Reinvesting in America Helping governments renew the sources of economic strength and deliver for their peopleCompendiumDecember 2023 McKinsey on GovernmentContentsii Introduction1 US government productivity: A more than $2,000 per resident opportunity12 Federal financial management: How governments can do more with the budgets they have17 Inclusive infrastructure investment: How to empower communities27 Building innovation ecosystems: Accelerating tech hub growth39 Rural rising: Economic development strategies for America’s heartland49 Will a labor crunch derail plans to upgrade US infrastructure?61 Transforming public sector hiring with data-enabled talent ‘win rooms’67 ‘Dig once’ could help states manage material and worker shortages72 One year into the BIL: Catalyzing US investments in energy91 Paving the way to resilience: Strengthening public sector adaptation planning and execution111 Closing the digital divide in Black America119 Can public EV fast-charging stations be profitable in the United States?127 Unlocking the potential of generative AI: Three key questions for government agenciesiReinvesting in AmericaIntroductionAs 2023 ends and we look ahead to 2024, our world and our country continue to face a broad range of challenges—including climate change, economic uncertainty, and continued geopolitical tensions. In the face of these challenges, the United States is investing trillions of dollars in public-sector capital via the Bipartisan Infrastructure Law, the Inflation Reduction Act, and the CHIPS and Science Act to bolster economic security, energy security, and national security. In aggregate, these new investments seek to accelerate technology and transform America’s industrial policy and built environment. If implemented effectively, these policies may fundamentally alter the public- and private-sector landscape for the next several decades. The year 2023 was one of planning. The US federal government drafted and issued guidance for a range of new programs. Many state governments designed, launched, and scaled central coordinating functions charged with winning competitive grants and deploying federal funding (competitive and noncompetitive, new and enduring) as efficiently and effectively as possible. Agency leaders have developed novel approaches to deploying green financing, expanding broadband infrastructure, accelerating new technology, and building hydrogen hubs to ensure that the United States can keep pace with the demands of rapid modernization across industries.We believe 2024 will be a year of transition from planning to implementation, with more shovels hitting the ground each day to build the future American economy. To make this happen, leaders at the federal, state, and local levels can work with industry counterparts to address a bevy of significant—but tractable—challenges, such as complex service procurement timelines, material and l...
