Digital Government Strategy Phase 1 – Discovery report

1. Digital Government Strategy Phase 1 – Discovery report ‘e kōre e taea e te whenu kotahi te whāriki te raranga’ — ‘one strand alone will not weave a tapestry’  

2. This Discovery Report presents our findings from the research stage for the Digital Government Strategy We plan to develop the Digital Government Strategy iteratively over three phases. This Discovery Report concludes phase 1 – Understand. Understand Jun – Jul Engage Aug- Sep Co-create Oct - Nov • In the Understand phase, our research and analysis covered a wide range of topics relating to the digital transformation of governments. This report highlights the complexity and the interconnectedness of what digital transformation really means and provides a lens into the scale and scope of change. • We have: • assessed and curated research by academia, research institutes, industry, and thought leaders throughout New Zealand and globally,  • reflected on our progress to date anddrawn on lessons learnt, • drawn on existing research and engagements from within government, • evaluated the ambitions and strategies of other jurisdictions, and • debated a number of well-established and emerging disruptive trends. • Our findings are presented through a number of emerging themes and questions for further exploration through a series of inclusive engagements, as we co-create the Digital Government Strategy. CORE TEAM SONITHA ANIRUTH JARROD BAKKER SARAH CASEY JAMES COLLIER LEE DOWSETT TOM ILLINGWORTH MIKE SMITH ADAM STAPLETON DIGITAL GOVERNMENT STRATEGY Discovery Report System Transformation Department of Internal Affairs Te Tari Taiwhenua

3. Contents • Section 1: Context • The Government aspires for NZ to be an inclusive country delivering intergenerational wellbeing • A bold ambition has been set for digital – All New Zealanders are thriving in a digital world • We have built a strong foundation for digital transformation • The drivers for change are fast, complex and demanding • Chief Executives set a challenging inquiry for the Digital Government Strategy • There are interlinking government initiatives • Section 2: Analysis and Insights • There’s no escaping the digital era – it’s already here • Digital is about more than just technology • New Zealand is increasingly digital and government needs to keep pace • Digital 7 Nations– A shared goal to strengthen digital transformation • A snapshot of what other governments are doing • Some global exemplars • Section 3: Emerging themes and changes we need to make • Emerging themes • Role of government in a digital world • Modernising system settings • Investing for the future • Section 4: Next steps • How might we reimagine experiences and reshape the system? • Shaping insights through engagement

4. Section 1: Context • The Government aspires for NZ to be an inclusive country delivering intergenerational wellbeing • A bold ambition has been set for digital – All New Zealanders are thriving in a digital world • We have built a strong foundation for digital transformation • The drivers for change are fast, complex and demanding • Chief Executives set a challenging inquiry for the Digital Government Strategy • There are interlinking government policies

5. The Government aspires for NZ to be an inclusive country delivering intergenerational wellbeing Government priorities The Government is committed to achieving outcomes that will enhance intergenerational wellbeing of New Zealanders. These ambitions are reflected in Government’s priorities. • A bold ambition has been set for digital - All New Zealanders are thriving in a digital world • Digital becomes the foundation of an adaptive government that can respond at pace to deliver value to citizens and will be a key means to achieve these priorities. • We will have to change what we do and how we do it by embedding human-centrednessinto our operating practices and workforce. • We need to re-architect government for integration, speed and agility: • reimagining experiences by co-designing with key stakeholders, civil society and partners, • working in new operating models and practices that are adaptive and responsive, • adopting emerging technologies; understanding the value-risk trade-offs, • creating the right conditions and capabilities that enable others to access government data, business rules and common capabilities, • enabling participation in government through inclusion, trustworthiness and openness, and • demonstrating leadership that balances seniority withexpertise, reflected through contemporary talent development approaches. • This will equip us with the mind-sets, skillsets, technologies and data so that people, the economy and government benefits. 1 • Building a productive, sustainable and inclusive economy • Grow and share New Zealand’s prosperity • Support thriving and sustainable regions • Transition to a clean, green, carbon neutral New Zealand • Deliver responsible governance with a broader measure of success 2 • Improving the wellbeing of New Zealanders and their families • Ensure everyone is earning, learning, caring, or volunteering • Support healthier, safer and more connected communities • Ensure everyone has a warm, dry home • Make New Zealand the best place in the world to be a child 3 • Providing new leadership by government • Deliver transparent, transformative and compassionate Government • Build closer partnerships with Māori • Value who we are as a country • Create an international reputation we can be proud of A digital government has a role to play in enabling the achievement of these goals for New Zealand. The digital era we are in presents opportunities for us to do things differently: to leverage the connectedness of society, economy and government.

