By 2020, half of the labor force will comprise members of the so-called Generations Y and Z. Digitization will affect ever more aspects of life and work. The public sector cannot ignore such developments. Avenir Suisse works on strategies for the digital development of our democracy. With the public sector’s room to manoeuvre eroded by the constantly rising share of planned spending in federal and cantonal government, we also prepare proposals for economic policy reforms. Avenir Suisse’s solutions range from increasing discretionary spending to budget cuts and tax reforms. To raise competition within the federal system, we propose possible ways of reforming the new fiscal equalization system and the division of responsibilities between federal government and the cantons.