Chairman of IBM sees need for a major shift in government capabilities

Many mature economies suffer from seriously antiquated infrastructures, in which they need to invest, acting more collaboratively with business and civil society. But many of the capabilities and skills needed are engrained in those mature economies, and may serve them well in the drive for growth that besets developing and mature economies alike.  Economies that succeed will have clarity about the economic and societal innovation they do uniquely well; but governments are in desperate need of modern subject-matter expertise; and they need to be more pragmatic and less ideological: a rising tide of data exists that can help design infrastructures that can revolutionise the delivery of future growth. (See: http://www.heraldtribune.com/article/20111103/ ZNYT05/111033015)

 

      It is intriguing to read an alternative perspective on economic growth – from the viewpoint of a leading industrialist – Sam Palmisano is Chairman of IBM. He started his article (in the Herald Tribune, 23.2.12) by observing that there are at this moment many countries seeking to climb from low-income to middle-income status alongside the leading economies that are in a high state of competition for their own future growth.

He avers that this actually presents exciting opportunities for the developed world. Many of the capabilities and skills sought by an innovation-based global economy are deeply engrained in Europe, Japan and the United States, he says.

But in addition to global integration, the world’s mature economies have been piling up massive deficits – not just financial, but deficits of competitiveness: ageing populations, rusting infrastructures, out-of-date education systems and antiquated regulations. And these are needing to be addressed just when those more mature economies are faced with a financial crisis. The world will not wait while we do that, so how do we do it, he asks; and suggests three broad steps.

Firstly we need to invest in the future: in areas like infrastructure, education and deep research, along with greater flexibility through smarter labour and trade regulations. We cannot simply cost-cut our way to competitiveness. We need both balanced fiscal policies and far deeper collaboration among government, business and all of civil society.

Second, every player in this game needs to deliver unique value. If you want to be competitive, you have to be really good at something people value; and the economies that succeed will have clarity on the kind of economic and societal innovation they do uniquely well – what makes them stand out in the global competitive market place.

Finally, government must become smarter: government is in desperate need of modern subject-matter expertise. Take public safety: we used to measure crime-fighting by the size of our police forces and the state of the art of their equipment, but more and more police forces are fighting crime with data – that is why New York City is now one of the safest large cities in the world. The same applies to traffic management, water systems, energy grids and more. The systems by which our world runs are being transformed before our eyes. Government has to be at the forefront of those changes.

The good news is that a new generation of leaders gets it, and they are eager to get going. They embrace technology; they think in terms of large-scale, sustainable systems. And they’re highly pragmatic, rather than ideological. You find them in the emerging global cities of the world. Here Europe has a powerful trump card, with cities that are rich in intellectual life and knowledge resources.

Without question, the issues we face to-day are challenging, but they are solvable. He is optimistic, he says, because we now have at our disposal an enormous new natural resource, a rising tide of data that enables us to see and understand our world as never before. ‘What the discovery of the Western hemisphere was to the 15th century, the discovery of steam power to the 18th century and the discovery of electricity to the 19th century, the explosion of data will be to the 21st. Its economic and societal value is almost incalculable. If we seize upon this new resource, I believe future historians will look back on this moment not as a shift to lower expectations and growing gaps between haves and have-nots, but as the dawn of a new golden age of innovation, a time of widely shared economic growth and of global citizenship.’ 

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