«Saudi Arabia Faces Its Future in Vision 2030 Reform Plan»

Jane Kinninmont. Chatham House

«Saudi Arabia’s new Vision 2030, launched by Mohammed bin Salman, the king’s son and defence minister, this week, is a newly ambitious repackaging of the diversification policies that all the Gulf countries have been developing for years now. Most of the policies are not radically new, but reflect a longer term drive for economic reform that has gained fresh urgency from low oil prices and new-generation leadership.

»The elements that really stand out as new include the privatization through a local IPO of a small (up to 5 per cent) stake in Saudi Aramco, the state oil company. The remaining shares in Aramco would be transferred to the country’s public investment fund, creating a substantial Saudi sovereign wealth fund for the first time: while sovereign wealth funds were pioneered in the Gulf by Kuwait in the 1950s, Saudi Arabia’s government has traditionally held most of its savings as US treasury bills at its central bank − a risk-averse approach that has earned tiny rates of return in the past few years. It was bound to follow the other Gulf states in this direction eventually.

»Another dramatic move is the suggestion that Arab expats will be able to obtain green cards, ending the current sponsorship system which has facilitated human rights abuses. Bahrain has already technically ended its sponsorship system but phasing out abusive labour practices is a far longer term process. Nonetheless, the move would be welcomed around the Arab world, and would be a positive for Saudi soft power in the region, as well as labour-market flexibility at home.

»Similarly striking is the ambitious tourism target to increase tourism numbers fivefold, to 30 million visitors a year, by 2030 − drawing on a strategy already developed by another son of the king to encourage religious pilgrims to travel more widely around the country.

»These all form part of a much larger plan to increase the role of the private sector, including through privatizations of state assets and services, and attract more talent, visitors and investments − as the UAE and others have been doing for some time. Even the name is familiar: Bahrain published its own Vision 2030 in 2008 and Abu Dhabi issued one in 2009, both led by crown princes who wanted to associate themselves with economic transformation.

»Rather, the main novelty lies in the fact that for the first time in Saudi Arabia they are being espoused by a leader who is both very senior in the royal family and very young, belonging to the generation that will face the post-oil age in their own lifetimes. Previously such policies have usually been communicated by senior technocrats, such as the heads of SAGIA, the general investment authority, or ministers of finance or economy or industry. Ambitions to diversify the economy and develop the private sector have always been far in excess of implementation.

The main novelty lies in the fact that for the first time in Saudi Arabia they are being espoused by a leader who is both very senior in the royal family and very young, belonging to the generation that will face the post-oil age in their own lifetimes.

»There are four reasons for this. First, these initiatives have not been joined-up across government. Second, the government has not taken on the vested interests of the traditional merchant elite and royal family business people in preserving the status quo: maintaining a model of business dependent on cheap energy, cheap labour and the patronage and goodwill of the government (essential for contracts, land access and licences in a profoundly state-driven economy). Third, the wider public traditionally expects state benefits such as subsidies, public sector jobs and services, seen as their legitimate share in the national wealth, and often described as part of a ‘rentier bargain’, or social contract. Fourth, the high oil prices of recent years have enabled the leadership to put off or dilute some of the planned reforms, and specifically to ramp up public spending every year, with particularly vast handouts at the time of the Arab spring and upon King Salman’s succession.

»Mohammed bin Salman appears to bring fresh confidence to these efforts because he has the backing of his father and the low oil price makes the case for reform clearer (and is forcing all the other Gulf countries to cut subsidies and spending). Also, perhaps, the turmoil in the Arab neighbourhood is discouraging opposition movements in the countries that remain peaceful, strengthening the appeal of the political status quo compared to uncertain alternatives − reducing the risk that economic grievances will translate into a resurgent Saudi opposition movement. But the changes in the economic relations between citizen and state will inevitably alter the political relations too, especially with an increasingly well-educated and globally connected youth population with economic expectations that typically exceed their job prospects. The nature of the social contract in the Gulf will come under strain, and will need to be reinvented.»

Public Administration and innovation


Newsletter L&I, n.º 106 (2016-05-30)

n.º 106 (2016-05-30)

TAGS: # visão de futuro # visión de futuro # vision du futur # future vision

Administração Pública e inovação | Administración Pública e innovación |
Administration Publique et innovation | Public Administration and innovation

Um inovador | Un innovador | Un innovateur | An innovator

Uma inovação | Una innovación | Une innovation | An innovation

A execução da inovaçao | La ejecución de la innovación | L’exécution de l’innovation |
The innovation execution


Liderar Inovando (BR)

«Programa Zona Franca do Futuro Lançado na Segunda Convenção e Exposição Internacional Anual da Organização de Zonas Francas Mundiais» ( ► )
«Evrnu™ e Levi Strauss & Co. criam o primeiro tecido jeans produzido com resíduo pós-consumo de vestuário de algodão» ( ► )
Elaine Pinheiro: «Da inclusão ao empoderamento digital: pelo uso consciente da tecnologia para impacto social» ( ► )
«CES Asia 2016: Duas visões diferentes de futuro» ( ► )

Liderar Inovando (PT)

«Arte urbana em malas? Por Angola é possível» ( ► )
Mário Lopes: «Portugal terá competitividade condicionada pelos transportes e mobilidade» ( ► )
«Porque Lisboa não é Berlim, há um movimento para definir Lisboa» ( ► )
«Schindler parceira do Projeto Solar Impulse» ( ► )

Liderar Innovando (ES)

«Crearemos un gobierno innovador con visión de futuro: Chacho Barraza» ( ► )
Ferrán Adriá: «Tengo miles de defectos, pero tengo una virtud, que es ver el futuro» ( ► )
Pau García-Milà: «La innovación es un proceso normal que se debe pasar para salir de la zona de confort» ( ► )
Eythor Bender: «Hay que acabar con los Gobiernos que luchan contra
el progreso» ( ► )

Mener avec Innovation (FR)

«Côte d'Ivoire: en route vers la IIIe République» ( ► )
«France, Suisse et Allemagne: à chacun sa vision de l'industrie du futur» ( ► )
Fougier Eddy: «L'alimentation du futur entre décroissance et technologies propres» ( ► )
«Kuang-Chi lance un fonds international pour l’innovation basé en Israël» ( ► )

Leadership and Innovation (EN)

Bard Papegaaij: «Successfully leading change in government» ( ► )
Mushtak Parker: «EPF's syariah scheme a game-changer» ( ► )
«Industry bodies welcome new IPR policy» ( ► )
«Igniting Young Minds to Become Change Makers» ( ► )

Licencia Creative Commons Licencia Creative Commons
Atribución-NoComercial 4.0 Internacional


«Igniting Young Minds to Become Change Makers»

Business Insider

«The young population of a country is the custodian of its future as much as it is the harbinger of change. They are innovators, they are restless and they are in a hurry to taste success. When many countries struggle with increasingly aging populations, India is blessed to have a high percentage of young. As per the 2011 census almost 41% of Indians are below the age of 20 years. If they are provided with proper education and employment skills, the International Monetary Fund estimates that they have the potential to add 2 percentage points to the annual economic growth of India till 2031. This is the demographic dividend that could make the country an economic superpower in the coming years.

