Leveraging design in policymaking

How can governments take action to help smaller companies reap the benefits of IIoT (Industrial Internet of Things)? In September 2019, we collaborated with the World Economic Forum (WEF) to lead the methodology in an interesting application of design: supporting the creation of new public policies.

By Raphael Sousa, María Ana Barrera, and Andrés Vélez

WEF is working with the Brazilian government and other entities on an initiative to design public policies that encourage the use of emerging technologies in Brazilian industrial SMEs (small and medium-sized enterprises). Accelerating the Impact of IoT Technologies is part of a larger platform that aims to develop policies that will accelerate the benefits of connected devices for consumers, business, and societies. WEF had the ambitious goal of defining the best policy, so there was only one possible starting point: research. Traditionally, this hasn’t been the case for public policymaking. However, when considering this specific user (manufacturing SMEs), we needed to dig deeply to understand the whole picture and identify specific challenges.

While embarking on this adventure, we encountered different challenges — from stakeholder management to systems thinking — that we want to share with all policymakers to help them consider the role of design in public policy:

Identifying the right problem to tackle, without a policy-driven mindset

The classic design-led problem-solving approach is very effective. It uses analytical and creative thinking to identify the right problem; it creates a wide number of interesting, possible solutions; and it strategically selects a challenge to pilot, implement, and scale.

In this case, understanding the core problem behind why SMEs struggle with implementing IIoT goes beyond IIoT and policymaking. Usually, the problems revolve around fundamental topics like people, time management, resource allocation, and dealing with day-to-day operations, rather than. These issues demand a lot of time and effort, and shift attention away from becoming more productive in the long run, leveraging innovation, or forecasting uses of the potential data collected. During this project, all of this was evident after our research phase.

Understanding these challenges requires that we move away from the idea of creating a policy (the project’s focus), and instead, learn to dig deep into what companies believe to be important, how they deal with their daily tasks and concerns, and what stops them from achieving the goals they set. When doing this, you can uncover questions like:

• How might we engage employees and managers in industry 4.0? → Very much related to IIoT.

But also…

• How might we train people without lowering productivity? → Directed towards why starting to focus on IIoT might be tricky.

The importance of systems thinking when tackling public policy

Governments create mechanisms (policies) to bridge society’s gaps, incentivize behaviors and habits, and positively impact social dynamics and individuals. In this case, the WEF wanted to impact the market dynamic — supply and demand, businesses, etc. — to trigger efficiency and productivity in Brazilian SMEs.

Every design project starts with understanding the real problem. Asking “Why?” and understanding the context, actors, and forces that can shape that problem is a complicated task, especially when you already have a solution in mind, such as public policy. But just as it’s complicated, it’s exciting, because it forces you to think about the entire ecosystem, not just users or policymakers.

When it comes to policymaking, if we analyze what positive impact means at the society level, we start to understand that we’re talking about a system. That is, one constituted by people and probably driven by cultural and local forces. We need to understand both the individual and the group levels to ensure we’re focusing on real needs and root causes with systemic impact that can be beneficial or harmful. Immediately we start questioning things like:

• What does positive impact look like for a supply chain?
• How can we benefit the entire chain, and not just one actor?
• What systemic consequences would a direct action have in each node, or stakeholder?
• What consequences can an action have outside of the value chain?

All of these inquiries are extremely relevant in an evidence-based, policymaking approach, and they need to be addressed before implementing a policy.

Policy design is a multi-stakeholder exercise

We’ve all heard about the default collaboration and co-creation methods as opportunities for creativity. Still, people from different backgrounds, with varying perspectives and interests, collaborating properly is no easy task. It’s no wonder many challenges posed by companies imply collaboration and multi-stakeholder approaches. Here are two key questions to help consider all the players involved:

• How might we define a strategy around the entire value chain?
• How might we work collaboratively and deal with conflicts of interest?

By default, policy design is a multi-stakeholder exercise. The journey from a social need to the pens of policymakers requires a lot of analysis and reflection. This journey demands analysis in domains that include budgeting, socioeconomics, legal, political, environmental, and administrative — all spread across different entities, both public and private.

To offer a bit of context, our collaboration with WEF involved: four Brazilian government ministries; 15 industrial SMEs; 15 consulting firms; ten industry associations; ten system integrators; six start-ups; six large tech providers; five tech parks and incubators; and seven players from academia. And this number tends to grow as projects move towards more tangible and actionable solutions.

Leading the research exercises based on innovative design methods helped us make sure that all stakeholders understood the importance of a human-centered approach. It also helped align participants’ expectations about each session. But most importantly, through co-design sessions, we provided a space for collaboration and knowledge-sharing among almost 100 cross-disciplinary people with different origins and motivations.

Designing a policy that can survive in the current scenario

It’s no accident that our current system presents barriers to change and evolution: bureaucracies bring predictability and order. This is mainly because many of our current institutions were created to maintain their own stability and longevity, instead of being structured to grow with the changing needs of the people they serve.

New collaborative and creative economies challenge our status quo every day. Many born-digital products and services have managed to survive while struggling to push change forward. New business models that were founded in the reality of workers’ needs, labour informality, and unmet market needs, challenge the traditional beliefs of today’s socioeconomic system. These models have exposed a need for flexibility, agility, and human-centered policies.

So, when co-creating together with companies, suppliers, and government agents, we asked ourselves:

• How might we find and retain the right talent for industry 4.0?

Some unexpected ideas may result, for example…

• “No need to retain. Instead, let’s build a community of experts who work across industries and companies.” So the best talent at hand can be trained, thanks to a community effort. As a result, the community benefits.

This is a complicated, multi-faceted task for policymakers. They have a lot of questions to ask themselves:

• How can we transform this idea into policy?
• How can we play with current policies to achieve the expected results?
• How can a community employ a group of experts?
• How might we deal with industrial exposure, competitive advantages, and confidentiality issues?

All of these concerns must be addressed, but this is the beauty and the purpose behind beginning to build human-centered policies. They may contradict and challenge the current rigid legislation in order to design what will actually benefit people.

Design can transform anything if you let it

If we had to pick the greatest lesson this project gave us, it would be the understanding that design transcends aesthetics, user experience, product development, and business transformations. It can also lend a hand to policymaking. Through design you can attempt to solve any type of challenge, because the design process seeks to understand the user, environmental and economical needs, and it will engage in testing to see if solutions work. These methods can be applied to any realm.

It’s no coincidence that after years of working with companies that are trying to solve corporate challenges (such as building an internal innovation culture), we also discovered similar ones that tend to emerge across all design exercises:

• How might we fight the fear of failure and uncertainty?
• How might we innovate without certainty?

These are the types of challenges that will move us forward, so we can keep pushing the limits to design what matters. Our case study goes into further detail about this project. You can download the methodology and research results for further information.

If the systematic problem that creates the social gap is not understood across all its facets, it will be challenging to design what matters. So ask yourselves: is 4IR about technology or people?