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Embracing visionary thinking

Between January 1918 and December 1920, some 500 million people around the world were infected by a flu pandemic that killed between 50 and 100 million people. The Spanish flu, as it became known, arrived in three waves. During the first wave the sick and elderly were most at risk – the normal risk groups for flu. It was in the second and third waves, however, after the virus had mutated, that the young and healthy were hardest hit and most of the deaths occurred.

It has been suggested that the conditions of World War I were partly responsible for both the mutation and rapid spread of the flu virus. Governments had not anticipated or planned for the outbreak of a pandemic at such a time. Consequently, they unwittingly created the conditions for the virus to become more dangerous. Usually, people who are very ill with flu stay at home, while the mildly ill continue to mix with the community, spreading a milder flu strain. In the trenches, however, those soldiers who were less affected continued to fight, while those too ill to fight on were taken in crowded transports to busy field hospitals in the rear, spreading the virus.

Around the world many governments were caught unprepared for the pandemic that followed. Nearly a hundred years later, pandemics still have the potential to wreak havoc across many nations. In the last quarter of a century, ‘over 30 new or newly recognized infections have been identified around the world’.1 According to the UK National Risk Register, the majority of these infections are transmissible between vertebrate animals and humans. This makes them more difficult to track.2

The risk of a pandemic is ever present. At any one time there will usually be a number of disease outbreaks that have the potential under certain circumstances to become global pandemics.3 Take the outbreak of SARS (Severe Acute Respiratory Syndrome), which began in late 2002 and quickly spread across Asia, North America, South America and Europe. It took until mid-2003 for the epidemic to be brought under control. Over 750 people died and some 8,000 were affected by the disease.4

Governments not only have to deal with pandemics; their remit is broad and growing. For example, 15 February 2013 was a special day for astronomers. It was the day that 2012 DA14 paid a brief visit to Earth. The 190,000 tonne chunk of rock passed within 17,200 miles of our planet, nearer than some satellites. An expected visitor, astronomers had known of its existence and route for almost a year. On the same day, however, another meteor – this time 10,000 tonnes – appeared, unanticipated, over Chelyabinsk in Russia. The damage caused by the meteor was reduced by its detonation in the Earth’s atmosphere; nevertheless, the Chelyabinsk meteor injured over 1,500 people and damaged more than 7,000 buildings.5 6

Foresight and futures

We live in an unpredictable and complex world. A major concern for governments everywhere is how to deal with uncertainty. Whether pandemics or meteors, governments are expected to have a ready response. Government for a new age must first contemplate risks where the drivers or constraints involved are not fully understood, where it is usually impossible or difficult to accurately forecast their likelihood, or their consequences and implications. These include risks such as near-earth objects and pandemics, major changes in technology, climate, resource availability, the impact of demographic trends, economic shocks and many others.

But how? There are strategies and tools that can help governments prepare for the future. One approach is the development of a number of foresight or futures tools, often supported with the use of ‘big data’ and data analytics.

Foresight in this context can be viewed as a policymaking support process that facilitates a particular way of thinking about the future and examining themes and issues that need to be considered strategically and with a long-term perspective. Foresight work allows a greater range of possible futures to be considered when formulating strategy. It challenges conventional wisdom by forcing the consideration of alternatives.

Among the most common tools and techniques used are horizon scanning and scenario building or planning. In practice, the two are used in tandem: horizon scanning to identify the trends and drivers that are then used in scenario building. Scenario exercises – here a part of strategic foresight – and short-term horizon scanning can produce useful results separately. But they are often more effective when combined, feeding into a broader analysis of emerging risks, and informing an overall assessment of the challenges and opportunities a country might face.

Foresight work offers internal advantages for governments. These include creating a shared understanding of the future and a common vocabulary for discussing it; providing a forum for organizational knowledge sharing and for tapping into outside expertise not normally accessible in the planning process; the creation of informal networks across ministries and departments; and a safe forum for discussing potentially controversial and difficult issues.

One attractive feature of foresight, especially scenario building, is that in some cases it is possible to conduct with relatively few resources. One of the main requirements and challenges is human resources – getting trained individuals to oversee the process and, where more detailed work is needed, the research capacity to support that.

