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Prof. Carlota Perez  Cambridge and Sussex Universities, U.K. and Tallinn University of Technology, Estonia Flemish Conference on local e-Government Ghent, Belgium, December 2010 MODERNISING  GOVERNMENT  TO SHAPE  A BETTER FUTURE
WHAT DO WE MEAN BY MODERNISATION OF GOVERNMENT AND WHY DO IT? ,[object Object],[object Object],[object Object],Modern technology in government would make little sense  if it did not contribute  to real social progress That’s not enough!
By modernisation of government we mean using the most powerful means  available in our time to enable reaching  the new and more ambitious goals  that become possible for the economy and society THE NEW AND MAJOR CHALLENGES IN THE ECONOMY, THE ENVIRONMENT  AND EDUCATION CAN BE BETTER FACED  WITH A MODERN GOVERNMENT USING ADEQUATE TECHNOLOGIES
The historical analysis reveals  a process of mutual shaping in a periodically changing context A crucial relationship to examine TECHNOLOGY SOCIETY
What worked before for growth and innovation may not work from now on BECAUSE IN MARKET ECONOMIES  TECHNICAL CHANGE OCCURS BY REVOLUTIONS Capitalism experiences pendular swings  every two or three decades  To a “golden age”   led by production  aided by an active government in order to make the most of the installed potential for growth and for social well being when investment concentrates in installing the new technologies and changing the range of wealth creating opportunities From a “gilded age”  led by finance aided by unfettered free markets THE MAJOR BUBBLE COLLAPSE  MARKS THE SWING OF THE PENDULUM
2 Technological, organisational and cultural change with the paradigm shift 3 Redesigning government, its behaviour and its roles 1 Technological revolutions  and techno-economic paradigms
2 Technological, organisational and cultural change with the paradigm shift 3 Redesigning government, its behaviour and its roles 1 Technological revolutions  and techno-economic paradigms
Each revolution drives a GREAT SURGE OF DEVELOPMENT and shapes innovation for half a century or more FIVE TECHNOLOGICAL REVOLUTIONS IN 240 YEARS The ‘Industrial Revolution’ (machines, factories and canals)  1771 Age of Steam, Coal, Iron and Railways  1829 Age of Steel and Heavy Engineering (electrical, chemical, civil, naval) 1875 Age of the Automobile, Oil, Petrochemicals and Mass Production 1908 Age of Information Technology and Telecommunications 1971 Age of Biotech, Bioelectronics, Nanotech and new materials? 20??
Why call them revolutions? TRANSFORMING THE OPPORTUNITY SPACE AND  THE WAYS OF LIVING, WORKING AND COMMUNICATING Because they transform the whole economy! A massive change in managerial common sense A powerful cluster  of new dynamic industries and infrastructures with increasing productivity  and decreasing costs Explosive growth and structural change New generic technologies, infrastructures and organisational principles for modernising  the existing industries too A quantum jump in innovation and productivity for all NEW INDUSTRIES NEW TECHNO-ECONOMIC PARADIGM
The paradigm shift taking place since the 1970s A radical change in managerial “common sense” brought on by a different set of enabling technologies CONTINUOUS IMPROVEMENT STABLE ROUTINES HUMAN CAPITAL HUMAN RESOURCES FLEXIBLE STRATEGIES FIXED PLANS GLOBALISATION INTER - NATIONALISATION HYPER-SEGMENTED MARKETS THREE TIER MARKETS OPEN NETWORKS CLOSED PYRAMIDS FLEXIBLE PRODUCTION MASS PRODUCTION VALUE NETWORK PARTNERS SUPPLIERS AND CLIENTS ENVIRONMENT AS CHALLENGE NEGLECT OF ENVIRONMENT LEARNING ORGANIZATIONS TAYLORISTIC ORGANIZATIONS
Source: Based on Nelson and Winter, Dosi, Wolf, Abernathy and Utterback, Arthur, etc.  THE LIFE CYCLE OF EACH GREAT SURGE The process of propagation of each  technological revolution and its paradigm Deployment of potential Time FIFTY TO SIXTY  YEARS FROM IRRUPTION TO MATURITY Techno-economic paradigm defined Radical innovation MATURITY IRRUPTION  Previous revolution exhausted and declining Next revolution in gestation
