Trends in Local Government

Trends in Local Government

March 2016

Ron Steinkamp, CPA, CIA, CFE, CRMA, [email protected]

mailto:[email protected]

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Alliance for Innovation

Forces

Trends

Solutions

© 2016 All Rights Reserved Brown Smith Wallace LLP

Table of Contents

3© 2016 All Rights Reserved Brown Smith Wallace LLP

Alliance for Innovation

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• Mission = Inspire innovation to advance communities with the help of Arizona State University and the International City/County Management Association.

• Goal = impact organizations and communities, changing the way local government performs.

www.transformgov.org


Background

http://www.transformgove.org/

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• Looked at the next 20 years in local government to identify the next big things.

• Worked with experienced and emerging professionals, a global panel of subject matter experts, all lots of data.

• Identified 4 forces and 44 trends.


Report


Forces

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Resources Technology

Demographics

Governance


Four Forces

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• Availability of resources is tied to survival, so it is the most important force.

• Includes food, water, air, habitat, and other natural materials/resources.


Resources

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• The tools and knowledge we use to extract and transform resources into things that make our lives more comfortable and convenient, or to develop capabilities beyond our physical bodies that allow us to go places and discover new realities.


Technology

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• The “who” behind society’s changes. • People produce through our physical and intellectual labor.• Do we have enough working people with the right experience

and skill sets.


Demographics

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• Distribution and management of society’s assets (resources, technology, people).

• Administered through the rule of law and the rule of markets.• The most reactive force – changes in resources, technology

and people often run ahead of governments capability to deal with them.


Governance


Trends

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1. Climate Change - Climate change events (rainstorms, hurricanes, tornados, etc.) are growing more intense and the cost of damage is increasing.

2. Food Insecurity – As the planet gets hotter, droughts will drag on longer and with greater intensity leading to decreases in food production and increases in food prices.

3. Water Shortages & Access – Droughts will become more severe and have a huge impact on water availability. By 2030, half of the world’s population will live in “high water stress” areas.


Resource Trends

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4. Energy Grid Disruption – The U.S. energy grid is very complicated, unreliable and at risk from attack and natural disaster.

5. Mining – New sources of mining (fracking, deep sea) will unlock greater energy resources, but could cause environmental concerns.

6. The “NORC” Shift – The Northern Rim countries (Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and 13 U.S. States) north of the 45th parallel will realize longer growing seasons, increased food production, less ice enabling easier shipping routes and access to resources. These areas may also see massive immigration from other hotter and drier parts of the world.


Resource Trends (Cont.)

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7. Digital Citizens – More and more citizens are relying on the internet through computers, phone and web ready devices. Government must learn to leverage technology to become more relevant to citizens.

8. Sharing Economy – Eliminating the middleman to share resources, products and services between users via technology will become more prevalent. Government must figure out how or if to tax.

9. Education Reform – Student achievement in the U.S. is slipping compared to other countries. New models of teaching and learning will transform education and technology will enable it.


Technology Trends

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10. Open Innovation – Utilizing technology enabled participatory platforms to engage the public to solve community issues.

11. Behavioral Insights – We are wired to behave as others do. How government communications, forms, etc. are designed will impact outcomes.

12. Unmanning – New technologies will eliminate the need for some human workers. Research indicates that by 2035, almost half of all occupations in the U.S. could be automated.


Technology Trends (Cont.)

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13. Decentralized Manufacturing & 3-D Printing – 3D printing will replace manufacturing for many products having an impact on employment, commercial space and taxes.

14. Global Digital Currency – Global digital currency will become more prevalent transforming how assets are transferred and fees collected.

15. Carless Communities – The new generation no longer considers car ownership important for social acceptance. Bus, train, taxi, bicycle and car-sharing will increase in popularity.



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16. Infrastructure Overhaul – The U.S. infrastructure is failing and needs investment. It is estimated that it will cost $57 trillion to build and maintain worldwide infrastructure needs through 2030.

17. New Financial Partnerships – New partnerships will need to be formed to fund the infrastructure investments. Some examples are new investors (global investors, Public Private Partnerships, Crowd Funding, etc.)

18. Microgrids – We will see more microgrids (self-contained energy grids) because of State incentives, cheap electricity storage, increased likelihood of superstorms and cyberattacks.



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19. Off-Gridding – Local communities will generate more energy from renewable sources.

20. Electric Vehicles – We will see more electric vehicles.

21. Water Recycling – Due to higher temperatures and water insecurity, we won’t be using drinking water to flush toilets.

22. Desalinization – The demand for fresh water will attract new attention and investors.



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23. Nanotechnology – Increase in use of nanotechnology could result in changes in manufacturing.

24. Tech-Enabled Health Care – Transformation of healthcare based on technology.

25. Biomimicry – This is the study of nature to solve human problems. Research in this area will increase.



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26. Tribalism & Identity Politics – As communities become more diverse, local government must work hard to make all citizens feel included and represented.

