Geo-Economics and Politics

In a digital society, governments should innovate with the best of them

Staff members of the Beijing Municipal Environmental Protection Monitoring Center work in a monitoring room of the air quality forecast and warning center in Beijing, China, May 21, 2015.

Image: REUTERS/Kim Kyung-Hoon

Helen Margetts
Director and Professor, Oxford Internet Institute, University of Oxford
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The Digital Economy

Government needs to reclaim its past role as innovator. It is often claimed that government is unable to innovate; without profit surrogates, public officials have no incentive to do so. This view was fuelled in the 1980s, which sparked two decades of antipathy to the state. But when you look at the history of digital government, governments in the 1960s led the way in developing computer technology, digitizing their operations and creating large-scale information systems. It was only in the 1980s that governments started to lag behind the corporate world in terms of innovating with digital technology. And as Marianna Mazzucato has shown in the Entrepreneurial State, governments were behind many of the innovations that underpin today’s digital society, from the internet to GPS to the iPhone.

A platform society

We live in a “platform society”, where we spend an increasing proportion of our time on digital platforms, particularly provided by Google, Apple and Microsoft, but also social media such as Facebook, Twitter and YouTube, shopping platforms such as Amazon and eBay, and newer platforms of the sharing economy, including Uber and Airbnb. All these platforms run on the basis that the more time we spend there and the more things we do, the more data we generate, and that data can be used to develop the services provided, so that we spend more time there, in a virtuous feedback loop of usage, data generation and innovation. This platform society also exerts a number of pressures on government to innovate with digital technology and data.

The most obvious pressure for innovation comes from the decade of austerity and cuts that followed the financial crisis of 2008, pushing governments to do “more for less” with technology and to introduce “digital by default” programmes rather than expensive multi-channel approaches. Other pressures come from the large-scale transactional data generated by the platform society and by digital government itself that could be used for policy innovation, for example through predictive or probabilistic policy-making, as is already happening in education and policing, or in big cities where smart travel cards provide unprecedented quantities of fine-grained data on journeys and individuals with the potential to transform the design of transport systems.

A digital society means that regulation must also be digital – taxis for example, are heavily regulated in most cities, but Uber’s data-driven platform poses a huge challenge to analogue regulatory models. Likewise, experience with other platforms means that digital citizens have new expectations of government in terms of being able to interact digitally; they do not expect to write a check or fill out a form (although they often have to), and they may not even expect to be able to call government either (as they do not think of calling Amazon).

Finally, government needs to innovate around the new challenges that the platform society introduces to the provision of public goods such as security and public health. Cybercrime and online extremism and radicalization, for example, are forcing security and intelligence services to reinvent themselves.

People look at their mobile phones while waiting for a train at a subway station in Tokyo, Japan, October 14, 2015.
Image: REUTERS/Yuya Shino

Government as a platform for innovation?

All these pressures from the platform society and platform economy push government to be more innovative. Can government meet this challenge? It may be that to do so, government has to develop as a platform itself, as proposed by the US writer Tim O’Reilly in his Government as a Platform (GaaP) model. O’Reilly argues that if you look at the history of the computer industry, the innovations that define each era are frameworks that enabled a whole ecosystem of participation, from the personal computer through the internet to the iPhone. So governments should aim to become an open platform that allows people inside and outside government to innovate. He puts forward seven principles for platform thinking in government: open standards, “keeping it simple”, design for participation, experimentation, data mining, learning from hackers and leading by example.

One country pursuing enthusiastically the GaaP dream is the UK, so explicitly that the model was cited in the 2015 autumn spending review by then Chancellor of the Exchequor, George Osborne, and a Government as a Platform Chief has been appointed in the Government Digital Service, the lead agency for digital government. The approach is to create a series of building blocks or platforms that can be slotted into the services of any agency – Verify, a federated identity system; GOV.UK Pay, for making payments to government; and Notify, so that people know the status of their case or application.

Have you read?

But the challenge is that the data landscape is about as far from platform giants like Amazon or Google as it is possible to imagine. Legacy databases, unique to the largest departments and incompatible with each other, work against any kind of data-sharing or data-driven design, particularly as there is no unique personal identifier for citizens throughout their lives, but rather different identifiers held by different departments for different purposes. A plan to reform the government’s registers, so that data is held once over and in an authoritative way by a department with sole responsibility for that particular data looks promising, but is still at the starting blocks. So data-driven service innovation, or the “intelligent centre devolved delivery” organizational model favoured by retailers, seems far away in the UK, as in many other countries.

It is perhaps tiny Estonia, with a population of 1.2 million, which offers hope for the idea of government as a platform for innovation. Estonia’s digital government sits on two conceptual layers. First, eID is a secure identification layer based on a unique personal identifier – a PKI-based authentication contained in an identification card or mobile ID. Second, X-Road is a means of communicating securely between a series of registries where data is held in a distributed way, where only one department or agency has control over any one piece of data, and where citizens may see what data the state holds about them and who has accessed that data, and for what purpose. These two layers allow a third service layer, where departments may develop any services they see fit, as long as they are integrated with X-Road.

Although the GaaP model was never explicitly followed in Estonia, X-Road and eID seem to offer the kind of platform for innovation that O’Reilly had in mind, with departments and agencies as well as banks, corporations and mobile companies developing their own digital services on the two layers. It is not yet a data-driven, policy-making environment, but the possibilities are there. Estonia is certainly following the GaaP principle of leading by example, offering X-Road freely to other countries as a way of communicating between their own data registries. Finland, Oman, Azerbaijan and Palestine have already taken the system, and Canada is showing an interest, with Germany’s Chancellor Angela Merkel visiting Estonia’s “e-government showroom” in the summer of 2016.

Keep it simple

The case of Estonia illustrates the importance of the GaaP principle to build a simple system and let it evolve, which O’Reilly considers essential for innovation to flourish: “A complex system that works is invariably found to have evolved from a simple system that worked ... A complex system designed from scratch never works and cannot be made to work.” To reclaim the role of innovator, governments may need to work out how to scale this tiny example of the platform approach in practice. After all, most of the platform giants where we spend so much of our lives – Google, Facebook, Amazon, Twitter – started simple and small.

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