Heidi Crebo-Rediker on future-proofing your business amid geopolitical risks

Joe Kornik: Welcome to the VISION by Protiviti interview. I’m Joe Kornik, Editor-in-Chief of VISION by Protiviti, our global content resource examining big themes that will impact the C-suite and executive boardrooms worldwide. Today, we’re supporting the future of government, and I’m thrilled to welcome in Heidi Crebo-Rediker. Heidi has held senior leadership positions in both government and business, providing advice on geo-economics and international economic policy for two U.S. presidents. She served on the Biden Treasury Department transition team as lead on internation affairs, and previously in the Obama Administration as the state department’s first chief economist, where she provided guidance to two secretaries of state on the intersection of finance and geopolitics. She is a former CEO and currently a partner at International Capital Strategies, an executive vice president at America’s frontier fund, and an adjunct senior fellow at the Council on Foreign Relations. Heidi, thank you so much for joining me today.

Heidi Crebo-Rediker: Thank you so much for the invitation to join you.

Kornik: Heidi, you have such a unique background with extensive public and private sector experience on a global scale. So, your perspective here will be really valuable, I think. We’d all agree that we’re in a pretty tumultuous time right now, and navigating that, I think, will be challenging. So, what’s your advice to business leaders for future-proofing their business against geopolitical risks and sort of disruption that’s sort of happening all around us right now?

Crebo-Rediker: So, that is a great question, Joe. I guess my first piece of advice would be if you are not paying attention to geopolitical, and I would extend to political risk, this can impact your business, and now is the time to start. I guess the second point I would make, piece of advice, is to be proactive. If you’re going to future-proof, you need to be proactive and not reactive. Scenario plan and make it the job of the board and the management. This is something that outside of government I’ve been doing for the past 10 years or so with International Capital Strategies. It’s a healthy exercise.

So, just going back to the first point on why? Why pay attention? When we came out of COVID, we are facing a hot war in Europe, in the Middle East, and both took place very, very quickly. It took a lot of companies and countries by surprise, and there have been big ramifications for supply chains and commodity prices and energy security and transition, insurance costs, and relationships between companies and countries as a result. Again, we’re also facing tension in the South China Sea, in the Taiwan Straits, and we are deep into arising strategic competition between the U.S. and China. So, the result is really, there’s some big structural changes that we’re already seeing in the flows of goods and capital and trade relationships, and this architecture is going to continue to change. It’s playing out now and it will play out over the next decade.

We all know that concentration risk makes companies vulnerable and resilience and diversification of supply chains and of service providers can actually lessen the blow. Conflicts not only result in sudden disruptions, but they also can be followed on with sanctions and export controls and investment restrictions and the like. So, these are forced reactions. I think that brings me to my second point, which is that you can get ahead of this. In being proactive and not reactive. The way that I would recommend doing this is really to scenario plan. You can’t really model for geopolitical risk. It involves looking into the future and looking around corners and being smart about the way you plan for the different scenarios of what could happen. Then you can start to prepare how your company would respond to each one. I think scenarios are powerful tools. They should be a habit, not just a one-off event. It’s a good habit because it enables you to challenge conventional wisdom and really protect both the board and management against groupthink.

I think scenario planning is not new. If you go back to Shell and the famous Shell scenarios, they’ve been doing this since the 1970s. Just developing visions of the future. I think because they’ve been dealing with geopolitical risks for a long time, it’s something that they’ve become very good at.

I would take the example of Russia’s brutal invasion of Ukraine. Most countries and companies really didn’t anticipate that Russia would invade Ukraine beyond the invasion of 2014. It was a real massive failure of imagination and planning for the unthinkable because there was a lot of signals in that, in that noise running up until the invasion. We were paying attention to it because the signals were very clear and we flagged that the invasion was imminent. Imagine the ramifications and the clients that we were working with got, to the best of their ability, their investments and also their people out. It’s really also, I think, a study in how both European countries and companies became overly dependent, eyes closed. They developed a vulnerable overdependence on Russia for energy. There was huge concentration risk. There was no scenario plan that this would happen. It was captured by groupthink and I think that’s what you want to try to avoid as a company.

