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Tuesday, May 18, 2010

Britain in 2010

In January 1991, the Policy Studies Institute (PSI) published a report called Britain in 2010. In 12 May 2010, contributors to the original report and other policy researchers gathered at the RSA for a seminar called Back to the Future, to take a retrospective look at the report.

How should we judge this report?

  • accuracy?
  • relevance?
  • practical effect on policy and governance?
How did PSI expect people to use its future projections? How did people actually use them? What effect did the existence of these projections affect outcomes? For example, to what extent were predictions self-fulfilling or self-refuting? To what extent did these projections help to reframe the political agenda?

Malcolm Rigg identified four criteria
  • useful numbers
  • important issues
  • helpful conceptual tools
  • making sense of the whole
Let's start by looking at the numbers. How reliable are such numbers, and if not reliable what use are they?

Policy-makers might argue that the relative numbers are more useful than the absolute numbers. If we know what commodities and capabilities are going to have greatest value in twenty years time, then that should influence our long-term development choices. If we assume that transportation costs are low, then we can expect certain types of work (such as manufacturing) to migrate to low-wage parts of the world. If services then become more expensive than goods, then cheap labour will move to those cities where people can afford them, and in their private lives even politicians (who should know better) are tempted to pay cash or turn a blind eye to their lack of documentation. The challenge for futurologists is not to identify these links, but to work out their cumulative effect over many decades.

But as Terry Barker pointed out, numerical predictions are sensitive to the pace of change - timing and inertia. Imbalances can build up, so it is not hard to predict that some collapse or readjustment will occur at some stage, but the exact scale and timing of this event is almost impossible to predict accurately. (This is rather like predicting earthquakes and volcanic eruptions - we know roughly where they are likely to occur, and we may even be able to assign a probability to an event in a given time period. but we cannot be certain.) And numerical predictions are also sensitive to extremely small differences in starting conditions. For example, tiny differences in relative prices can have a cumulative effect after many years - thus the manufacturing cost advantage of China over Europe has resulted in a significant global shift in economic power over the past twenty years, to an extent that was not fully appreciated in 1990.

So that's an important issue that failed to emerge from the numbers. Another important trend that was overlooked in 1990 was the rise of the internet. Obviously there was some interest in the socioeconomic potential of various technologies, but much of the attention at that time was focused on workplace technologies such as robotics, perhaps over-influenced by a belief in the economic primacy of manufacturing.

At the start of the seminar, Jim Northcott had mentioned the issue of policy inertia - taking a long time to shift strategic thinking to accommodate changing circumstances and demands - and suggested that policy makers were slow to abandon the assumptions of the cold war. But the economic importance of manufacturing, and the naive belief in the value created by financial services, could also be regarded as a form of policy inertia.

In his talk, Malcolm Rigg looked specifically at housing - an area that can easily slip below the radar of policy debate. Malcolm pointed to the enormous waiting lists for social housing, suggested this was because housing policy moves much slower than housing markets, and argued that therefore housing policies needed to be more flexible. But this assumes an acceptance of housing goals, whereas the defacto policy (POSIWID) is clearly to use waiting lists as an instrument of policy. Malcolm also mentioned the actions of Conservative governments (Heath as well as Thatcher) pushing through policy decisions that resulted in increased house prices and increasing housing shortages.  But policy analysts should not discount the possibility that governments might wish to influence housing markets for (short-term) political advantage.

Ben Martin talked about the relationship between forecasting and foresight. This is about creating the future, not just predicting it, and links to Fred Steward's insistence that reading current signs and trends had to be combined with articulating societal goals. Ben also talked about the parallels between policy studies and innovation, which implied that policy studies should be driven by a specific demand for policy insight, and mindful of the absorptive capacity of the client organizations.

Fred also spoke eloquently about the need for a new kind of evidence-based policy, based on practical experiments and learning-by-doing. Matthew Taylor endorsed this, and spoke of the importance of what he called civic invention - practical social action rather than merely sending pamphlets to ministers. This marriage between innovative thinking and practice is entirely compatible with our vision for the Next Practice Research Initiative.

Coming back to the numbers question, I was struck by the limitations of making forecasts in terms of traditional metrics such as GNP or growth, and I wondered about the role of policy studies in getting society to think in terms of more sustainable measures of well-being. In my question to the panel, I invoked the memory of Donella Meadows, and suggested that shifting the metrics counted as a more powerful leverage point in her model. Apparently John Kay (the economist and author of Obliquity) is currently working on this question. I look forward to seeing the results.

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