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How 4IR is enabling policy-making for a more sustainable and agile future

An exhibit symbols the fourth industrial revolution "industry 4.0" during the Hannover Fair in Hanover, Germany, April 25, 2016.    REUTERS/Wolfgang Rattay - D1BETHKEVDAB

An exhibit symbols the fourth industrial revolution "industry 4.0" at the Hannover Fair. Image: REUTERS/Wolfgang Rattay

Stefanie M. Falconi
WEF Fellow to Global Future Council, Senior Researcher at Igarape Institute
Rebecca King
Lead, Strategic Integration, World Economic Forum Geneva
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Book Overview: Shaping the Fourth Industrial Revolution

This article is part of: Sustainable Development Impact Summit
  • Emerging technologies, such as distributed ledger, biotech and data science, enable governments to design the right policies to ensure a sustainable future.
  • Application of 4IR technologies must be coupled with agile governance to ensure challenges, such as privacy and data consistency, are managed in an agile way.
  • Together, the application of 4IR and agile governance can equip governments to “turn the tide” so businesses and the public can transition to a more sustainable future.

On the heels of the IPCC report, the threat of hurricanes and wildfires are causing problems to already-stretched governments. The technologies that will help us tackle climate change directly – like carbon capture, solar and wind energy farms, and electric vehicles – are well cited. These technologies excite consumers and investors alike, who envisage the potential applications at the intersection of emerging technology, sustainability and new business models.

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Less well known and praised are the technologies enabling policymakers with the data and insights to make complex decisions under uncertainty. This means putting tech in service of the needs of the public and decision makers.

The Opportunity - 4IR technologies

Policymakers can harness the Fourth Industrial Revolution – the automation of traditional manufacturing and industrial practices using nanotechnology, biotechnology, new materials and advanced digital production technologies – to drive the sustainable development agenda.

Here are four examples:

1. HyperSpectral Imaging is a technique that provides high resolution optical data to improve environmental monitoring. Images provide environmental monitoring such as detecting location of pollution (e.g., CO2 emissions) or tree covering for conservation. The technique is becoming more accessible and accurate, and can be utilised at different scales from satellite to drones to proximal sensing. While technology costs are still expensive for many to access, the development of improved and low-cost consumer versions of the technology – such as from Spectricity, which aims to put hyperspectral sensors in your pocket – are key to making the technology applied to mainstream regulation. At scale, this technology makes monitoring and mitigating readily available even to agencies with small budgets, enabling more localised accurate decision-making.

2. Distributed ledger technologies (DLT), including blockchain, improve current processes and systems to support transparency and increase accountability of decision-making. Only now are we beginning to grasp the applications for this technology. Examples include anywhere from standardising environmental, social and governance (ESG), to democratising access to insurance. According to the OECD, DLT platforms provide a way to standardise data, assess asset performance, and enhance compliance in areas such as ESG standards and tracking the SDGs. Also, DLT platforms can provide decentralised insurance options in order to protect emerging markets given the increased vulnerability they face under increased extreme weather events. DLTs seem promising for improving government developed systems such as emissions certificates and other mechanisms for protecting the global commons.

3. Biotech and synthetic biology is the generation of products that mimic and/or replace existing products that are resource intensive or pose high externality costs (e.g., through environmental degradation). Meat (animal protein) is a common example given its resource intensive production, but the list is long and includes alternative materials and foods that mimic natural resources such as leather, plastics, rubber and ‘green’ chemicals. Biotech and synthetic biology pose many regulatory and consumer safety challenges that need to be managed. However, they provide policy-makers with the opportunity to shift consumer habits and improve their own environmental management systems. Synthetic biology is being re-imagined to benefit people and the planet.

4. Artificial intelligence and data science provide insights from complex data, and can increase the speed and accuracy of policy-makers' decisions. Both depend on data inputs to understand a system and how it reacts to stress, which predict future scenarios with tools such as digital twins. For example, government agencies can use data and AI to predict conditions that lead to hurricanes, wildfires and droughts. Increased data inputs can create more robust algorithms to provide more accurate predictions, such as the intensity and frequency of natural disasters. All these tools enable policy-makers to respond earlier and more effectively to potential natural disasters, saving lives, and minimising economic and societal risks. Moreover, foresight exercises and simulations can help local and regional authorities prepare and respond more effectively by accurately allocating resources.