There are other challenges. Having a permanent foresight unit can help encourage buy-in by stakeholders and use by government for policymaking. It provides a focus for futures work, educates civil servants about futures studies and provides outputs when needed by specific ministries. Creating formal processes is also helpful. In the corporate world, for example, energy giant Shell – instrumental in the development of scenario planning as a tool – typically has several scenarios in place at any given time. Anyone proposing a major investment or strategic initiative must explain the merit of their proposed idea in this context.

There are numerous risks inherent in foresight work. There is a constant danger of misinterpretation: the media may misunderstand the nature of the scenario-building or horizon-scanning process, and disparage the possible scenarios that a government produces.

Furthermore, with government officials predisposed to shaping the world around them through policy, they risk constraining their thinking by approaching the scenario exercise with predetermined views. Also, without buy-in at the top from the beginning, scenarios in themselves tend to have little effect. Therefore the choice of subjects that lead to effective scenarios may have at least as much to do with political circumstances as with the nature of the problem at hand.

Transformation at work: British foresight

The UK government’s foresight programme was, until recently, primarily located in the Government Office for Science, part of the Department of Business, Innovation and Skills. The foresight unit in GO-Science looked at the future along two different time horizons. With its main foresight programme it searched the far distance with in-depth studies looking at potentially significant issues twenty to eighty years in the future. For the slightly nearer future, the Foresight Horizon Scanning Centre conducted projects looking at specific issues ten to fifteen years out.

The UK Cabinet Office also instigated a foresight programme in 2013. In March 2014, after a parliamentary review of foresight work in the UK government, the Cabinet Office’s Horizon Scanning Secretariat and the Government Office of Science’s Horizon Scanning Centre were merged to form the Horizon Scanning Programme Team.7 8

The UK’s foresight programme was originally tasked with looking at issues that were future-oriented and based upon science and technology; related to cross-disciplinary science and technology, cutting across departmental boundaries; of influence to government policy; not being looked at elsewhere; and supported by committed stakeholders. The issue had to involve a significant amount of uncertainty. For example, the UK government undertook a major exercise on the impact of the growing prevalence of obesity, precisely because nobody can predict its exact implications for health and society.

Issues under investigation at the time of writing included the future of cities and the implications of an ageing society. Other topics recently covered by UK foresight – such as global environmental migration, global food and farming futures, and the future of computer trading in financial markets – show a similar level of inherent uncertainty and potentially huge implications.

UK foresight has contributed to building futures and evidence analysis filling specific gaps in current policy understanding, and provided options for policymaking and strategic interventions addressing complex issues.

Horizon scanning

As Beat Habegger, a sustainability-risk researcher, points out in his report on horizon scanning in Switzerland, the term ‘horizon scanning’ is vaguely defined.9 It tends to be used in two main ways. Habegger describes these as ‘a policy tool that aims to gather systematically a broad range of information and evidence about upcoming issues, trends, advancements, ideas and events in an organization’s political, economic, social, technological or ecological environment,’ and ‘a collective term for a multitude of so-called foresight activities that aim to improve the capabilities of organizations to deal with an uncertain and complex future.’

We consider horizon scanning more along the lines of Habegger’s second description, encompassing its use as a policy tool but forming part of a broader foresight programme.

In practice, horizon scanning is often used in conjunction with scenario planning to identify the trends and drivers used in building scenarios.

Diagram 1. The two meanings of horizon scanning

Source: Center for Security Studies, Horizon Scanning in Government, Federal Office for Civil Protection, Switzerland

Using horizon scanning sensitizes government to a much wider range of possible futures. This helps to inform research agendas by highlighting areas where there are important knowledge gaps. At the same time, it allows analysts a glimpse of early developments that presage major changes.

Interestingly, the success of a horizon-scanning exercise is less dependent on advanced technology than on the depth and breadth of the network and the connections through which it is deployed. Signals need to be detected, information gathered, distributed and made sense of. To do these things well, organizations must foster and maintain interaction with a wide variety of experts, both inside and outside government, both domestic and international. These experts will cover a wide range of subjects from economics to social policy, military matters to information technology. This network of experts can provide regular input and commentary on the trend signals detected.