»The young innovators of today are curators and custodians of a digitally empowered society and are steering technology on the right path to achieve the deliberated goal of a digital future for India. The youth bring enormous energy, superhuman effort and a fresh perspective to the table. These qualities play an immense role if a change has to be brought about in any society or nation. Mentoring and nurturing this young talent will help the nation address the myriad problems that it is facing today.

»Realizing the potential of the country's young, aspiring individuals, several enterprises as well as educational institutions have launched initiatives to harness their capabilities at a very early stage and are providing them with the right platform to take their ideas forward and ensure success in life. Premier educational institutions, such as the IITs, have dedicated incubation cells to help young entrepreneurs with brilliant ideas. Multinational organisations also have their own initiatives to encourage and boost the entrepreneurial spirit.

»In several parts of Asia-Pacific and now India, forums are being provided so that youth can exchange experiences and ideas to enhance their participation in the process of social and economic advancement, especially around issues important to them, including health, education, employment and corruption. Overall, the challenge in this region lies in opening up new spaces and establishing innovative mechanisms for constructive engagement of youth in different fields or sectors.

»As a responsible telecom operator, we have also launched initiatives to connect our brightest and tech-savvy youth to address challenges facing the society. We run Telenor Youth forum in collaboration with Nobel Peace Center, through which our endeavor is not just to bring together young leaders to collaborate around social challenges but also to foster understanding, prosperity and ultimately peace in the societies we operate in.

»India's young are gradually bringing about changes in society that they live in and are ready to experiment with new things and put their dreams to reality. Right from mobilising communities to addressing issues plaguing our society to creating solutions/applications that can benefit the society, young Indians are transcending all imaginations in innovating for society. When it comes to technology innovation, there have been several success stories. A case in point is Ajit Narayanan, age 29, who was trained at the incubation centre of IIT Madras. Through his innovation Avaz -- an affordable, tablet-based communication device for the speech-impaired -- he has given voice to many.

India's young are gradually bringing about changes in society that they live in and are ready to experiment with new things and put their dreams to reality.

»Another social entrepreneur, Akanksha Hazari founded m.PAANI that uses mobile phones to provide basic services, like safe water, education, healthcare, energy, and nutrition to underserved communities. The users are awarded loyalty points based on their day-to-day expenditure on products which can be redeemed later and can be shared with family members as well.

»There are several such examples in India and the number is growing, with impetus from different enterprises as well as the government. These instances will not only foster a culture of innovation and free thinking but also will create resurgence in the fraternity to take up more such initiatives in health, safety, unemployment, e-commerce and other pressing social and economic issues. Indian government's Digital India vision and Start-up India initiative have given a fillip to several young minds to think beyond traditional career choices. The country's youth today feels that he or she can bring about change in society and is working towards that.

»While today young entrepreneurs are actually coming to the forefront and contributing to the changing society, what is required is that this movement reaches beyond metropolitan cities. There is immense talent in small cities of the country which are often ignored as the students of metro cities take all the limelight. While initiatives like Start-up India are boosting the entrepreneurial ecosystem of India, the movement will gather its actual momentum only when it reaches the nooks and corners of the nation. This will not only spur the young entrepreneurial spirit of the nation but will also actually address grass root issues.

»About the author: Sharad Mehrotra is the CEO of Telenor India, with 25 years of work experience in the telecom industry. With a BE in Electronics engineering from Pune University and MBA in Marketing management, he holds extensive senior management experience from telecom operations and infrastructure industries.»

The innovation execution


«Industry bodies welcome new IPR policy»

Business Standard

«As per the policy, DIPP will be the nodal department for all IPR related developments in India.

»Industry bodies have welcomed the government’s recently announced National Intellectual Property Rights (IPR) Policy. According to FICCI, the Policy correctly identifies IP as a strategic tool for furthering India’s economic goals and therefore recommends for the effective protection of IP rights as an essential element for making optimal use of innovative and creative capabilities of its people.

»“The national policy contains many encouraging recommendations including the need to create awareness on the importance of IPRs through a nation-wide promotional campaign and linking it to other national initiatives like ‘Make in India’ and ‘Digital India’, undertaking a baseline survey across sectors to evaluate the IP potential in specific sectors,” said Harshavardhan Neotia, president, FICCI.

»According to the government, the National IPR Policy, which received the Cabinet nod on May 13, 2016, will lay the future roadmap for intellectual property in India.

»“The National IPR Policy is a vision document that aims to create and exploit synergies between all forms of intellectual property (IP), concerned statutes and agencies. It sets in place an institutional mechanism for implementation, monitoring and review. It aims to incorporate and adapt global best practices to the Indian scenario. This policy will weave in the strengths of the government, research and development organisations, educational institutions, corporate entities including MSMEs, start-ups and other stakeholders in the creation of an innovation-conducive environment, which stimulates creativity and innovation across sectors, as also facilitates a stable, transparent and service-oriented IPR administration in the country,” said the government press release.

According to FICCI, the Policy correctly identifies IP as a strategic tool for furthering India’s economic goals and therefore recommends for the effective protection of IP rights as an essential element for making optimal use of innovative and creative capabilities of its people.

»NASSCOM has applauded the new IPR policy for encompassing the entire value chain spanning across IPR awareness, generation, legislative framework, administration, commercialisation, enforcement and adjudication, human capital, comprehensively covering all aspects of the domain.

»The policy has reformed the current administration by making Department of Industrial Policy and Promotion (DIPP) the nodal point coordinate and guide future development of IPRs in India while responsibility for actual implementation of the plans of action will remain with the ministries/departments concerned in their assigned sphere of work. This single umbrella approach will help leverage linkages between various IP offices. The proposed Cell for IPR Promotion and Management (CIPAM) to be constituted under the aegis of DIPP, would be an important connection with the inventors and innovators.

»“Other significant policy announcements include making the DIPP as the nodal department for all IPR related developments in India, the emphasis to make the Indian Patent Office an increasingly service oriented organisation and to improve IP enforcement and the adjudication mechanism, among others,” added Neotia of FICCI.

»Companies face a lot of difficulties in monetising intangibles like IPR. “The policy has captured the concerns suitably and their proposal to create a ‘simple loan guarantee scheme to encourage start-ups’ based on IPRs as mortgage-able assets; financial support and securitization of IP rights for commercialisation by enabling valuation of IP rights as intangible assets through of appropriate methodologies and guidelines, and enabling legislative, administrative and market framework are in the right direction. Further, specific references to promoting use of OSS, as well as support for IPR generation for ICT technologies, including those relating to cyber security for India are welcome,” said NASSCOM in a statement.»

An innovation


Mushtak Parker: «EPF's syariah scheme a game-changer»

The New Straits Times Press

«Behind the euphoria of the announcement last Thursday by the Employees Provident Fund (EPF), Malaysia’s iconic pension fund, that it is in the process of launching Simpanan Syariah as an alternative investment choice for its 6.79 million active members, is the depressing global state of the politics and economics of retirement beckoning in the 21st century.

»For the future of affordable and dignified ageing for all is as much a challenge for Malaysia as it is for any other country, irrespective of development status.

»Datuk Shahril Ridza Ridzuan, EPF chief executive officer, is indeed a pension fund manager on the go. He is keen on matching what his members seem to want with a first-mover advantage, which if successful could prove to be yet another iconic Malaysian innovation in the global Islamic finance space.

