Technology-driven disruptive change is shifting economic, social, political and cultural norms. Christine Coste told attendees at the recent NZPI Conference in Napier it will also alter central and local government roles and responsibilities.
The central/local government relationship has been a key topic in recent editions of Local Government Magazine. As the localism debate gains momentum, we need to see beyond a simple duel between local and central government. The technology-driven disruptive change occurring around the world is not just a setting or backdrop to this issue. It is a significant influencer and may indeed be the deciding force in the outcome of the debate. Rather than seeing emerging international case studies as remote examples with lessons to be borrowed and adapted, increasingly we can see them as alternative solutions to our own problems.
Technology is bringing disruptive change to all facets of life. It is not just the technology itself but the powerful changes this brings to the fundamentals which underpin our established economic, social, political and cultural norms. These shifts are just beginning but we need to be aware of these trends to best examine the balance of central and local government roles and responsibilities.
These disruptive forces will influence the localism debate in three ways:
• The hyperconnected citizen Most people are increasingly active in the borderless virtual world. A growing population of digital nomads use technology which allows them to be truly location-independent. This challenges the connection of people to a geographic location.
• The borderless world The internet-based digital sphere has no territorial borders. This undermines nation states and their sovereignty. Governments are forced to reconsider their role, and there are nations who provide public services to citizens of other countries, challenging the monopoly of the state.
• The global economies of scale In a hyperconnected world, adopting international models and using the economies of scale of emerging tech solutions may, paradoxically, be the best way to achieve more effective localised democracy and participation.
THE HYPER-CONNECTED CITIZEN
The rise of the virtual world and digital nomadism
The move online is quickly accelerating. E-commerce as a percentage of total retail spend has increased from five to 15 percent in the past five years. According to a NZ Post eCommerce Report, 2017, in New Zealand it was eight percent in 2017 and has a growth rate 10 times that of retail based in physical stores.
More New Zealanders spend a greater percentage of their time online. Some people now spend more time “in” the online world than they spend doing the previously most time-consuming daily activity – sleeping. Stats NZ collects data about how New Zealanders travel internationally – when we go, where we go and how long we stay away for.
There is also a Stats NZ data set which indicates how long we are absent from our local communities, and that is data provided in the annual survey of internet service providers. This data shows the quick growth in New Zealanders’ access to fast, uncapped internet connection and how this translates into staggering increases in data use.
New Zealand’s total data use in June 2018 had increased 40 percent since the previous year. In total, there has been an eight-fold increase in data use in the past five years.
While these statistics lack any detail on where these people are going when they dive into the internet, information on New Zealanders’ most viewed websites do demonstrate a trend of being “beyond” both their local community and indeed New Zealand.
Our citizens today have their daily actions influenced by algorithms programmed by humans half a world away. These algorithms use data generated by users to optimise further influence and engagement. Analogue processes in the “real world” simply are not as evolved at engaging and incentivising citizens to participate.
The rise of the digital nomad is also an accelerating trend. These skilled workers have a digital-based job which allows them the freedom to be “location-independent” remote workers. A 2018 MBO Partners report Digital Nomadism: A Rising Trend calculates there are five million digital nomads in the United States today.
In his work The Future of Digital Nomads – How Remote Work Will Transform the World Nomad List founder Pieter Levels predicts there will be up to a billion digital nomads worldwide by 2035.
Hyper-connected people experience a personalised and empowering level of user experience from their interactions with private companies and organisations. This consumer experience far exceeds that which this person experiences when they are acting as a citizen. This moves us on to the next topic, as governments try to respond to a borderless world.
THE BORDERLESS WORLD
Transforming governments and the decreasing importance of national sovereignty and localised public service
We think of government, whether central or local, as a monopoly. If you are an entrepreneur in New Zealand, you register your business in New Zealand, right? Not anymore, as Estonia has demonstrated as the pioneer of e-residency.
Estonia is recognised as the most advanced digital society in the world. It has a modest population of 1.3 million yet has an additional 50,000 e-residents. One of the cornerstones of its digital strategy is a smart ID card which provides a one-stop-shop for electronic identity verification.
As we manage a seemingly endless number of usernames and passwords for every public and private sector identification process, we can appreciate the appeal of a well-designed user centric ID system. And this is what Estonia offers with e-residency – the ability for non-Estonians who are under-whelmed by their own government systems to opt into a more advanced system.
Estonia’s “country without borders” approach to the provision of public services has a target to acquire 10 million e-residents by 2025.
Bitnation is also challenging traditional governance with a proof of concept project to provide citizens with a global free market for governance services. It harnesses the power of blockchain to create what it terms “Governance 2.0: decentralised, borderless and voluntary”.