Once information has been gathered and analysed, it is shared with other parties, whether that is other parts of government, organizations in the private sector or the public at large. Managing this process requires some sort of secretariat. In Singapore, for example, this role is fulfilled by the Coordinating Minister for National Security.

Formal mechanisms are required to integrate the findings into policy formulation. Findings from horizon scanning must not be ignored and wasted. Doing so can be very costly, as public servants have discovered. For example, in 2004, shortly before Hurricane Katrina devastated New Orleans, FEMA (the Federal Emergency Management Agency) conducted an elaborate scenario – ‘Hurricane Pam’ – dealing with the impact of a category-four hurricane on an American city. It does not appear that the findings from that exercise were incorporated into government practice.10

Findings from horizon-scanning exercises need to be available to search and access, right across government. In addition, when policy or strategy is being formulated, the people responsible for any resulting proposal should be required to confirm that they have searched the horizon-scanning material for relevant items.

Governments with formal foresight functions tend to have the most advanced capabilities in horizon scanning. Both the UK and Singapore, for example, have created consolidated horizon-scanning offices covering a wide range of issues. Elsewhere, especially in developed countries, horizon scanning is used by individual government departments, rather than coordinated across governments. Science and technology is a popular focus of scanning efforts. For example, the Health Policy Advisory Committee on Technology (HealthPACT) in Australia was established to ‘provide advance notice of significant new and emerging technologies to health departments in Australia and New Zealand to exchange information on and evaluate the potential impact of emerging technologies on their respective health systems’.11

There may also be horizon-scanning efforts linked to particular projects or government policies. In the Netherlands, the Commission for Consultation of Sector Councils ran a Netherlands Horizon Scan, which focused on creating priorities for society-oriented research.

Elsewhere, the Sigma Scan was a project run by the Horizon Scanning Centre, part of the UK government’s foresight programme. The project produced some 250 short papers or summaries of issues and trends that may be relevant to the UK in the next fifty years. The topics covered a broad range of public policy issues, from the conventional politics of UK–EU relations, to more philosophical subjects such as the impact of shifting values on societal norms. Outside experts conducted a follow-up refreshment exercise, updating a quarter of the papers.

Each entry in the scan briefly discusses a single, clearly defined possible trend. It includes a ranking of the trend’s potential impact, its likelihood and any controversy surrounding whether the shift is taking place. It also briefly outlines the potential policy impacts.

The Centre turned to external contractors with expertise in futures work and public policy to create the Sigma Scan. These included Outsights, a strategic-futures consultancy, pollster Ipsos MORI and the Institute for the Future, a non-profit research centre.

The project included efforts to engage with the senior civil service. The original launch of the Sigma Scan programme included workshops organized by the Horizon Scanning Centre involving policymakers, business leaders and other stakeholders.

The original aim was to create a central government repository for the findings from horizon scanning. The Sigma Scan project proved so popular, though, that many departments created horizon scans of their own, undermining the hope of creating a single repository. The danger with departments running their own horizon scanning is that they risk failing to detect important issues in fields outside their remit and expertise. Even if foresight does become an accepted part of government policymaking, coordinating departmental efforts becomes an ongoing challenge.12

Multiple scenarios

Another popular tool used for futures and foresight work is scenario planning, which is concerned with improving decision making against a background of possible future environments. It presents alternative images instead of extrapolating trends, and allows for sharp discontinuities to be evaluated. It prompts decision makers to question their basic assumptions, anticipate future threats and opportunities, and creates frameworks for a shared vision of the future to influence organizational and individual behaviour. Using scenario planning, organizations and governments can get closer to understanding the nature and impact of the forces that will be driving the world in five, ten and even twenty years’ time.

As a facilitated group process, scenario planning encourages knowledge exchange and the development of an understanding of key trends, enabling people to construct a series of scenarios to compensate for common flaws in decision making, such as overconfidence and tunnel vision.

