What does it mean for a government to invest and research megatrends? How does it help to prepare the governance system of tomorrow? To what extent are megatrends taken into consideration in international development research and programming? I have met Elina Kiiski– Kataja and Tony Addison at the Oodi Library in Helsinki to discuss these questions.
Research and analysis help cast light on the phenomenon of megatrends. Megatrends are going to have long-term effects on governments, societies and economies. Some of these effects are already visible in our societies. The Finnish innovation agency, SITRA, has launched a page on its website called Megatrends 2020 to open up a discussion about the trends that will have the biggest impact on our future. The page explores tensions such as: tensions between the transformation of work and the need to ensure an equitable livelihood for all; pursuing a sustainable versus a restorative economy; the widespread use of technology and its effects on inequality; the politics of having corporations or governments deciding on technology; the falling costs of renewable energy; centralised policy decision-making versus broad technology-enabled citizen engagement; and many more.
Megatrends give rise to disciplines such as futures studies and foresight, which represent an attempt to forecast technological advancements and other environmental trends. They represent a specific form of evidence that enables governments to predict how people will live and work in the future.
Governments, mainly in high-income countries, and large corporations invest and use foresight analysis and megatrends as a source of evidence to inform strategic (policy) decisions. The Finnish government has established in 2015 the project to reform the Government’s steering framework (also called OHRA). The multinational Shell is well known for their expertise with foresight and scenarios.
But to what extent are megatrends taken into consideration in international development research and programming?
I discussed these questions during a video call with Elina Kiiski-Kataja, Director of Research and Foresight at Ellun Kanat and former leading foresight specialist at the Finnish Innovation Fund, Sitra, and Tony Addison, until recently the chief economist and now non-resident senior research fellow with UNU-WIDER in Helsinki and a professor of economics at the University of Copenhagen’s Development Economics Research Group.
Arnaldo Pellini – Tony, does international development research and programming consider megatrends such as the one Elina and SITRA have been working on? After all, international development should be guided by the SDGswhich look at 2030.
Tony – My sense is that megatrends, in the way it is used in the foresight knowledge community, is not embedded in the way the international development community operates. For sure, there are a plethora of international reports, especially published by international agencies and international NGOs, and those that embed the latest results of international research are very thorough, especially when they draw upon the sciences: one thinks here, for example, of the climate change assessment reports produced by the International Panel on Climate Change (IPCC). But the international reports that come out of UN agencies, the World Bank, the IMF and the OECD, are often rather bland and usually confine themselves to a limited set of scenarios – albeit the analysis that is done is thorough, but it is done within a relatively narrow set of future possibilities.
The research community, as found in academia, has become quite narrow in many of its concerns. Within development economics, which is my disciplinary area, the last 20 years has seen a narrowing of focus, with the rise of randomised control trials (RCTs). These try to assess the likely impact of interventions, typically in the areas of education and health care (with more studies of livelihoods projects in recent years). The aim is to inform the design of project interventions and allocation of public spending. This is fine as far as it goes, but they are subject to considerable critique, albeit the award of the 2019 Nobel Prize in Economics to two of their foremost practitioners has given them considerable status. This is part of a general trend within development economics towards more and more studies that are micro-economic in orientation.
This has meant a gradual drift away from some of the ‘big picture’ thinking that characterised development economics in its early years. For sure, it was sometimes too general, and too utopian in nature – especially in the academic economics community – but at the same time it did try to address some of the very large questions of development, including scenarios for the future. In contrast, among policy makers in East Asia there was an approach that incorporated some elements of foresight knowledge but not necessarily in ways that are evident to us as outside commentators: much of this was done within ministries and government agencies, only sometimes seeing the light of day in published planning documents.
The SDGs are largely a set of aspirations, with so many goals and targets that countries can ‘pick and mix’ what they wish to go for. This is not necessarily a bad thing, for the SDGs are above all a statement of political commitment by UN member states, but they do not provide an analytical framework for thinking about the future.
Arnaldo – Elina, can you give concrete examples of how megatrends and the analysis that underpin them can inform public policy? After all, public policy is most of the time very short term, if not mainly reactive. At best it is linked to election cycles of four to five years.
Elina – In Finland there are several mechanisms that have been developed to tackle the challenge of how public policy could better take into account different drivers and megatrends that affect our society.
First of all, the Finnish Parliament has a Futures Committee that specialises in foresight and public policy. The committee doesn’t participate in legislative work but of course its members take part in other parliamentary committees alongside the Futures Committee. The Futures Committee acts as an internal think tank in the Parliament and it can have projects on themes that it decides. One of the most important tasks of the Futures Committee is to comment on and approve the Finnish Government’s Report on the Future, that every government produces once every four years on a theme they find important.
This brings us to the second important characteristic of Finnish public policy and foresight which is the governmental activities and foresight processes. The Finnish ministries conduct foresight activities themselves internally and there is also an active National Foresight Network that brings together different parts of the Finnish institutional foresight processes and aims to bring foresight knowledge closer to decision making. The National Foresight Network functions under the Prime Minister’s office. As mentioned earlier, every four years the government publishes a Report on the Future on a theme it finds important. It goes through the parliamentary process so that the Futures Committee responds to it.