»The country is supported by the most proactive public policy on Islamic finance anywhere in the world, developed way back from the early 1980s as a dual banking system, where a conventional one operated side by side with an Islamic one — cooperating but not interacting — and what is today called the Malaysian Model.

»That was the dream of the then governor of Bank Negara Malaysia (BNM), the late Tan Sri Jaffar Hussein.

»Four decades later, Shahril is embarking on an initiative which could eventually have game-changing implications and a renewed relevance for Islamic finance, which has been struggling to establish its identity, especially in a post-2008 financial crisis.

»The demand dynamics of Malaysian pension uptake and provision is clear and present. In a survey of EPF members, a staggering 71 per cent of respondents agreed with the launching of a Syariah-compliant retirement offering.

»Come Jan 1 next year, on the official launch of Simpanan Syariah, the EPF expects a migration of some two million or 40 per cent of members to the new scheme. The Islamic spoke of the EPF will, at an instant, manage funds in excess of RM120 billion, which would make it the first and only Syariah-compliant state-run pension fund in the world, and the largest to boot.

»Shahril comes across as a quiet, self-confident operator at ease with “EPF’s vision of becoming a world-class organisation for being the first in the world and offering”.

»However, it is revealing to know that EPF sees Simpanan Syariah as a “benchmark for others to follow”. For, Malaysians have a reputation in the international market, especially in the Islamic finance space, for being over-modest and non-confrontational.

»As such, proven innovations are strictly for home consumption and not to be exported. Lembaga Tabung Haji, for instance, one of the top non-bank financial institutions in Muslim countries, if not the world, is a classic example.

»Never mind the potential global utility of mobilising the savings of millions of ordinary Muslims, some of whom would never have thought of doing so in the first place, with the added bonus of also merely saving for the annual pilgrimage to Mecca to perform the haj, under the comfort of state patronage instead of ruthless travel operators.

»Lest people get carried away, let me put the EPF in perspective. Yes, it is the seventh largest pension fund in the world with assets under management touching RM685 billion, just below Singapore, Canada and China, but way behind Japan’s US$1.14 trillion (RM4.6 trillion), Norway’s US$884 billion and South Korea’s US$430 billion government pension funds.

»EPF has enjoyed an annualised investment asset growth rate of 11.5 per cent and a dividend rate of not less than 2.5 per cent over the last three decades. Given the size of the population, and hence, new entrants to the labour market, its relative growth trajectory will be constrained by such demographics.

»To put this in a sobering global context, total pension assets last year for the top 19 pension markets, including Malaysia, according to Willis Towers Watson’s Global Pension Assets Study 2016, were estimated at US$35.4 trillion, slightly down on the previous year, albeit pension assets relative to gross domestic product for the above countries declined to 80 per cent last year compared with 84 per cent in the previous year.

»Indeed, we hear so often these days about pension black holes and the millennial generation having to work longer to pay for some of the excesses of their fathers and grandfathers. Only recently, British Home Stores went into administration leaving a pension black hole of over half a billion pounds.

»Whether it is through poor asset allocation strategies or senior executives raiding their workers’ pension fund for nefarious reasons, the point is that pension investments can go belly-up for manifold reasons.

EPF is focused on pension and financial literacy in making people understand the basic level of savings they should aim for to meet certain income levels when they retire. That is fine for people who are earning enough. What about the people who are not?

»In the case of EPF, while it is heavily invested in Malaysian equities, bonds and sukuk, given its size, it has to be more globally focused at the same time. Currently, its overseas investments account for 25 per cent of its portfolio.

»“We always felt that for the purposes of protecting the overall return of the fund, we needed a more diversified base. In terms of our assets and portfolio, this strategy has worked out pretty well. Even in the light of the weakening ringgit we have still been expanding overseas.

»“We work very closely with BNM, especially to mitigate volatility in the spot market, which is the extent of our restrictions in terms of investing overseas. We are still in the process of getting the right mix in terms of the asset base,” explains Shahril.

»True, EPF has a lot going for itself as a pension fund. It is arguably one of the most proactive when it comes to shareholder activism and has set the benchmark for transparency in its voting record in companies in which it has substantial holdings.

»It is also the largest pension investment fund (PIF) investor in the Syariah space — up to 45 per cent of its investment portfolio. With the launch of Simpanan Syariah, this could go up even further. But, a word of caution, though! Is the Islamic finance space capable of absorbing such increased demand, not only from EPF, but also other public investment funds?

»“In the Islamic finance space, we need to look into refining the rules and getting more clarity on the rules over the timeline as we develop the space,” advises Shahril.

»These include greater Syariah clarity in terms of leverage and interest income ratios of listed companies, and access to liquidity.

»EPF is fortunate in its sukuk investments. The Malaysian market is the largest and most developed in the world with a wide range of maturities and issuers. As such EPF’s sukuk investment strategy has an importance that goes beyond the return expectation of its members.

»The latest figures from the Securities Commission Malaysia for actual sukuk issued in Malaysia show a marked 10 per cent year-on-year decrease to RM117.7 billion last year from RM262.76 billion in 2014.

»As such, more involvement in sukuk issuances by the likes of EPF will give that much-needed traction to the domestic market and restore the dominance of sukuk as the preferred choice of fixed income instruments for local and international investors.

»Not surprisingly, Shahril is oft mobbed by a beauty parade of flattering fund managers trying to get a chunk of the mandate which EPF inevitably outsources.

»At best the PIF involvement in the Islamic finance industry is minimal. The reality is a mere five per cent migration of the investment of the 26 or so PIFs from the Muslim countries would result in a phenomenal multi-billion dollar incremental increase in the market size of the global Islamic finance industry. However, the investment will, especially of SWFs in GCC countries, tends to be highly prejudicial against investing in sukuk and other Islamic finance assets.

»However, there is a pension conundrum of potentially seismic proportions, which is beckoning, especially as the inequality gap in wealth and earnings in countries and between countries shows no signs of abating, and what the World Bank has coined as “the greatest threat to humanity”.

»Over the last few years, the financial inclusion debate has rightly championed the plight of billions of people who are “unbanked” — basically people with no access even to the most basic bank account.

»That figure, according to the World Bank, stands today at two billion adults.

»What the World Bank and other international “do-gooders”, together with governments, regulators and PIFs, have failed to champion under financial inclusion are the billions of ordinary working class people who are “unpensioned” — those who have no chance of earning enough to save, let alone pay into a pension scheme.

»Shahril concedes that this is a challenge, including in Malaysia.

»“What you find is that the bottom half of our population do not earn enough to save enough during their working lives. If you look at any retirement system, whether it is based on defined benefits or defined contributions, you are going to have divergence.

»In the defined benefits system, the state can only provide the bare necessities or basic income level or replacement level for its population. This means that most people who want a comfortable living will have to save during their lives.”

»EPF research shows that the top 30 per cent of working Malaysians (in other words the very rich and rich) can easily afford and plan for their retirement provisions. But, a staggering bottom 40 per cent will not be able to do so, and will depend on state handouts and charity if they cannot muster the savings bottom line.

»Over time, this becomes problematic because of inflation, the increasing cost of longevity due to medical costs, increasing contributions and lower benefits. But, perhaps more importantly, it has potentially catastrophic sociopolitical implications of alienation, poverty enhancement, emergence of urban underclass and, yes, radicalisation.