Scenario planning is not an exact science. It is not a foolproof way of predicting all possible outcomes. It does, however, allow government departments to examine the assumptions they have about the future and the decisions they would make in certain circumstances. It is a structured process that, although implemented differently in different organizations and governments, usually contains some common elements:

• Task analysis addresses the question ‘where are we now?’ It considers the goals and strategies of a ministry, examining existing strengths and weaknesses. The idea is to promote alternative ways of thinking, outside the existing mindset.
• Influence analysis identifies external factors influencing current thinking and strategy. Through this process the degree of influence of various factors can be estimated.
• Projections looks at the present and future status of external factors. This task is formulated in a neutral way, allowing alternative futures to emerge rather than prompt participants in any particular direction.
• Grouping alternatives checks alternative developments against each other for consistency, compatibility and logic.
• Scenario interpretation is when different scenarios are analysed, compared and contrasted, and given names.
• Consequence analysis looks at the outcomes of the identified scenarios, assessing and measuring risks and opportunities, and examining government strategy on a ‘what if?’ basis.
• Disruptive events should be analysed from as many directions as possible. When a potentially disruptive event is identified, its impact and the scenario can be assessed, and preventative and response measures prepared.
• In scenario transfer, the last step of the process, the opportunities and risks already identified are used to help form government policy.13

Certain topics are better for scenario building than others. These include topics related to sectors that demand a strategic long-term view because there is a clear trend or a natural evolution that will strategically impact the sector – for example, we know that the population is ageing in the West and want to discover the impact of an ageing population on healthcare systems. Alternatively, there are topics where new discoveries or technologies will strategically impact their future, such as the impact of shale gas on the energy sector.

Transformation at work: scenario impact scoring in the Netherlands

In the Netherlands, the government’s foresight capacity is tightly integrated with security-risk assessment and relies on a detailed set of processes. After a scenario is created, risks arising from the scenario are measured against ten impact criteria derived from five areas of vital interest. The impact criteria cover:14

• Territorial safety (including encroachment on Dutch territory and infringement of the international position of the country);
• Physical security (including fatalities, seriously injured and chronically ill, and physical suffering);
• Economic security (including costs);
• Ecological security (including long-term impact on the environment and nature);
• Social and political stability (including disruption to everyday life, violation of the democratic system, and social, psychological impact).

Each criterion receives an impact score under the scenario. These are aggregated, using a variety of methods, into a single overall impact score for the scenario. Then the likelihood of the scenario is incorporated to develop an overarching risk assessment.

The individual scores are derived in a way that depends on the nature of each criterion, but each includes consideration of the extent of the consequences – from limited to catastrophic – as well as their geographic spread and the likely upper and lower limits of their impact.15

This exercise will feed into the development of government action plans to eliminate, reduce or mitigate expected adverse impacts identified in these scenarios.

Transformation at work: foresight and scenario thinking in Singapore

In general, foresight work encompasses a range of techniques and methodologies. Which ones an organization employs reflects their needs and experiences, and can be adapted.

Singapore is a good example. It began using scenarios in the Ministry of Defence in 1991. By 1993, the cabinet was convinced of their usefulness for long-term strategy and development, establishing the Scenario Planning Office (SPO) within the Public Service Division in 1995.

At the same time, to ensure scenario thinking was embedded across government rather than confined within the SPO, the Singaporean government created PS21, a programme to instil across the civil service a mindset of ‘welcoming, anticipating and managing change’. Scenarios played a key role in promoting the anticipation of change.

The spread of scenario skills led to futures teams becoming established in other government areas, including the Ministry of Trade and Industry, the Ministry of Defence, and even the Ministry of Community, Youth and Sports.

A number of events around the turn of the century, notably the Asian financial crisis and 9/11, led to some scepticism among civil servants about the usefulness of scenarios as a tool. Rather than abandon them, however, government officials in Singapore sought to make them more useful.

First, they increased the remit of the SPO, renaming it the Strategic Policy Office, and shifted its focus to inter-agency issues that might otherwise not receive due attention. They created tools complementary to scenario planning, which gave greater consideration to discontinuities and unexpected events – the ‘black swans’ popularized by Nassim Nicholas Taleb. A particularly important addition was the creation of the Risk Assessment and Horizon Scanning Unit in the Office of the Deputy Prime Minister.

