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GP3Nov04: In Search of Governing Ideas Off the Map. In this month’s Harvard Business Review, our Managing Partner William Dunk implicitly asserts that most of the bright ideas in the world today are percolating out of the tiny countries at the edges of the earth, the oh-by-the-way nations largely ignored by us and the media we read. (See HBR, November 2005, pp. 19-20.) Finland cuts into heart and cancer rates with an ultra-aggressive public health program. Dubai becomes the economic star of the Middle East as a transportation hub. Australia produces 13 years of straight growth by natural resource exports combined with prudent control over the public purse. We have essayed about this phenomenon in “Falling off the Map.” Participative Democracy. In general, the major countries of the world are caught up in gridlock. While there are a litany of reasons why they have slumped into stasis, we would say that the core issue is that their peoples are not engaged with the fate of their nations. Democracies work when the vox populi is educated and is making itself heard. In other words, democracies work when the people act democratically. Otherwise, perverse and marginal interests control the political agenda. With the single exception of China, a party dictatorship no less, the people of the big powers are not in the thick of things. There, in the PRP, an exceptionally skilled leadership that comes out of the city-state of Shanghai combined with a national citizenry that is on the economic move, have produced dynamic public policy. Moreover, the UN, the World Bank, the EU, the NGOs, and the host of regional alliance organizations do not seem to point the way to effective governance. Their critical weakness is that they are really quite removed from popular control, and are, instead, the creations and creatures of bureaucratic policy wonks about the globe. Especially sad is the UN. It has become tatty, and, on a recent visit, we found that it had an autocratic, preachy flavor, and that its workers harp on what’s wrong with the world, dashing all the hopes it aroused at its founding. You will find a note on this on Big Ideas. November 2’s High Note. At this writing, we don’t have the electoral results in hand. But what’s promising about our presidential elections is not our two main presidential candidates, both of whom lack a forward-looking program. But, by all accounts, record numbers of people are making it to the polling booths. This, at least, gives us the hope that we might once again become the cradle of democracy. In broad participation lies the hope that we might take up substantial concerns and overhaul the whole of our rusty infrastructure (to include health, education, and our senior benefits schemes), which is both broken and outdated to such an extent that it is a drag on our economy and everything else. Who Is Well-Governed? First off, we don’t know. It’s not altogether obvious in 2004 what a country should be trying most to achieve or how its governors can really help. Jeffrey D. Sachs, a development economist shaped by Harvard who now heads up Columbia University’s Earth Watch Institute, thinks Nirvana resides somewhere in Scandinavia. “Consider just about any social indicator—income per capita, health, democracy, economic competitiveness, environmental consciousness, honesty—and the Nordic world of Iceland, Norway, Denmark, Sweden and Finland is sure to shine.” The UN and Transparency International also give the Nordic Tribe high marks. “On the combined Human Development Index, Norway and Sweden ranked first and second in 2004 out of 175 countries.” (See Jeffrey D. Sachs, “The Best Countries in the World, Newsweek, July 26, 2004.) Before you sell your house, quit your job, and buy airline tickets to the North Country Fair, you’d best pause a minute, do a little soul searching, and probe further to see if the ice people have got it right. The Swedes, for instance, are notoriously morose: their full cup always seems half empty when you join them in conversation. The wrenching movies of director Ingmar Bergman paints their troubled persona in black and white—an endless psychodrama below a placid surface. Maybe you should look to Gross National Happiness, the goal espoused by Bhutan which we discussed in “The Kingdom of Happiness,” instead of the laundry list of indicators worshipped by economists and social scientists. We have learned that happiness is much higher in unlikely, unprogressive places like Nigeria and El Salvador, at least according to the people who survey such things. There’s more than a little commentary that suggests that Western concepts of progress have very little to do with happiness or spiritual achievement. Even Aristotle, back at the beginning of the West, regarded technology—the porous foundation on which the West is constructed—as a very mixed blessing. Good governance reaches well beyond the technocratic development indexes so cherished by the social scientists. Small Is Beautiful. E.F. Schumacher’s notions were a bit romantic (see www.schumachersociety.org). Nonetheless, we are inclined to think he got it right, in ways he did not imagine, in his Small is Beautiful. Theory aside, we just have a bias for small countries, and we don’t thing the world has figured out how to run countries of 100 million or more. By this measure, Europe is going in the wrong direction, and the constitutional treaty 25 leaders of the European union just signed is not a recipe for excellence We would look to Iceland, Finland, Dubai, Ireland, Singapore, Australia, and other venues for societal models we should appropriate. “Off the map” countries not only provide new, great ideas but they have clues about good government. Notice that these are not all democracies, nor are they particularly homogeneous. They just manage to get along and go along. Just as the 21st century is to see the flowering of nanotechnology, we expect it will also learn to celebrate the nano-state. Big Beliefs. We suspect that small countries that shine will aspire to big things. Elsewhere we have said that societies need big men, and behind big men come big beliefs. See our Letter and Dictum, “Big Beliefs Make Big Men.” Getting behind big ideas is the tough challenge for Russia, the U.S., Germany, and Japan, which are consumed by distractions and too mindful of the 24-hour concerns churned out by their broadcast media. Their leaders are diminished because they’re climbing up small hills, not mountains. Better to be a small nation pursuing big ideas, than a big nation after the trivial. Singapore now has ambitious technology goals as a matter of national policy. Bhutan, as we have said, is first in the world in putting happiness forward as the legitimate goal of government. The Payoff. We don’t know why, but the developing economies are doing very much better than the developed nations at the moment. “Growth in emerging economies is running at its fastest for at least three decades.” The IMF expects emerging and developing economies to charge ahead 6.6% this year. Since 2000, they’re going at 2 ½ times the rate of the developed nations (See The Economist, October 16, 2004, pp. 67-68 and Agile Companies.) Apparently, the richer nations are squandering resources and aiming at the wrong targets, the result perhaps of poor governance. Maybe the reason for this lies in the urban dominance possible in small countries. Urban planner Jane Jacobs, in her Cities and the Wealth of Nations and in other works, postulates cities—not business firms, not central governments—are the core economic units that drive economies. We think cities can more easily determine the life of small nations, but lose their power when countries become too diffused and complex. It may be that the city is more of a power in both small and developing nations, creating an intensity and national focus not available elsewhere. If you’re an agile company today, you’d best steal ideas from the Third World and small countries. As importantly, you will want to do business there, since they are growing, and the developed nations are stuck in the slow lane. Finally, as a company and as an individual, you should feel compelled to invest there. |
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