6. We have built a strong foundation for digital transformation Digital Transformation 2018 to 2030 2030 2030: NZ is a smart society 2025: society, economy and government, together deliver sustained public value 2025 2022: A digital mind-set and skillset is pervasive in government 2022 2020: Principles for ethics, trust and inclusion are at the heart of what we do 2020 2017: The GCIO’s role and responsibilities expanded to GCDO to drive digital transformation across government Functional Leadership 2012 to 2018 2015 2014: GCIO mandate extended 2013: Government ICT Strategy and Action Plan 2012: ICT Functional leadership established Shared Services 2008 to 2011 2010: The GCIO moved to an operational agency to combine its strategic ICT leadership with operational expertise 2010 2008: GCIO and a Shared Services function established E-Government 2000 to 2007 2005 2001: New Zealand’s first e-Government Strategy 2000: e-Government unit formed 2000

7. The drivers for change are fast, complex and demanding • We are in an era of global digital transformation where the pace of change, the sharing of knowledge and instantaneous communication is changing citizen expectations of government. • The State sector is not immune to digital disruption and governments are under sustained pressure from citizens to be more agile and deliver greater value in shorter time periods. • Delivering faster value to New Zealanders will require us all to work with digital mind-sets and skillsets. This ambition currently experiences a tension with the traditional paradigm that was shaped through the 1980s State Sector reform. Bringing innovation, adaptiveness and agility is vital for government’s digital transformation to be successful. • We need to create a sense of urgency across government to change. This will need to be informed by an understanding of the scale and complexity of change and what it means to be government in a digital world so that no one gets left behind. • Harnessing the capabilities of digital offers opportunities for achieving growth and equity for all New Zealanders to thrive. This is government co-evolving the social contract with citizens so that they can participate in a smart, intelligent world.  “When it comes to innovation, the edge is the place to be” Rt Hon Jacinda Ardern Prime Minister

8. Chief Executives set a challenging inquiry for the Digital Government Strategy In May 2018 the Chief Executives who make up the Digital Government Leadership Group (DGLG) commissioned the development of a Digital Government Strategy, setting the inquiry of: “How might we reimagine experiences of citizens and businesses and reshape the system  if we were designing government for a digital era?” • Objectives for the Digital Government Strategy • Define the role of government in a networked world. • Create the linkages for the alignment with the Aotearoa New Zealand Digital Strategy. • Develop digital leaders, at all levels, and capabilities that embrace and advance leading edge innovation and creates the conditions for New Zealanders to leverage government’s digital assets. • Modernise the system design to take advantage of new ways of working and incentivising system outcomes. • Define our “Digital DNA”as an overarching set of qualities that enables us to deliver the cultures and experiences of a responsive government. Connectedness The digital era is characterised by connectednessof people, data, systems and connectedness across and beyond boundaries of organisations and geographies. The public service operates in this increasingly connected environment, so we cannot think of digitalgovernment only as individual agencies or only as government in isolation. Working in silos will only address single problems and cannot appreciate the nuance and complexity of the wider ecosystem. We have to think in an integrated way and work across the boundaries of society, economy and government to unlock new types of public value. Government’s role changes from controller to orchestrator, co-creator and enabler.

