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Abu Dhabi, UAESaturday 20 April 2019

In an uncertain future, governments must harness their power to innovate

With many challenges facing the world, new ideas should not be the sole preserve of private companies

The musician Will.i.am spoke about the tech-industry's collection of personal data at the World Government Summit in Dubai. Chris Whiteoak / The National
The musician Will.i.am spoke about the tech-industry's collection of personal data at the World Government Summit in Dubai. Chris Whiteoak / The National

The gulf between advocates of big government and those of small government has long been one of most important divisions in contemporary politics. Both positions have champions on the left and right, and the argument is just as heated as any of those that exist between these traditionally adversarial ends of the political spectrum. In a nutshell, small government people believe that state power is the problem, while the latter consider it the solution.

However, this fundamental political conflict is rather less visible than many others. It is most frequently encountered in the United States, where proponents of small government – who often self-describe as libertarian and adhere to a non-interventionist philosophy in fiscal and civil matters – are vocal and well-funded. In Europe and the Arab world, there is a stronger tradition of governments taking responsibility for infrastructure, providing employment and overseeing wide areas of the economy.

The big-government philosophy has been given a particularly prominent platform this week in Dubai. The World Government Summit has provided a global stage, on which to showcase the bold steps governments around the world are taking right now and what they hope to achieve in the future.

One of the most contentious aspects of the big and small government conversation is that of innovation. When it comes to creating new technologies or approaches to problems, there is a widespread belief that the private sector – lean, nimble and willing to take chances – is better placed than the bureaucratic public sector. Yet, as the multiple sessions of the World Government Summit have shown, there is a huge amount that governments can do – and, in some cases, only government can do.

There are certainly challenges when governments try to innovate. Two of the most important hurdles can be summarised as matters of public standards and public money.

In the first instance, the public generally holds government projects to a higher standard than those of private companies. If consumers are unhappy with private companies, they can simply withdraw support by not using them. Governments also have the ability to sanction them. It is much harder to apply such measures to government itself.

Innovation requires funding and virtually guarantees a certain amount of failure. After all, new ideas don’t always work

However, it appears to take a lot for the public to turn its back on private companies that provide useful services. Take, for example, the much-talked about field of big data. In his keynote speech to the WGS, Mohammed Al Gergawi, Minister of Cabinet Affairs and the Future, said that “the private sector now knows more about us than any government around the world”. The musician Will.i.am made the same point later on Sunday, noting that companies such as Google, Amazon and Facebook hold – and crucially monetise – vast quantities of user information.

Still, concerns over privacy have not translated into the widespread abandonment of these applications and sites. Compare that response to the enormous opposition faced by the Indian government over its Aadhaar universal identity scheme – the largest biometric identity programme in the world, which critics argue impinges on privacy and individual freedom.

The reason for this discrepancy in attitudes is important: many people believe that such projects hold a more intimate kind of information – fingerprints, iris scans, health details – about us than tech companies gather.

As regards the matter of public money, innovation in infrastructure or technology requires funding and virtually guarantees a certain amount of failure. After all, new ideas don’t always work. If taxpayers are uncomfortable with their government taking risks with their money, or if the tally of failures is too big, there are often political consequences.

But failing to innovate is not an option, especially at a time when challenges are coming thick and fast. Just look at the range of urgent matters covered at the World Government Summit.

Climate change, sustainable development, tax avoidance by global corporations, technological innovation and interfaith dialogue. These issues are relevant to almost every country, and government is able to play a significant role in addressing them.

A good example of innovation with public money recently concluded in Finland. At the end of 2018, the nation finished a trial of universal basic income. In a two-year scheme, 2,000 unemployed Finns were given a guaranteed €560 (Dh2,300) a month, with no strings attached. The idea was that this financial safety net would encourage them to find jobs. On that score, it comprehensively failed. However, the creation of an environment where bold, new ideas can be explored is a success in and of itself.

A sufficiently high level of trust between government and the public does appear to give a certain amount of latitude, when it comes to risky projects. It should be no surprise that countries with low levels of corruption find it easier to justify taking chances on new ideas. Good governance, therefore, is a clear driver of innovation. Governments have the power to change people's lives for the better. The debate, knowledge-sharing and collaboration seen at the World Government Summit will allow them to better harness it for years to come.

Updated: February 12, 2019 02:59 PM

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