Returning to the sovereign nations, the UK is a world-leading digital government with an aim to be “digital by default”. Not just the government but the whole nation. This broad focus puts the UK out in front of leading digital nations as it pursues not only the digitalisation of the public sector, but also the digital transformation of British citizens and society.
The digital transformation of the UK has required an examination of the relationship between central and local government. There is a tendency to see local government as a part of government rather than a programme which can fall within the portfolio of a minister. This is, however, hindered by the lack of a British constitution which means there is no constitutional provision for local government per se.
The UK experience, whilst not without its problems, has demonstrated a commitment for all of government to act together. Central and local government organisations, along with other stakeholder agencies, signed the Local Digital Declaration to champion delivering the best digital experience for UK citizens.
The central government has funded innovation programmes to elicit best practice in local government, share the learnings and promote uptake of emerging solutions across local councils. Overall, there is a focus on best serving citizens with an open mind to the need to restructure government to respond.
Lastly, the evolution of government in Europe offers some lessons on going beyond the nation state. Centuries ago the city state was the unit of governance. Then, over a long and vibrant series of event, nations emerged. More recently the EU has set to unite these nations into a larger entity. Whilst the influence of the EU is often maligned, the challenges it has, and is, facing are analogous to the upcoming immersion of all nations into this borderless world.
A founding principle of the EU is free movement within the EU. The EU has challenged many kinds of regulation in member states as a barrier to free movement. Reforms have been enacted to change how goods and services are exchanged, reaching to the liberalisation of professions such as law.
In medicine, advanced countries such as Estonia have near 100 percent use of e-prescriptions making obtaining medical care paperless and easy. Now, citizens in 22 EU member states are to have the opportunity of a borderless system for filling prescriptions and obtaining repeats. Doctors in one nation can prescribe and pharmacists in other nations can fill that prescription or issue repeats to better meet the citizen’s needs.
So, we can look to many examples internationally. However, the most important lesson is not that these are remote examples: they are indeed responses to the same forces we will see here in this country.
The transition to solutions will be different for each nation because of their past and current system. Yet the vision of the future is eerily similar.
When we see governments around the world struggle to tackle issues such as taxation of online purchases, tax residency for digital nomads and the ability to censor and control material published online, we are in fact seeing a struggle based around the decreasing influence of national sovereignty.
This challenge to national sovereignty has prompted some nations to become protectionist and given rise to xenophobia. However, the biggest threat is not from interference by other nations, it is the borderless virtual world. Controlling physical borders does not halt the change.
GLOBAL ECONOMIES OF SCALE
Adopting tech to facilitate more participative government
Advanced technological systems are now the hubs around which information, knowledge and human experts converge to solve the complex issues. The technologies which drive what we do are universal – think BIM, CAD and GIS systems.
These tools are developed to solve problems common around the world. There is recognition that the challenges and trends we are experiencing, from urbanisation to climate change, are common to all people and nations and it takes a united approach to respond.
Economies of scale are key to devising state-of-the-art technology to respond. We need to invest in smart technologies which provide the hubs around which our communities, leaders and experts can converge.
These include tech systems referred to by neological terms such as GovTech, PlanTech, PropTech and LegalTech. To make use of these tools, we need to adopt some of the universal ways of conceptualising these problems, and the common parlance around them. This cannot be done ad hoc by local authorities. It requires some centralisation, not to Wellington, but beyond.
We need to use globally relevant solutions to remain competitive. These solutions offer consistency, economies of scale and comparable data streams. Leaving individual communities to devise solutions when these are already available globally is not efficient.
That said, we must also find a way to incorporate our local and unique qualities and attributes as we apply this technology in our country.
Technology offers us a solution to the first two issues above – location-independent people and decreasing importance of nations. Governments can avoid people slipping into the virtual world by integrating the virtual and the physical world. This ensures individuals remain connected and involved in their location.
This is as true at the national level as it is at the local level. The internet of things offers the ability to create better linkages between these two worlds. Bringing big data to life in the city to inform residents also reinforces connection to place.
We now live in a global and connected world, and power struggles between agents of national and local governance only serve to distract from the more significant forces changing our communities. New Zealand needs to be unified, and renegotiate the roles and responsibilities of different levels of government in a mature manner, if we are to best serve our country and its citizens in this emerging borderless world.
We are faced with highly-mobile, location-independent citizens who can shop around not only for retail purchases and professional services but also state-provided public services as in the Estonian example.
How much does governance need to change to rise to this challenge? Well, as of yet, we simply don’t know. However, it is likely to be extensive and New Zealand needs to closely look at the impact of the current world on our communities. We are not reorganising the services, resources and funding systems which we have today, as this is rapidly being outdated by some of the most disruptive change in human history.
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This article was first published in the July 2019 issue of NZ Local Government Magazine.