Blockchain and Digital Transformation in the Public Sector – Three Key Themes

Gothenburg University
Juho Lindman and Livia Norström, University of Gothenburg, Sweden
BLING Final Book article
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Blockchain architecture, Business Need, Data handling, Legal Requirements, Mandate


Understanding digital transformation in the public sector is increasingly important as novel technologies challenge assumptions about how public organizations work. How public services are transformed, how organisations change, and changes in value creation are key to understanding these shifts.

Understanding the potential transformation of public sector services, and the new value this could create

Livia Norström and Juho Lindman, University of Gothenburg, Sweden

Blockchain technology will facilitate digital transformation in the public sector by offering tamper-resistant storage, a decentralized governance and sharing architecture, and by enabling novel types of services.

Blockchain technology also challenges a number of key assumptions about how the public sector is organised, and about how it changes.

Future possibilities

Every so often, a technology arrives that spurs digital transformation and prompts us to re-think some of the previously taken-for granted assumptions about how public-sector organizations work and how they deliver services. Blockchain is one of these technologies.

Blockchain allows for more reliable record keeping, increased security, and higher quality transactions and data, which are important improvements in public service. Blockchain-enabled solutions will enable organizations and stakeholders to manage and track transactions, data, and services. This opens up possibilities for new ways of organizing service delivery, and could enable new cultures of openness and collaboration in service design and delivery.

Current hype

Gartner’s Hype Cycle for 2019 (Gartner, 2019) lists blockchain as one of the most important technologies for digital government. The early hype around blockchains – including buzzwords and overblown expectations

– played a central role in the early innovation activities which interpreted and legitimized blockchain technology, and when mobilizing local resources to work with the technology in organizations.

However, the overblown expectations and hype surrounding blockchain make this a tricky area for research and development; it is much easier to find information about project launches and plans than information about blockchain’s actual deployment for end users.

Technology and change

With the complex problems it faces, the public sector must organize for change.
The importance of understanding digital transformation in the public sector is increasing as novel technologies challenge assumptions about how public organizations organise themselves and how they deliver services.

There is a need to better understand the challenges that public-sector organizations face when they are conceptualizing and designing for change with blockchain technology. More research and theorizing are needed on the transformational effects of blockchain, especially on how the decentralized service architectures implied by blockchain and distributed ledger technology challenge the prevailing organizational paradigm of centralized control and governance.

We can align the attributes of blockchain technology (new service functions and features, e.g., immutability; new organization forms, e.g., stakeholder collaboration and a new decentralized way of working, including delivery of new values in terms of service outcomes) against the attributes of digital transformation in the public sector (changes
in service, changes in organizational structure and culture, and changes in value delivered).

There are three things which we need to explore to better understand the impact of blockchain and similar novel technologies:

  1. the transformation of public services,
  2. the transformation of organizational structure and culture in public services, and
  3. value creation (including the creation of ‘non-economic’ value).

3 key questions on the impact of blockchain on organisations

First, research is needed to understand government organizations’ business needs and how blockchain technology can support improvements in the delivery of public services. We need more evidence of the scale of public-sector blockchain usage through

both empirical data and use cases. We also need better knowledge of the legal issues organizations must tackle when using blockchain technology for service delivery. Second, the decentralized character of blockchain technology implicitly (and sometimes explicitly) challenges our existing beliefs about ways of working/delivering services in

the public sector. It particularly challenges beliefs in the traditional paradigm of service design and delivery through centralized/ top-down organisations. This decentralised shift poses questions about the prevailing organizational structure and culture in the public sector, and how suitable it is for new emerging service delivery approaches that are increasingly collaborative and decentralised.

We must also better understand the how practitioners are organising blockchain projects to meet service design and delivery challenges. A range of different approaches to experimentation and innovation are currently being used to deliver different types of projects across a range of service domains.

The importance of understanding digital transformation in
the public sector is increasing as novel technologies challenge assumptions about how public organizations organise themselves and how they deliver services.

Third, it is clear that decentralized service architectures may lead to entirely new types of service offerings, offering new and different types of values to citizens and other participants in these networks. This transformation requires an in-depth understanding of:

  • how blockchain may disrupt public-sector processes, and
  • what changes in (citizen, organisational) values may result from such disruptions,
  • how blockchain can reconfigure trust between the public sector and citizens, and
  • what the role of the public and private sectors will be in these new dynamics

We are only at the beginning

The technology of blockchain enables changes in how organisations work, how they are structured, and how they collaborate with other organisations to deliver new kinds of services. We are only at the beginning of this transition, and work is needed to better understand the real-world implications of this shift and the relationship between digital transformation and new forms of service delivery.

Norstrom, L., Lindman, J., (2023) Digital Transformation in the Public Sector and Blockchain – A Research Agenda – unpublished manuscript