The Fourth Industrial Revolution and the Future of Work – Part 3 The Challenges for Government

In my blogs of 5 & 27 July, https://samiconsulting.wordpress.com/2016/07/05/the-fourth-industrial-revolution-and-the-future-of-work-part-1/, I previewed SAMI’s workshop on scenarios for the 4^th Industrial Revolution, and reported on a workshop we held on the subject, https://samiconsulting.wordpress.com/2016/07/27/the-fourth-industrial-revolution-and-the-future-of-work-part-2/

The Road Ahead for Government

At the July Workshop, we asked participants what aspects of the 4^th Industrial Revolution would keep the Prime Minister awake at night. We have gained a new Prime Minister since the discussion, but the issues have not changed.

First the Good News

The technological changes of the Fourth Industrial Revolution are potentially helpful to Government in achieving its aims:

• Technology will encourage globalisation and a knowledge and skills economy that may well flourish outside the confines of traditional trading blocs (and may indeed undermine them)
• Technology has the potential to improve the efficiency and effectiveness of health and social care systems – prevention of illness, helping people to stay healthy, connecting communities better; it will benefit other public services as well – enabling better services to be delivered at lower cost
• There will be a revolutionary change in defence and security systems, offering a “first mover advantage” to those who can make best use of emerging technologies
• The Fourth Industrial Revolution will reward those economies that are open, flexible, and have a skilled and adaptable workforce

But there’s another side

Governments could find themselves increasingly powerless against mega-corporations – the Exponential Organisations described in Salim Ismail’s book of the same name. Regulating the activities of these global behemoths (and raising taxes from them) may be beyond the grasp of a single country.

Citizens as well, either individually or in communities of interest, will increasingly use technology to seek greater autonomy, which will challenge the norms of government and wider institutions – for example blockchain technology could foster new approaches to banking and personal finance. Renewable energy may erode the dependence people have on the national grid for energy; and skilled and knowledgeable people will seek to develop technology and communications systems independent of the global giants.

If Government agencies, whether HMRC or NHS Trusts, are too slow to adopt new technologies, they will both fail to generate the efficiency gains needed to keep public services going, and damage the reputation of government. Already, doctors report that one of the most common complaints from patients is the inability to access wi-fi in hospitals and clinics. A tech-savvy population will have no patience with analogue public services.

If the disruptive effects of technology are too great and too rapid, or if the Government fails to mitigate them, then rising employment and inequality could lead to serious social unrest – especially if the middle classes, who have a vested interest in the status quo, suddenly find that the status quo is working against them. In the most extreme event, when the middle classes turn on the Government, revolutions can happen.

So What is to be Done?

The Government needs to address four areas:

• Understanding the future – knowing what the opportunities and the risks ahead are, and their application to the World, to the UK, and to the specific workings of government. Parliamentary Committees have for a number of years been pressing Governments to up their game on horizon scanning; the advent of the Fourth Industrial Revolution is a significant additional pressure on Government to become future aware.
  • Is the Cabinet Office’s Horizon Scanning Unit in the right place and adequately resourced to ensure this?
  • What lessons can be learned from other governments and from other sectors?
• Ensuring that the UK has the infrastructure in place to benefit from the enormous advantages of technological change, and addressing the risks of cybersecurity – whether criminally or politically motivated: the Government needs to be an enabler of change.
  • How can Government get this focus – at national and local level, and in its service-delivery arms as well as policy?
  • As accountable officers for agencies that deliver services, what expectations should Permanent Secretaries have of the rate of change and adaptation in those agencies?
• Understanding the potential impact of changes on the role of government, the extent of government, and the relationship between individual citizens and companies and other organisations in the future – including, critically, the scope for government to raise revenue through taxation – the UK has an analogue system of government, built largely on a template designed by Haldane in 1918.
  • What would digital government for a digital age look like?
  • Can the Government connect digital platforms to the existing structure, or is more radical reform needed?
  • What skills does Government need, and how can it get them in the most cost-effective and sustainable way?
• Maintaining social cohesion at a time of potentially major disruption – for example instability in the labour market, and significant changes in wealth distribution – the riots of 2011 showed how quickly instability can spread (and digital communications certainly accelerated this). If the models of Osborne and Frey of the Oxford Martin School are anywhere near correct in stating that 47% of current UK jobs will be at risk, this presents a massive social challenge. Even OECD’s “more conservative” estimates of about 10% of jobs being at risk presents a major problem for national and local governments to manage.
  • What role does Government need to play in managing through the inevitable turbulence the 4^th Industrial Revolution will bring?

The Government will need to address these areas within the context of its other activities and priorities – including redefining the UK’s position in the world post-Brexit, gearing up health and social care systems to meet the predictable challenges of an ageing population, defence against both terrorism and hostile states, and achieving economic growth.

Written by David Lye, SAMI Fellow

The views expressed are those of the author and not necessarily of SAMI Consulting.

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