Fourth Industrial Revolution

How governance is changing in the 4IR

An attendee takes a selfie with with her iPhone with Brad Smith, President and Chief Legal Officer of Microsoft takes part in a panel discussion "Cyber, big data and new technologies. Current Internet Governance Challenges: What's Next ?" at the United Nations in Geneva, Switzerland November 9, 2017. REUTERS/Denis Balibouse - RC1B1ED220E0

Image: REUTERS/Denis Balibouse - RC1B1ED220E0

Nima Elmi
Head of Government Affairs, Centre for the Fourth Industrial Revolution, World Economic Forum
Nicholas Davis
Professor of Practice, Thunderbird School of Global Management and Visiting Professor in Cybersecurity, UCL Department of Science, Technology, Engineering and Public Policy
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Fourth Industrial Revolution

This article is part of: World Economic Forum Annual Meeting

In the face of rising inequality and falling levels of trust, political leaders and their citizens are becoming increasingly sceptical about the potential of further global integration to contribute to national interests. Yet at the same time, public and private sector organisations and individuals are embracing a range of emerging technologies which know no geographic or political boundaries.

There is an inherent tension, therefore, which will only increase if not properly addressed. To put it another way, in an increasingly fractured world, what does responsive and responsible leadership look like? What does it mean for the role of the public and private sectors? What kind of new rules, norms and principles might we need to adopt? How should we create and enforce these rules in a more divided world so as to lead to the best possible outcome for everyone?

One of the key characteristics of the Fourth Industrial Revolution is the uncomfortable pace of change being experienced by organisations and individuals, as emerging technologies create ways of developing, exchanging and distributing value across society. These changes are particularly challenging for governments which, as former US Secretary of State Madeleine Albright has observed, are tasked with understanding and responding to a range of 21st-century challenges, armed with 20th-century mindsets and 19th-century institutions.

As a result, traditional models of governance are being disrupted by technologies. These range from the more familiar, yet still daunting, challenge of adopting digital means of managing and securing information within and across large bureaucracies, to the more esoteric yet urgent task of anticipating the social impacts of the latest neuro-technologies. But it is not just the adoption or regulation of technologies that are affecting governments.

In such a world, it is perhaps no wonder that existing governance infrastructure, particularly systems that assume the public sector is the primary actor responsible for making and enforcing appropriate rules, seems outdated. The outcome is that governments are often criticised for being slow and cumbersome in their response (or lack thereof) to the fast pace of technology innovation.

Private sector players, particularly those deeply involved in the production or deployment of new technologies, often consider governments to be short-sighted, ill-prepared and, more often than not, acting in ways that stifle innovation. The result is a further erosion of trust between these different actors, and a corresponding shortage of cooperation and collaboration at a time and in a context when multi-stakeholder action is urgently needed.

Such a “deficit” perspective towards governments – the assumption that they are chronically ill-prepared to govern in a future rife with advanced technologies – is in some ways unfair. Emerging technologies are immensely challenging for any organisation, given that they are complex, multifaceted and continually evolving in the way they can be developed and used. The consequences of these technologies - whether intended or not - are very difficult to anticipate, particularly across the entire economy.

We also forget that governments themselves are often just as complex as new technologies, consisting of multiple layers and sites of power, often encompassing agencies and organisations of differing responsibilities that number in the hundreds or even thousands.

Finally, it’s sometimes easy to overlook the fact that at least some of this complexity exists because governments play a unique role in society. They represent, protect and provide services to entire populations across a dizzying array of issues and carry the burden of coordination and delivery costs that dwarf those of organisations in the private sector.

Nevertheless, if we are to harness the benefits of emerging technologies whilst minimising their disruptive elements, we must address their interlinked dynamics, the transnational and societal scope of their impact, and the political nature of the technologies themselves.

Crucially, new governance models must highlight and integrate the fact that the responsibility for governance does not lie purely with the public sector. Instead, it must harness the insight and influence of the private sector while ensuring that citizens are protected from the negative and disruptive elements of emerging technologies.

Agile governance means we must update how we make them in the first place, ensuring that governments and businesses alike are equipped to be more nimble in the way they anticipate and respond to new technologies.

Have you read?

A number of countries are experimenting in this way, and a few have been piloting new approaches for some time. It is in this context that we have seen a proliferation of public sector policy labs and innovation hubs over the past 15 years at the national level, like MindLab in Denmark, which was established in 2002 as one of the first government policy labs to the regional level, such as the EU Policy Lab tasked with developing innovative policies for the 28 countries of the European Union.

These public policy labs or innovation hubs act as workarounds to inject experimental, creative and citizen-centred approaches to the way policies are made, putting forward alternative solutions. They are often better adapted to public budget constraints than legislating cumbersome structural changes to existing governance models.

Through these innovative workarounds of existing governance models, trust is being built across sectors, which may go some way towards addressing the threat of increasing divisions in society. Governments are more willing to accept sharing the burden of governing emerging technologies with private sector actors and civil society bodies through crowdsourced policymaking platforms such as CrowdLaw; creating regulatory sandboxes like the government of Sweden’s policy for autonomous vehicle testing in Gothenburg; and encouraging self-regulation through open source innovation associations like Partnership on AI, a technology industry consortium focused on establishing best practices for artificial intelligence systems.

Given the magnitude and scope of technological advances the world is experiencing, and the increasingly blurred lines between the role of the public and private sectors and civil society, it is no surprise that governments as public administrations and policymakers are facing and accepting a new normal of governance beyond government.

The Fourth Industrial Revolution is revealing a number of gaps and opportunities in how leaders govern in both the public and private sectors. These range from increasing the capacity of existing governance structures to assess and absorb new technologies, to the creation of entirely new roles for policymakers so as to better balance the need for safety and precaution with opportunities for the private sector to test new creations.

The World Economic Forum, as the international organisation for Public-Private Cooperation, is launching a global initiative on Agile Governance dedicated to reimagining policymaking for the Fourth Industrial Revolution. The Forum defines the concept of agile governance as “adaptive, human-centred, inclusive and sustainable policymaking, which acknowledges that policy development is no longer limited to governments but rather is an increasingly multi-stakeholder effort.”

The Agile Governance initiative will support key stakeholders through the transition of what leadership in the Fourth Industrial Revolution looks like for policymakers and policy shapers. By focusing on reducing the time lag often experienced by policymakers, who are usually forced to react to new technologies rather than anticipate innovations, and working alongside business and civil society, the initiative will develop frameworks and policies that augment the emergence of new technologies. You can read more about the role of the private sector in the governance of emerging technologies here.

See for further reference:

White Paper on Agile Governance: Reimagining Policymaking for the Fourth Industrial Revolution (January 2018)

K. Schwab and N. Davis, Shaping the Fourth Industrial Revolution, World Economic Forum (2018)

For an in depth read on this topic, Professor Klaus Schwab's new book Shaping the Fourth Industrial Revolution is available here.

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Fourth Industrial RevolutionGeo-Economics and Politics
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