»EPF is focused on pension and financial literacy in making people understand the basic level of savings they should aim for to meet certain income levels when they retire. That is fine for people who are earning enough. What about the people who are not?

»This feeds into a whole new paradigm for the 21st century society — that of inequality, earnings differentials, wealth distribution and the morality of a minimum, nay, living wage.

»Mushtak Parker is an independent London-based economist and writer.»

An innovator


Bard Papegaaij: «Successfully leading change in government»

Enterprise Innovation

«Leading successful change has challenged government CIOs for decades, even more so today as the digital age brings more and faster change than ever before. "Softer" leadership skills are mandatory and separate CIOs who lead their organisations into digital business, from those relegated to IT roles that "keep the lights on."

»When dealing with a cultural aversion to taking risk, change leaders essentially have three options:

»1. Force the change on people by increasing the risks associated with not changing — usually by threatening people with punitive measures and performance management.

» 2. Encourage people to change by decreasing the risks associated with changing — by making it safe to try out new behaviours.

»3. Reduce the collective risk aversion by changing the culture.

»While it might be tempting to force change on people, which might even produce short-term results, it is almost always counterproductive. Scaring people into change causes them to experience higher levels of stress and anxiety, which may lead them to fall back to their default behaviours rather than try out new ones. Even when they display new behaviours when actively pushed to do so, they will not become part of their standard repertoire and as soon as the direct threat is lifted, the old behaviours will tend to come back in full force.

»Changing the culture has the best long-term outcomes, but it takes time to settle and become embedded into the collective consciousness. Encouraging people to change, combined with activities associated with changing the culture is, therefore, the most productive approach. It produces short-term results by actively encouraging people to experiment with new behaviours and helps engender a change in the culture's attitude to risk. This is achieved by showing people that not only is it safe to change, but that new and experimental behaviours are actually successful (that is, recognised and rewarded) in the new situation.

»Change leaders making a difference

»We can learn a lot about change by looking at the way successful government change leaders are making a difference in what is considered by many to be one of the toughest environments to change. As can be expected, their journeys are not without their own personal struggles.

»All of the change leaders we have spoken with recently are keenly aware of the need to equip their organisations with the ability to change faster. But they are also mindful of the current change speed of their culture and the need to take that into account if they want to successfully build the change capabilities required.

»One CIO we spoke to from an Australian ambulance service finds embarking on change challenging and often hears 'that isn't how we do it here' and 'you need to be more patient; we don't change that fast.'

»The public sector can be a particularly tough place to lead change and the culture hard to transform. There are many ingrained stories of how the public sector works and these can be a challenge to dispel. However, even in these difficult environments, change leaders persist because the end result is well worth the effort, even if getting there can be difficult.

»Permission to experiment with change

»When an enterprise begins a change initiative, such as embarking on a digital business transformation, enthusiasm and excitement often run high. Leaders paint the vision of what the future holds and what the employee experience will be. However, as reality sets in and the specifics of how work will be performed, what new behaviours and skills will be needed and how the enterprise will function begin to emerge, the consequences of the change become real, and the trouble begins. It is at this stage that change resistance, more often than not, rears its ugly head.

»Gartner believes as a first step that giving permission to try things and experiment is absolutely pivotal to creating the environment for successful organisational and cultural change. This step is not that obvious or intuitive and is one that is rarely practiced explicitly. Putting it into practice will require resolve, diligence and patience on the part of leaders.

»Support and protect employees' efforts to change

»Government change leaders realise they can't drive change or make employees change, but they can enable it. Employees can begin to make changes when they understand the direction and vision, which results from change leaders clearly and constantly communicating with them. This creates understanding, which opens the way for employees taking actions and trying out new methods and behaviours that lay the foundations for change.

Government change leaders realise they can't drive change or make employees change, but they can enable it. Employees can begin to make changes when they understand the direction and vision, which results from change leaders clearly and constantly communicating with them.

»Government CIO change leaders make a big effort to share their vision. They spend much of their time out in their organisations, traveling around to different locations, adapting the conversations to each group of employees, and helping employees see they can make a contribution to the bigger organisation and how this creates change. To do this successfully, CIO change leaders are constantly honing their communication abilities.

»These change leaders also listen — a lot! Active listening skills are key here. It forces a leader to attentively listen to others, which helps to avoid misunderstandings and tends to make people less defensive and closed, encouraging them to say more. These are all necessary conditions to lead change in your organisation.

»Successful CIO change leaders also actively support employees' efforts to change. They take this beyond just paying "lip service" to change and actually put it in practice. Remaining empathetic, asking for input and being a good listener are tactics these CIOs continually apply.

»The ambulance CIO I mentioned earlier believes it is important that all teams within the organisation work together and feel they are part of the overall vision. He encourages everyone to share ideas about how to move forward, as well as listen to and understand everyone's contributions. The CIOs role is to then move their ideas forward, demonstrating progress and achievements, which motivates and excites the team. At the same time, he continues to push them to pick up the pace, as he believes success instils confidence to take on more. The key to leading change for him is to focus on finding the motivation, putting it into the bigger picture of saving patients’ lives, caring for the community and supporting paramedics, while continuing to push the pace.

»What we can learn from this is that it is important to invite employees to come to you with new ideas and proposals. But it is also critical to protect those who try new things by shielding them from negative sentiments that may arise in the organisation. Your employees will be watching you closely to make sure you meant it when you said you would back them up and protect them. So, make sure you defend them in public; be visible when you stand up for your team, and show them clearly you take your role as protector seriously.

»Be prepared — your current culture is likely to attack new ideas (and the people who propose them) in order to protect the status quo. As change leader, you must protect these employees from this response.

»Employees know that other employees and business leaders are watching to see if there are any bad consequences for taking big risks. To counter this, change leaders accept overall responsibility for employee initiatives within the change program to reassure employees they can comfortably try things out and are not risking their reputation or job with every, even slightly daring, move.

»Leading change is hard, but also fun and rewarding

»Never assume that leading change is easy. It is exhausting and likely one of the toughest challenges you will tackle as a leader, requiring determination, passion, adaptability and the creativity to find methods that resonate with your organisation. But when the stakes are high, changing culture can be a fun and rewarding job.»

