FUTURE STUDIES « Governance in the 21st Century Governance As we move into the 21st century, the turbulent transformation of economy and society looks set to continue. Growing integration of markets, radical new in the technologies, the increasing knowledge intensity of human activity, all point to the emergence of an immensely complex world. But how will it be managed? And by whom? What forms of organisation and decision-making will be required 21st Century at local, national and global levels to meet the challenges of the next decades? One thing seems certain: old forms of governance – in the public sector, corporations and civil society – are becoming increasingly ineffective. New forms of governance will be needed over the next few decades which will involve a much broader range of active players. Traditional hierarchical organisations and top-down control will give way more and more to a wider diffusion of responsibility FUTURE STUDIES and decision-making that builds on the talents for innovation and creativity of individuals and groups. This book explores some of the opportunities and risks – economic, social and technological – that decision-makers will have to address in the coming years, and outlines what needs to be done to foster society’s capacity to manage its Governance in the 21st Century future more flexibly and with broader participation of its citizens. www.oecd.org ISBN 92-64-18541-0 03 2001 01 1 P -:HSTCQE=V]ZYV]: © OECD, 2001. © Software: 1987-1996, Acrobat is a trademark of ADOBE. All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only. Unauthorised reproduction, lending, hiring, transmission or distribution of any data or software is prohibited. 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Forew.fm Page 1 Friday, April 27, 2001 2:52 PM Governance in the 21st Century ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Forew.fm Page 2 Friday, April 27, 2001 2:52 PM ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non- discriminatory basis in accordance with international obligations. The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became Members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention). 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Forew.fm Page 3 Friday, April 27, 2001 2:52 PM Foreword In the run-up to the preparations for EXPO 2000 – the World Exposition in Hanover, Germany – the OECD Forum for the Future organised a series of four conferences to take place beforehand around the theme of “People, Nature and Technology: Sustainable Societies in the 21st Century”. The series considered four key areas of human activity: technology, economy, society and government. The conferences explored possible evolutions of key variables and analysed different development paths in order to expose some of the main policy implications and options. Each conference provided analysis of underlying trends and policy direc- tions. However, the overall aim of the series was to build a comprehensive founda- tion for assessing the critical choices likely to face citizens and decision makers in the next century. The entire series benefited from special sponsorship by EXPO 2000 and four German banks – Bankgesellschaft Berlin, DG BANK Deutsche Genossenschafts- bank AG, NORD/LB Norddeutsche Landesbank, and Westdeutsche Landesbank Girozentrale (WestLB). Additional financial support was provided by numerous Asian, European and North American partners of the OECD Forum for the Future. This book deals with the fourth and final conference in the series, hosted by the NORD/LB Norddeutsche Landesbank in Hanover, Germany on 25-26 March 2000. The theme was “21st Century Governance: Power in the Global Knowledge Econ- omy and Society”. Three main messages emerged from the discussions and analyses that are summarised in the pages that follow. First, old forms of governance in both the public and private sectors are becoming increasingly ineffective. Second, the new forms of governance that are likely to be needed over the next few decades will involve a much broader range of active players. Third, and perhaps most impor- tantly, two of the primary attributes of today’s governance systems – the usually fixed and permanent allocations of power that are engraved in the structures and constitutions of many organisations; and, the tendency to vest initiative exclu- sively in the hands of those in senior positions in the hierarchy – look set to undergo fundamental changes. 3 © OECD 2001 Forew.fm Page 4 Friday, April 27, 2001 2:52 PM Governance in the 21st Century Harbingers of changes in the first attribute can be found in highly supple organisations, both public and private, that are capable of regularly redistributing responsibility according to the nature of the task rather than on the basis of a rigid authority structure. That spontaneous determination of the most appropriate level for wielding power and taking responsibility goes hand in hand with the weaken- ing of the second attribute of most prevailing governance systems, a decline in hierarchical or top-down methods for determining goals and means. Gradually, at the leading edge of many economies and societies – particularly in areas where the production of intangibles and personal customisation are becoming dominant – initiative is shifting to the people who have detailed knowl- edge of what is desired and what is possible. Traditional leaders in either the workplace or the public sphere can no longer specify in advance exact outcomes or methods. Instead, in the context of shared missions and common rules, the objectives and techniques are being left to the unforeseeable innovations and creativity of the individuals and groups that have a deeper understanding of the specific needs and resources. Organisational and creative liberty, however, has very exacting preconditions. In the future, more diffused approaches to governance in all parts of society will only work if there are frameworks in place that assure very high levels of transpar- ency, accountability and integrity. At the same time, for public authorities and society more broadly, the ability to put new forms of governance into the service of realising people’s collective good will depend on a common commitment to democratic values, human rights and equality of opportunity. Even with these frameworks and values in place, the emergence of new forms of governance will still depend fundamentally on the capacity of individuals and groups to partici- pate actively in making and implementing decisions. Meeting these challenges of individual and group capabilities will, at least from the perspective of government policy, probably entail a two-pronged thrust. One is to implement policies that foster, in ways laid out by the previous books in this series, technological, economic and social dynamism. The second approach, discussed in this volume, concerns policies that target improvements in three areas: the full range of learning infrastructures, the frameworks that are crucial for establishing confidence, and the standards (mission/values) that provide the com- mon basis within which a society functions. By improving the capacity to make and implement decisions throughout society, these policies are likely to provide one of the main stepping stones to the realisation