KPMG, in collaboration with the Mowat Centre at the School of Public Policy and Governance, University of Toronto, has published the report “Future State 2030: The global megatrends shaping governments”. Their analysis distinguished nine global megatrends impacting governments at all levels all over the world, focusing on the individual, the economy or the physical environment. Their recommendations for strategic actions were equally clear: governments need to take a long term view on accelerating social and environmental challenges. Their advice boils down in three categories: needs, structures and skills.
Not only the global demographics are changing, we are talking about an aging population in many parts of the world versus youth bulges in other parts of the world. Another megatrend is individual empowerment through education, health and technology. This leads to a demand for transparency, participation and civil entrepreneurship on what used to be government roles. ICT as enabling technology plays a huge role in this empowerment, as people define more needs and applications for mobile technology and related devices. These are indeed disruptive technologies, as McKinsey pointed out earlier this year.
We cannot imagine anything else than our global interconnected economy. However, KPMG warns that we may fail to materialize an optimum of economic benefits when international conventions are not strengthened. Public depth is a significant constraint and may affect governments capacity to respond to major social, economic and environmental challenges. Economic power shift rebalances global power in favour of emerging economies. The established international institutions and national governments will need a greater focus on maintaining their transparency and inclusiveness.
Greenhouse gas emissions are expected to rise, despite all efforts to bend this trend. It may lead to all sorts of unpredictable changes in the environment while further taxing the resilience of natural and built systems. There are no clear cut solutions for adaptation and mitigation. The combined pressures of population growth, economic growth and climate change will place increased stress on essential natural resources (including water, food, arable land and energy). Lastly, our largely urbanized world will bring opportunities for people, but also challenges, such as pressure on infrastructure and resources.
Response strategies for governments to meet the needs and demands of stakeholders in the next 20 years
What governments need to change?
According to KPMG, governments need to be aware of the interconnectedness of megatrends by engaging in international, regional and jurisdictional forums. Evidence based policy making requires not only strong data analysis, but also an innovative eye for ‘big data’ and also qualitative, soft measurement of civil energy and entrepreneurship. The latter part is especially relevant, as citizens are capable to mitigate and manage certain downstream megatrend impacts in an elegant and cost effective way. Among the many other recommendations, holistic long term thinking stands out as a key strategy for governments.
How governments need to change?
Scenario exercises and foresight studies help to establish a future oriented mindset in all aspects of policy making and especially infrastructural planning. However, flexible and adaptive policy making is crucial. Learning by doing, small locally empowered pilots. Actually it is similar to design thinking, where you start with prototyping and experimenting before rolling out big operations.
Further, in our interconnected world it is crucial to be internationally integrated through active engagement with international partners and increased cooperation with international institutions. Reciprocal relationships help to have all parties to get positive policy, business and social results.
Important skills for governments
The skills mentioned bij KPMG focus on all aspects of foresight thinking and strategic understanding of global trends and their impacts, as a factor into decision-making processes. System thinking is also an important skill to understand the interconnectivity of systems, for instance the food system, and knowledge of international capital markets and the financial system.
Parallel of these strategic decision making capacities, there is an equal need for governments to tap into the energy of society. This means, collaborating with empowered citizens, regionally rooted entrepreneurs and others, facilitate them with their initiatives to get things done without waiting for grand schemes from governments or big institutions. In the Netherlands, we call this public pioneering and it is land marking a transition in the public sector. Public pioneering allows for experimentation, exploring new collaborations, new roles and new solutions. A two tier approach of system thinking, strategic foresight thinking together with public pioneering could be a way to implement many of the changes that KPMG proposes for governments.