Finally, Finland has a lot of agencies that hold foresight at the heart of their work. One of them, Sitra, the Finnish Innovation Fund that was established in 1967 to develop the Finnish society and economy, and it still conducts this activity successfully by educating decision makers and bringing public and private interest groups together to think about the future and do research on the future. It also conducts pilots and projects on themes important for the Finnish future. Another one is Business Finland, which helps Finnish companies to thrive. It does a lot of technology-relevant and business-relevant foresight and work with Finnish companies, helping them to take advantage of opportunities that arise in the changing world.
So I would say that through institutional settings, futures thinking and megatrends can be actually quite well attached to public policy. And I think it is also worth mentioning that in 1967 Finland was still a developing country that had a difficult history, as it had been only 20 plus years since the end of the war with the Soviets and 40 plus years since the bloody civil war. So in many ways Finland put futures thinking at the heart of its post-war rebuilding strategy. It was also very successful in adapting ideas about the welfare society, that at the time was something very new.
Arnaldo – I have been involved in many projects, working with government organisations in Southeast Asia, which aimed to strengthen the use of evidence and knowledge to inform public policy. In most cases the evidence referred to the here and now, that is, current problems and ways to address them. Thinking about it now, it is as if foresight is not part of many of the different types of evidence that the government can use to inform public policy decisions.
Elina – I think that evidence-based decision making is a really important factor when forming quality public policies. However, you are absolutely right in noting that futures thinking very often lacks evidence. Or to put it another way: we usually have a lot of evidence on different megatrends, such as climate change or the fast development of technology. But what we don’t have evidence on usually is how these megatrends affect us in different fields of society and what we should do about it. This is where we need futures thinking, which is mainly the ability to look at developments from different points of view. In my opinion good futures thinking involves three different ways of looking at the phenomenon called futures. The first one is probable futures, which usually consists of data, statistics, etc. So it comes close to evidence-based thinking. Because in the past we had x in the future, it will be very likely that it will develop in to y. But more and more we also need to think about possible futures, which are futures that might surprise us and we need to be able to speculate and think about different scenarios – also unlikely ones. And finally, more and more, we need desirable futures, and then we need visionary thinking that comes close to innovation processes and creative thinking. Because very often also those shaping the future are the ones that build the future they want by their visions and strategic choices.
Tony – If futures thinking is to be useful to governments, then it needs to be done in ways that yield a very wide range of scenarios, including the downside – such as those that emanate from domestic and external shocks. The latter are hard for most governments to think their way through, because doing so reveals institutional weaknesses in their ability to respond, and these are hard truths that ministers and civil servants don’t necessarily want, at least not to be openly available to the media and public.
The Covid-19 pandemic has revealed, with brutal clarity, weaknesses in policy and institutions right across the developing world (and the developed world as well). There has been little or no scenario analysis of the macro-economic impact of pandemics on public finances, debt, and growth scenarios of low- and middle-income countries. Consequently, countries did not build up fiscal buffers (fiscal savings) and foreign exchange reserves to draw upon in such crises. We are now seeing the results unfolding.
Arnaldo – I am wondering whether, when a government decides to invest and use foresight analysis to inform strategic policy decisions, it is a sign of a shift in governance attitudes and approaches. It seems to be that investing in predicting the main trends over 30 to 50 years signals acceptance that the systems in which we operate are complete and interconnected, and that addressing public policy problems requires testing and experimenting with solutions. In doing so, we need some sense of where the work and society is moving. This is very different, has noted Paul Cairney, from the linear and rational view of policy making that is a key part of the post-war public policy systems in place today.
Tony – Institutions and think tanks. I don’t think most government departments will have sufficient breadth of disciplinary background, nor the independence to consider unpalatable futures that would lead to questioning of the current policy stance. Governments in the developed world increasingly claim to base policy on evidence. ‘Evidence-based policy’ has been the big mantra of recent years, but I think this has been quite limited in scope and impact within government: the biggest decisions are often the product of political calculation. The United Kingdom over the last decade is a prime example of that.
Fundamentally, development studies and development policy as practiced and preached by the community of development practitioners is way too optimistic. It is essentially an ‘enlightenment’ project, believing that with enough shared good sense and commitment the world can reach some kind of nirvana in which poverty is ended everywhere, and all good things come to pass. But the success of nations is highly contingent on trends that are not necessarily within their control. If future studies is to have a role in the development space, then it needs to be given a mandate to consider the darker side of development as it establishes scenarios for the future.
Elina – Absolutely. I believe it is starting to loom that the challenges societies are facing are so complex in nature that it is simply impossible to find solutions with linear thinking. However, it is not an easy transformation and it also means that many institutions, such as parties and public policy institutions, must find new ways to operate with these challenges, and conduct research and experimentation. I think part of the problems that western governments are facing today, with difficulties in executing policies efficiently or even forming a government are symptoms of this complexity. But I want to be an optimist and believe that solutions will be found, that in development policy one of the greatest opportunities lies in the potential to develop new solutions for new generations that do not have the same path dependencies that western countries from the previous industrial era have. I think we will see lots of future-oriented policies invented in countries with young populations who have the ability to look boldly to the future.
Arnaldo – Tony and Elina, thank you very much