EACH GREAT SURGE GOES THROUGH TWO DIFFERENT PERIODS Due to resistance in assimilating such profound changes Next big-bang From irruption  to bubble  collapse From “golden age” to maturity DEPLOYMENT  (20-30 years) INSTALLATION  (20-30 years) Financial bubble We are here Time Degree of diffusion of the new technological potential  big-bang “ Creative destruction” Battle of the new paradigm against the old Concentration of investment  in new-tech Income  polarisation LED BY FINANCIAL CAPITAL facilitated by  unfettered free markets INSTALLATION  (20-30 years) Financial bubble “ Creative construction” Use of  new paradigm for growth and innovation across all sectors Spreading  of social benefits LED BY PRODUCTION CAPITAL facilitated by government policy DEPLOYMENT  (20-30 years) Next  big-bang Recessions,  institutional change and role shift Turning Point
The shift from financial mania and collapse to Golden Ages  is enabled by regulation and policies to shape and widen markets  THE HISTORICAL RECORD Bubble prosperities, recessions and golden ages INSTALLATION PERIOD DEPLOYMENT PERIOD TURNING POINT Bubbles of  first globalisation Belle Époque (Europe) “Progressive Era” (USA) 1890–95  Railway mania The Victorian  Boom 1848–50  Canal mania The Great British leap 1793–97 Internet mania and financial casino Global Sustainable  ”Golden Age”? 2007 /08 -??? The roaring twenties Post-war Golden age Europe 1929–33 USA  1929–43 1771 Britain 1829 Britain 1875  Britain / USA Germany 1908  USA 1971  USA 1 st 2 nd 3 rd 4 th 5 th GREAT SURGE Bubble prosperity Maturity “ Golden Age” prosperity Collapse & Recessions
The structural shift involves A CHANGE IN THE DRIVERS OF INNOVATION A successful deployment depends on modern and innovative government and policies to shape the social and market context for taking best advantage of the new paradigm FINANCE in a  facilitating service  role THE STATE in a  facilitating service  role A vast free market experiment The full flourishing  of the installed potential PRODUCTION  and  THE STATE as drivers  and innovators DEPLOYMENT FINANCE and  THE NEW ENTREPRENEURS as drivers  and innovators INSTALLATION
3 Redesigning government, its behaviour and its roles 1 Technological revolutions  and techno-economic paradigms 2 Technological, organisational and cultural change with the paradigm shift
THE TECHNO-ECONOMIC PARADIGM Is the most powerful set of technological and organisational means for achieving complex goals in a particular epoch ,[object Object],[object Object],[object Object],[object Object],[object Object],It is applied across all spheres and becomes the shared “common sense” for a long period (until the next revolution)
The main trends of the current paradigm shift depend on ICT ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],FLEXIBLE ADAPTABLE SYSTEMS KOWLEDGE- BASED SOCIETY GLOBALISATION
SURVIVAL COMPETITION DRIVES THE CHANGE IN FIRMS Those that do not adopt the new paradigm stagnate or disappear INERTIA DELAYS THE CHANGE IN GOVERNMENT INSTITUTIONS It is usually the political pressure  during major crises that forces the modernisation of the State
And how do non-profit institutions learn the new paradigm? THROUGH THE FLOW OF PEOPLE AND INFORMATION ACROSS SOCIAL SPHERES THE RESULT IS SOCIETY-WIDE LEARNING Other organisations  and Institutions Modernized firms New firms
THE CLOSED HIERARCHICAL AND FUNCTIONAL PYRAMID  OF THE MASS PRODUCTION PARADIGM It was used successfully for decades by companies, governments  and most large organizations, but is now obsolete etc. etc. etc. etc. etc. etc. etc. etc. etc. etc. etc. Suppliers Clients
MULTIPLE FORMS OF LOCAL AND GLOBAL NETWORKS OF THE ICT PARADIGM Along  the value chain  Agreements from initial inputs to final distribution Clusters of small firms Usually combining cooperation and competition Around a large  company (local or global) Including internal disaggregation,   outsourcing and various forms of joint ventures, contracts alliances and agreements,  local or at  a distance
THE MODERN NETWORKED ORGANISATION AND ICTs ARE  THE MAIN  ENABLERS STRATEGIC MANAGEMENT Inter-functional semi-autonomous units INTERCOMMUNICATION INTERACTIONS Inter-functional semi-autonomous units Strategic management sets the goals and provides the resources COMMON SERVICES COMMON SERVICES … as well as with  common services and other units Semi-autonomous units interact intensely  with suppliers, clients  and allies… SUPPLIERS  CLIENTS  ALLIES SUPPLIERS  CLIENTS  ALLIES
