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Article Article February 6th, 2018
Infrastructure • Technology • Innovation • Delivery

How governments should rise to the challenge of disruption

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The snowdrifts and freezing temperatures of Davos - quite a contrast to life in our hometowns of Singapore and Dubai - already seem a distant memory.

What is lingering, however, is the sense that greater teamwork and unity is the only way we will address the structural inequalities that continue to exist between countries, genders and social classes. Unfortunately, this is easier said than done - particularly at a time of huge disruption, which seems to be coming at us from every direction.

Politically, the combination of increasing nationalism in previously global champion states and regional even global ambitions of previously inward looking states, are combining to uproot the old order.

And then there is also unprecedented technological change, including automation, artificial intelligence, and rapid advances in fields such as nanotechnology and genomics, all of which will impact just about every aspect of society. And perhaps for the first time in a long while, the notion of demographic dividend only make sense when talking about the quality rather than the quantity of the population.

It is clear that governments have an integral role to play in managing these forces - but how and where should they focus?

Assess and adapt

It is difficult to overstate the magnitude of what's headed our way, not least for the world of work. Traditional jobs in nearly every industry - manufacturing, agriculture, professional services - will be redesigned or completely eliminated, the degree varying by country.

Adapting education systems to embrace new ways to provide students with the skills required in the 21st century will be critical. For example, skills such as "global competence" - which will be measured for the first time this year by PISA - need to be developed. But that's only one of many necessary courses of action. Government leaders must also develop new industrial policies that support their countries' competitiveness. It can be done.

Take Germany, for example.  Its Federal Ministry for Economic Affairs and Energy and the Federal Ministry of Education and Research have created a coordinating body that brings together stakeholders to discuss the long-term strategy for Industry 4.0. The government is also funding Mittelstand 4.0 centres of excellence, which provide small and medium-size enterprises with information and training related to new manufacturing technologies.

Italy, too, is not standing still. In 2016, its government launched an initiative to stimulate industry investments in new technology, including tax incentives such as rapid depreciation schedules, increased tax credits, and deductions for investments in start-ups. And in Singapore, the government is seeking to advance new manufacturing technology, including a programme to support robotics R&D and adoption.

This type of proactive approach can only be encouraged but policymakers must not neglect their regulatory role. They need to ask themselves how regulations might need to change in order to allow new digital business models to flourish. And as new technologies and business models remake industry, smart regulation will be needed to create the necessary safeguards for workers and citizens without discouraging innovation.

Policy approaches should also be tailored to a country's specific advantages and opportunities. Poland, for example, is ideally located to attract manufacturing thanks to its proximity to Western Europe and its relatively low costs. And Indonesia boasts many of the factors needed for a boom in technology start-ups: a young and growing population, an emerging middle class, and a relatively immature technology landscape. It just needs to sort out its less than friendly regulatory environment.

Perhaps they can learn from two of the world's largest economies. China has outlined a plan that aims to modernise its manufacturing with advanced technologies such as robotics, 3-D printing, cloud computing, and big data. And to improve their record in job creation, Indian policymakers have sponsored an in-depth assessment and scenario analysis of factors including government policy, access to finance, and mechanisms for supporting lifelong learning.

Radical routes

Such examples are just a few of the ways that policymakers are adapting to the forces of disruption - but there is always more to do, particularly when it comes to the challenges wrought by technology. If ever there was a time for governments to consider completely novel and radical approaches, it is now.

The good news is that many administrations have already started. Finland, for example, is currently testing the concept of a universal basic income in a two-year pilot. But this is just one way for governments to start anew.

Our colleague Dag Detter has made a compelling case for governments and cities to take a new approach to utilising their vast and often underutilised assets. This starts with a full accounting of the assets that they own and control - from infrastructure to utilities to valuable data - and then determine whether better management of those assets could yield increased revenues. Such funds could be used for critical investments in education and workforce retraining.

And governments also need to remember to look beyond their own horizon. Some of the most forward-looking thinking is taking place outside the public sector, such as the World Economic Forum study on the shifting dynamics in education, gender and work. And Teach For All - along with a network of education-focused organisations that includes the Asia Society, the Brookings Institute, and Results for Development - is leading roundtable discussions with more than 100 global education stakeholders on how the world's education ecosystem needs to evolve.

No time for small thinking

In our jobs we are lucky enough to meet with government leaders around the world and we have no doubt that they are fully aware of the disruptive storm bearing down on them. But thinking big is not straightforward - especially when the day-to-day pressures of managing the government machine often leaves little or no time to consider the wider picture.

This means that policymakers and pundits, citizens and civil society, academics and business leaders, must come together anew to seek out new approaches and experimentation. We need a fundamental rethinking of how government is structured to encourage collaboration across departments, eliminate silos, and create an agile organisation.

This won't be easy - anything but - but strategies that are fully focused on the individual stand the best chance for success. Will this happen? Only time will tell, but one thing's for sure - we've all got a stake in how this pans out.

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