9. There are interlinking government policies • There’s a lot going on within the broader system of government that requires an integrated response. We need to share knowledge, leverage strengths, and work towards shared outcomes. This is the digital mind-set; fostering stewardship, collaboration and participation. • Digital Rights Framework • The Framework will specify the role of government in a world where digital rights are human rights in a digital world. • State Sector Reform • The programme aims to transform the system of the State Sector by focussing on providing better results and services for New Zealanders. • Cyber Security Strategy refresh • The refresh will consider whether government has the right resources and arrangements to address the increasing cyber threats facing New Zealand. • System initiatives • Data Strategy • Government has a unique role to play in laying the groundwork for the future data system • Living Standards • The Living Standards take a more holistic view of the value our investments deliver, and will take a critical role in informing the shape of policy development • Open Government Partnership • New Zealand is a signatory to the Open Government Partnership and is striving to improve openness and engagement between government and citizens • Digital Inclusion Blueprint • The Blueprint will deliver to a future where all of us have what we need to participate in, contribute to, and benefit from the digital world. • Key system stakeholders • Digital Government Leadership Group • Government Chief Data Steward • DEDIMAG • Future of Work Forum

10. Section 2: Analysis and Insights • There’s no escaping the digital era – it’s already here • Digital is about more than just technology • New Zealand is increasingly digital and government needs to keep pace • D7 – A shared goal to strengthen digital transformation • A snapshot of what other governments are doing • Some global exemplars

11. There’s no escaping the digital era – it’s already here Generational change and other shaping forces are transforming the world in fundamental ways and the pace of change is accelerating. We already live in a “digital society” and the technologies propelling it are affecting every aspect of our lives – how we work, interact with each other, participate in our democracy and how we see ourselves. New Zealanders are participating in an on-demand world – television is on-demand, movies are on-demand, travel and taxis are on-demand, holiday accommodation is on-demand. It’s about having the trust and ability to interact, engage and transact when and where they want to and how they want to. The digital world is not only about websites, self service and portals. It’s about information flows, data, digital communities, social connectedness, privacy, rights, ethics, as well as enabling technologies. This creates fertile ground for government to harness the potential of this changing environment to better serve people and to function better as government.   We know that business practices will change the next generation of government services. We know that how we interact and engage with people will change. We know that some jobs will disappear and new ones will emerge. We know that the ways of working needs to change in order to create a system of government that is open, transparent and human-centred. We know that the networked world we co-exist in requires us to break down siloes and develop new forms of collaboration. We know that we will need to work closely alongside people, community groups, local government and industry partners, to find new and innovative ways to deliver government to New Zealanders in a digital world. We know less about how the implications of digital innovation will play out over time. Digital offers opportunities but also surfaces new risks that require a collaborative response so that we can navigate through change that delivers intergenerational wellbeing. Skillsets Technology Mind-sets Data

12. Digital is about more than just technology • “Digital means doing things differently in an increasingly connected world - using new mind-sets, skillsets, technologies and data to benefit people, government and the economy.”  • Mind-sets • The values and core behaviours that define how things get done is the cornerstone of a digital government. The concept of the “ Spirit of Service” leads us to how we should deliver government to New Zealanders. In a digital era, we need these values to reflect the characteristics of digitally ready environments as described by Boston Consulting Group: • promoting an external, rather than an internal, orientation • prizing delegation over control • encouraging boldness over caution • emphasising more action and less planning • valuing collaboration more than individual effort. Skillsets Digital is creating new types of service experiences and operating models that require new skills and ways of working. Skillsets are a combination of behavioural, cognitive, and technical competencies that draws on people’s abilities to solve complex problems. Working in multidisciplinary, multigenerational, and multi-stakeholder environments is a hallmark of digital as it brings diversity into the design and delivery of policy and service to New Zealanders. Currently, innovation happens on the fringes and connects people, good practice and opportunity. Embedding innovation into our “digital DNA”creates opportunities for growth and life-long learning. In a world of machine learning and algorithms, we will need to pair people with machine decision-making. This will grow skills in data science as well as human-centredness, where qualities such as empathy and judgement will complement the efficiency and scale of machine-generated decisions Skillsets Technology Mind-sets Data

