Technology is changing the Role of Government and Business
When Google’s Chief Economist, Hal Varian, said that “Google will make us more informed,” he was actually referring to how greater access to information may increase people’s potential to contribute to society. And while this may be true, digital technologies are also subversively changing the interrelationships between governments and businesses.
While organisations are continuing to digitally transform, everyday transactions are increasingly being mediated by technology and captured through data. But it’s much more sophisticated than merely translating what once used to be analogue information into digital — technology (including smart sensors) has the ability to collect and record much more data on a single transaction than humans have ever done before.
Not only that, the computational processing power and storage capacity that organisations have access to today are phenomenal. Compare this to the early 19th century, when censuses were carried out by collecting paper documents and collated by hand. Data assets were historically held and predominantly managed by Governments, and with that came their ‘monopoly’ on citizen data.
Our ‘citizen data assets’ saw governments organising their efforts into various portfolios such as finance, health, education and social services (amongst others), and the collection of civic data became more sophisticated and aligned with departmental services. Policy advice and economic forecasts also benefited from more data — with government departments in the best position to provide any quantitative ‘crystal-balling’ of the future.
Much has changed today and — like it or not — private organisations such as Google, Facebook and Amazon are now holding the lion’s share of information on citizens. The large masses of data they collect gives them unprecedented access to personal, social and economic information, allowing them to derive new insights and potentially achieve forecasting supremacy (if they haven’t already!).
Meanwhile, governments are still grappling with the many challenges of data regulation and integration — and are coming to terms with how to get the most out of their data. Government data, often fragmented by the very portfolios they put in place to compartmentalise their services and policy advice, has become ‘siloed’. And this has also constrained Government’s ability to compete with the private sector for deeper data insights.
The balance of power when it comes to knowledge about citizens has undoubtedly shifted from Government to Business.
Yet, the narrative is so much more complicated — governments have a duty of care for their citizens, and this includes protecting citizen privacy and human rights. The apparent tension between deeper data insights and privacy protection has been the focus of many government data integration projects in an effort to gain more ground in the understanding of complex policy issues.
Policymakers today have to navigate not just government agency silos, but a public-private collective of information that could be utilised to create better public policy. Private data collected in organisations is mostly used to uncover new business insights and better customer/client services. But this same data, viewed from a social good perspective, could also provide new policy insights and benefits to society.
As data sources continue to diversify, we’re beginning to see new data-sharing collaboratives emerge, with McKinsey & Co. estimating an increase of around 20 per cent in companies forming data-related partnerships from 2017 to 2019. By collectively putting the pieces of the ‘data-puzzle’ together, better data models are being developed for better services all round.
Indeed, the recent COVID-19 pandemic has resulted in unprecedented data-sharing arrangements which has enabled faster outbreak research. At the same time, Google has been using location data gathered from smartphones to help public health officials understand people’s movements and compliance to new policies.
The task of data sharing, though noble, does not come without its challenges — data sharing collaboratives present a myriad of legal, technical, commercial, ethical and privacy risks, not to mention its impact on public trust. What’s required at the outset are strong governance practices that ensure responsible data collaboration and innovative solutions.
Last month, the ‘Beeck Center for Social Impact + Innovation’, supported by the Rockefeller Foundation, released a guidebook on sharing data for social impact, which includes a framework for establishing responsible governance practices. It acknowledges a ‘fundamental need to reform data-governance’ in an environment that is often under-resourced, leading to practices that can be unsustainable and ineffective.
And this leads us to a closer examination of the relationship between governments and businesses.
Interestingly, while government may have lost some of it’s citizen data ‘turf’ to the private sector, it still has the power to protect the interests of its citizens and address any imbalance through carefully considered rules and legislation. The ‘General Data Protection Regulation (GDPR)’ adopted by the European Union is one such example where legislation is redefining how businesses uses personal data.
But can a fundamental change of the relationship between government and business, as it relates to data, achieve a greater social good?
In her recent Schumpeter lecture, Professor Mariana Mazzucato, founding director of the ‘Institute for Innovation & Public Purpose’, spoke of the need to re-design the governance systems of public and private sectors to redress imbalances within capital markets, including how they relate to one another. By focussing on the concept of “value”, Professor Mazzucato puts forward what might be an evolution of public-private partnerships — ones that are ‘mission oriented’ to co-create greater public value.
Could the same may be applied to data-driven or evidence based public policy design? The prolific growth and re-distribution of citizen data assets may warrant a re-think of the role of government and business.
In 2018, the Australian Treasury and LinkedIn presented some early findings on the gender gap in tech entrepreneurship across seven countries. What was unique to this pilot, was that almost no data was exchanged between parties — what was shared were aggregate data insights that were relevant to the policy problem. Here was a case study that showcased what might be possible with collaborative data efforts focussed on a specific ‘mission’ and a small shift in the role of government and business.
How the relationship between government and business will evolve with more data is as yet unknown. But what is clear is that technology has changed the status quo, and the role of government and business must shift if we are to achieve greater social value with data.
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Phoensight is an international consultancy dedicated to supporting the interrelationships between people, public policy and technology, and is accredited by the International Bateson Institute to conduct Warm Data Labs.
This article was based on ‘Who’s running things now? Why data is changing the roles of government and business’ Mandarin, Feb 2020, and the ‘Data for Good’ Event, hosted by General Assembly on the 5th Feb 2020.