It begins with the board. Integrating geopolitical risk and how you determine what spillovers and disruptions may occur and embed it into the oversight mandate. You do need board members, or at least advisors with the right background who can ask the right questions. It’s a lot about asking the right questions.

Kornik: As I mentioned, you served on the Biden Treasury Department transition team as lead on international affairs, helping build the sort of international economic policy team, crafting policy on economic security, China policy, supply chain resilience, as you mentioned, trade, energy, the IMF and more. I bring all those up because they’re all still, I think, really big issues right now. Which of those issues will require the most attention and action over the next several years and how should we be addressing them?

Crebo-Rediker: So, I think all of those areas and issues are important. I think maybe a more helpful exercise is to look at those issues through a framework or a prism. The prism I would choose is that national security is trumping commercial and economic interest, and that is the world in which we live right now. It’s not just the U.S. This is something that is very clear, the prism that China is using. The prism that Russia is using. Increasingly, you’re seeing countries, Japan, you’re seeing many countries in Europe actually looking at, taking a look through the national security prism. This plays out in supply chain resilience, in trade, in energy and energy security, and even through IMF programs. I think most clearly, it’s playing out in U.S.-China policy. We have better mood music right now. The direction of travel is quite clear regardless of who is going to be in the White House come January of next year. But, right now, I would not be as much distracted by the mood music and think about what the general trajectory of the relationship is. On the back of that trajectory, the U.S. has really reconfigured a lot of its economic security relationships. If you look at the Indo-Pacific, there’s new architecture that we’re creating with allies, likeminded countries. We’re creating new kind of sectoral partnerships, like the minerals, security partnership. It’s really focused on how the government, the U.S. government, is looking at its own supply chain resilience. Critical minerals and metals are necessary for energy transition and energy security, and they have defense applications as well. So again, it’s the national security prism.

The other thing I would say is there’s a potential for forced decoupling that could come about as part of the defensive agenda that countries have. The U.S., the G7, other likeminded countries, and it’s for several reasons. As I mentioned, we’re guarding against our own strategic vulnerability. Because we’ve also seen over the past, more than a decade, that China is a master of weaponization, of overdependence, and it’s part of their strategy. So, we need to be thinking like that as well. It’s not just critical minerals and metals. It’s also we have overdependence in pharmaceutical products. What we’ve seen with the Russian invasion is that we had overdependence on various types of food commodities, and so we saw food shocks.

The second is that I think we’re going to see a lot more protecting of strategic advantage. The U.S., we’ve already, we’ve seen for several years into the protection and increasing protection of critical and emerging technologies. I think this is a trend. I think there’s more to come. The White House has been very clear. It’s about advanced computing and microelectronics, quantum, artificial intelligence, and also, on their list, biotechnologies and biomanufacturing, and think about broadband. There are many different categories that we might want to be thinking about where we want to be protecting national security and how that might play out in commerce.

Kornik: Right. Right, and that sort of leads me right into my next question, which I mentioned in the intro that you served in the Obama Administration as the state department’s first Chief Economist where you provided strategic advice to Secretaries of State on the integration of economics and finance with geopolitics, right? I think that’s something that a lot of business leaders are sort of struggling with right now. So, what strategic advice would you give business leaders trying to sort of successfully navigate that integration between finance and economics with geopolitics?

Crebo-Rediker: So, one of the things, and looking back at that experience at the state department, you got to get out of your silo and make silo-crossing something that is part of an institutional culture. Because we live in a very complicated world, and convergence is a theme that we’re really seeing everywhere. In a time of rapid convergence, you don’t want to be stuck in a silo. So, institutionalizing, that is actually critical. That’s what we did at the state department for economic state craft. You had a department that was filled with immensely talented professionals that have deep national security talent. The idea was really to get them and encourage them to think differently about some of the economic and financial drivers of power and also of change that had implications for foreign policy across the institution. That included, at the time, financial crises, the rise of non-market state actors and the impact on global commerce.