27. Structural (Youth) Unemployment – Due in part to the global talent pool and investments made to automate factory floors and our lives, we could be facing a 20 year period of structural unemployment.

28. Civil Rights Spring – A young generation aching for a better future where rights, freedoms, and basic human dignity are upheld by their governments, who rule wisely and control police militarization.


Demographic Trends

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29. Mass Migration – Migration will continue to create dynamic population shifts.

30. Middle Class Map – The U.S. middle class will decrease from 18% in 2009 to 7% by 2030.

31. Elder Expense – Citizens over 65 will increase. When Social Security was first rolled out, there were 14 workers supporting every retiree. Currently, the ratio is 9 to 1 and it is projected that the ratio will be 4 to 1 by 2050.


Demographic Trends (Cont.)

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32. Urbanization – Mid-size cities (1-2million) are growing.

33. Rural vs. Urban – More people are moving to cities.

34. Smart Citizens – Progressive communities will focus more attention on citizens who engage with technology to make their lives more convenient or make their cities better.

35. Nomadic Workforce – Global recruiting will increase.



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36. Hyper-localization – As a response to globalization, some communities are going hyper-local (ex. Creating local currencies) and getting off the grid.



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37. Declining Federal Government Effectiveness – National governments are failing in the eyes of their citizens and are running into budget issues.

38. Trust in Government – Trust in government is at an all time low, especially at the Federal level.

39. City-to-City Collaboration – In the absence of national leadership, local governments will need to become more reliable and effective through collaborations.


Governance Trends

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40. VUCA Leadership – VUCA = Volatile, Uncertain, Chaotic, and Ambiguous. This is the environment in most local governments with falling tax revenues, staff retirements, increasing citizen expectations and more societal problems falling on local government to solve. Local leaders need to embrace the opportunity to reinvent government.

41. Citizen Engagement – Next generation citizens will not show up to place based events. Future-ready communities will need to determine how best to engage these citizens.


Governance Trends (Cont.)

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42. Direct Democracy – Residents are calling for more direct democracy – for example, participatory budgeting.

43. Corporate and Special Interest Influence – Money flowing into elections is up and will continue to increase. This will increase the need to focus on and maintain public trust.

44. Fiscal Uncertainty – As the nation and states transfer more responsibilities to local governments, budgets will be stressed resulting in more debt. This is in addition to rising pension and health care costs.


Governance Trends (Cont.)


Solutions

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1. Determine your community’s resource threats and opportunities

• Which resource trends (positive and negative) will have the greatest impact on your community?

• How is your community responding to these trends?

2. After resources, determine next areas of greatest vulnerability (Technology, Demographics, Governance)

• Does your community have plans to address these vulnerabilities?• What other information do you need to know to develop plans?• Who else needs to be involved?


Basic Solutions

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3. Invest in leadership development for elected officials and staff

4. Consider collective procurement• Coordinate purchasing through a central purchasing department or work through

a consortium.• How can additional savings be realized by extending this to other areas such as IT,

maintenance, professional development, etc.


Basic Solutions (Cont.)

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5. Strengthen community networks• When disaster strikes, local governments that have high-trust relationships with

organizations outside the bureaucracy rebound the most quickly and completely.• Map your networks. What community networks and relationships do you have?

How strong are these connections? • What connections are needed? How could you develop, expand and enhance

them?

6. Be a place for all people• Provide “Bias Awareness” training.• Make connections with diverse members of the community and invite to

participate.• Increase community engagement.


Basic Solutions (Cont.)

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7. Interdisciplinary, Innovative Local Government• Create innovation teams across government departments to break down

governmental silos and use interdisciplinary groups to address some of the biggest challenges.

• Convene broad community stakeholders to address cross-community issues.

8. Broaden your definition of Sustainability• Go beyond traditional environmental components to include economic and social

justice factors.• Consider a scorecard to report on environmental, social, and economic

sustainability goals.• Consider working with other communities to share best practices.


Intermediate Solutions

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9. Develop contingency plans for both rapid growth and decline

10. Balance the community’s focus on growth with quality of life


Intermediate Solutions (Cont.)

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11. The Fifty-Year Plan• Provides a set of guiding and enduring principles that can better withstand term-

by-term political pressure.• Enables a government to make long-term investments in infrastructure in a way

that feels appropriate to the time horizon.• Enables residents to think about their choices from their grandchildren and great

grandchildren’s perspectives.

12. Invest in Strategic Foresight• Process to help a community assess trends, explore possible futures, and determine

its future vision.


Transformative Solutions

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13. Invest in Open Government and Smart Citizens• Share community data and engage citizens digitally and through “old school”

methods.• Deepens trust.• Facilitates social cohesion and breaks down tribalism

14. Reinvent Local Government• Determine why the local government exists.• Determine how its purpose has shifted since the City/County was founded.• Determine what the role of government should be for the next generation.


Transformative Solutions (Cont.)


Questions?

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Ron [email protected]

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Trends in Local Government