If tech companies ran the country

What might they teach governments about building state capacity in the 21st century?

Hi, it's Chris from the Tony Blair Institute. In this edition we’re pondering what governments might learn from the way tech companies organise themselves for the internet era.

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This headline was doing the rounds a little while ago:

It was taken from Governor Steve Sisolak’s annual State of the State speech, in which he proposed the creation of Innovation Zones to attract cutting-edge tech companies. The companies running these zones would have the same authority as counties, for example to raise taxes and form school districts.

The idea of companies accumulating civic power isn’t new.

As far back as the Victorian era, English industrialists like the Cadburys set about establishing so-called model villages around rural factories. As well as housing workers, these often saw companies paying close attention to schools, medical services, green spaces and other public works.

One of the more famous recent examples of companies fusing business and civic power is the Reedy Creek Improvement District. This was incorporated in the 1960s after Disney petitioned the Florida State Legislature, and is the immediate governing jurisdiction for the Walt Disney World resort.

Fast forward to today and the other side of the Atlantic Ocean, and construction on the eponymous Akon City in Senegal is set to begin later this year (complete with green energy and its own cryptocurrency, by all accounts).

Nevada’s proposal is based on the notion that traditional government bureaucracy is not up to the task of attracting and retaining innovative tech businesses. But it also echoes a broader motif in the contemporary policy debate: that however else we feel about them, the tech companies in our lives are often perceived to be more competent than many of the increasingly ineffectual arms of the state.

This feeling is only going to get stronger. The modern-day collapse of distance between the public and industrial-era institutions puts a huge premium on governments having the basic competence to get stuff done. But many of the challenges facing contemporary leaders are failures of state capacity, stranding them at the helm of systems unable to move with the times, to resolve market failures and collective action problems, or to make infrastructure investments for the long term.

The final frontier

The good news for politicians — and for all of us attached to liberal democracy — is that most people probably aren’t ready for full-scale government-by-corporation just yet. We may, however, be further down the path than many realise.

The sorts of community standards that apply on apps like Facebook and Airbnb already provide a rudimentary form of platform governance. The rules that companies set will look and feel increasingly like laws, particularly as corporate policy matures and as we spend more of our lives in immersive digital spaces like Fortnite and Roblox (all of which only strengthens the case for regulating big tech more effectively).

In some cases, new trustless and cryptographically-secured protocols are taking rule-making out of the hands of centralised authorities altogether. And as if the governance of cyberspace isn’t enough to be getting on with, the beta terms of service for SpaceX’s internet service included a clause declaring that no Earth-based government has authority over activities taking place in transit to or on Mars.

Back on terra firma, forward-thinking digital government people are working hard to drag public administration and public service delivery into the internet era. Outside of government, interesting govtech startups are attracting funding and multiplying fast.

Done right this is about business models and culture as much as it is about technology and processes, and when it goes well it makes a tangible difference to people’s lives.

It also lends weight to the democratic process: repaying the trust that voters place in the systems and leaders they elect, and demonstrating though action that government is there to serve the people.

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Nevertheless, imagining what things might be like with benign tech companies running the show, rather than with old-fashioned governments trying to be a bit better at tech, is an interesting thought experiment.

Put the years of dystopian sci-fi conditioning to one side (there’s plenty of time to watch Blade Runner again later) and I think several things would stand out.

  1. We’d be better at handling scale. 20th century institutions assume that systems are finite and try relentlessly hard to impose order at source. You can see this in action in pretty much every government form you’ve ever been asked to fill in, the design of which was almost certainly dictated by the bureaucracy that will have to ingest it. 21st century organisations embrace infinite chaos and use technology to expose legibility to end users. Google is a masterclass in this approach; the way Amazon stacks its fulfilment centres is quite unlike how any government would go about it.

  2. We’d be more responsive. 20th century institutions are designed primarily for broadcast (with the occasional flip into receiving mode when an election comes around or a big enough scandal breaks), and find it much harder to routinely listen, reflect and respond to feedback from the public. 21st century organisations run much tighter feedback loops — technologies like analytics and chatbots scale easily, whereas face-to-face meetings and letters to local representatives do not. With this infrastructure in place, it becomes far easier to identify root causes, extract actionable feedback and track improvements in service delivery.

  3. We’d try to do less top down. 20th century institutions hold tight to the notion of government as a tightly coupled system; leaders expect to pull the levers of power and see the machinery of government move in tandem with their wishes. More often than not, however, they leave office disappointed. 21st century organisations focus more on marketplaces and incentives as the best ways to coax stability and good outcomes from complex systems of interdependent participants. Seen through this lens, progressive policy goals may be best pursued not through big government but rather by focusing on civic platform infrastructure that empowers others.

  4. We’d be testing many more frontier ideas. 20th century institutions are naturally conservative, seeking to preserve what worked before and preferring incremental change over anything more drastic. This is a much more viable strategy for government monopolies than it is in other sectors, where there is a constant threat of competitive disruption. 21st century organisations lean in hard on R&D, and are not afraid to make long-term bets on infrastructure and talent that help them evolve to stay ahead of a changing external environment. Tech companies would be working furiously to take advantage of things like AI and smart contracts to revolutionise public administration, rather than sitting on the sidelines and waiting to bat them away.

It should go without saying that this essay isn’t a call to hand government over to the big tech companies (if only good policymaking was that easy!). Nor is it an assertion that Silicon Valley would so easily crush the many and difficult challenges that only governments have to face.

But it is to argue that state capacity matters, and that in today’s rapidly changing world there is more than ever before for policymakers and political leaders to learn from what is happening beyond the corridors of power — and in particular from the organisations that are busy redefining the world through technology and innovation.

Given the outsized role that tech now plays in all of our lives, it’s perhaps no coincidence that the tech sector is consistently more trusted than any other and that there is strong support among the public for tech companies to play a bigger role in public service delivery.

Good government is of course about much more than raw efficiency. Nevertheless, mastering the business of governing has never been more important.