Agile Governance

Here's how agile governance could help manage global uncertainty

Toyota Motor Corporation President Akio Toyoda gets out of an e-Palette autonomous concept vehicle at the Tokyo Motor Show, in Tokyo, Japan October 23, 2019. REUTERS/Edgar Su

Agile governance has allowed Japan to take a forward-thinking approach to the regulation of autonomous vehicles Image: REUTERS/Edgar Su

Lord Callanan
Minister for Business, Energy and Corporate Responsibility, Department for Business, Energy and Industrial Strategy of the United Kingdom
Mirek Dušek
Managing Director, World Economic Forum
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Agile Governance

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  • Almost a year after signing the 'Agile Nations Charter', a group of nations have adopted a new method of policy making, known as agile governance.
  • The transition from traditional to agile governance requires substantial changes in leadership, culture and process.
  • The signatories to the Agile Nations Charter have developed ten projects to advance the agile governance agenda.

In recent times, political, economic and social systems have been faced with an increasingly complex set of global challenges. Factors including the pandemic, climate change, political instabilities and cyber-risks make it difficult to navigate a path to a sustainable, inclusive future.

Governments around the world have worked hard to deliver at speed to help businesses respond to the unprecedented challenges of the pandemic and aid economic recovery. This has included fast-tracking changes to rules and laws, in order to facilitate new forms of medical care, support work-from-home arrangements and develop vaccines. The pandemic highlighted the importance of governments being adaptive and co-ordinated.

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Traditional governance systems made it difficult to harness new and innovative technologies, or even to make effective use of existing technology. They have often required 6 months or even years to implement a new policy. The question for governments is: how can policy-making become faster, more effective, and more agile?

What is agile governance?

Governments have recognized the need to adopt a new method of policy making, known as agile governance. This style of governance is dynamic, adapting on a needs basis; it places people at the heart of decision making; and it is inclusive, involving others directly in policy design. Traditional governance tends to focus on delivering a process or output to achieve a goal; for example, specifying strict quality standards. In contrast, agile governance focuses on delivering value for citizens. It is a more innovative and flexible, for example by specifying performance-based targets and letting companies determine how to meet them.

The transition from traditional to agile governance is not straightforward. It requires substantial change in leadership, culture and process, not only from government but also from businesses and citizens. Below we’ve highlighted four key shifts that help establish adaptive responses to current and future disruptions.

1. Incremental policy development

Often new initiatives and policies are designed through long, drawn out processes, in which policy-makers collect all the evidence and secure buy-in from stakeholders before taking any action. Each stage of development is a big step forward. This leaves government heavily exposed to sudden change, as policies are aiming to be complete solutions that are often in practice too inflexible to respond to new problems. Using an agile governance approach, each stage of development is incremental. Policy design is an iterative process, with products being developed and then continuously revised.

2. Policy innovation

Policy innovation is just as critical as technological innovation. Current regulation and policy systems can restrict new innovations and market entrants by being excessively prescriptive. Governments should aim to identify new techniques for how to regulate industry, how to govern responsible technology development, and how to create a competitive marketplace.

For example, Japan is creating an outcome-focused, technology-neutral regulatory framework for autonomous vehicles (AVs). The framework defines the desired goals for AVs and measures performance against them. This regulation includes a system of exemptions to permit the trialling of AVs, voluntary technical requirements and continuous revision of regulation based on trials. It allows companies to continue to develop their unique technologies and test them in an environment that is safe for consumers. Recently, this forward-thinking approach has helped companies like Honda to test their technology in Japan, and adapt their vehicles to Japan’s distinct traffic environment, regulations and laws.

3. Leveraging scientific methods and approaches

Policy making is increasingly about experimentation. Governments are creating spaces to test new ideas – including regulatory sandboxes, test beds, laboratories, innovation spaces or experimentation programmes – that are outside of standard governance procedures. These spaces allow let organisations deploy and improve their products, and help governments identify how to improve their governance systems.

We need to borrow from scientific methods to establish experimental environments that accumulate into policy change, from small-scale tests to larger ‘scalebox’ initiatives, which allow firms to focus on scaling up. For example, the UK Regulator’s Pioneer Fund aims to keep the UK at the forefront of regulatory thinking and experimentation. It sponsors regulator-led projects that encourage business innovation and investment.

4. Cross-sector collaboration

Policy-making should be a participatory, collaborative process that engages all relevant stakeholders, including businesses, independent regulators and citizens. For example, businesses can be encouraged to govern themselves through market-led governance mechanisms, such as self-regulated industry codes of conduct. This can increase the robustness of regulation to uncertainty, as industry are often more aware of sudden change and new risks. Citizens, as well as business, can be regularly engaged for feedback and ideas on government policy-making through crowdsourcing.

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What is the World Economic Forum doing to help companies reduce carbon emissions?

How are governments using agile policy-making?

The signatories of the Agile Nations Charter are coordinating efforts to advance agile governance across the world. The 'Agile Nations' are an intergovernmental regulatory cooperation network made up of seven founding nations – Canada, Denmark, Italy, Singapore, Japan, United Arab Emirates and the UK. The UK is currently chairing the network, while the World Economic Forum and the Organisation for Economic Co-operation and Development participate as observers and supporters.

In its first year, the network has already ten developed projects across six priority areas of innovation: regulation; data and communications; green tech; medical devices and treatments; mobility; and professional and business services. Specific cross-country efforts to advance the agile agenda will include: developing an ‘Agile Governance Guidebook’ providing a guide to the theoretical framework to the practice of innovation governance; drawing up common principles and promoting international standards for consumer protection products; and exploring how to develop technology to support the legal system, including ethical standards, access to justice and consumer protection, competition and a sustainable global market.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Agile GovernanceGlobal GovernanceESG
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