Budget Deficits Risk Future Sustainability #cindertoflame

How government - at all levels - spends money, impacts: taxes, job growth, economic development, social protection, safety, healthcare, childcare, education, infrastructure, the environment, climate and many other services and programs.

Internationally, governments are struggling from unprecedented spending due to the COVID-19 pandemic resulting in billion and trillion dollar deficits that pose risk to future sustainable development goals.

While preparing for my Canadian federal election decision in 2021, I compared the party platforms and was surprised to learn that none of the six main parties presented a strong plan to address the escalating national deficit; nor, was there mention of ever trying to balance the budget.

As a Canadian taxpayer, and among those who experienced job loss during the pandemic, here’s my view: Government at every level, should be held to the same accountability as individuals and families who manage their household income to ensure “value for dollars spent” and “living within our means”. Responsible public financial management requires fixed attention on eliminating the budget deficit through reduced spending and cost containment. This is critical for future sustainability of public services and programs, that are triaged by benefits for each community.

With keen interest in municipal government, I reviewed major Canadian City strategic plans and budgets. The complexity of municipal management is readily apparent. Cities are reporting significant budget deficits due to the financial impact of COVID-19 amid escalating service requirements, such as programs for an aging population and new immigrants. Moreover, people are struggling with the basic costs of living, affordable housing and food security.

Cities have developed elaborate plans that focus on cost containment strategies and innovative opportunities. With respect to innovation, a Canadian trend was observed: the innovation strategy utilized by Cities fits with continuous quality (process) improvement and is frequently tied to information technology to improve efficiency, documentation and reporting.

While incremental process improvement is advantageous, it also has drawbacks. Attention to process scrutinizes what currently exists; rather, than welcoming more radical changes or starting from scratch. Another imminent risk is that when processes are perfected over time, additional efficiencies and cost savings will diminish.

Continuous quality (process) improvement alone, will not solve complex corporate and system challenges, such as government budget deficit projections into future years. A more robust solution is required. Creativity and innovation research categorize process improvement as small innovation; whereas, successful “major” innovation is characterized by a paradigm shift in thinking and action that results in something novel (e.g. design and delivery of services or products) that is embraced by customers (and clients) and yields high impact for Corporations.

How can public and private sector Corporations align for major innovation?

Case study research underscores the critical role of corporate culture in enabling major innovation and is described as “the secret sauce” that is somewhat elusive and challenging to identify and measure. A healthy corporate culture empowers people to generate more novel ideas and innovative solutions to complex challenges. Corporations who have built an innovation culture based on continuous quality (process) improvement have acquired key strengths; however, further alignment is required to embark upon major innovation. Research has reported innovation paradoxes such as corporate conflicts with maintaining the status quo and order. For example, while senior leaders vocalize their interest in major innovation, potential for disorder and chaos impedes progress (DeFillippi, Grabher and Jones, 2007).

Successful major innovation is an intricate balance between creative ideation and business acumen as described by Ted Levitt (former editor of Harvard Business Review) in his article entitled: Creativity is not enough (2002). As well, integrating major innovation with continuous quality (process) improvement affords the strength of combined innovation strategies, as the latter polishes the processes in the new realm of service delivery.

This is the segue to my non-partisan, social enterprise and Cinder to Flame's vision for sustainable, quality living.

As a Corporate Health, Culture and Innovation Strategist (and the founder) of Cinder to Flame consulting, I help Corporations solve complex challenges with strategic services that energize people, fuel a healthy corporate culture and ignite major innovation.

Navigate to Cinder to Flame’s home page: https://www.cindertoflame.ca/

Here's the link to the International Institute for Sustainable Development:

https://www.iisd.org/about-iisd/sustainable-development

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