Each style became “the good life” redefining people’s desires  and guiding innovation trajectories EACH GREAT SURGE HAS ALSO BROUGHT  A CHANGE IN LIFESTYLES AND PATTERNS OF CONSUMPTION Age of Steam, Coal,  Iron and Railways 1850s-1860s Urban, industry-based  VICTORIAN LIVING in Britain DEPLOYMENT PERIOD LIFESTYLE Age of Steel and Heavy Engineering 1890s-1910s Urban, cosmopolitan lifestyle of THE BELLE EPOQUE in Europe Age of the Automobile, oil and Mass Production  1950s-1960s Suburban, energy-intensive AMERICAN WAY OF LIFE 2010s-20??s Will the developed and emerging countries adopt a variety  of ICT-intensive and “glocal” SUSTAINABLE LIFESTYLES? Our current Age of global ICT
In the mass production surge the change of paradigm in consumption was enabled by suburbanisation and the Welfare State  at the national level  To succeed this time in fostering a golden-age-deployment, all levels will have to play their role, from the global to the local
2 Technological, organisational and cultural change with the paradigm shift 1 Technological revolutions  and techno-economic paradigms 3 Redesigning government, its behaviour and its roles
THESE GOALS WILL REQUIRE ACTIONS FROM THE GLOBAL TO THE LOCAL LEVEL TO ENABLE SUSTAINABLE GROWTH AND INCREASING SOCIAL WELL BEING MUCH INSTITUTIONAL INNOVATION IS NOW NEEDED Regulating and restructuring  the national and global financial architectures towards financing the real economy (away from the casino) FINANCE ICT Facilitating universal access to broadband and the intelligent use of internet for all of the above WELFARE Reinventing the Welfare State for the current paradigm  and fostering investment within and across countries  (for expansive –rather than intensive– demand growth) EDUCATION Enabling the education intensity, coverage and variety  required for the Knowledge Society GREEN Tilting the playing field strongly in favour  of environmentally friendly investment and innovation
CONCEIVING GLOCALIZATION : A flexible network of policy, information and regulation levels All enabled by information and communications technologies Interacting networks and markets Regulation and coordinating levels  PUBLIC PRIVATE THIRD SECTOR Global Supranational (Blocs) National Regional Local “ Parish”, etc. COMMONALITY DIVERSITY
A dynamic, healthy, well informed and well connected  GLOCAL community needs world quality services with high quality ICT  Empower the citizens for a good life in the global space DEFINING THE ROLE OF LOCAL GOVERNMENT IN A GLOBALISED WORLD: INNOVATION Local access to infrastructure, information,  finance and other forms of support define how favourable the context is for innovation EDUCATION Both formal and informal education  (and shaping of citizen behaviour) occur at the local level and can be enhanced ENVIRONMENT Only at the local level can the conditions be created  for well being with “green” lifestyles GLOCALISATION The welfare of the citizens and the community will increasingly depend on their capacity to interact  locally and with the global economy and society
ICT ALSO REQUIRES CHANGES IN ORGANISATION AND BEHAVIOURS but about reinventing service behaviour for empowering citizens E-government is not about putting the bureaucratic routines on the web Organizational  and behavioural change Equipment change Maximum effectiveness Optional trajectories
THAT IS WHAT THE CITADEL STATEMENT DOES FOR RESHAPING E-GOVERNMENT AND FOR EMPOWERING EVERY BIT OF EUROPEAN TERRITORY AND SOCIETY TO SUCCEED IN THE GLOBALISED ECONOMY Not only THINK GLOBAL, ACT LOCAL But also THINK LOCAL, ACT GLOBAL

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Prof. Carlota Perez – Modernising government to shape a better future

  • 1. Prof. Carlota Perez Cambridge and Sussex Universities, U.K. and Tallinn University of Technology, Estonia Flemish Conference on local e-Government Ghent, Belgium, December 2010 MODERNISING GOVERNMENT TO SHAPE A BETTER FUTURE
  • 2.
