Governing the Asian Century:

From risk takers to strategic risk holders

“Our whole life has been disrupted.” says Geetha, a sleepless mother about her struggle for water in Chennai- the city in India facing its worst water crisis in history. Geetha, a mother of three daughters, stays in the slums of Chennai where there has been no water for days and has to wake up her daughters to catch the rare opportunity of stocking water at odd hours in the night.

Building on last year’s Istanbul Innovation Days on NextGenGov, UNDP and Dark Matter Labs are designing the NextGenGov journey in Asia, to be kicked-off with a retreat in March 2020 and to be twinned with a similar event and programme across Africa. This blog sets out the why and the how.

Emerging Strategic Risks and Strategic Innovations

Emerging strategic risks and innovations

Part 1 : The Why

1.1 The Asian High Speed Express & the coming storm.

Asia is almost single handedly driving global growth whilst also being at the forefront of a perfect storm of strategic risks facing us as a global civilisation.

We know the environmental challenges of climate change and sea rise will strongly affect Asia’s major cities, nutrition supply chains, and trade port infrastructure; the region is already responsible for over 80% of global plastic waste leakage in oceans; and of the 20 most polluted cities in the world, 18 are in South Asia — with massive associated societal & economic impacts. And the effects of these risks are no longer in the far distance: for example, the Indonesian government’s plan to move its capital has sparked a region-wide debate about the future of coastal megacities in the region.

Layered over this landscape are human development challenges. One of the most profound ones would be reimagining the future of work in a region where youth unemployment is around 10%, where female labor-force participation is the lowest across the globe, and where poor working conditions mean that employment does not equate to stable income or economic resilience. At the same time public policy regulations are increasingly out of sync with the growth of online platforms that can exercise their exponentially growing powers for both good and ill.

At the same time, the region is also home to some of the most radical, large scale (and often controversial) policy and governance experiments. Lots of ink has been spent discussing China’s social credit system and AI powered City Brains as well as on India’s Aadhar, precisely because they are often seen as precursors of things to come within the government-tech sphere. Less attention has perhaps been devoted to other phenomena, such as China’s non-textbook emergence from poverty and SDGs Experimental Zones, or Asian states’ dabbling with the venture capital state model. But we are witnessing experimentation at all levels of government, from Telangana’s state innovation cell to Mindanao’s efforts in promoting grassroots innovation in conflict zones, from Seoul’s exploring grassroot-driven energy transition to Indonesia’s waste banks.

1.2 A very 21st century kind of challenge.

We increasingly recognise Asia is at the forefront of the Great Transition, where the externalities of our old world threaten to make us extinct and new technologies could either emancipate us — or make us redundant.

We also recognize that the climate crisis needs to be addressed in relation with the other great societal risks of our time: growing inequality, extinction-level losses in biodiversity, and the looming labour market and social disruptions brought about by runaway technologies.

As we have argued before, governance in this context could be seen as the central failure of the late 20th century and the crucial issue that will define whether humanity will thrive during the 21st century — and survive beyond. New capabilities and trends like rapid real-time data feedback loops, algorithmic decision making, data and new insights on the causal chains of injustice and root causes of inequality are challenging established ways of decision making. Many existing means of governance and regulation are becoming operationally obsolete and look like out-of-place western-centric ideological relics unsuited to an age of growing complexity. But until recently, governance innovation has been sidelined as an inconvenient overhead or as a euphemism for the removal of regulation to speed up growth; and as we argued after Istanbul Innovation Days 2018, “hampered by simplistic notions about the levers of change, awed by networked power dynamics in the private sector and undermined by austerity in the public sector, many of us seem scared and disoriented in responding to these shifts. Worse still, we seem unable to make the case that ultimately, good governance should not be a means of state control but a means to unleash a sustainable transition.” And this transition is very much upon us.

Any transition that is fit to respond to the scale and scope of the challenges will need to address the structural interdependence of potential solutions alluded to above: e.g, addressing climate breakdown cannot be separated from addressing inequality. This reality requires states around the world to remake and recast the objectives and capabilities of their governance engines in a very short period of time — decarbonising economies, remaking human capital, reinventing bureaucracy, driving inclusive innovation — all simultaneously.

Of course, maintaining the means and architecture of inclusive growth and poverty alleviation has been at the forefront of regional policy makers’ to do list over the last 20 years, in order to maintain and preserve social order. Yet as the scale and urgency of these strategic risks across the region grow in an unprecedented manner, it is increasingly becoming apparent that they threaten to undermine the future trajectory of growth and even revert the hard won growth of the last 40 years if let unmanaged. But they also present a strategic opportunity to create the lead markets and societies of the 21st century.

