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What is the future for government?

 


What is the future for government?

Technology is connecting people within and across national boundaries and disrupting existing assumptions. Mounting public debt is limiting the scope of governments to act in a range of policy areas. We are seeing an increase in the frequency and magnitude of extreme weather events.

These global megatrends raise questions about government's ability to respond and adapt, given the potential impact on government’s core responsibilities of economic prosperity, security, social cohesion and environmental sustainability.

To better understand the megatrends that will have the most impact on governments in the years ahead, KPMG International engaged with the Mowat Centre at the School of Public Policy and Governance, University of Toronto.

Michael Hiller
"More than at any point in human history, we live in a world where events and decisions in one part of the world can influence lives on the opposite side of our planet."
Michael Hiller
National Leader, Infrastructure, Government & Healthcare
The resulting report, Future State 2030, identifies nine global megatrends in three dimensions as having the most impact on governments in the years ahead.

Changes in the status and expectations of the individual

#1 – Demographics
Higher life expectancy and falling birth rates are increasing the proportion of elderly people across the world, challenging the solvency of social welfare systems, including pensions and healthcare.

#2 – Rise of the individual
Advances in global education, health and technology have helped empower individuals like never before, leading to increased demands for transparency and participation in government and public decision-making. These changes will continue, and are ushering in a new era in human history in which, by 2022, more people will be middle class than poor.1

#3 – Enabling technology
Information and communications technology (ICT) has transformed society over the last 30 years. A new wave of technological advances is now creating novel opportunities, while testing governments’ ability to harness their benefits and provide prudent oversight.

Changes in the global economy

#4 – Economic interconnectedness
The interconnected global economy will see a continued increase in the levels of international trade and capital flows, but unless international conventions can be strengthened, progress and optimum economic benefits may not be realised.

#5 – Public debt
Public debt is expected to operate as a significant constraint on fiscal and policy options through to 2030 and beyond. Governments’ ability to bring debt under control and find new ways of delivering public services will affect their capacity to respond to major social, economic and environmental challenges.

#6 – Economic power shift
Emerging economies are lifting millions out of poverty while also exerting more influence in the global economy. With a rebalancing of global power, both international institutions and national governments will need a greater focus on maintaining their transparency and inclusiveness.

Changes in the physical environment

#7 – Climate change
Rising greenhouse gas emissions are contributing to climate change and driving a complex mix of unpredictable changes to the environment while further taxing the resilience of natural and built systems. Achieving the right combination of adaptation and mitigation policies will be difficult for most governments. 

#8 – Resource stress
The combined pressures of population growth, economic growth and climate change will place increased stress on essential natural resources including water, food, arable land and energy. These issues will place sustainable resource management at the centre of government agendas.

#9 – Urbanisation
Almost two-thirds of the world's population will reside in cities by 2030.2 Urbanisation is creating significant opportunities for social and economic development and more sustainable living, but is also exerting pressure on infrastructure and resources, particularly energy.

In certain megatrend areas – such as enabling technology – it is not just a question of risks posed but also the potential for increased opportunity.

For governments, this means evolving the way they operate, in some case dramatically, to govern in a world characterised by these pervasive and interconnected trends. They will need to look at what may be need to change, as well as how, but most importantly, governments will need to manage change through strong leadership, superior teams, and a clear and compelling vision to 2030.


Download the report for KPMG's strategic review of the policy, regulatory and program changes governments will need to consider, as well as the strategies, structures and skills required to effectively implement these needed changes.


1. European Union Institute for Security Studies. 2011. Citizens in an Interconnected and Polycentric World
2. United Nations Population Division. 2012. World Urbanization Prospects – The 2011 Revision.

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