Public Administration and innovation


Newsletter L&I, n.º 105 (2016-05-23)

n.º 105 (2016-05-23)

TAGS: # convivência # convivencia # convivialité # coexistence

Administração Pública e inovação | Administración Pública e innovación |
Administration Publique et innovation | Public Administration and innovation

Um inovador | Un innovador | Un innovateur | An innovator

Uma inovação | Una innovación | Une innovation | An innovation

A execução da inovaçao | La ejecución de la innovación | L’exécution de l’innovation |
The innovation execution


Liderar Inovando (BR)

«Conheça a programação cultural dos Jogos Rio 2016. A cultura brasileira será a porta de entrada para a Olimpíada e Paralimpíada» ( ► )
«Ed Lee, de São Francisco: a diversidade é nossa força» ( ► )
Celaine Refosco: «Sonhos coletivos: empreendedorismo e ação» ( ► )
«Prefeito acompanha construção da Praça da Juventude» ( ► )

Liderar Inovando (PT)

«“Trabalhamos para um património riquíssimo comum: a Língua Portuguesa e a cultura da CPLP”» ( ► )
Mário Lúcio Sousa: «O nosso único passado é a nossa cultura, o nosso único futuro também» ( ► )
Christiana Martins e Joana Pereira Bastos: «A cor da pele conta para os resultados dos alunos» ( ► )
«Crianças têm de estar mais com os pais» ( ► )

Liderar Innovando (ES)

«El Ayuntamiento de Albacete ha participado en el Consejo de la Red por la Transparencia y la Participación Ciudadana» ( ► )
«'Future Nature', la naturaleza del futuro imaginada por
Bernardo Rivavelarde» ( ► )
«Con exposición colectiva El eco de la Tierra celebran segundo aniversario de galería Chopin» ( ► )
«ONG impulsa plataforma de convivencia civil para niños» ( ► )

Mener avec Innovation (FR)

Christophe Noisette, Pauline Verrière: «France – OGM, HCB et société civile : la coexistence est-elle possible ?» ( ► )
«Samsung Business cible les réseaux constructeurs» ( ► )
«“Chief Millennials Officer”, une nouvelle profession hôtelière ?» ( ► )
Lucile Berland: «Les nouveaux écolos ont tué l'écologie anxiogène» ( ► )

Leadership and Innovation (EN)

Renaud Thillaye: «Beyond Brexit: can the EU operate as a platform?» ( ► )
Waqas Younus: «Fairy tale of a city» ( ► )
Piero Formica: «The Innovative Coworking Spaces of 15th-Century Italy» ( ► )
Gary Rosenblatt: «Make-a-thons pair techies and people with disabilities to turn tikkun olam into action (Repairing The World In 72 Hours)» ( ► )

Licencia Creative Commons Licencia Creative Commons
Atribución-NoComercial 4.0 Internacional


Gary Rosenblatt: «Make-a-thons pair techies and people with disabilities to turn tikkun olam into action (Repairing The World In 72 Hours)»

The Jewish Week

«Four years ago I wrote with some skepticism about “an audacious plan to repair the world,” as described by its chief creator, the Reut Institute, a Tel Aviv-based think tank.

»At a roundtable discussion I attended in April 2012, along with about two dozen Jewish professionals and lay leaders, we were told that the plan called for collaboration between the State of Israel and the Jewish diaspora to come up with a strategy that would dramatically improve the lives of 250 million people in the next decade.

»It didn’t turn out quite the way it was imagined. The result is in some ways less grand in scale — the government of Israel is not involved. But in other ways it is even more inspiring. And the goal of helping so many millions of people is still on track, aided earlier this month by a $700,000 Google Impact Challenge grant for making the world more accessible to people with disabilities.

»But I am getting ahead of the story.

»Back at the roundtable, Gidi Grinstein, the founder of Reut, said that after 18 months of internal analysis of “this 21st-century tikkun olam [repair the world]” project, the organization determined that the best way to approach the challenge was to address a specific global need like water, food, prenatal health or energy security — areas where Israeli innovation excelled. The primary motivation: to fulfill the Jewish value of improving the world by addressing human suffering. In addition, he said, the project would strengthen the Israel-diaspora relationship and enhance Israel’s standing in the international community, positioning the Jewish State as a light unto the nations rather than Goliath to the Palestinians’ David.

»The attendees were asked for feedback, and the general consensus was a mix of admiration, encouragement and doubt. They saw the concept as impressive but impractical, and expressed worries about Israeli government bureaucracy and turf battles between and among Israeli state agencies and philanthropists, here and in Israel.

»The planners continued to meet and hone their ideas. In 2013, the Reut project managers, now working with the Schusterman Family Foundation and its ROI Community, began to focus on solving neglected social problems where there are few market or government solutions. The idea was further narrowed to create a collaborative competition among talented technology innovators — designers, engineers and project managers — willing to donate their time and skills to develop products for people with disabilities.

»They came up with the name TOM (Tikkun Olam Makers). In an interview last week, Grinstein called the competition “a radical new approach to inclusiveness in the 21st century,” a way to address and help solve — quickly and inexpensively — problems that may be encountered by a relatively small number of people. Or even one person.

The planners continued to meet and hone their ideas. In 2013, the Reut project managers, now working with the Schusterman Family Foundation and its ROI Community, began to focus on solving neglected social problems where there are few market or government solutions. They came up with the name TOM (Tikkun Olam Makers).

»While there is little or no economic incentive for big companies to address the particular needs of individuals with disabilities, TOM is anchored in the belief that there are thousands of highly trained experts around the world willing to donate their creative energy for the sake of the intellectual challenge and, even more, out of a simple but profound sense of doing good — directly helping another person.

»“It’s a way to make sure the benefits of innovation and prosperity ... trickle down to the whole society,” Grinstein said, noting that skilled innovators relish the idea of helping people they’ve actually met, not just creating in the abstract.

»In July 2014, TOM held its first “make-a-thon” in Israel, an intense, 72-hour event where teams of “makers” (the volunteer experts) meet with “users” (people with disabilities) and seek to develop, on the spot, solutions to the users’ individual needs. Employing a combination of what one participant called “advanced technology and chutzpah” often means working through the night to create something that is functional and inexpensive.

»It could be a way of allowing a child with cerebral palsy to play a musical instrument; designing a light, folding wheelchair so taxis will be more willing to stop for people who use them; fashioning a prosthetic limb; or coming up with a book page-turner for a paralyzed reader.

»Scores of working prototypes have been created since the first make-a-thon. Since then there have been six more, in Israel, Brazil, Canada and the U.S. Many more are planned in countries like Argentina, Australia, Vietnam, Spain, Italy, South Korea and maybe even Dubai over the next several years, and the themes — disabilities, the elderly, children, etc. — will be decided by the specific communities. Volunteers are over-subscribed, even though most teams spend four to six weeks in advance planning for their project. (The 72-hour make-a-thons are considered the equivalent of six months of product development, according to the organizers.)

»Most of the “makers” are not Jewish, and some are Arab. TOM leaders note that these events are an ideal platform for coexistence, people working together for a common cause.

»‘Give Me Five Minutes’

»Sefi Udi, 36, an Israeli electronics engineer and industrial designer, was hit by a car 12 years ago and is now paralyzed from the neck down. That did not stop him from continuing to work, operating a computer stylus in his mouth to design products to help those who cannot use their arms or legs. A member of the TOM team from the beginning, he is both a maker and a user.

»“I am fortunate I have the knowledge and the ability to create tools for me, and for other people,” he told me. “Before TOM I didn’t meet others doing this kind of work. Now I meet them in person and through technology.”

»Richard Lushai, a design engineer in Calgary, Canada, learned about TOM by chance after watching a video of the first make-a-thon. He was intrigued and decided to lead one of his own, locally. “But I ran into money problems and was about to give up,” he told me, “and finally decided to call the TOM office in Tel Aviv one night at 2 a.m.” He was connected to Arnon Zamir, the TOM director, who told him, “give me five minutes and we’ll put together a team,” Lushai recalled. “Suddenly everything changed.”

»He was given the help to hold the make-a-thon with four teams of mostly student designers and engineers — the events usually have about 10 teams.

»Among the people they worked with was a 2-year-old girl with Rett Syndrome, a rare genetic neurological illness, who is unable to walk. “She loved going out in the snow, but it was difficult to take her out in a wheelchair,” said Lushai. “We came up with a collapsible sled, and were delighted to see a video of her using it a few weeks later.”