  • 3. By modernisation of government we mean using the most powerful means available in our time to enable reaching the new and more ambitious goals that become possible for the economy and society THE NEW AND MAJOR CHALLENGES IN THE ECONOMY, THE ENVIRONMENT AND EDUCATION CAN BE BETTER FACED WITH A MODERN GOVERNMENT USING ADEQUATE TECHNOLOGIES
  • 4. The historical analysis reveals a process of mutual shaping in a periodically changing context A crucial relationship to examine TECHNOLOGY SOCIETY
  • 5. What worked before for growth and innovation may not work from now on BECAUSE IN MARKET ECONOMIES TECHNICAL CHANGE OCCURS BY REVOLUTIONS Capitalism experiences pendular swings every two or three decades To a “golden age” led by production aided by an active government in order to make the most of the installed potential for growth and for social well being when investment concentrates in installing the new technologies and changing the range of wealth creating opportunities From a “gilded age” led by finance aided by unfettered free markets THE MAJOR BUBBLE COLLAPSE MARKS THE SWING OF THE PENDULUM
  • 6. 2 Technological, organisational and cultural change with the paradigm shift 3 Redesigning government, its behaviour and its roles 1 Technological revolutions and techno-economic paradigms
  • 7. 2 Technological, organisational and cultural change with the paradigm shift 3 Redesigning government, its behaviour and its roles 1 Technological revolutions and techno-economic paradigms
  • 8. Each revolution drives a GREAT SURGE OF DEVELOPMENT and shapes innovation for half a century or more FIVE TECHNOLOGICAL REVOLUTIONS IN 240 YEARS The ‘Industrial Revolution’ (machines, factories and canals) 1771 Age of Steam, Coal, Iron and Railways 1829 Age of Steel and Heavy Engineering (electrical, chemical, civil, naval) 1875 Age of the Automobile, Oil, Petrochemicals and Mass Production 1908 Age of Information Technology and Telecommunications 1971 Age of Biotech, Bioelectronics, Nanotech and new materials? 20??
  • 9. Why call them revolutions? TRANSFORMING THE OPPORTUNITY SPACE AND THE WAYS OF LIVING, WORKING AND COMMUNICATING Because they transform the whole economy! A massive change in managerial common sense A powerful cluster of new dynamic industries and infrastructures with increasing productivity and decreasing costs Explosive growth and structural change New generic technologies, infrastructures and organisational principles for modernising the existing industries too A quantum jump in innovation and productivity for all NEW INDUSTRIES NEW TECHNO-ECONOMIC PARADIGM
  • 10. The paradigm shift taking place since the 1970s A radical change in managerial “common sense” brought on by a different set of enabling technologies CONTINUOUS IMPROVEMENT STABLE ROUTINES HUMAN CAPITAL HUMAN RESOURCES FLEXIBLE STRATEGIES FIXED PLANS GLOBALISATION INTER - NATIONALISATION HYPER-SEGMENTED MARKETS THREE TIER MARKETS OPEN NETWORKS CLOSED PYRAMIDS FLEXIBLE PRODUCTION MASS PRODUCTION VALUE NETWORK PARTNERS SUPPLIERS AND CLIENTS ENVIRONMENT AS CHALLENGE NEGLECT OF ENVIRONMENT LEARNING ORGANIZATIONS TAYLORISTIC ORGANIZATIONS
  • 11. Source: Based on Nelson and Winter, Dosi, Wolf, Abernathy and Utterback, Arthur, etc. THE LIFE CYCLE OF EACH GREAT SURGE The process of propagation of each technological revolution and its paradigm Deployment of potential Time FIFTY TO SIXTY YEARS FROM IRRUPTION TO MATURITY Techno-economic paradigm defined Radical innovation MATURITY IRRUPTION Previous revolution exhausted and declining Next revolution in gestation