13. Digital is about more than just technology • “Digital means doing things differently in an increasingly connected world - using new mind-sets, skillsets, technologies and data to benefit people, government and the economy.”  Technology Government is carrying a large technology legacy and has embedded practices and processes. We need to make different technology and sourcing choices than we do now. The shift is from large scale bespoke systems to iterative capabilities utilising open standards and data sharing. At the same time, a new wave of exponential technologies are enabling new types of experiences. These technologies come with risk and opportunity, and as they converge we’re going to need to work with industry and academia to co-regulate and define the ground rules. Our challenge is to understand more about the likely impacts on our society, economy and government so we can adapt and take full advantage of the opportunities disruptive technologies present. Data Data is a valuable asset and can produce meaningful insights and evidence to inform policy and decision-making. It offers the potential for government to meet citizens and businesses how, where and when they want, through responsive services that utilises data and insights. Government’s vast holdings of authoritative data are currently not widely discoverable or available for reuse. The potential to leverage this asset to reimagine experiences and create economic value is significant. However, this cannot be achieved without due care being paid to the trust and confidence relationship (social licence) between government and New Zealanders. Skillsets Technology Mind-sets Data

14. New Zealand is increasingly digital and government needs to keep pace 93 % of New Zealanders have access to internet in 2017. 80% of households have an internet connection • New Zealand’s pace of digital adoption is fast. But government’s pace of adoption is slow, resulting in a disconnect between: • people’s experiences and expectations of digital in their daily lives, and • government’s ability to respond to complexity and new operating models. • In order to keep pace, our challenge is to reimagine experiences and reshape the system for government in a digital world. • Government has the responsibility to provide equitable and inclusive opportunities for everyone to participate in a changing society and to support those who choose not to, or who are unable to, use digital channels in transacting with critical services. Openness, transparency, and the rights of people are at the core of having a trustworthy government. • As the connectedness of people, data, systems, and geographies becomes more pervasive, the boundaries between society, economy, and government will continue to blur. In this context, government has an important role to play in ensuring that the right conditions and capabilities are in place for New Zealanders to thrive. 47 average time in hours New Zealanders spent a week using a smart device in 2016 12 petabytes of data went through school networks Jan-June 2018, almost double from the same period last year 8.72 % of students enrolled at NZ tertiary education providers in 2017 studied within the field of information technology 28,749 Businesses formed the technology sector in 2015 $8.6m invested in early-stage Agri-tech businesses in 2017 1.3 % of GDP is spent on R&D, and this is increasing to a ten-year target of 2% < 3 integrated government services in 2017

15. D7 – A shared goal to strengthen digital transformation Digital is situational – driven by user needs, in open partnership for the delivery of outcomes. Digital transformation is high on the agenda of governments and each brings a different focus to reflect the needs of their citizens, society, economy, and government. Each jurisdiction carries strengths in different areas and are at different stages in their maturity journey, for some this comes with strong political support and mandates and is deeply embedded in their public reform agenda. • The D7 nations have the following common areas of focus in their Digital Strategies: • Ensuring connectivity with citizens with fair access to digital services regardless of background or status.​ • Creating and fostering an environment for businesses to grow. Existing businesses need to be incentivised to transform and new businesses must feel that the government will support them.​ • Innovation requires support from central government - it should not be the privilege of well funded organisations to be bold.​ • Investment in digital talent is required for everyone to thrive in the: home, workplace, country and world. The D7 Charter

16. A snapshot of what other governments are doing • Every government has a different focus and is at a different stage of maturity. • Distinct to their culture and environment, other jurisdictions are exploring their commitments to digital leadership and culture, inclusion and equity, digital infrastructure, operational efficiency and online services. • Australia’s Digital Transformation Agency is leading on user-centred design, using agile methodologies, and having strong technology skills and assurance capabilities. • Canada [D7] is focusing on improving the people-government interaction by optimising business practices and digital technology choices to increase operational efficiency and cost-effectiveness. • Denmark is leveraging their digital transformation to grow opportunities that allow people to participate in and provide input on government decisions. • Estonia [D7] is a country which has consciously chosen a path finder role, adopted rapid reforms, and been a role model for the creation of new solutions built on a strong architectural foundation. • Israel’s [D7] priority is to use digitisation to alleviate the significant soci-economic gaps among disadvantaged populations. Their innovation in cybertech is core to their economy and industry priorities. • Japanis building on their foundations and focusing on changing the culture and operating model of government for a digital world. • Mexico has adopted a multi-channel approach to delivering government services based on the needs of users. • New South Wales aims to remove legislative barriers where appropriate, support new legislation to be ‘digital by default’, and review existing legislation to support the release and access of quality data. • Ontario have combined Digital Government and Consumer Services portfolios, at Ministerial level. • Singapore is pursuing a Smart Nation strategy where capability building and advanced sensor networks are core to Singapore’s digital direction. • South Korea’s[D7] Government 3.0 paradigm is being used to deliver services that are centred on citizens and their daily routines. • Sweden’s is driven by a future where “Digitally skilled and digitally secure people are able to drive innovation, where determined leadership and infrastructure are important prerequisites.” • UAE has a strong vision and appetite for innovation, driven by the Ministry of Cabinet Affairs and the Future. • United Kingdom [D7] has rationalised its web domain and developed a single point of entry to government. They continue to use Digital technology to drive change in working and culture to serve everyone. • Uruguay [D7] has focused on closing the access divide by bringing mobile and internet technology to its citizens and has a universal access plan which provides 1GB/month free.

