Nagy Hanna: Transforming to a Networked Society

Transforming to a Networked Society. A Guide for Policy Makers

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Nagy HANNA

The article analyses goals, objectives and functions of government in the process of e-transformation and the formation of the networked society. The author pays attention to the painful process of implementing a new social paradigm; recommendations are formulated to overcome the barriers.

Key words: electronic (digital) transformation, network structure, innovation, digital technology, government.

A networked society is a transformative improvement of societies' capabilities to shape their physical, economic, social and intellectual environments to their own ends, with the power of digital networks. This transformation arises from the recent developments of Information and communication technology (ICT) and its integration into economies and societies. It is a process of fundamental structural change, a shift to a new techno-economic paradigm, enabled by ICT.

As mobile and digital technologies are expanding into more areas of society and economy, we see performance of ICT technologies continues to evolve at fast pace. Additionally an abundance of data is generated from connections, sensors, and applications. The network is turning from being mainly a means for connection to being an increasingly important source for data-driven innovation. New insights from data hold great opportunities to generate substantial value for business and society. Add to this development the radically reduced communication costs and the ease at which literally anyone today can access very powerful tools and platforms to innovate and reach out to the markets and we have very powerful ingredients for radical and disruptive innovation across industries, public services and private life. Over the years ahead, technological advances and improved performance of ICT infrastructure will bring new ways for people to create, learn, produce and innovate. We call this new emerging society - of which we have seen only the beginning - the Networked Society.

Policy makers need to address the benefits as well as the risks of the ongoing ICT revolution. Technological revolutions are accompanied by profound social and institutional changes. Hence, they encounter powerful resistance from established institutions, dominant vested interests, and incumbents. Adjusting the social and institutional environment to take advantage of a technological revolution and its associated techno-economic paradigm can involve painful adjustments, often disruptions to, and even destruction of, legacy systems, institutions, and processes.

Adoption of new technology, or systems of technologies, is foremost a social transformation process. It provides new opportunities for people, organizations and society to essentially do the same things with less cost and effort or to do new things that were not previously possible, essentially moving the frontier of possibilities. At the same time it threatens incumbent interests by disrupting power structures, established market positions and modalities of value creation. Realizing the transformational potential of the information and communication revolution also requires redesigning or building new networks of institutions, transformation of regulatory frameworks and governance, new skills and competencies, and even radical changes to ideas and culture.

It is only when innovations are widely diffused and broadly adopted by people, businesses and public institutions that long term sustainable impact on economy and society can be achieved. Diffusion and adoption of innovations are what ultimately matters for any significant socio-economic impact. Institutional and public policy frameworks prevailing in a society can assist or constrain this potential impact.

Policy makers' capacity to manage ICT-led transformation is of strategic significance, since it drives the well-being of nations. The role of policy makers is to lead institutional change, empower change agents and innovators, and set policy frameworks for the wide and effective adoption of the new technologies. Benefiting from transformational change requires sound public policy making that shapes and determines the duration, cumulative strength, distribution and sustainability of socio-economic benefits that can be achieved in the networked society.

ICT specialists and utopians tend to focus only on the potential benefits of this technological revolution. Policy makers need to address issues of transitional and long-term costs, such as impact on job markets and skills, and on health, learning and cognitive development among children, growing income inequality, and erosion of privacy and security. These socio-technical risks will increasingly come to the fro as ICT and Internet-based applications penetrate ever further into the information society. They should become an integral part of future ICT policy and e-transformation practice. Managing these risks should be part of how a whole society can steer e-transformation towards an inclusive and desirable vision of development. Policy makers can be proactive in mobilizing the whole of government and society to address them.

A Strategic framework should guide thinking about the ICT-enabled transformation ecosystem, and its main components and key players, in order to pursue coherent policies and mutually reinforcing ICT-enabled development initiatives. This e-transformation framework maps the connections and the relationships among diverse players concerned with supply and demand for e-transformation. It facilitates the creation of national consensus on e-transformation, and systematic thinking about ICT as enabler of development. It also helps policy makers and stakeholders in identifying the missing links and binding constraints in the e-transformation ecosystem that should be prioritized.

The Digital Transformation ecosystem can be conceived as composed of key interdependent elements:

(a) Enabling Policies and Institutions: The policy and institutional environment can either enhance or obstruct the interactions among all elements of e-Transformation. They condition the supply of information and communication services, and the demand and effective use of ICT in all sectors.

(b) Human Capital. Skilled human resources, both as ICT users and producers, are at the heart of the ICT revolutions.

(c) Technological competencies. A dynamic local ICT services and innovation ecosystem is necessary to adapt the global technology to local needs, to manage and maintain the technological infrastructure, to develop digital local content and solutions, and to effectively partner with the global suppliers of ICT.

(d) Information and Communication Infrastructure. Affordable and competitive information infrastructure, including affordable access to the Internet, fixed and mobile narrow- and broad-band, and other digital connectivity tools.

(e) Digital Transformation. This involves a holistic transformation of a user sector or whole economy through joint investment in ICT and complementary sector policies, institutions, processes, and capabilities.

The key message of adopting a holistic approach to transformation is the criticality of interdependencies and scale effects in the emerging ICT ecosystem of a country. National ICT plans should go beyond information infrastructure investments, and to invest in other enablers of transformation. These enablers include: ICT education, ICT services development, digital policies, sector policy reforms and institutional changes aiming to remove barriers to ICT led transformation, ICT services development, ICT-led business process innovation, new business and organizational models, and e-leadership capabilities.