»Another team worked on adding sensors to a blind woman’s walking stick, alerting her to obstacles in her way.

»Lushai noted that one team was made up of students from Yemen who were at first reluctant to join up, given Israel’s negative image in their country. But he convinced them it was a good cause and they participated.

»“That created a bridge through TOM,” Lushai observed. “In some ways it’s easier to bring people in under the innovation banner than the political one.”

»Though TOM officials play down the Israel component of their work and are apolitical — Sefi Udi says “it’s not about Israel, it’s about the Jewish people” — Lushai noted, “everyone knew the Israel connection — the whole spirit is very Israeli.”

»With the new Google grant, TOM is entering a new phase. Sefi Attias, whose title at Reut is “innovation shepherd,” explained that “we are stepping back a bit” and encouraging local communities around the world to produce their own make-a-thons, with guidance, support and best-practice advice from TOM.

»Funds from the grant will be used to develop a web platform to display TOM-inspired products and prototypes, help some of the prototypes become polished projects, and promote the project around the world. Google mandates that the funds must be used by the end of 2016, a deadline that, Grinstein says, should “dramatically accelerate the pace of innovation.”

»He still believes TOM can improve the lives of a quarter of a billion people in the next decade as communities across the globe launch their own make-a-thons, harnessing the talent and inspiration to transform Tikkun Olam from a cliché into a blessed reality.


»For a three-minute video of TOM in action: www.youtube.com/watch?v=B07v98t-lVg»

The innovation execution


Piero Formica: «The Innovative Coworking Spaces of 15th-Century Italy»

Harvard Business Review

«Coworking spaces are on the rise, from Google’s “Campus” in London to NextSpace in California. Much has been made of these shared workspaces as a brand-new idea, one that barely existed 10 years ago. But the way they function reminds me of a very old idea: the Renaissance “bottega” (workshop) of 15th-century Florence, in which master artists were committed to teaching new artists, talents were nurtured, new techniques were at work, and new artistic forms came to light with artists competing among themselves but also working together.

»The Renaissance put knowledge at the heart of value creation, which took place in the workshops of these artisans, craftsmen, and artists. There they met and worked with painters, sculptors, and other artists; architects, mathematicians, engineers, anatomists, and other scientists; and rich merchants who were patrons. All of them gave form and life to Renaissance communities, generating aesthetic and expressive as well as social and economic values. The result was entrepreneurship that conceived revolutionary ways of working, of designing and delivering products and services, and even of seeing the world.

»Florentine workshops were communities of creativity and innovation where dreams, passions, and projects could intertwine. The apprentices, workers, artisans, engineers, budding artists, and guest artists were interdependent yet independent, their disparate efforts loosely coordinated by a renowned artist at the center — the “Master.” But while he might help spot new talent, broker connections, and mentor younger artists, the Master did not define others’ work.

Florentine workshops were communities of creativity and innovation where dreams, passions, and projects could intertwine. The apprentices, workers, artisans, engineers, budding artists, and guest artists were interdependent yet independent, their disparate efforts loosely coordinated by a renowned artist at the center — the “Master.”

»For example, Andrea del Verrocchio (1435–1488) was a sculptor, painter, and goldsmith, but his pupils weren’t limited to following his preferred pursuits. In his workshop, younger artists might pursue engineering, architecture, or various business or scientific ventures. Verrocchio’s workshop gave free rein to a new generation of entrepreneurial artists — eclectic characters such as Leonardo da Vinci (1452–1519), Sandro Botticelli (1445–1510), Pietro Perugino (c. 1450–1523), and Domenico Ghirlandaio (1449–1494).

»What can those who want to create more innovative and collaborative workplaces today — whether that’s a better office in a traditional organization, a coworking space, a startup incubator, or a fab lab — learn from the workshops of the Renaissance? The bottegas’ three major selling points were turning ideas into action, fostering dialogue, and facilitating the convergence of art and science:

»Turning ideas into action. Renaissance workshops were not just a breeding ground for new ideas; they helped ideas become reality. Likewise, today’s innovative workplaces need to be equipped with everything people need to turn their insights, inspirations, and mental representations into new products and ventures. Coming up with new ideas is hard enough, but the real challenge for many organizations is figuring out how to exploit them and turn a profit.

»Fostering dialogue. Ferdinando Galiani, a Neapolitan economist of the 18th century, argued that markets are conversations. The quality of the network — that is, the combined intelligence of people and organizations with different skills and abilities — plays a critical role in innovation.

»In Renaissance workshops, specialists communicated with each other consistently and fluidly, facilitating mutual understanding. The coexistence of and collision among these diverse talents helped make the workshops lively places where dialogue allowed conflicts to flourish in a constructive way. The clash and confrontation of opposing views removed cognitive boundaries, mitigated errors, and helped artists question truths taken for granted.

»Today, we often recognize the need for these kinds of illuminating conversations without really making space for them in our organizations, either because organizations are too afraid of conflict or because people are simply too busy to try to expand their understanding of each other. But Renaissance workshops offer proof of how important it is for collaborative workplaces to draw on sources of opposing ideas and controversial opinions.

»Facilitating the convergence of art and science. While often remembered as primarily artistic today, in truth the Renaissance workshop was transdisciplinary. This helped create a holistic approach to creativity, which stands in opposition to our own organizations, in which people in different specialties are often separated into silos.

»For example, during the Renaissance nature was seen as a convergence of art and science, as in the famous “Vitruvian Man” drawing by da Vinci. Many of today’s most exciting business opportunities are similar meetings of technological advances and aesthetic beauty. Bringing these disciplines together fosters mutual learning through experiments that lead to business opportunities.

»Whether you are running a coworking space or trying to get your own organization to be more creative and collaborative, think about some of the ways you might follow the example of a Renaissance workshop.

»Piero Formica is the founder of the International Entrepreneurship Academy and a Senior Research Fellow at the Innovation Value Institute. He is author of The Role of Creative Ignorance: Portraits of Path Finders and Path Creators and Grand Transformation Towards an Entrepreneurial Economy: Exploring the Void

An innovation


Waqas Younus: «Fairy tale of a city»

The Express Tribune

«Imagination is a powerful tool. Imagine you live in a metropolitan city plagued by violence, corruption and all the malice imaginable. Now imagine for a moment, that the local government has called on the community to band together and create a consensus on how to fix the city and transform it into a modern and an innovative metropolis. See yourself sitting in a room, surrounded by local politicians, everyone discussing future government projects to cater to the neighbourhood’s needs. Feel that sense of ownership when both parties walk out of that room having signed agreements detailing the roles and responsibilities of both parties.

»What if the chief minister, in ensuring full disclosure and transparency, broadcasts the agreements and meetings to the entire city? Imagine the public participating in the budgeting process where the local communities decide the allocation of the portion of the city budget. Also imagine that the government opens up library parks, libraries with ample green space around them for public use, in the city’s slums that offers education to low-income individuals. Envision the underprivileged youth’s exposure to book clubs, theatre groups and other healthy activities. Visualise the government emphasising public education, building schools and libraries in poor cities.