In 2010, the Singapore government created the Centre for Strategic Futures (CSF) to coordinate futures work within the government. Supported by the SPO, the aim was for the CSF to become the focus of the government’s futures-related work and to provide a government-wide perspective on major strategic issues. The plan was also to make a virtue of the spread of futures capacity by requiring every ministry to have a futures team that coordinated through a Strategic Futures Network made up of deputy secretaries from each.

Harnessing big data and analytics

The ability of governments to carry out foresight work is greatly aided by big data, and the predictive analysis it allows.

The latest data-storage technology makes it possible to store information across a wide variety of formats and in increasingly large volumes. One prediction is that between 2013 and 2020 the digital universe will grow by a factor of ten – from 4.4 trillion gigabytes to 44 trillion. The International Data Corporation (IDC) predicts the amount of data being stored will be 2.16 zetabytes, growing to 3.77 zetabytes by 2016.16

Interestingly, IDC calculates that while only five per cent of data is currently ‘valuable or target rich’, this figure will more than double by 2020 thanks to big data and other technology.17

The production of data is endless, and everywhere. Wherever we go, we produce data: when we drive our cars, when we turn on the power in our houses, when we use our mobile phones. From the sensors placed in the structural fabric of the world that we inhabit, to the wearable devices that stream information to and from the Internet, we produce data. Then there are businesses producing and stockpiling data of all kinds, capturing the minutiae of detail from billions of stakeholder interactions, while governments accumulate data about their citizens – their health, their journeys, their households and their financial affairs.

This amount of data represents both opportunities and challenges. There are, for example, challenges associated with capturing, organizing, storing, searching, analysing and representing such volumes of data. This is the challenge of big data.

The exact origins of the term ‘big data’ are uncertain. Many people attribute its initial use to John Mashey, who worked as chief scientist for Silicon Graphics in the 1990s.18 Whatever its origin, the concept is increasingly important in both the public and private sectors.

Big data refers to large, complex data sets that conventional data tools are unable to cope with effectively. One way of describing big data is by reference to the 3Vs model developed by IT research firm Gartner. The three Vs in question are Volume, Velocity and Variety: the amount of data, the speed in and out, and the range of data types and sources. Big data is both stored data, and data produced as we consume other data.

Big data does not solely present challenges. It also offers unprecedented opportunities for both public and private sector organizations. Coupled with the latest, most advanced database management tools and predictive analysis techniques, big data can provide important insights into relationships, behaviours and impacts.

Transformation at work: the health of a nation

The big data phenomenon is a game changer for governments as it is for numerous industries. Many public sector organizations hold huge datasets of information. In the UK, for example, the National Health Service (NHS), one of the world’s largest publicly funded health services and biggest employers, holds vast quantities of clinical and patient data. Among other things, it publishes details of every prescription item by doctor and by month – 400 million data points.19 Now organizations are taking the NHS’s big data and using it to conduct analysis that provides new insights into the way that the service operates and how it might be improved.

Mastodon C is a big data specialist which has worked on a number of different pieces of analysis related to the NHS clinical data.20 One project looked at the adoption of best practices among doctors’ surgeries. In particular, Mastodon C used the data to investigate whether small practices were slower to adopt best practices than larger ones. As it turned out when investigating the uptake of a particular diabetes drug, it was clear that single-handed practices were slower to prescribe the drug than larger practices. However, the data also revealed that what neighbouring practices were doing was a more significant determinant of best-practice adoption than practice size.21

The team at Mastodon C also looked at the different practices of doctors in prescribing generic and proprietary drugs. In doing so, it discovered considerable variation in the frequency of prescribing proprietary statins over generics, a variation worth some £200 million per annum to the NHS.22

Big data’s next frontiers

Work by the McKinsey Global Institute (MGI) concluded that big data could help the public sector improve its efficiency and productivity.23 In Europe, for example, MGI estimated that effective use of big data could reduce administrative costs in the EU by fifteen to twenty per cent, or the equivalent of some €150 billion to €300 billion in value creation. (The gain is derived from both increased efficiency and closing the gap between the actual and potential amount of tax revenue collected.)