In the next part we will outline how we are framing our approach towards governance models to deal with these 21st century challenges.

In the previous part of the blog we have outlined why we need to look for the new governance models to deal with the unprecedented challenges of the 21 century and why Asia is the place to develop them. In this part we outline where the locus of these new models might be and how we plan to accelerate the emergence of those models.

Part 2 : The What and The How

2.1 What’s the Governance Innovation we need?

History has shown repeatedly how great economic and industrial revolutions and transitions are a function, not only of new technologies and new needs, but also of institutional and governance innovation. If this is truly to be the Asian century, the region will be need to avoid what Geoff Mulgan has dubbed governance sinkholes, and drive the innovation and emergence of a whole new class of governance models. We hypothesise these could be based in three foundational (and much needed) shifts that we are witnessing.

A. Beyond singularity. We believe it is important to recognise we are living in moment where the hegemony of the western, individual-centric nation state ideology is being challenged by alternative paradigms — these include:

1. The rise of the civilisation state where the sovereign construct is society as opposed to the individual — with countries such as China embracing a future where this expansive notion of the root of lawfulness changes everything, from societally acceptable AI decisions to the legitimacy of different pathways to unlocking deep societal changes.
2. The renaissance of Indigenous approaches to governance that drive new hybrid models and perspectives on rights and responsibilities, such as our co-habitation with natural ecosystems (with examples including self sovereign rivers being granted the same legal rights as personhood).
3. The rise of cities as places of transition and deliberative legitimacy, where fresh solutions to complex issues originate thanks to their concentration of human, social, cultural and financial capital, and because of the proximity between diverse actors and the issues, innovations and decisions at hand. As the economic engines of our 21st century economy, where the top 600 cities account for 60% of global GDP, cities are already leading the way in the climate transition.

B. Beyond Bureaucracy.

Digitalisation directly or indirectly is disrupting our models of governance — directly driving possibilities like real-time compliance monitoring, autonomous decision making, ‘law as code’ regulations, unbundling of property ledgers and registers; and indirectly through enabling new forums for citizen involvement, e.g. citizen juries and citizen assemblies or deliberative participation forums. These new technologies are driving mass reductions in co-ordination costs, and unlocking the potential for decentralized, contextually relevant decision making like we’ve never seen before.

C. Beyond certainty.

In the face of runaway tech innovation and the uncertainties of climate breakdown, we need to shift from regulating perceived certainties to dealing with continuously evolving known and unknown uncertainties. This means developing regulations focused on anticipating and managing risks, not eliminating them (which will be a fruitless and dangerous labour). It means developing regulations that can positively respond to disruption through the use of futures techniques; and designing for adaptability through the use of outcomes-based, parametric, and conditional regulations. Creating innovative governance standards and antifragile capacities for a complex and volatile 21st century is crucial to sustainable scaling of radical technologies, whether 4th generation regulatory sandboxes or new ministries of possibilities.

What are we to make of this confluence of unprecedented strategic risks and rise in governance capabilities and opportunities for experimentation? It invites a series of questions:

Where is the locus in government bureaucracies in Asia — and beyond — for imagining new possibilities and experimenting with new options — and who should drive this type of work? In an increasingly complex reality, will governments across the region be able to create the structural governance innovations necessary to manage the rapidly emerging strategic risks, or be myopically railroaded into preserving and enhancing the current architecture of development and growth? How do we strategic accelerate the capacity for experimentation with both a sense of urgency and purpose?

2.2 How do we deliver it?

The critical questions above have shaped our design strategy, which is centered around two key building blocks: acceleration and delivery.

Some of our early attempts of fostering a culture of experimentation within government have focused on risk takers (as opposed to risk holders): the bureaucracy ‘hackers’, often channeling energy from the bottom, for which we were trying to provide political cover for experimentation. Our current hypothesis is that given the foreshortened timescale of change necessary, we need to complement this bottom up energy with renewed attention towards risk-holders: seasoned bureaucrats who are dealing with strategic risks here and now, can understand their repercussions across government silos and have greater agency to drive system change. To validate this hypothesis, building on experiences such as States of Change and the Scottish Virtuous Economy Forum, we are interviewing and engaging with both current and retired senior government officials across the region, developing personas and trying to get to the ins and outs of the machinery of government — the ‘dark matter’.