17. Some global exemplars Canadian Open Data Exchange: a partner network focused on simplifying and enhancing access to open data for commercialization purposes in Canada. Canada Centre of excellence on design thinking and lean methodologies. Digital services are being used to allow people to participate in and provide input on government decisions. Denmark e-Residency: a government-issued digital ID available to anyone in the world. Allows anyone is start and run a business in Estonia. Estonia As the Digital Government Strategy clarifies the priority needs and opportunities for New Zealand, we will be able to learn from the best around the world to accelerate digital transformation of the New Zealand Public Service The education sector is embracing AI, automation, and robotics to proactively support citizens to sustainable employment amidst global trends of automation. Finland Digital Leadership Programme in partnership with Harvard Business School Israel Songdo: a smart city by design. Sensors monitor everything from traffic flow to energy use. Republic of Korea Smart economic hubs will continue to be developed through mandated ICT funding and a unified strategy to create innovation initiatives. United Arab Emirates GDS Academy: The GDS Academy teaches civil servants the digital skills they need to transform public services. United Kingdom Digital inclusion – including a universal access plan (1GB/month for free), fibre network roll out, and laptops to all schools and students. Uruguay

18. Section 3: Emerging themes and changes we need to make • Emerging themes • Collectively reimagine experiences • Uplift workforce skills and culture • Embrace new leadership models • Redesign system settings • Establish solid digital foundations • Deeper Dives • Relationship between government, economy and society in a digital world • Modernising system settings • Investing for the future

19. Emerging Themes The emerging themes provided a response to the challenge that the Digital Government Partnership set: How might we reimagine experiences of citizens and businesses and reshape the system if we were designing government for a digital era? The insights we have developed tells us that, in order to achieve a digital transformation of the public service, leadership and culture, our workforce skills and capabilities, and our operating capabilities will need to be reshaped. This reshaping will enable us to be responsive to the forces of change, the pace of change, and the expectations of New Zealanders. The five themes identified are interconnected and give us a mechanism through which we can develop a strategy that takes us on the pathway to a digitally transformed public service. Identifying where to prioritise investment in people and technical capability will be a focus for the next phase of engagement. Through our research and engagements, a number of themes emerged.

20. Collectively reimagine experiences • Listen to and learn from people and businesses so that experiences with government are reimagined and designed with them The constituents we work for are critical. People and business are central to government policy, service and innovation. We need to put them at the start, the centre, and the end of everything we do. This means understanding their needs and their individual journeys by discovering and engaging with them, and ensuring that we have the skills and capabilities to listen and learn. This is integral to ensuring inclusion, participation and accountability which are values that are intrinsic to New Zealand. Innovation and systems thinking enables us to take a holistic approach to address complex challenges and to reimagine experiences through collaboration and openness. Fostering a culture of experimentation and quick learning has the potential to make the delivery of government solutions responsive and human-centred. To collectively reimagine experiences, how might we? Mainstream innovation: Practices such as design thinking and co-creation are useful for problem-solving. These competencies should be adopted across organisations and not just in ‘innovation teams’. Adopt system thinking: We need to take a holistic view of society and economy alongside the capabilities and priorities of government. This approach should be central to policy formulation and service design. Build partner ecosystem: Open up government information and processes to industry, academia, and not-for-profits to deliver public services that meet people and businesses where they are. … what else might we do?

