Governance 4.0: Need In Times Of Emerging Challenges

Governance refers to the process of decision making of administration that ensures accountability, transparency, responsiveness, rule of law, stability, equity and inclusiveness, empowerment, and broad based participation. Governance is about the culture and institutional environment in which citizens and stakeholders interact among themselves and participate in public affairs.

• The world is transiting through an unprecedented crisis in the form of a deadly pandemic. Global issues such as - hunger and malnutrition, poverty, terrorism, corruption, protectionism, inequality, global warming, etc. requires a reformed governance structure. The Davos summit of World Economic Forum held in January 2022 proposed a novel version of Governance 4.0. It envisages a reformed global governance to address global issues.

What is Governance 4.0?

It is a new method of policy and decision making which is dynamic, adaptive, inclusive, and places people at the heart of decision making. It gives primacy to society and nature over businesses and governments. While traditional governance is focussed on outputs to achieve a goal, Governance 4.0 focuses more on outcomes and how it affects citizen’s lives.

Need for Governance 4.0

• The 21st century world, along with agendas of rapid economic growth, is also characterised by increasing political conflicts, deepening social divisions, re-emergence of infectious diseases, debt crises, and inadequate regulation of technology, global warming and climate change.
• Traditional governance systems made it difficult to harness new and innovative technologies, or even make effective use of existing technology. Traditional models of leadership are no longer relevant in addressing complex issues of global scale.
• The current emphasis of governance is based on a narrow conception of economics and short-term financial interests. Coordination and collaboration on global issues is missing even when the pandemic has highlighted the importance of governments being co-ordinated.
• Earlier models of governance which were based on the idea of a strong leadership, a capitalism based on shareholder’s interests, and crisis management with a short term strategy have failed to keep the people at the core of governance and address issues affecting their lives.

Limitations of Earlier Governance Models

• Governance 1.0: It commenced immediately after World War II. Public and corporate governance were marked by the rule of the “one man”: the elected or unelected “strong leader.” It was largely top-down in approach.
• Governance 2.0: It emerged in late 1960s and affirmed the primacy of material wealth and progressive global financialization. It was based on a narrow vision and it continued to prevail until the outbreak of the COVID-19 pandemic.
• Governance 3.0: It started with the onset of pandemic. It is based on crisis management with focus on operational thinking and is largely a trial-and-error approach.

Components of Governance 4.0

• Long-term Policies: It will replace short term crisis management approach with a long term strategic thinking with people at the core. Each stage of policy development is incremental and policies are continuously revised.
• Increased Participation: It will replace the top down approach of decision making with that of increased roles and responsibilities of all stakeholders such as businesses, independent regulators, citizens, civil society etc. as the world is highly complex and interconnected. Citizens, as well as business, can be regularly engaged for feedback and ideas on government policy-making through crowdsourcing.
• Agile Governance: It is a more innovative and flexible approach to governance and focuses on delivering value for citizens.
• Leveraging Scientific Methods: It involves more use of technology in policymaking such as regulatory sandboxes, test beds, laboratories, innovation spaces or experimentation programmes, etc. It helps governments to identify improvements in their governance systems.

Rapid changes in technology, emergence of decentralised systems such as blockchain, infectious diseases, climate change, biodiversity loss, and other socio economic issues adversely affect the lives of people. As the world changes, public and corporate governance must change. World leaders should not get stuck in the mindset of earlier governance models and should become the pioneers for a new age of governance.