Entrepreneurial states need public-purpose tech — and vice versa
By Jaideep Prabhu, Professor of Marketing and Jawaharlal Nehru Professor of Indian Business & Enterprise at the Judge Business School, University of Cambridge
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We are living in a revolutionary age. New technology has not only revolutionized our personal lives — from Zoom to smartphones — but also transformed the core fabric of how governments and businesses operate. For the first time in human history, even small companies and startups can achieve a large societal impact, the ramifications of which we are only now beginning to understand.
Recognizing the potential of the private sector, governments everywhere are asking a similar set of questions: how should states engage with start-ups and social entrepreneurs to stimulate innovation and drive inclusive growth? And how do we ensure innovative technologies benefit society and not the opposite?
These are the questions I address in a new book which was published earlier this year: ‘How Should a Government Be: The New Levers of State Power’.
In the book, I argue that to balance effectiveness and efficiency with the preservation of our freedoms, governments need to adopt several principles. Of these, the need for the state to be entrepreneurial is of particular relevance for galvanizing public-purpose technology (PPT) — technology that can help to address big public needs.
In short, governments are entrepreneurial when they create environments for new and experimental organisations, cultures and business models to grow and find their feet. But if we are not good enough at fostering the right regulatory and industrial policies that support this burgeoning sector, PPT might never reach its full potential.
The UK government provides an interesting example of how to go about being entrepreneurial with PPT. The Bank of England, for instance, has fostered a thriving ecosystem for financial technology (FinTech) companies, including those serving under-served communities and addressing fraud and corruption risks, through the use of a ‘regulatory sandbox’, surfacing tricky regulatory issues early and ensuring that potential failures don’t pose systematic risks to the wider financial ecosystem. Likewise, the UK government’s Centre for Autonomous and Connected Vehicles has done a remarkable job of coordinating and fostering an ecosystem for all the diverse actors in this new sector, which shows promise for both our urban mobility systems and broader decarbonisation efforts. By engaging proactively, the Centre has been able to identify regulatory and policy challenges that will need to be resolved for the sector to grow, such as adequate upskilling and access to specialized labour as well as rules that govern testing of autonomous vehicles and the reporting of relevant data.
Throughout the book, I consider stories and cases from both developed countries (such as the US, the UK, Denmark and Canada) and developing nations (such as India, China, Kenya and Bangladesh). This choice is fuelled by a conviction that cross-country comparisons matter. In important respects, governments are similar: they have similar objectives, resources and constraints, and comparable ways of working and processes. But even where they differ, comparisons can be revealing. After all, what one country does differently can inspire people from another to change.
The cases from the UK show a way for other governments to be entrepreneurial by being proactive and engaging early with new technologies and the players involved. Doing so is essential to ensuring that these technologies thrive while their negative unintended consequences do not disrupt societies and individual lives.
‘How Should a Government Be: The New Levers of State Power’ (Profile Books) was published February 11, 2021. To read a review and buy a copy, click here.
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