21. Uplift workforce skills and culture • Invest in reshaping a workforce that is engaged, empowered, and equipped to thrive Work is changing and as we become an increasingly digital government people will need to have a composite skill set made up of behavioural, cognitive and technical competencies. This will enable complex problem solving alongside subject matter expertise amplified through a culture of experimentation and customer-focus. Life-long learning characterises how people will grow and build skills to develop career paths that build a diversity of professional capabilities from a range of experiences and that are not linear in its design. We need leaders to adopt flexible, facilitative non-hierarchical ways of working. The shape of teams will change to be multi-disciplinary and drawing on the best able and most appropriate resources from within and outside of government. Interconnected networks (people, process, and systems) are a core feature of digital environments. Co-creation and collaboration will become core to the ways we work and reflect the culture and core values of the public service. Innovation should not only be ring-fenced into hubs or labs as it is a core problem solving competency and these mind-sets should pervade organisational capability. To uplift workforce skills and culture, how might we? Adopt new ways of working: Empower our people to use judgement to deliver results. This enables people to use ways of working and methods which support what they are doing. Build new skills: Our people need a mix of behavioural, cognitive, and technical competencies that are continuously refreshed so that we can be responsive to change. Create diverse teams: Solving complex problems requires multiple perspectives that are equally valued. Multidisciplinary teams with diverse attributes, skills and backgrounds are found to be efficient and effective. Connect professions together through collaborative communities. … what else might we do?

22. Embrace new leadership models Flattened hierarchies, multi-disciplinary networks and adaptive leaders flexibly respond to emerging opportunities and the pace of change A new style of leadership is required to provide direction and facilitate change in a dynamic environment. The nature of government as an institution, requires positional authority (related to role and responsibility) to govern and hold accountability. Adaptive leadership is required so that positional leaders and knowledge leaders (at all levels) can chart a course through a dynamic environment where they cannot predict the outcomes. This creates a leadership approach that distributes accountability, works with diversity, and learns through experimentation. The incentive system should reward leadership at all levels. To embrace new leadership models, how might we? Change the incentive model: Value collaboration, partnerships, and leadership at all levels. Incentivise behaviours that champion openness, partnership and cross government collaboration. Empower knowledge leaders: Move away from a culture of managerialism to value and empower knowledge leaders by distributing some decision rights and accountability to them. Lead through facilitation: An adaptive leader distributes accountability, works with diversity, and learns through experimentation. This style of leadership is able to lead through uncertainty and empower a workforce to perform. Encourage flexibility: Trust teams and talent. Leaders need to be able to work with diverse views, focus more on action than planning, and work cross-functionally so they have the flexibility needed to pivot towards new solutions. … what else might we do?

23. Redesign system settings • Reshape features of the public management system so it enables digital government New value cannot be realised through outdated business models, management approaches and ways of working. The fundamentals of our public management system need to be reshaped so that we can deliver better public value that focusses on customer satisfaction and experiences, wellbeing, safety and protections, fairness and equity. Digital government is not only about automating or digitising processes and putting services online, but is about creating the right conditions and capabilities for an enduring and sustainable system of government for a digital world. The system settings are an important mechanism of change as they shape the culture, behaviours and operating model of government. Several dimensions of the system settings need to be reshaped for the digital era, including those that underlie governance, investment, technology and procurement practices and incentives, to which all roads lead. In order to create a digital government for a digital world investment in change, over a sustained period, is required. To redesign the system settings for digital, how might we? Rethink norms and practices: Create the conditions and capabilities for an enduring and sustainable system of government that can reimagine experiences, uplift workforce skills and culture, and transform the leadership model. Several dimensions of the system settings need to be reshaped, including those that underlie governance, investment, technology and procurement practices Encourage experimentation: Foster experimentation and iteration, and take new approaches to managing risk. Invest for the future: ‘Digital’ offers new ways of problem-solving that does not require large-scale capital investment. It is better suited to incremental investments that allows for fast course-correction. Multi-agency initiatives need a clear path to funding and ongoing operations. This investment approach will enable government to be more cost effective. … what else might we do?

