Increasing Gross Business Income (GBI) in Washington State
Washington State can do more to ensure a faster, smarter and more accountable state government. By setting clear goals and continually tracking results, the state will be better equipped to engage its employees, partners and the public in building a healthier, better-educated and more prosperous Washington. The Association of Washington Business recognizes the need for Red Tape reduction and supports any initiative in this direction.
The state launched Results Washington, a new system combining the best aspects of Government Management Accountability and Performance (GMAP) with a significantly expanded Lean initiative that involves all state agencies. One of the goals of Results Washington is to increase Gross Business Income (GBI) from $646 billion in 2012 to $749 billion by 2015.
To achieve this goal the State wants to significantly reduce businesses’ time, cost and frustration of administrative compliance. The standard cost model (SCM) is an international recognized tool that can be used to achieve these tangible results for businesses.
The Governor’s Office for Regulatory Innovation and Assistance (ORIA) helps people navigate Washington’s environment and business regulatory systems and collaborates for innovative process improvements. Sira Consulting trained ORIA’s staff in using the SCM model by executing five pilot studies. During these pilots, ORIA’s staff and the staff from the responsible departments were trained in using the SCM.
The trainings involved the principles of the SCM as a tool to find possible red tape reductions and quantifying these effects for the Washing State economy. We also trained the participants in filling the model with the necessary facts and figures. This included instructions about how to prepare and do interviews with businesses, about how to perform data analysis and to use the SCM model to identify tangible burden reductions.
The five Pilots
ORIA’s team worked together with the responsible departments on five pilot projects. We coached the team along the steps of doing measuring administrative burden. We helped them getting the right information in interviews and guided them along the different challenges of measuring administrative burden.
ORIA’s team was very successful during the pilots and this resulted in a good understanding and quantification of the administrative burden. More important, the pilots list concrete measures to reduce red tape in the State of Washington. The measures are now implemented in the departments’ improvement plans.
The reduction of red tape has become an important topic in South Africa. Red tape includes filling out paperwork, obtaining licenses, and having multiple people or committees approve a decision. It also covers various low-level rules that prohibit businesses doing business. Red tape frustrates businesses from getting things done. It wastes time and costs money. It holds back job creation, economic growth and poverty reduction by contributing towards business failure, lost investment, and reduced competitiveness. The benefits of red tape reduction include increased employment opportunities, formalisation of the local economy, improved regulatory supervision, increased compliance with laws and norms, and decreased opportunities for corruption. This is the reason that the Red Tape Reduction Unit of the Western Cape Government (RTRU WCG) seeks to cut red tape. To this end the RTRU WCG has introduced the Mark of Good Public Services (MGPS).
The MGPS was originally developed in 2009 in the Netherlands by Sira Consulting in close cooperation with the Dutch Ministry of Economic Affairs and various municipalities. The MGPS is a proven instrument for municipalities to improve their public service delivery to business. It is designed to improve the business climate and stimulate economic growth, job creation and prosperity. The MGPS can also help lower the operating costs for the municipality and improve governance. Sira Consulting has implemented the MGPS instrument in South Africa in two pilot projects, in Hessequa Local Municipality and Drakenstein Local Municipality.
By participating in the MGPS pilot project both municipalities have taken a significant first step to improve their service delivery to businesses. One of the key findings was that improvement is possible. In total 90 improvement measures were identified. These improvement measures are aimed at cutting out unnecessary steps in complex procedures, simplifying rules and regulations in the municipal by-law, simplifying decision making processes, re-designing forms, increasing transparency and availability of information, acknowledging the importance of communication and participation, and increasing the responsiveness of the municipality to the needs of the business community. It is important to note that mostly all of the identified improvement measures are budget-neutral. They will – of course – require time, effort and (political) commitment, but in general they will not tax the already stretched budgets and limited resources of municipalities.
The improvement measures (or variations thereof) that were identified in the MGPS project, will be implemented by Hessequa Local Municipality and Drakenstein Local Municipality. They will remove red tape, reduce unnecessary costs, and speed up processing times. In short, both municipalities will become more effective at solving the problems faced by their local business communities, which can be summarized as: an inability to get things done, high costs of doing business, and long waiting times. It is possible to achieve a reduction of administrative burden of at least 25%. This frees up limited resources that local businesses can use to create jobs. Besides the creation of sustainable local jobs that help to eliminate poverty and reduce inequality, it also initiates a virtuous cycle of growth that will benefit the local and national society.