery models. This is particularly true in spheres that traditionally fall in the public domain, such are welfare, healthcare, and urban mobility. The complexity and diversification of citizens’ needs call for innovative solutions, and it turns out that digital platforms may just fit the bill.

Platforms provide a digital infrastructure where citizens, service providers and public administrations can network their competences, know-how, and resources to deliver more innovative, efficient, and personalized services. But despite the potential advantages, critical issues arise as well. Some of the most serious concerns regard inclusivity, user autonomy in decision-making, privacy protection and the risk of triggering unbridled growth to reach critical mass, which leads to “winner-take-all” situations with a single or a few platforms cornering the market.

In one of the three studies for my thesis, which I ran with the help of my co-author Liudmila Zavolokina at HEC Lausanne, we analyzed 25 cases of privately-owned public service digital platforms in Italy. Our analysis corroborates the positive contribution of these platforms in relation to various dimensions of public value.  Here are some of the main benefits:

• Improving administrative efficiency by streamlining bureaucracy and speeding up interactions between citizens and administrators.

• Promoting social values by tackling big challenges, in keeping with the platforms’ mission. Examples include traffic congestion, pollution, recycling, improving health, curbing school dropouts, and supporting work-life balance, particularly for women.

• Personalizing services by creating customized experiences, which is what these platforms do best. Services can be tailored to individual conditions, needs and preferences.

In any case, our study also highlights certain drawbacks that emerge from digital applications, network effects, user-centricity and the for-profit nature of platforms:

• Regional disparities: The success of a digital platform is contingent on its ability to reach a critical mass of users. This means that platforms are more effective in densely populated areas that are already well served, while rural areas and lower-income neighborhoods are penalized.

• Digital exclusion: Most platforms tend to target younger, educated users who are technologically competent; this inadvertently excludes anyone who is less tech-savvy.

• Privacy & data: The business model for many platforms is based on collecting and selling user data. This gives rise to ethical concerns, especially when platforms handle sensitive personal data such as medical records.

• Algorithmic influence: Algorithmic nudging can push users toward solutions and suppliers based on the commercial interests or priorities of the platform, rather than service quality parameters. This limits users’ decision-making autonomy.

• Integration and interoperability between public and private systems: Both public and private platforms tend to operate in closed ecosystems, fragmenting service access. An example is private healthcare platforms which are not integrated into the country’s National Health System; this creates duplication and discontinuity in patients’ care pathway.

Public service digital platforms offer undeniable advantages by upgrading service effectiveness, enhancing personalization, and enriching the user experience. However, these infrastructures also present critical challenges such as inclusivity, individual autonomy, privacy, and overall service quality.

To overcome these criticalities and promote greater public value, policy makers should adopt measures which ensure ethical, transparent, and responsible management of advanced technologies like artificial intelligence and data utilization.

But rather than simply serving as a regulator, the public administration should provide digital infrastructure, regulatory frameworks and technological standards that make it possible to create open ecosystems and facilitate interoperability between platforms and public and private services.

Francesca Casalini & Liudmila Zavolokina, “From private platforms to public value: An explorative analysis of privately-owned public service digital platforms in Italy,” in Unravelling Collaborative Platforms in Public Services: steering toward Co-creation of Public Value, doctoral dissertation by Francesca Casalini for her PhD in Management, at the University of St. Gallen, Switzerland.