24. Establish solid digital foundations • Adopt appropriate policies, frameworks and toolkits, complemented by technical capabilities that encourage and enable openness and participation • Strong digital foundations are required for government to participate in digital ecosystems. These foundations come in the form of modern policies, frameworks, and standards, complemented by the technical capabilities to serve as a base for rapid development and implementation of innovation. • Core capabilities are likely to include: • policy to support inclusion and participation; • policy to inform an ethical and rights-based approach to digital and data opportunities; • adaptive rules and conditions so that co-creation and innovation can flourish in a dynamic environment; • an open and transparent government, contributing system capabilities and assets for reuse; • resilient and secure technology infrastructure such as digital identity and data platforms. To open up participation with solid digital foundations, how might we? Open digital infrastructure: Government needs to operate as a “platform” in which data, processes, and business rules are shared, open, and reusable. This requires safeguards to foster trust and confidence in government. Champion Ethics and Rights: Make transparency, openness, privacy, inclusion, and social licence central to what we all do, to encourage responsiveness. Enable transformational technologies: Some emerging technologies have the potential to fundamentally reshape the way government operates and the way services are delivered. Multi-stakeholder governance, from within and outside of government, allows us to be responsive to emerging technologies and address any negative consequences of disruption. … what else might we do?

25. Relationship between government, economy and society in a digital world • As technologies converge, public services will be co-created and data will be generated and collected in abundance by non-governmental partners. The roles of the public and private sectors will blur. Government has a new set of operating conditions requiring a new kind of responsiveness. • Government is facing a step change because the world it operates in is changing and becoming more complex. This means new problems, new technologies and new ways of viewing things. The role of government in this world will change, and increasingly the issues the state sector needs to respond to are big and intractable. In a networked environment where torrents of data are generated, every policy and service design has to consider issues of data security, privacy, access and stewardship. • We are talking about a change in how decisions are made and then delivered. We are talking about distributed networks and systems that embrace new ways of working. We are talking abut multi-stakeholder governance. We are talking about new ways in which we bring talent together, from within and outside of government. We are talking about openness and transparency. We are talking about trust and confidence in government when government does not “own” value chains end-to-end. We are talking about flattening structures and empowering leaders at all levels. • Creating the right conditions and capabilities for a digital government will involve changing a range of characteristics in the administration: • the policy instruments used by government to intervene in society the economy and environment to make change, • the system settings that support these policy instruments, and • the mind-sets, skillsets and toolsets available to all. • We will need to: • Rethink approaches to leadership, investment, procurement, incentives, policy development, service design and delivery, and regulation • Understand and learn what citizens/businesses/society might need to allow them to engage and enable them to take advantage of new systems, tools and ways of engaging • Reshape functions, system settings, possible organisational forms and change management in order to optimise the opportunities that digital presents (joining up) • Reset decision rights and accountability . “I could not imagine a topic that is more important for the future than the relationship between government and innovation… …bureaucracy needs to be replaced by meritocracy” - Klaus Schwab, World Economic Forum

26. Redesign system settings We have to disrupt ourselves in order to create a government for a digital era. The data, investment, risk and governance approaches to service delivery and policy development need to be re-architected for speed, agility, and integration. • Responding to a digital world cannot be achieved using outdated business models, management approaches and ways of working. Society now requires us to be open, innovative, faster, more economical and responsive to change, while also making good decisions and not being wasteful.  • The current operating model of government was designed as part of the 1980s State Sector Reform and served well for the paradigm in which we lived characterised by managerialism. Now that we live in a digital era the fundamentals of our public management system need to be reshaped so that we can deliver public value that focusses on better customer satisfaction and experiences, wellbeing, safety and protections, fairness and equity. These are cornerstone to being a digital government in a digital world. • The 2012 changes to the State Sector Act and the Public Finance Act didn’t go far enough to think about and address the operations and culture of government for a digital world. With the current review underway there zre huge opportunities for the changes to Public Finance Act and State Sector Act to prepare government for a digital world. This will require the highest levels of legitimacy and support. Changes to the legislation will need to translate to changes across a range of system design settings and behaviours. And such a change will need to have operating models that are adaptive and responsive so that value can be delivered to the public. This type of change is multi-dimensional, complex and applies across the design of the public administration. It is change that needs to be enduring as it reshapes the system with mindsets, skillsets, data and technologies to serve New Zealanders in a digital world. If we do not modernise our system settings we will continue to apply old world solutions to new world contexts. As a consequence, we will fail to meet the needs and expectations of New Zealanders. “At present the public management system restricts ‘joined-up’ work… …the current output focus should be complemented by an equally strong focus on outcomes” - Peter Hughes, 2012