At that time, we also were looking at the weaponization of energy and pipeline politics. So there were sort of those things that had clear national security implications. Then we also were thinking about the rise of economic tools. How can we create opportunity and sort of have a development of a positive economic statecraft, enterprise funds, as well as some of the more coercive tools like sanctions. We brought a lot of new talent in, but also it was really about getting everybody to think a little bit differently, getting them out of their comfort zones and crossing siloes.

I think the state department’s actually doing that right now with critical and emerging technology. Same thing that businesses are doing, society is doing. The tech innovation as a source of national power for the U.S., it’s increasingly foundational. So, every bilateral relationship and multilateral relationship, and every functional issue that the state department deals with, from climate change to human rights or arms control, there’s definitely a technology element that’s growing. So, business leaders need to drive the silo-crossing as an institutional priority. Bring in new talent, new perspective, and then this will feed back better into scenario planning.

Kornik: Right, right. You have such a unique perspective because you do have such vast experience in both the business world and the government world. Sort of the public and the private sector. How do you see those two most effectively interacting and intersecting in the future? What does the public-private sector Venn diagram, if you will, what does that look like?

Crebo-Rediker: The Venn diagram—I like that. I like the visual. I think the public-private sector Venn diagram is changing very quickly and it’s increasing the overlap between public and private. It’s ever more important. It’s directly related to what we’ve already discussed. I think it’s really, it’s the flipside and it’s the opportunity side, that industrial policy with all of the challenges that come along with managing that appropriately really presents the biggest opportunity. The opportunity that we see in the United States is this enormous invested home and with trusted partners because you’re looking at strategic resilience, not only with the U.S. but with allies and partners.

This investment is going to be ramping up over the next five to 10 years. I don’t think we’ve internalized, really, the scale and the ambition that these instruments and this funding is actually going to provide for the companies. Most importantly, interacting with the government with shared objectives. We can’t really do this the same way that a country like China would, because our strategic advantage really is our capital markets, our private investors, our innovative capacity that we see coming from companies. So, a lot of the programs that are industrial policy in nature are really designed to catalyze and take advantage of this private sector ability to innovate and invest.

The U.S. isn’t always—I mean, the government isn’t always the first place that you would think of to actually want to do business or better your investment strategy, but there are a lot of opportunities in this on-shoring and friend-shoring initiative. We see it’s not just in the U.S. We’re seeing this happen in the EU. We’re seeing it happen in Japan, and it’s a combination of using subsidies and tax incentives and grants and subsidized loans and loan guarantees and credit enhancements and sort of all the tools we can put in the toolbox. The approach has been one where it’s ecosystems and hubs. You can look at the way that the U.S. is trying to roll out some of these funds in the hydrogen space, in the computing space, quantum space. It’s a really different approach than anything we’ve done in the past.

There is a huge, huge investment, a big boost in investment in basic scientific research. Really the biggest that we’ve seen in the past 70 years. If you’re looking to invest abroad, developing markets are very highly supported through a new and expanded U.S. development finance corporation. They use a lot of the same instruments I just talked about but they also make direct equity investments, and that’s something very different when you look at the Venn diagram concept. U.S. direct investment in equity is something that we really, we haven’t seen particularly outside of the U.S. So, I guess there’d be—there will be tensions about how this Venn diagram grows and managing industrial policy in a market economy, but I think it really—it’s not only necessary but I think it’s a trend to watch if this is going to end up growing over time.