  • 12. EACH GREAT SURGE GOES THROUGH TWO DIFFERENT PERIODS Due to resistance in assimilating such profound changes Next big-bang From irruption to bubble collapse From “golden age” to maturity DEPLOYMENT (20-30 years) INSTALLATION (20-30 years) Financial bubble We are here Time Degree of diffusion of the new technological potential big-bang “ Creative destruction” Battle of the new paradigm against the old Concentration of investment in new-tech Income polarisation LED BY FINANCIAL CAPITAL facilitated by unfettered free markets INSTALLATION (20-30 years) Financial bubble “ Creative construction” Use of new paradigm for growth and innovation across all sectors Spreading of social benefits LED BY PRODUCTION CAPITAL facilitated by government policy DEPLOYMENT (20-30 years) Next big-bang Recessions, institutional change and role shift Turning Point
  • 13. The shift from financial mania and collapse to Golden Ages is enabled by regulation and policies to shape and widen markets THE HISTORICAL RECORD Bubble prosperities, recessions and golden ages INSTALLATION PERIOD DEPLOYMENT PERIOD TURNING POINT Bubbles of first globalisation Belle Époque (Europe) “Progressive Era” (USA) 1890–95 Railway mania The Victorian Boom 1848–50 Canal mania The Great British leap 1793–97 Internet mania and financial casino Global Sustainable ”Golden Age”? 2007 /08 -??? The roaring twenties Post-war Golden age Europe 1929–33 USA 1929–43 1771 Britain 1829 Britain 1875 Britain / USA Germany 1908 USA 1971 USA 1 st 2 nd 3 rd 4 th 5 th GREAT SURGE Bubble prosperity Maturity “ Golden Age” prosperity Collapse & Recessions
  • 14. The structural shift involves A CHANGE IN THE DRIVERS OF INNOVATION A successful deployment depends on modern and innovative government and policies to shape the social and market context for taking best advantage of the new paradigm FINANCE in a facilitating service role THE STATE in a facilitating service role A vast free market experiment The full flourishing of the installed potential PRODUCTION and THE STATE as drivers and innovators DEPLOYMENT FINANCE and THE NEW ENTREPRENEURS as drivers and innovators INSTALLATION
  • 15. 3 Redesigning government, its behaviour and its roles 1 Technological revolutions and techno-economic paradigms 2 Technological, organisational and cultural change with the paradigm shift
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  • 18. SURVIVAL COMPETITION DRIVES THE CHANGE IN FIRMS Those that do not adopt the new paradigm stagnate or disappear INERTIA DELAYS THE CHANGE IN GOVERNMENT INSTITUTIONS It is usually the political pressure during major crises that forces the modernisation of the State
  • 19. And how do non-profit institutions learn the new paradigm? THROUGH THE FLOW OF PEOPLE AND INFORMATION ACROSS SOCIAL SPHERES THE RESULT IS SOCIETY-WIDE LEARNING Other organisations and Institutions Modernized firms New firms
  • 20. THE CLOSED HIERARCHICAL AND FUNCTIONAL PYRAMID OF THE MASS PRODUCTION PARADIGM It was used successfully for decades by companies, governments and most large organizations, but is now obsolete etc. etc. etc. etc. etc. etc. etc. etc. etc. etc. etc. Suppliers Clients
  • 21. MULTIPLE FORMS OF LOCAL AND GLOBAL NETWORKS OF THE ICT PARADIGM Along the value chain Agreements from initial inputs to final distribution Clusters of small firms Usually combining cooperation and competition Around a large company (local or global) Including internal disaggregation, outsourcing and various forms of joint ventures, contracts alliances and agreements, local or at a distance
  • 22. THE MODERN NETWORKED ORGANISATION AND ICTs ARE THE MAIN ENABLERS STRATEGIC MANAGEMENT Inter-functional semi-autonomous units INTERCOMMUNICATION INTERACTIONS Inter-functional semi-autonomous units Strategic management sets the goals and provides the resources COMMON SERVICES COMMON SERVICES … as well as with common services and other units Semi-autonomous units interact intensely with suppliers, clients and allies… SUPPLIERS CLIENTS ALLIES SUPPLIERS CLIENTS ALLIES