27. Investing for the future Funding and procurement processes were designed for investment in traditional, capital assets and physical infrastructure such as roads, hospitals, and schools. By nature, these require large scale projects where the output and build process is relatively known, and therefore uncertainty is relatively contained. Digital provides new opportunities and ways to solve problems through modular, scalable investments. This necessitates a rethink of the design of the investment system that leads to long-term sustainability. Digital and ICT are the fastest growing asset classes across government, though their investment is being driven through traditional investment, procurement, and governance mechanisms and practices. The current mechanisms are a barrier to innovation because they are monolithic and seek to have all of the answers up front in a “big business case” approach. This is prohibitive because it locks us into prescriptive solutions and technologies, without the flexibility to adapt as we learn more. This approach is unsustainable as it was designed for an industrial and manufacturing era. Incentives and risk appetite across the system are misaligned with the environment that requires an empowered learn-by-doing model, that promotes experimentation. Digital enables us to tackle problems or opportunities that are often complex, or have a high degree of uncertainty, with quick learning. These complex problems also often cut across agency boundaries, which are currently challenged by siloed funding and governance approaches. Investing for the future is about having a coordinated and integrated view of the capabilities (people, technology, and data) we need and the outcomes we’re trying to deliver to New Zealanders, and having a digital investment portfolio to match. This is about investing in people and culture, technology, data, and the platforms we need for tomorrow and beyond. Current state: $5.7 bn ICT assets are held by agencies within the GCDO mandate 20% of the government’s $5 bn capital spend each year is in ICT and Digital capabilities

28. Section 4: Next Steps • How might we reimagine experiences and reshape the system? • Shaping insights through engagement

29. How might we reimagine experiences and reshape the system ? Digital does not change fundamental policy outcomes such as the need for good jobs, mobility or protection of privacy but it does affect how we seek to achieve such goals. In transportation for instance, policy must factor in automated vehicles that provide a different set of choices and opportunities, as well as previously unconceived risks. In education, digital enables a new learning potential that really is life-long and accessible to everyone. Our Digital DNA will need to embody ethics, rights, inclusion and privacy by design – shaping what we do and how we do it.

30. Shaping insights through engagement– prompts to think about REIMAGINE • How might New Zealand innovation flourish by opening government capabilities and assets for re-use? • How might ‘digital’ contribute to intergenerational wellbeing? • How will the voice of citizens and businesses, including iwi, shape service design and delivery and policy? • How will digital rights be treated as human rights? Reimagining experiences • How might government grow its partnership, across the digital ecosystem, with society and economy? • What is the impact of the intergenerational focus of the Living Standards Framework on the digital investment system? • What further changes are required for government’s infrastructure to be resilient and responsive to emerging opportunities? • How might government adopt a learning through co-design culture throughout all areas of policy and operations? • What does the public-service of the future look like? How might multidisciplinary capabilities achieve outcomes together? • What may life-learning look like in a digital ecosystem of government, society, and economy? • How might the agency operating and funding models shift? Embrace new leaderships models Establish Solid digital foundations Uplift workforce skills and culture Redesign system settings RESHAPE

31. References • Our research and analysis covered a wide range of topics relating to the digital transformation of governments. • Research was drawn from a range of institutions, including but not limited to for example: • World Economic Forum • MIT Sloan Centre for Leadership • MIT Centre for Information Systems Research (CISR) • Berkman-Klein Centre for Internet and Society • Fletcher School Tufts University • Stanford Social Innovation Review • IPANZ • AI Forum • Internet NZ • Statistics NZ • NZ Treasury • Policy Quarterly • Other governments’ digital strategies and lessons • A list of resources is available.