Saturday, April 7, 2012

A new "grand bargain"?

The "grand bargain" between government and private enterprise that has helped grow some of the world's most successful democracies and economies is starting to unravel. Political economist Francis Fukuyama, author of "The end of history", argues that the world now needs a new "operating system".

Government provided the infrastructure, education, health, defence, transport, police and fire services that created the conditions in which business could flourish, and with it a large middle class of consumers.

As one leading US politician, currently running for office recently remarked, "no one ever got rich on their own."

The World Economic Forum 2012 Risk Report warns of the emergence of dystopia in the West as the middle class struggles to recover from a mountain of debt, underwater property values, reduced job opportunities, lower wages and salaries, and the inability of pensions funds to meet their commitments.

So why is the partnership in tatters?

A root cause is our collective inability to change the way society works - especially the role of government - in response to social and technological change. The rules for electing and operating governments and corporations are based on concepts that are almost two centuries and three waves of change out of date. We continue to use an operating system design for world where everything was less connected, ran more slowly, where life was far simpler than today.

Many public goods, the "free" services that governments provide, funded by our taxes, are now supplied by the private sector at a price and for a profit, often in direct competition with a government provider.

We keep on inventing new technologies that provide the old services more efficiently, for example, the internet, mobile phone and computer applications, that deliver the knowledge once provided mostly by libraries and schools, and services for which armies of clerks and sales assistants were needed.

Its no wonder government employees are digging in their heels and resisting change. And it also explain why so many are clamoring for less involvement of government in their lives. The livelihoods of civil servants are under threat from a technological revolution that has now intruded on "knowledge" and "wisdom work", in which Governments have always played a major role.

But we need to be careful we don't throw the baby out with the bathwater.

So here is a workshop to explore the issue:

1. What are the big issues in the world today that we seem unable to solve?

2. Who should be responible for solving these problems or creating new opportunities to deal with them more successfully?

3. What's the role of government in the "new economy" that is emerging? How should government work differently to the way it works right now?

4. What existing government services do we need to KEEP that are essential or working well, what do we need to ABANDON that no longer works, and what do we feel we need to RE-INVENT?

5. What is the role of business in the emerging "new economy"? How should business work differently to the way it operates right now?

6. What is the role of not-for-profits in the emerging "new economy"? How should not-for-profits work differently to the way they operate right now?

7. What might a new "grand bargain" look like? What do we need government to do that the private sector or not-for profits can not, and the private sector and not-for-profits do that other sectors do not do as well? What is the new unique interaction between the parts? The new fabric?

Image: Sydney's Circular Quay: the underground railway, the harbour bridge, ferries and opera house, all developed and operated by government.