The Guide outlines the cycle of a national digital transformation planning and implementation process. This process starts with a broad assessment of national e-readiness and benchmarking the country on key indices against comparable or leading nations. Policy makers should deploy appropriate benchmarking and e-readiness methodologies to spur national dialogue. A shared vision of the opportunities and challenges and/or SWOT analysis of the country's economy should guide the integration of ICT into a national development strategy. It should be anchored in shared understanding of the possibilities, benefits, and risks of the ongoing ICT revolution, and the barriers to a desired transformation.

Integration of ICT into national development demands intensive interactions between those immersed in the world of ICT and technological innovation, and those concerned with the goals and challenges of transformative development. This calls on ICT policy makers and regulators to break out of the ICT bubble, and to interact with the sectoral/developmental context to be transformed. Leaders of various economic and social sectors should view ICT as a driver of transformation in their sectors, rather than an add-on or after thought to their programs and sector strategies.

ICT-enabled transformation possibilities are vast and ever expanding, starting from automating processes, to informing decision making, improving governance, innovating services, enhancing service delivery, and transforming finance, education, health and infrastructure. The guide focuses on effective practices for transforming government and key service sectors.

Transforming Government. This should be driven by a shared vision of future government to meet the challenges posed by globalization, rising expectations, and networked society. The Guide illustrates the vast range of ICT applications to enable public sector reforms. It outlines key strategic approaches to implement ICT applications across government: taking a whole-of-government perspective; creating customer-centric transformation; sharing processes, infrastructures and resources; and developing integrated multi-channels for service delivery. Special attention should be given to mobilizing demand for online services and monitoring their adoption and effective use. New tools should be leveraged for public sector transformation: mobile devices, open government data, big data and analytics.

Transforming Key Service Sectors. Government agencies need to move beyond the acquisition of ICT tools to understanding their transformative impact. Digitally-enabled sector transformation calls for a vision-driven, reform-based strategy to bring about sustainable transformation. Integrated ICT strategies and investments in any sector must be jointly synchronized with relevant sectoral policies, regulations and investments in the domain to be transformed. A sector transformation strategy should benefit from taking an ecosystem view of the target sector (demand), combined with a holistic view of the ICT ecosystem (supply). The Guide shows how this integrative ecosystem view of sector transformation can be applied to the education and learning sector, as well as other service sectors.

Mastering the digital transformation process demands building specialized leadership and institutional capabilities, enabling policies for a digital economy, a high quality communication infrastructure, and fast learning from local and global practice.

Leadership capabilities and institutional innovations are an essential ingredient of digital transformation. Policy makers should define clear roles for government, private sectors, and other development partners in leading the transformation process. Leaders need to network and coordinate across institutions to set coherent policies, overcome political economy barriers, and manage structural changes. They should build institutions with the requisite core competencies to orchestrate and implement various elements of the transformation process. The Guide outlines key design options for e-leadership institutions, the strengths and weaknesses of these options, and the core competencies required from transformational leaders.

Policy makers should give attention to developing enabling policies and regulations for the emerging digital world. Policy reforms are essential to harness the ongoing technological changes and their integration into the economy and society for maximum transformational impact. Political economy challenges and barriers will ultimately condition the focus and implementation of these reforms, as they do in other public policy arenas. Policy makers may focus on the key questions that a regulatory framework must answer, and the distinct regulatory approaches that have emerged to address them. The Guide outlines key specific public policy issues that have significant impact on research, innovation, diffusion, and adoption of ICT in support of transformation. A converging technology environment has significant implications for the need for coherent, robust, and technology-neutral policy and institutional frameworks.

A high-quality broadband infrastructure has become an essential foundation to a vibrant e-transformation ecosystem. The Guide outlines key steps in developing broadband strategies to promote supply and to mobilize demand. The goal of universal access is key: societal interests are at stake in serving those unconnected populations, to capture scale and network effects, and to build a truly inclusive and networked society. The guide explores options for pursuing universal access. It also recommends policies for managing the spectrum, which has become an increasingly critical resource for deploying mobile broadband networks.

The Guide sums up emerging lessons from the experience of the leading countries into ten mutually reinforcing fundamentals:

1) Commit to a holistic, long-term transformation strategy, integral to a national development strategy;

2) Leverage stakeholder engagement and coalitions to build a shared vision and commitment for the goals of digital transformation;

3) Tap synergies among actors/elements of the e-transformation ecosystem, and exploit supply- and demand-side economies of scale;

4) Attend to the soft infrastructure or local capacity to master digital transformation: leadership, policies, and institutions;

5) Pursue public-private partnerships to tap private sector innovation, resources, and know-how most needed for transformative change;

6) Emphasize digital diffusion and inclusion for broad-based and equitable transformation;

7) Adopt strategic approaches to funding to match the diverse innovation, flexibility, coordination and time horizon needed for all elements of digital transformation;

8) Balance strategic direction with local initiative to generate a dynamic for national drive, local experimentation and adaptation, and fast scaling;

9) Enable change, innovation, and learning via decentralization, knowledge sharing, innovation funds and change management processes; and

10) Practice agile and participatory monitoring and evaluation from the start and throughout the transformation process.

These fundamentals can be mutually reinforcing. Practicing them should help countries and local governments build capacity to master the digital transformation process. Mastering this process is likely to be the defining core competency of the 21st century.

Strategic Advisor, Visiting Professor at University of the Witwatersrand (Wits University), South Africa