»What if the city dedicates space for local and foreign companies to set up their offices? Envision an international cooperation agency that creates international ties to increase the flow of capital, products, services and knowledge. Imagine the city provides funding, space and mentorship to small and medium companies to help create businesses, proposals, financial plans and marketing strategies. Envision a large state-owned company being run by the municipal government that contributes 30 per cent of its revenue to the city. The company funds huge projects such as botanical gardens, planetarium, children’s interactive museums, libraries, large urban parks and even a 16,000 hectare park right outside the city. Not only that, but the company even funds 3,000 students annually and also has a fund to spur innovation and new businesses.

What if the city dedicates space for local and foreign companies to set up their offices? Envision an international cooperation agency that creates international ties to increase the flow of capital, products, services and knowledge. Imagine the city provides funding, space and mentorship to small and medium companies to help create businesses, proposals, financial plans and marketing strategies. Envision a large state-owned company being run by the municipal government that contributes 30 per cent of its revenue to the city. Now, this may sound like a fairy tale but it is the true story of Medellín, Colombia.

»Now, this may sound like a fairy tale but it is the true story of Medellín, Colombia. The city was heralded as the “Innovative city of the year” by both Citibank and The Wall Street Journal. The local government changed Medellín from a drug capital into a modern and innovative city. The lessons learned from this city’s success story can be applied to any city in Pakistan, given that we have the determination and resolve to see the changes through. Some important goals guided and prioritised Medellín’s development projects. Those were as follows: a) indicators of human development and quality of life will guide public investment, focusing on first serving the ones in most need; b) public space and infrastructure must become the framework where education and culture are cultivated in places of encounter and coexistence; c) urban projects must simultaneously integrate physical, cultural and social components, improving not only places but also the life and interactions of people in the communities; d) the integrated metropolitan transport system must be used as the organising axis of mobility and projects in the city. All projects must be directly linked to the main transport system; e) the decision to make Medellín an educated city, with education and culture as priorities that guide programmes and projects.

»All these were not mere words eloquently crafted by an expensive speech-writer to win an election, but goals that are meaningful. Their usefulness was proven by the mayor of Medellín, and our policymakers can make use of these ideas. Meaningful infrastructure development is good, but haphazard infrastructure development is not. It is said that if we plan cities for cars, traffic and noise, we will get more cars, traffic and noise. However, if cities are planned for healthy people and places, we will get more healthy people and places. Moreover, local governments rarely take local opinion or input before making decisions, which weakens the sense of ownership and pride that locals may feel about the decisions made by those in charge.

»There is this powerful idea of the ‘Power of 10’ — the number can vary. But the idea is, basically, that if we can do 10 things to attract people to one place (such as a place to sit and play, art to touch, music to hear, food to eat, history to experience and people to meet), then we may have designed a good place. We can then further it by creating 10 such places. We can then create 10 such places in 10 other neighbourhoods. This will snowball into a massive project that will drastically improve the life of every citizen.

»As a nation, and as individuals, we need to take a step back and evaluate our current developments. Are they truly what we need to improve the lives of everyone involved? Or does the answer to that question lie in the fairy tale of Medellín?»

An innovator


Renaud Thillaye: «Beyond Brexit: can the EU operate as a platform?»

The Policy Network Observatory

«Can the concept of 'platform' offer a new way of thinking about how the EU can effectively operate?

»Whatever the outcome on 23 June, the British referendum has already left a deep mark on the European Union (EU). The Brexit debate is taking place against the background of numerous serious crises directly questioning the EU’s relevance, with all leading to different conclusions. While British leaders have been criticising the EU for its regulatory and institutional overreach — “something that is done to people rather than acting on their behalf”, as David Cameron put it at Bloomberg in January 2013 — most voices on the continent have deplored the EU’s lack of clout and ability to impact on ‘big things’ such as immigration, socioeconomic divergences and security. This very paradox is likely to cast a long shadow on the EU’s future: some nations like it as soft as possible, while others see no other way than a political union.

»Yet does it make sense to hold the EU together in the presence of such diverging projects, and can it work? In this piece I argue that the concept of ‘platform’ offers some interesting insights on how the EU could operate in the future, in a digitised world where the thirst for bottom-up initiative goes alongside the need for collaboration, data-sharing and resource-pooling.

»A world celebrating autonomy and innovation

»Let us start where the leave campaign want to take us in the UK. Despite their unconvincing economic argument, advocates of Brexit have done a good job of asking essential questions about democracy and global success in the twenty first century. Michael Gove has put “democratic self-government” at the top of the Brexit rationale, a perfectly reasonable principle. The leavers often take ‘small’, agile democratic nations such as Switzerland, Israel, Canada, Australia and New Zealand as evidence of the possibility to flourish outside larger ensembles. They doubt the EU’s legal and institutional architecture is necessary for European nations to manage their interdependence. Why wouldn’t intergovernmental co-operation and free trade be enough?

»Europeans have long answered this question. Back in the 1950s, creating a common market and embedding co-operation within supra-national institutions was seen as a condition for success and instrumental to installing peace. European nations voluntarily locked themselves in the same house and could not escape from the task of building it. After getting in, Britain did a lot to prevent the European house from aiming too high, or building the walls too thick. Instead, it promoted the idea of a large, open tent.

»However, Margaret Thatcher had to compromise: free trade in services would not happen without some degree of regulatory convergence, the launch of economic and monetary union, and greater financial solidarity as a result of EU structural funds. A Europe merely based on ‘mutual recognition’ and emulation was never the plan.

»The context is different today. Europeans may not love each other, but they are unlikely to go to civil war again. More significantly, global competition urges nations, cities and regions to act swiftly and experiment, to develop their own niche and brand. The world cries out for autonomy, self-accomplishment, decentralisation and innovation. Any organisation — whether the EU, the state, large companies or political parties – faces pressing operational questions: how to remain relevant when the digital potentially breaks down barriers and monopolies, and allows for personalised trajectories and solutions? How to avoid stifling individual ownership, tailor-made services, and remain a relevant platform that makes the most of its members?

»A more differentiated EU: from the exception to the norm?

»The discontent about the EU may still be attributable to a rigid institutional set-up inherited from the 1950s and lacking the flexibility to accommodate various member state expectations. Yet, differentiation is not a particularly new feature of EU integration. The number of country-based exceptions and special provisions burgeoned in the 1990s, when the European Economic Community (EEC) decided to move forward. Concepts such as ‘differentiated integration’, ‘Europe à la carte’, and ‘multi-speed Europe’ were born in that context.

»As the maps below show, differentiation takes the shape of overlapping perimeters, a varying degree of integration and multiple legal frameworks. The Eurozone (EMU) is a treaty-based obligation from which three countries have opted out, either de jure or de facto, and which six member states are yet to fulfil. The Schengen area, originally an intergovernmental agreement and today embedded in EU treaties comprises 27 member states, including three non-EU countries. Enhanced co-operations are another form of treaty-based differentiation. Only three co-operations have emerged so far, on a unified EU patent, divorce law and in the area of financial transaction tax (still under discussion). What the maps do not mention are all EU-related intergovernmental treaties such as the Treaty on Stability, Coordination and Governance (so-called ‘Fiscal compact’, 25 member states), the European Stability Mechanism (ESM, 19 euro countries) and the Prüm convention (co-operation on cross-border crime, 14 member states).

