02 Aug 2018

Turbulence and unpredictability define our era and governments around the world are navigating stormy seas of diverse challenges, especially in a VUCA-world that is characterised by volatility, uncertainty, complexity and ambiguity.

While hyper-connectivity and technology offer the opportunity for better governance, it poses a potential challenge of greater instability.

In this context, how can governments deliver meaningful services that demonstrate value to a diverse group of people, and what are the challenges that lie ahead?

Mastering big data

The rapid pace of digital development is a defining characteristic of our times.

The proliferation of smartphones worldwide is creating massive amounts of data ripe for analytics. Whether it is daily commuter movements throughout transport systems, banking transactions, currency movements, or footfall in public places, data provides policymakers with a wealth of insights useful in planning.

However, this doesn't mean that life is easier for governments. There is a scarcity of talent in data analysis and a paucity of expertise in dealing with this ocean of information. There are also higher expectations from citizens for data privacy and transparency.

Hacktivists behind emerging cybersecurity threats transform the way in which transparency demands confront governments. Moreover, the power of social media can unite citizens in rallies and demonstrations.

To counteract this, policy managers in the public sector need to become not only digitally literate, but also be able to leverage the power of social media campaigns by engaging with both the highly educated and less educated, the optimistic and the cynical.

Black swan events

Although data is now able to help predict unexpected occurrences, disruptive events such as the Indian Ocean tsunami of 2004 and the 2011 Fukushima nuclear disaster remain outside the capabilities of data prediction. They can overwhelm governments' ability to react even with contingency planning in place and can cause significant and unforeseen chain reactions.

For example, extreme weather events can cause disruption to the energy supply infrastructure. And it is likely that these black swan' events will become the norm, rather than the exception, in the years ahead.

Governments will need a fundamentally different approach to public management systems. They will have to rapidly develop 21st-century capabilities to respond to both micro-trends (such as small, low-probability developments) and mega-trends (such as urbanisation, climate change and an ageing population).

Tried and trusted resilience-building strategies, such as stockpiling resources and building reservoirs, will need to be supplemented with planning, forecasting and scenario building.

The rise and fall of political authority

In a world where technology and globalisation have led to increasing public awareness of the workings of government, the greater transparency has not necessarily resulted in greater appreciation.

Such contradiction manifests itself in the populist sentiments that are sweeping across the world and resulted in political upsets such as Brexit and Trump's U.S. presidential victory, or in civil unrest and uprisings in the public square like the Occupy Central movement in Hong Kong.

This is 'authority turbulence': unpredictable, rapid dynamics which influence how public leaders and institutions acquire, consolidate and lose authority when grievances are real or even perceived.

The radicalisation of some Western teenagers by the Islamic State is an extreme example: modern state authority is being abandoned in favour of traditional and charismatic (and often deadly) authority.

This increasingly turbulent environment in which authority and legitimacy have to be acquired, earned, and maintained over and over again, forces public leaders to balance distributive and collaborative leadership with tough and decisive leadership at the same time. Administrative leaders will have to invest in political capabilities to manage ever faster changes of governments, and in maintaining domain expertise because this legitimises their existence in the eyes of officeholders and stakeholders.

Ageing and population growth

Political instability is aggravated by demographics that are putting societies under strain. The ageing population around the world has associated costs that are difficult to predict.

However, the burgeoning youth population in developing countries is adding to the global workforce. This has led governments in developing countries to rethink the size of their welfare state.

Their challenge is to achieve growth levels that allow the economy to absorb this exploding demographic. This require governments to articulate complex policy architectures, and forge new career structures, work-life balances and longer work periods that may see retirement ages creeping upwards.

In developed countries such needs will have to be balanced against social welfare policies which are under pressure.

Ultra-urbanisation and megacities

As populations burgeon and age, decisions on where people choose to live change and have attendant implications for the economy.

Across Africa and Asia, megacities are emerging as centres of economic activity, creating pronounced differences in development between rural and urban areas.

In countries such as China, where Beijing and Shanghai are top-tier cities, there are 135 smaller second-tier cities whose policies are increasingly driven by mayors and city managers. This shift is increasingly pivoting growth and governance innovation from the national to the local level.

As cities become magnets for population, drivers of economic growth, and pioneers of technological innovations such as driverless cars, electric vehicles and robotics, public sector leaders will need to broker deals between central governments and outlying municipalities competing for resource allocation.

Forging new governance partnerships

The rise of the informal city states is accompanied by the rise of new actors and social agents non-government organisations (NGOs) and non-profit organisations that governments need to leverage social collaboration from.

The delivery of public services is no longer the sole responsibility of governments. A trifecta of corporations, local government and NGOs is increasingly collaborating on policy and decision-making.

In Australia, for instance, corporations, educational institutions and local governments are joining forces to reskill new workers to remain employable at a large aviation company that threatened to leave the area.

Public leaders therefore increasingly find themselves developing innovative partnerships which leverage and synthesise the best that the public, the private and the voluntary sectors have to offer. Ignoring these different sectors will not create value moving forward.

Numerous challenges exist in the VUCA-world today, and it remains to be seen how successfully governments of both young and established democracies will have to keep evolving in embracing new roles, skills and competencies to meet them.

More information about Zeger van der Wal's work on "The Future of Government" will be available in an upcoming downloadable whitepaper.