DonateE-Government – Should we do it Hybrid or Comprehensively?
The states are at crossroads. Only one thing is clear: Digitization will increase. But many representatives are unclear how they should implement that in public services. Let’s compare two different e-government models – the hybrid approach embraced by Hesse, Germany, and the fully integrated, state-led system in Lithuania – to assess their economic implications and projected administrative costs over the next five years.
Advantages and Challenges of Hesse’s Hybrid Model
Hesse’s hybrid e-government strategy uniquely leverages collaboration between public authorities and private sector innovators, particularly startups. This cooperation accelerates digital service delivery and reduces duplication of development efforts, leading to moderate initial investments with potentially significant long-term savings. The model fosters flexibility and adaptability through cloud-based infrastructure and open interfaces, enabling the government to harness continuously evolving market solutions. However, this approach also entails challenges, including the need to overcome legal and technical integration hurdles, and increased governance costs related to data security and digital sovereignty as reliance on external providers grows. More details on Hesse’s model can be found here and on the Hessian Ministry’s Innovation Challenge.
Lithuania’s Fully Integrated E-Government Approach
Instead of this, Lithuania’s system exemplifies a comprehensive, government-driven digital transformation, where all major administrative services are provided through centralized online platforms. This demands substantial upfront public investment to establish robust IT infrastructure and stringent legal frameworks supporting digital identity and data protection. Despite higher initial costs, the model offers efficient end-to-end automation, reduced staff requirements, and enhanced citizen convenience through unified service portals. The state retains full control over data and architecture, mitigating risks associated with third-party dependencies. However, innovation cycles may proceed at a slower pace compared to market-driven models. This approach is well-documented in European Union studies, such as this EU Parliament report.
Five-Year Economic Outlook and Cost Trajectory
The full integration costs more from the beginning. But how does the systems compare in mid-term? Over five years, Hesse’s hybrid model is expected to realize cost efficiencies by sharing development responsibilities with private entities and avoiding redundant processes. These savings may be offset by scaling regulatory and cybersecurity oversight, which requires continuous investment. Its success relies heavily on effective governance and the capacity of public agencies to manage partnerships.
Conversely, Lithuania’s centralized system will likely consolidate administrative cost reductions through standardized, fully automated processes. While requiring substantial public capital expenditure initially, the approach promises stable operational costs and minimized legal complexities. Its consistent governance model ensures sustained data security but may limit agility in adopting emerging technologies.
Full integration saving 50 instead of 10 billion euros
While Hesse’s hybrid e-government initiative presents an innovative step forward, it remains overly reliant on market-driven solutions and external providers that may undermine long-term digital sovereignty and security. The approach lacks the comprehensive, unified vision required to truly transform public administration in a sustainable and future-proof manner.
Lithuania’s comprehensive e-government pathway, by contrast, offers a more robust, secure, and efficient model. Its state-led investments in integrated IT infrastructure and digital identity frameworks establish a resilient foundation that maximizes cost savings and service quality over time.
Should Germany expand the Hesse model nationwide, it could see moderate modernization gains but remain vulnerable to fragmented standards, growing regulatory complexity, and fragmented data governance. Meanwhile, should larger economies like France, Great Britain, Italy, and Turkey adopt the Lithuanian model, they could achieve significantly higher administrative cost savings—potentially in the tens of billions of euros annually given the size of their public sectors.
To put this in perspective, public administration expenses in Germany alone reach over €500 billion annually, roughly 15% of GDP. A full, integrated e-government model could realistically cut 5-10% of these costs over five years—translating to savings of €25-50 billion. In contrast, hybrid models might only save around 2-4%, missing out on deeper systemic efficiencies and governance benefits.
To remain globally competitive and digitally sovereign, Germany and other developed countries must look beyond hybrid approaches. The future belongs to comprehensive, state-driven digital administration frameworks exemplified by Lithuania, which offer long-term economic sustainability and secure, citizen-centric services.
