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The Transformation of Government


January 7, 2011

A year-end look at the “big picture” on technology-driven transformation of government

Doug Hadden, VP Products

Technology transforms the nature of government. From the phonetic alphabet through Web 2.0. From ‘yellow journalism‘ to Wikileaks. Transcending short-term news-worthy fads.

It’s an era of seemingly different and overhyped stories about government.  So many technologies over such long periods that we fail to notice the transformation.  Or the pattern of technology-induced transformation.

(For those of you unfamiliar with this notion of technology changing the nature of government, consult the work of Harold Innis, who described how the medium used for writing determined the nature of ancient empires, and Marshall McLuhan, who described the effects of technology on society.)

2010 exposed three interrelated government transformation trends:

  1. Change of the government to citizen power relationship though increasing mobile, Internet and social networking usage
  2. Global re-alignment, known as the “new normal” enabled through improved automated governance tools and ICT for Development (ICT4D)
  3. Devolution of the nation state partly as a consequence of social networking and DIY content 

1. Government – Citizen power relationship

Key concepts:  privacy, transparency, data-based journalism, governance, surveillance

Key technologies:  Government 2.0, mobile, social media, encryption

Key stories:

As the Las Vegas Sun reported, 2010 was a very digital year: “Ecuador’s president announced a state of emergency because of civil unrest via a tweet… People were engaged through social media, connecting to politicians, charities and causes. The American Red Cross raised nearly $33 million for the earthquake relief effort in Haiti via text messaging.”

Will Social Networking Transform Government?

What this means

  1. Citizens can band together for social change or monitoring governments using untethered mobile technology leveraging existing civil society networks or self-organizing through social networking. Citizens can track even opaque governments meaning that transparency becomes the only way to present the government view: the emperor has no clothes.
  2. Surveillance technology has become affordable and is starting to bridge a different digital divide. The gap between government and citizen surveillance capabilities will continue to narrow especially as citizens gain asymmetrical advantages. This will create more focus on performance in government. Long-term prediction: the debate over government size and cost will transition to the value of government. Dogma and opinion will be replaced by data and facts.
  3. Technology generates more concerns over balancing privacy, surveillance, security and transparency. Should anonymity be promoted to encourage freedom of expression or should radical transparency, following the Facebook ethos, be used to encourage thoughtful debate? Is Julian Assange a hero for transparency or a criminal?
  4. Slow migration from the “command and control” efficiencies from the analog world to improved efficiencies and effectiveness of the network model. Government organizations will continue to adopt Government 2.0 technology to improve internal processes and engage external citizens.

2.  Global Re-Alignment of the “New Normal”

Key concepts: technology leapfrog, governance risk & compliance, financial crisis, currency wars, aid effectiveness, ICT4D, globalization, competitiveness

Key technologies: mobile, aid management, government resource planning, transparency portals, government 2.0, government performance management

Key stories:

Governance Matters

What are the incentives for government transformation? Globalization. Competition. Good governance. Transparency and accountability have become a competitive value. It’s part of the Global Competitiveness Report. Governance  and ease of business indicators are published by the World Bank. Transparency International Corruption Perceptions Index is highly publicized. The Millennium Challenge Corporation uses indicators to track effectiveness at meeting the Millennium Development Goals.

What this means

  1. International organizations will be further re-aligned to reflect the growth in developing countries. (And, the ability for business to rapidly support the global market will be a competitive advantage.)
  2. Governments will continue to focus on technology incubation to improve economies.  At the same time, governments will increasingly release government information to encourage economic activity as described by Tim O’Reilly as “government as platform”.  The impact of releasing government collected data to economic development cannot be understated. O’Reilly has pointed out the impact of GPS as an incubator for private sector innovation. There will be a gradual move away from traditional manufacturing incubation in developed countries.
  3. Governments will become more transparent. There will be a higher adoption of budget plans, budget execution, civil service spending, civil service recruitment and procurement portals. Governments will leverage more transparency and accountability to become more efficient and effective. This will improve stability.
  4. Technology will begin to bridge the information gap between producer and speculator. The farmer in the field will have the same commodity price information that the trader has.
  5. There will be increased use of using country systems by donors in order to improve aid effectiveness. The pressure for transparency will increase on donors and citizens demand better results.
  6. Government performance management will become a competitive advantage. The ability to achieve desired results, not just spend money on programs, will become a key element in political debate. This will transcend the dogmatic cleavages we see in many countries.
  7. Information systems used by government will change to something that works rather than what vendors say works.  Governments will increasingly recognize where government-specific solutions should be used.

3. Evolution of the Nation State

Key concepts:  devolution, sovereignty, global village, corporate social responsibility, zombieconomy, old media

Key technologies:  Web 2.0, international public sector accounting standards, IPSAS, XBRL

Key stories:

How Far Will Government Transform?

What this means

  1. Continued evolution of the nation state

Marshall McLuhan predicted a global village created through an always present electronic age.

The printing press enabled mass production of books and newspapers in national languages. Languages were standardized. This technology led to the creation of the nation state. Radio, a “hot media”, enabled radical nationalism. Digital technology enables self-organizing. It enables political devolution and decentralization. It also provides the ability to manage at the supranational level. This supports the economies of scale for freer trade and regional organizations. Despite the current Eurozone crisis, countries continue to move towards EU accession and adoption of the Euro.

This global village with DIY organization will change the nature of government and the nation state. It’s still early days. Perhaps government become a competitive provider of services in the physical and virtual worlds as envisioned in the science fiction classic Snow Crash.

2.       More rapid impact on business and non-profit

The impact on the for-profit and non-profit world is more apparent. Non-profit NGOs with hierarchical structures are getting dis-intermediated. Networked non-profits and methods for direct donation from individuals to recipients are rises. Meanwhile, the concept that “the business of business is business” has been wildly refuted.  Business has come to recognize the need to have sustainable customers to have a sustainable business. Business also has become to understand the impact of practices on society. (Kind of a corollary to the impact that government has on business.)  New business models that focus on sustainability and real value, rather than what Umair Haque calls the “zombieconomy”.

Red Herrings

These represent a few elements of discourse that can distract us from what is really going on.

  1. Outsourcing. Outsourcing could be a seen as an expression of the centre-periphery model in operation. Yet, effective use of outsourcing has been shown to have economic advantages in the short term to developed countries. In the long run, outsourcing increases stability in developing countries, raises living standards and, ultimately, will provide a more equitable environment. Salaries will increase in developing countries.
  2. Globalization radicals. There is some validity that developed countries have exploited trade negotiations. Technology and transportation has created a global environment. The cat is out of the bag.
  3. Tablets. Tablet, eReader, netbook and smart phone wars are unimportant in the big picture. These technologies reduce costs, reduce the digital divide and make citizens more agile. (In some ways, the real takeaway is that usability can dramatically improve adoption.)
  4. Cable News. The increasing sensationalism of cable news is indicative of the loss of television impact on citizens. It’s the last desperate moves of an industry in decline.
  5. Cloud Computing. Cloud computing is about deployment, agility and does not appear to have any material impact except as an enabler of citizen surveillance and Government 2.0.
  6. Government will never Change. Lack of apparent Government 2.0 uptake and prevailing view that government culture  will never change suffers from a very short term
  7. CSR Backlash. This backlash to CSR with the notion that it reduces profit or a scam are criticisms of the early days of a broad trend.
  8. Donors and Country Systems. Donors will transition from thinking country systems are, as Richard Allen calls “courageous”, to realizing that this will reduce high transaction costs and encourage capacity building and anti-corruption. Also, many of the country systems have better use of public financial management good practices than donor systems.
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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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