  • 23. Each style became “the good life” redefining people’s desires and guiding innovation trajectories EACH GREAT SURGE HAS ALSO BROUGHT A CHANGE IN LIFESTYLES AND PATTERNS OF CONSUMPTION Age of Steam, Coal, Iron and Railways 1850s-1860s Urban, industry-based VICTORIAN LIVING in Britain DEPLOYMENT PERIOD LIFESTYLE Age of Steel and Heavy Engineering 1890s-1910s Urban, cosmopolitan lifestyle of THE BELLE EPOQUE in Europe Age of the Automobile, oil and Mass Production 1950s-1960s Suburban, energy-intensive AMERICAN WAY OF LIFE 2010s-20??s Will the developed and emerging countries adopt a variety of ICT-intensive and “glocal” SUSTAINABLE LIFESTYLES? Our current Age of global ICT
  • 24. In the mass production surge the change of paradigm in consumption was enabled by suburbanisation and the Welfare State at the national level To succeed this time in fostering a golden-age-deployment, all levels will have to play their role, from the global to the local
  • 25. 2 Technological, organisational and cultural change with the paradigm shift 1 Technological revolutions and techno-economic paradigms 3 Redesigning government, its behaviour and its roles
  • 26. THESE GOALS WILL REQUIRE ACTIONS FROM THE GLOBAL TO THE LOCAL LEVEL TO ENABLE SUSTAINABLE GROWTH AND INCREASING SOCIAL WELL BEING MUCH INSTITUTIONAL INNOVATION IS NOW NEEDED Regulating and restructuring the national and global financial architectures towards financing the real economy (away from the casino) FINANCE ICT Facilitating universal access to broadband and the intelligent use of internet for all of the above WELFARE Reinventing the Welfare State for the current paradigm and fostering investment within and across countries (for expansive –rather than intensive– demand growth) EDUCATION Enabling the education intensity, coverage and variety required for the Knowledge Society GREEN Tilting the playing field strongly in favour of environmentally friendly investment and innovation
  • 27. CONCEIVING GLOCALIZATION : A flexible network of policy, information and regulation levels All enabled by information and communications technologies Interacting networks and markets Regulation and coordinating levels PUBLIC PRIVATE THIRD SECTOR Global Supranational (Blocs) National Regional Local “ Parish”, etc. COMMONALITY DIVERSITY
  • 28. A dynamic, healthy, well informed and well connected GLOCAL community needs world quality services with high quality ICT Empower the citizens for a good life in the global space DEFINING THE ROLE OF LOCAL GOVERNMENT IN A GLOBALISED WORLD: INNOVATION Local access to infrastructure, information, finance and other forms of support define how favourable the context is for innovation EDUCATION Both formal and informal education (and shaping of citizen behaviour) occur at the local level and can be enhanced ENVIRONMENT Only at the local level can the conditions be created for well being with “green” lifestyles GLOCALISATION The welfare of the citizens and the community will increasingly depend on their capacity to interact locally and with the global economy and society
  • 29. ICT ALSO REQUIRES CHANGES IN ORGANISATION AND BEHAVIOURS but about reinventing service behaviour for empowering citizens E-government is not about putting the bureaucratic routines on the web Organizational and behavioural change Equipment change Maximum effectiveness Optional trajectories
  • 30. THAT IS WHAT THE CITADEL STATEMENT DOES FOR RESHAPING E-GOVERNMENT AND FOR EMPOWERING EVERY BIT OF EUROPEAN TERRITORY AND SOCIETY TO SUCCEED IN THE GLOBALISED ECONOMY Not only THINK GLOBAL, ACT LOCAL But also THINK LOCAL, ACT GLOBAL