Challenges to Government from the Multi-Polar World

To successfully protect and improve their citizens’ quality of life—while contributing effectively to international initiatives—governments need to understand and evolve to address new global realities, just as multinational companies do. However, the emergence of multiple centers of economic power and activity affects governments in very different ways from businesses.

This report—based on research by the Accenture Institute for Health & Public Service Value, as well as Accenture’s collective experience serving public service organizations around the world—articulates the drivers, dimensions and challenges of the multi-polar world that are unique to the public sector. It also makes very clear that governments cannot thrive in the multi-polar world by simply doing more with existing tools and methods.

To achieve high performance, governments need to develop new ways of working, including delivering services differently and making related changes to organizational structures, technologies and workforces. They need to concentrate on strategic, long-term thinking rather than on short-term political expenditures. Above all, they need to shift focus to the strategic goal of creating public value by improving the social and economic conditions of the people they serve.

In 2007, Accenture published the report The Rise of the Multi-Polar World, which describes a new era of globalization—one characterized by multiple centers of economic power and business activity. In this world, the United States, Europe and Japan are no longer the sole centers of economic power and business activity. In fact, within a few years, five of the 10 largest economies in the world will be "emerging" economies: China, Brazil, India, Russia and South Korea.

The Rise of the Multi-Polar World explored this new reality, explaining the drivers behind it and analyzing the implications, particularly for multinational companies. Of course, what affects businesses also affects governments, but the implications of the current patterns of globalization for governments can be very different from those that multinational companies face.

Based on further research by the Accenture Institute for Health & Public Service Value, as well as Accenture’s experience serving public service organizations around the world, The Challenges to Government from the Multi-Polar World offers in-depth, public service-specific insights about the multi-polar world. The report delves into the drivers and dimensions of the multi-polar world for government. Just as important, it outlines the related challenges—and delivers recommendations for governments to achieve high performance.

The Challenges to Government from the Multi-Polar World clearly articulates the key trends that are affecting governments—namely, global political realignment, environmental degradation and the movement of people and demographic changes. The report also explores five key challenges facing government in the multi-polar world:

1. Developing national talent. To attract talent and business, as well as to compete effectively, governments need to develop coordinated, flexible talent-management strategies that help create distinctive national capabilities.
   
   
2. Managing the movement of people and money. In this multi-polar world, people, companies and capital cross national borders as never before. Governments need to develop coordinated social, economic, regulatory and immigration policies that meet the needs of industry and enable the mobility of people, capital and goods while ensuring security.
   
   
3. Enhancing social infrastructure. Social infrastructure is crucial to improving social and economic conditions, attracting investment and competing successfully within the multi-polar world. Governments need to enable citizens to access the global labor market by providing them with flexible skills; to protect their citizens against the vicissitudes of the global economy; to adapt local public services to meet the needs of domestic as well as migrant populations; to address the threat of global pandemics; and to reduce the impact that long-term price increases and volatile markets have on citizens’ welfare.
   
   
4. Protecting national security. As political, economic and social interdependence between countries increases, new threats to national security emerge. Resource and transit security, for instance, are major concerns for most governments, especially in situations where economies rely heavily on energy supplies from politically volatile regions.
   
   
5. Ensuring environmental sustainability. Addressing the impacts of environmental degradation while maintaining economic competitiveness is a major issue for governments. Developing alternative fuels, regulating the impact of business and consumers, encouraging research and building physical infrastructures that support the use of renewable energy sources are strategic priorities.

To respond to the challenges and exploit the opportunities of a multi-polar world and to meet the needs of their citizens and businesses, governments must think strategically and act both globally and locally. They must balance the need to promote short-term success and to address immediate, pressing problems, particularly in difficult economic times, with the strategic goal of positioning their countries for economic and social success over the long term. They need to understand the new dynamics of globalization around them—both its current impacts and its continuing evolution—and respond positively in domestic and international arenas. They must fashion these responses in collaboration with national and multinational businesses, not only to parry threats but also to produce tangible positive improvements in the economic and social conditions of their people.

Our research indicates that for governments to achieve high performance in the multi-polar world, they cannot simply do more with existing tools and methods. Rather, they need to focus public service policy and delivery not only on traditional service transactions, but also on the broader concern of creating public value. And they need to develop new, co-productive relationships with governments of other countries, with businesses and with their citizens.

For additional information about our Multi-Polar World initiative, visit www.accenture.com/mpw.