The report identified five broad areas where big data could make a difference for governments. Greater transparency and sharing of data across departments will allow government departments, agencies and citizens to be more efficient about form filling, for example, as a lot of information requested from organizations and individuals by one department or agency is often held elsewhere by another.

Using an open data approach, governments can provide citizens and organizations with access to some of the massive data sets that they hold. This facilitates greater innovation across a range of topics, which can then feed back into service improvement and cost savings. Examples of open data approaches by governments include the UK’s website data.gov.uk, and Spain’s Aporta web portal (www.proyectoaporta.es).

Citizens can combine Twitter-type social media services with government information sources – on crime or severe weather events, for example – to provide highly local information services. They can also use government data to analyse and critique service provision, identifying possible efficiencies and improvements.

The availability of big data allows governments to look in more detail across and within departments and agencies and compare performance. The McKinsey report suggests that using performance dashboards will improve performance across individual units within a government agency or department as managers strive not to be outperformed by other units.

Citizens can use the variability in performance revealed by big data to make more informed choices about their lives. They might, for example, choose to have an operation at a hospital with a good record for a particular type of procedure, or use the information to make decisions about what schools to send their children to. Making such data publicly available is also likely to lead to an improvement in services.

A number of countries have demonstrated the value of using big data to drive segmentation and better targeting of tailored public services. In Germany, for example, the Federal Labour Agency used the mass of historical data it had accumulated to get people back into work more quickly.24

In addition, sophisticated automated data analysis techniques, such as the use of neural networks, can be used in conjunction with big data to support decision making in the public sector. Among other things, these methods can be used to identify fraud in areas such as taxation and welfare benefits. Providing open access to large databases and analytical tools can also help governments generate service improvements through third-party innovation. Feedback and analysis based on open data information by organizations and individuals can lead to suggestions for improving process and practice.

Extracting the potential benefits from working with big data is a challenge. Organizations and citizens need access to the data. This is partly connected to a government’s willingness to provide open access to the data it holds, and partly to people’s ability to access that data through technology. With access to information comes increased responsibility. Governments must demonstrate their willingness to maintain ethical standards by adopting appropriate codes of practice covering government use of analytics, for example, and making them publicly available.

For their part, organizations may need to overcome legacy issues and upgrade equipment if they are to use big data effectively. Both governments and organizations may need to recruit new staff or train existing personnel so that they have the skills and knowledge capabilities required to handle large datasets. Public sector leaders will need to be familiar with the latest analytical tools and techniques, for example.

In The Big Data Opportunity: Making government faster, smarter and more personal, Chris Yiu, head of the digital government unit at the think tank Policy Exchange, makes a number of recommendations for governments harnessing the power of big data.25 (He estimates the big-data-related opportunity for improving the efficiency of government at between £16 billion and £33 billion worth of savings a year).

These include establishing an ‘advanced analytics team’ at the centre of government. This team will help spot the areas where big data can make a difference in transforming government services. It can also, suggests Yiu, help departments grasp those opportunities and advise on solutions.

To increase the likelihood of big data being used effectively, Yiu recommends focusing on a small number of public policy areas to begin with, and setting specific monetary targets in terms of savings and benefits. There is also a case for introducing clear milestones for reviewing both progress and the value and existence of the programme.

Finally, it is important to test big data projects in a controlled environment before rolling them out in the real world.

In a nutshell: embracing visionary thinking

In a dynamically changing world, governments need to look beyond pressing short-term issues, and develop new ways of thinking ahead and preparing strategically to better cope with the threats and opportunities posed by an uncertain future.

Embracing visionary thinking requires the use of a growing number of tools for horizon scanning, scenario planning and foresight analysis. In addition, governments should leverage the immense volume and variety of available information through managing and exploiting big data, enabled by advances in techniques and technologies.

To succeed, futures capabilities should be institutionalized, standardized across government. Thinking about the future requires sustained investment and resources. It should involve expertise from professional communities, particularly private businesses, think tanks and academia. It also demands close ties with senior decision makers and policymakers so that coherent, future-looking recommendations can usefully inform the policy process.