Kornik: Yes, very interesting. That brings me to my last question. I think I might have heard a little bit of optimism in there, so I’m excited about that. First of all, thank you for your time today. You’ve been very generous with your time. I’m going to leave you with one final question, and I’m going to ask you if you’re optimistic that we’ll get this right. Are you optimistic that we’ll be living in a better world, let’s say, a decade from now? Take me out to 2035 and tell sort of what you see for the planet.

Crebo-Rediker: So, a decade from now, I would say on balance, with the right checks and balances. I see us living in a more dangerous, but I would say, overall, a better world. Given that you’re talking about 2035, I actually, I’m most hopeful because I think that the younger generation inheriting these challenges and opportunities is really well-placed to take the baton and move forward and make the most optimistic outcome that we could envision.

I’m, by nature, an optimist. I start there and I actually see this particularly in technology and innovation and the velocity of change.

What we’ll see between now and 2035, you have to really use your wildest imagination. We’ll see a revolution in drug development, in healthcare delivery, in education and manufacturing. We might see huge scientific breakthroughs in how to tackle climate change. So I think the innovation’s really boundless and I think it’s been democratized in terms of its accessibility to unlock human potential even with younger people right now leading the way.

That’s if we get it right. So, you can’t not look at the downside because the downside risks are pretty daunting. Particularly given our topic today, which is geopolitical risk. The potential for these risks to be exacerbated and for technology, in particular, to change the future of warfare, autonomous warfare, accelerate weapons of mass destruction and divide societies. The world is filled with bad actors, both state and non-state actors, and they have unparalleled access to data and to cyberweapons. We’re already capable of shutting down critical infrastructure. So, this is not necessarily even looking 10 years down the future, but you just have to project where this could go. So, again, ending on an optimistic note, because I do think that on balance we will end with a better future, but we have to manage the downside risks.

Kornik: Right. Well, Heidi, thank you so much for your time today. I really enjoyed our conversation. Thanks so much for those insights.

Crebo-Rediker: Thank you for the invitation this week.

Kornik: Thank you for watching the VISION by Protiviti interview. On behalf of Heidi Crebo-Rediker, I’m Joe Kornik, we’ll see you next time.

Digital expert: Metadata and ID keys to unlocking e-government

Joe Kornik: Welcome to the VISION by Protiviti interview. I’m Joe Kornik, Editor-in-Chief of VISION by Protiviti, our global content resource examining big themes that will impact the C-suite and executive boardrooms worldwide. Today, we’re exploring the future government and we’re joined by Dr. Ian Oppermann, cofounder of ServiceGen, a firm that helps global governments achieve digital transformation. He’s an industry professor at the University of Technology Sydney and is considered an expert on the digital economy. Prior to cofounding ServiceGen, Ian was chief data scientist for the New South Wales government. I’ll be turning over the interviewing today to my Protiviti colleague, Ghislaine Entwisle, managing director and leader in the Technology Consulting and Business Performance Improvement practice.

Ghislaine, I’ll turn it over to you to begin.

Ghislaine Entwisle: Thanks, Joe. It’s wonderful to be here with you again, Ian, and talking about a great topic today.

Ian Oppermann: Great. Great to be here. Thanks, Ghislaine.

Entwisle: Ian, you spent many years helping radically transformed government services in New South Wales by building the state’s digital capabilities to deliver excellence. Now, you’ve shifted to a new endeavor called ServiceGen, which is aiming to help global governments do the same thing. Can you tell us a little bit about why ServiceGen and its potential impact?

Oppermann: Yes. Thanks, Ghislaine. Yes, it was a very long time in government, eight-and-a-half years in total. It feels just like a moment when I think about it now.

Now, ServiceGen, the tagline for ServiceGen is Government Services Profoundly Reimagined, and it really is trying to take all of that transformational activity that we did in New South Wales, bottle it, and point it towards other jurisdictions. Some of that transformation was about greater customer service. Some of it’s around greater personalization. Some of it was just around making government easier to access. Of course, it’s all underpinned by data, digital, and, in some cases, identity. The ServiceGen offering really is the New South Wales model but adapted and redirected in other jurisdictions, and hopefully it helps other jurisdictions get through the really hard part of that transformation because very often they just don’t know where to start.