»Until recently, differentiation had a predominantly negative connotation. It openly contradicted the ‘non-discrimination’ principle of EU law, and sent the wrong signals to EU newcomers. Yet the enduring reality of exceptions and opt-outs shows that differentiation has become a permanent EU feature. Leuffen, Rittberger and Schimmelfennig (Palgrave Macmillian, 2013) stress that the EU was not about several parallel Europes. Rather, they argued that Europe is an “organisational and member state core [the EU-28] with a level of centralisation and territorial extension that vary by functions”. Differentiation happened when further integration was seen as having too high ‘autonomy’ or ‘identity’ costs in some member states. Because it resolved the ‘widening’ versus ‘deepening’ dilemma, it was probably here to stay.

Until recently, differentiation had a predominantly negative connotation. It openly contradicted the ‘non-discrimination’ principle of EU law, and sent the wrong signals to EU newcomers. Yet the enduring reality of exceptions and opt-outs shows that differentiation has become a permanent EU feature.

»Does it make sense? The EU as a platform

»Such institutional complexity and diverging expectations, nevertheless, raise questions about the EU’s relevance in the future. Why does the EU still need to bind together 28 member states in a web of rules and institutions? If differentiation has, de facto, become the norm, why not push it to its full logic and give the EU, in Cameron’s words, “the flexibility of a network, not the rigidity of a block”? Why would the Single Market not become a free trade zone based on ‘mutual recognition’ and the EU become a simple intergovernmental organisation?

»It might help to draw an analogy between the EU and what makes digital platforms indispensable and workable. Digital platforms such as Facebook, Google, Twitter and Uber provide basic, user-friendly and empowering infrastructures. They are embedded in society rather than functioning as separate entities delivering services and goods to passive costumers or clients. As a blog piece from the Harvard Business Review put it in 2013:

»“In construction, a platform is something that lifts you up and on which others can stand. The same is true in business. By building a digital platform, other businesses can easily connect their business with yours, build products and services on top of it, and co-create value. This ability to “plug-and-play” is a defining characteristic of Platform Thinking”.

»Digital platforms also aggregate data from their users and make them widely available, usually in exchange for a contribution, and they tend to extend in all areas of the economy. This results in accusations of overreach and intrusion.

»Applying the concept of platform to the EU can help to understand why keeping such a large organisation makes sense, and how it can operate with 28 very diverse member states. First, by joining the EU, member states (users) seek to access a number of exclusive goods (which has led some leads EU scholars to talk about the EU as a ‘club’ following James Buchanan’s 1965 economic theory of clubs). The internal market’s single rulebook, and the possibility to share and exploit data collectively, for instance through Eurostat, the Single Supervisory Mechanism, Europol and Eurojust, are assets which would be much more costly if accessed on a bilateral basis. In exchange for these goods, member states have some duties and responsibilities, and they all contribute to a common budget.

»A second feature of the EU platform is that all member states have been invited to join a number of optional collaborations over time. The Schengen area, the Economic and Monetary Union (EMU), the Common Security and Defence Policy (CSDP), coordination in the field of employment and social policy and enhanced co-operations have all been added to core market policies over time. Some member states are more active than others and successfully ‘upload’ their preferences to the EU level. Others ‘download’ best practices and seek to increase their domestic power.

»A third key feature of the EU platform is its legal personality, and its capacity to pursue a number of common values, goals and interests across the world. To use President Obama’s recent words, the EU “magnifies” the power of member states. It provides a form of collective sovereignty which is much more powerful than the sum of its parts. The collective power of the platform comes from the very fact that it remains one entity vis-à-vis third actors despite the relative internal fragmentation of is activities.

»The EU is therefore likely to stay relevant if it manages to remain a platform combining these three features: a number of privileges accessible to the members of the club in exchange for a contribution; the flexibility to experiment with building on the platform’s core infrastructure and activities; and legal personality – the ability to speak as one in the relationship with external organisations. Crucially, the 19 February agreement between the UK and the EU reflects this endeavour to let member states take different paths as long as the EU’s core strengths and basic principles are respected, especially in the field of economic governance:

»“The Union institutions, together with the Member States, will facilitate the coexistence between different perspectives within the single institutional framework ensuring consistency, the effective operability of Union mechanisms and the equality of Member States before the Treaties, as well as the level-playing field and the integrity of the internal market”. (European Council meeting conclusions, p. 13).

»Can it work? The limits of ‘live and let live’

»Politics, nevertheless, is as much about crude power relations and geopolitical realities as about rule- and value-based governance. This raises the question whether an EU platform can, indeed, escape the tragedy of conflict and power politics and operate according to the ‘live-and let live’ principle championed in Britain.

»Recent episodes have taught us that this might not be as straightforward as it seems. When it comes to Eurozone integration, the UK and a number of non-euro countries have been nervous to see others outvote them as a bloc. In defence matters, the UK has systematically opposed the creation of an EU operations headquarters. If the ten member states having launched an enhanced co-operation on the Financial Transaction Tax (FTT) eventually agree, the UK government stands ready to take the new scheme to the EU Court of Justice. Even if the 19 February deal means that member states have agreed on broad principles and procedural mechanisms to settle their differences, this does not herald the end of tensions and disputes.

»The UK and like-minded countries will need to accept the full implications of the presence of a small group of countries more committed to political union, and who might not use the traditional means of EU integration. Whether in the Eurozone or Schengen Area, supra-nationalism is set to remain the exception, in case of a member state’s significant collapse (what some have called ‘federalism by exception’). However, an increasing intensification of co-operation, the pooling of financial and human resources (such as through the European Stability Mechanism), and the socialisation that goes along with it is already changing the face of EU co-operation for a number of countries. The main treaty-based provision for differentiation — ‘enhanced co-operation’ — is very costly to use as it remains a ‘last resort’ option of EU policy-making and requires a qualified majority. Instead, we can expect more intergovernmental agreements such as the ESM Treaty and the ‘Fiscal Treaty’ (on Stability, Coordination and Governance in the Economic and Monetary Union). This does not mean that traditional EU institutions would be side-lined: these treaties rely on the European Commission, the Court of Justice and the ECB. However, it gives voluntary member states more room for manoeuvre.

»It is too early to predict how fast integration will go, and how many countries will be part of it. A plausible scenario could be that more crises and external shocks will prompt an avant-garde of member states to suggest some steps forward, and others to join the bandwagon. Indeed, the logic of self-government, autonomy and identity may be severely challenged by the return of geopolitics, violence, borders and the need to confront external threats as a block, not as a loose network. European nations would have few alternatives but using the EU for that purpose. Risk- and burden-sharing, mutual assistance and the readiness to “die for one another” (as Emmanuel Macron recently suggested) may well define future generations of Europeans in the long run. Ultimately, the UK and countries adverse to the logic of political union might sigh at the costs of being left out.

»In the mid-term, however, the direction of travel of the EU will remain indeterminate and we are likely to see more differentiation and experimentation. The EU will continue to operate as a ‘plug-and-play’ platform for its member states very much as digital platforms provide a basic infrastructure and privileged goods to its users, leave them the flexibility to build upon them, and occasionally speak in their name when common values, goals and interests are at stake. Even if Brexit happens, expect the UK to stay plugged in.

»Renaud Thillaye is deputy director of Policy Network.»

Public Administration and innovation