The Challenge: Effectively applying agile governance techniques

The opportunities for the 4IR to contribute to smart policies for sustainable development are enormous, but responsible technology governance is necessary. Technologies are tools that hold significant promise to shape a better future, but the challenges cannot be overlooked. It is clear that governments must balance how to leverage 4IR technologies while still supporting businesses activity and protecting citizens. We note below five examples of such challenges.

First, the use of 4IR technologies to monitor and measure activities that impact the environment (e.g., carbon and pollution levels) requires a set of standards that provide common reference points within and across industries (e.g., health, manufacturing) to ensure consistency of data and enforcement. The use of industry-led governance mechanisms, such as voluntary standards, codes of conduct and industry covenants, could help deliver policy objectives more rapidly than regulatory intervention.

Second, there is a need to test the application of 4IR technologies to policy-making to check that it achieves its intended outcomes. The use of regulatory sandboxes, or proof-of-concepts, can be effective in determining the benefits and improvement areas for deploying 4IR technologies for policy-making. For example, blockchain pilots in one industry can ensure that the systems are tested and trusted before being used in other sectors.

Third, anytime a technology collects an individual’s data, it is important to protect privacy and data security to create a trusted system that supports the greater public good while still protecting the individual. New models of data sharing, such as data collaborates, can encourage the exchange of data between business and government to create positive public value. Linkages between private and public IT systems can allow accurate and expedited decisions, while ensuring that official data protections are built in rather than in an ad-hoc basis.

No matter the upside of a technology, the potential for its unintended use must be considered.

Stefanie M. Falconi, WEF Fellow to Global Future Council, Co-founder of Instituto Limite, and Rebecca King Lead, Government Affairs - C4IR, World Economic Forum

Fourth, regulatory and adaptive technology requires a respect for the rule of law, human rights and democratic values throughout the lifecycle of the product or service. No matter the upside of a technology, the potential for its unintended use must be considered. The principles of anticipatory regulation can be applied by governments themselves to identify the implications of using 4IR technologies, and potential disruptions to their use, for policy-making through horizon scanning or scenario planning.

Fifth, there is a growing need for human-centred policies that encourage competition, combat environmental degradation and climate change, and promote democratic institutions. The use of 4IR technologies without human centricity could undermine the technologies’ effectiveness – e.g., technical interventions to relieve poverty that completely ignore socio-economic and cultural factors which may be at the root of the problem. To enable a more inclusive and participatory rule-making process, some policymakers are introducing the idea of crowdsourcing law-making.

How your government can lead the way

The examples showcase how 4IR technologies can help governments make better predictions, more informed decisions, improve their regulatory enforcement and build stronger market structures in support of a more sustainable future. They help governments be more agile in their policy-making to ensure that they are adaptive and able to respond to rapidly changing needs.


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However, scaling these technologies cannot be achieved without the right policies, incentives and regulatory environment. That is where agile governance comes in. We need the right market structures to enable peer-2-peer solar energy trading; new legal frameworks to enable cross-border data flows; improved monitoring and tracking of carbon sequestration; and more flexible consumer protection frameworks to manage synthetic products.

At the same time, emerging technology can enable governments to design the right policies, improve governance and make more informed decisions in support of the sustainable development agenda. Increasing accuracy of reporting, greater transparency on activities that impact the environment and the ability to clearly understand the trade-offs means policy-makers can adapt the regulatory environment to encourage climate and nature-positive innovation and development in the face of complexity and uncertainty.

The application of 4IR and agile governance could be what equips governments to “turn the tide” so that businesses and the public can transition to a more sustainable future.

Further case studies on how technology can be applied to regulation are being developed by the Global Futures Council on Agile Governance. There are also agile governance tools and techniques that can be applied to make the process more open and transparent to multi-stakeholder policies.

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