Entwisle: That’s very exciting indeed and no doubt, there’s demand for that service globally. What do you see are the main issues that governments are struggling with as they go digital on that journey and equally, what are the biggest impediments to e-government and how can governments overcome that?

Oppermann: That’s a really, really big question and that is, in fact, why we got the whole ServiceGen activity kicked off. Very, very often, people expect their engagement to government to look like their engagement with their bank or with a social media platform with any now very truly natively digital service offering, and governments struggled to do that. Partly, it’s legacy. Partly, it’s the cautiousness of government, but partly, it’s the fact that it’s different. Government is different. It’s not optional to deal with government. You have to, in many, many different ways. That technical debt, that legacy, that conservatism all roll up into the need for pretty profound transformation attitudes and technology and in terms of capability.

Also, the way of thinking about doing government, very often governments get elected promising transformation and then they get into government and realize just how complex the whole system actually is, how many parts there are, how many dependencies there are, how much technical debt there is. Part of the challenge is just the reality of what’s already in place and the fact that if you’re going to transform, you still have to keep delivering essential services—in some cases, really genuinely essential services—wanting to do that transformation. There’s a lot of elements to pointing or redirecting the ship in terms of transitioning to e-government or transitioning to more personal.

There’s also the challenge that there’s a lot of interconnecting factors related to the different parts of government trying to work together. If you deal with your favorite online provider, you expect them to understand you when you’re a customer or when you’re raising a complaint or you’re paying a bill. There are so many different parts of government that when you engage with health or transport or education, it’s very, very difficult for those different parts to come together. Government genuinely is different but people expect that same sort of personalized experience when engaging with government.

Entwisle: On that note then, artificial intelligence and how does that impact these issues that governments are struggling with?

Oppermann: Yes. Thanks, Ghislaine. It’s still a very, very hot topic and it has been almost—in fact, it has been more than two years now since we were all taken aback by what the new generative AI could do—but now governments are actually starting to find really powerful use cases. Those powerful use cases broadly come down to personalized delegations, so making sense of all the complexity that’s out there and intelligent summarization. I think it’s still now quite a long way to go in terms of process automation, joining together processes that don’t quite fit together, and there’s normally a human being in the middle there somewhere as a necessary step. We are starting to see more of those use cases actually come to light and be deployed, and there’s still, of course, also the really cutting-edge use cases in New South Wales of course, there’s a whole lot of work that’s being done around use of AI for image recognition, for things like are people wearing seatbelts? There’s the work that’s being done around health, around wound management. There are still those really cutting-edge cases but the main office and back office work is increasingly becoming more mainstream as people try, test and learn and start to join together some of those disjoint processes or start to do some of the work around making sense of large amounts of disparate information.

Entwisle: Yes. That’s really interesting. Do you also find that as governments become more sophisticated in their use of technology that—what impact does this have on the digital divide between citizens, countries, even continents? Do you think that e-government can close the equity gap?

Oppermann: That’s a really, really good question. My initial response would be yes, absolutely, it will help close the gap because it means more people could get more personalized services targeted at them. The reality, of course, is there’s always a proportion of society who either will not or cannot be on the other side of that digital divide, so there are people who don’t work online, can’t do online, don’t have connectivity. They just don’t feel comfortable engaging in a digital world. It’s interesting. I think it makes the divide more obvious. It makes the divide more clearly defined, and I think there’s a proportion of the community we always need to bring along in non-digital ways.

Having said that, for the majority of people, I think currently it’s looking good. It’s looking like more services get delivered to more people in a more joined up personalized way, but that’s all dependent on some pretty important things like identity and systems connected to other systems actually working together in a seamless way. I think the jury is still out.