As we advance our research, it is becoming clear that:

1. we need to engage risk-holders and their teams. This is no lone hero game and to have effective experiments we have to combine the clout and policy entrepreneurship of the risk-holders with other profiles, like doers, idea people, executives, etc.;
2. navigating politics and being able to get things done in the government is an art in itself and is critical for making experiments happen, be recognized and scaled;
3. understanding bureaucracy and political life cycles is critical for going beyond one-off ‘black swan’ experiment delivery — for instance, engaging a bureaucrat at the end of the term would make little sense as pet projects experiments have few chances to survive the succession. Structured processes of strategically managing risk and innovation & experiments are more likely to survive bureaucratic churn;
4. we need to start with the institutional ‘dark matter’ that our risk-holders have at hands in their current operating context. Next generation governance is less about intellectually speculative or futuristic scenarios and more about working with the present and stretching its possibilities. Our framing cannot be focused on an idealistic ‘to be’ but rather should generate conditions and critical institutional infrastructure for the emergence of new practices which model a new paradigm.

2.3 NextGenGov: accelerating the path to institutional innovation

With this strategic frame in mind, together with Dark Matter Laboratories, and following the format of Istanbul Innovation Days, we are designing the NextGenGov journey in Asia.

The journey will kick off with a retreat for government risk-holders to be held in Bangkok in early 2020. The event will be a springboard for experiments that aim to be coherent with the size and scale of the challenges faced by policymakers in the region.

Based on our learning from past attempts at accelerating institutional innovation, the NextGenGov journey will be informed by the following principles:

• Experiment-based learning and portfolio approach: As we are dealing with the dark matter of governance sinkholes, especially in highly complex and contextual future, there are no blueprints, evidenced universals or best practices to follow. Multiple parallel experiments in a portfolio logic can help strategic risk holders better understand constraints and opportunities in the systems they are trying to affect, thereby accelerating their learning.
• System awareness and leveraging networks: if they want to affect change, risk holders will need to be aware that they are an integral part of the system, not just designers or planners. We will also need to connect experiments with the surrounding ecosystems (from various governance players to grassroots innovators, all the way to our Accelerator Labs)
• From sinkholes to springboards: if we want sinkholes to turn into springboards, we need to focus on emerging challenges — here and now responding both at the scale of infrastructure and impact whilst creating the political conditions for new possibilities to be imagined and explored around them. Some examples include:
• Commons Breakdown: climate change, water, plastics and air pollution are symptoms of strategic failure of our institutional economy and our failure to govern. How can new governance models be developed based on transparency and participation, improved data collection and bestowing legal rights on the parts of the ecosystem?
• Governing radical technologies: future technologies and start-ups both are being let down by current paradigms of analogue governance, but equally governments often fail to effectively anticipate threats to the public good in governing emergent technologies. Unintended consequences and public backlash risks abound. How can use experimental work to help create agile governance capabilities for a complex and volatile 21st century tech landscape?
• Directing digital innovation towards greater inclusiveness: as discussed, digitalisation is disrupting our models of governance; how do we steer this towards public good, like what is happening in India where we look at ways to scale and improve the governance of innovative start-up technology ecosystems e.g. building on the Telangana State Innovation Cell’s Government Mentor Programme? What type of experiments can advance more inclusive governance models in our region?

We recognise this all needs to sit in the context of both an unprecedented demand for governance innovation (driven by the scale of environmental risks and the opportunity of human development offered by new technologies), along with a radical transformation in our potential means of governance. Together these present and demand a paradigm shift in our means, practices and philosophies of governing for the public good; Asia, if we are to survive as a global civilisation, will need to lead us there.

This is the progress made thus far and if you are one of those creative bureaucrats, thirsty for knowledge and support to handle the strategic risks that you are holding this experimental journey of governance innovation is for you! Please do reach out to us!

The Innovation Days have emerged as UNDP’s corporate R&D function, which aims to influence the demand and alert governments to trends and risks, accelerate learning about their potential implications and creates space for strategic co-creation of potential systemic pathways of response — thereby enhancing our transformational capacity to continuously refresh our programmatic offering vis-a-vis our partner countries.

Authored by Aafreen Siddiqui Alex Oprunenco Chloe Treger Indy Johar as part of collaboration between Dark Matter UNDP Innovation And Regional Innovation Centre UNDP Asia-Pacific