Entwisle: Yes, fair enough. It’s good to be optimistic but as you said, a number of challenges to overcome to get there. As we move towards a more digitalized government environment, you mentioned a little bit about identity. How concerned should we be about the government’s ability to protect data? The private sector, as we know, have had their fair share of struggles with cybersecurity issues. Are you confident that global governments might get that part right?

Oppermann: You’ve touched on what I think is the most important issue about all of the digital government, all the digital everything, and that’s what do we do with the data? How do we protect the data? We need to stop thinking about building data sets in the way we did in the 20th century. It’s not a relational data set that all comes together in one big blob. It’s really important that we stop thinking about that. It’s really important that we start to think instead about identity, which is a form of data, identity being managed by individuals in a Web3 sort of way as opposed to building a honeypot data set where you credential yourself at some level against that data set. If we build honeypot data sets, we will continue to have the sort of breaches that we saw last year and the year before, and then we’ll accelerate and it will become actually much, much more significant as we put more of our services into the digital world. We need to think about data fabrics, we need to think about virtualization, and we need to think about people hanging on to their own credentials and allowing people, governments, to say does A equal B rather than tell me what A is or tell me what B is? Is A greater than B? Is A less than B, rather than actually revealing those underlying components? That sounds really simple but it actually means that we need to turn our thinking inside out, and it’s not just in one system. If all these systems connect together, so you have your seamless engagement with government, all the systems need to start that transformation.

I think there are good arguments for doing it differently. Increasingly, there are good tools, frameworks, and even standards for doing things differently, but we really have to shake ourselves out of this 20th-century thinking.

Entwisle: Yes, absolutely. That honeypot approach should be in the past and the more governments move out of it, the better. Australia is in the process of rolling out the digital ID which as we understand it includes facial verification technology and also liveness detection. Can you explain a bit about how this will work and what really are the key advantages of that technology usage?

Oppermann: Yes. It’s a really important step, and facial verification is different from facial recognition. Facial verification is, are you the person that’s being put up as being you? Can we actually verify that it’s you? As opposed to who is this person who’s staring at the camera? That’s a really important distinction because it means that you’re using your biometrics to unlock information that you should have access to through verification. The liveness test is simply try to avoid that simple spoof where you can say, “Well, here’s a photo of someone or he’s me with a mask, and I look something like that person,” and unlock the liveness test prove that you’re real, prove that you’re animate, prove that you’re somewhere in context that you should be when you try to do this verification.

It’s a really important step forward because it does mean that you’ve got a really powerful and unique way of identifying yourself. It’s better than a signature. It’s better than, in most cases, a flat document, static document because you are real and you’re alive and you are the bearer of your identity. Potentially, it means that far more sensitive and personal services can be accessed in a simple intuitive way through this way of representing yourself in digital identity. The important thing about all of that, of course, is you’ve got this powerful key to unlock. It absolutely needs to be powerfully determined that that really is you when you registered in the system in the first place. If we get that right, then there’s a whole lot of really intuitive access to services that we will unlock, pardon the pun, through use of all that sort of biometric verification.

Entwisle: Yes, fantastic. Thank you for talking us through it. If we fast forward into the future, maybe a decade out, let’s say 2035, where do you envisage we will be on this journey, the journey towards digital government services, and how do we get there? Do you have any bold predictions to share with the audience?

Oppermann: It’s really, this is exercise of what does the world look like in 10 years out, this exercise of talking about what the world looks like 10 years out is something we’ve been doing for quite some time, and it’s really interesting that you say 2035 or 2034 as a decade out. Time really seems to be ticking away. A lot has happened in the last five years or 10 years, a lot has happened. We’ve really started to realize the value of data or digital, but we still got some fundamentals that we need to sort out. We still need to treat data as well and as carefully as we treat electricity. We still need to wrap our heads around all of the effort and frameworks and tools we need to deploy in order to safely and appropriately unlock the genuine value of data.

Ten years out, I hope, fingers crossed, 10 years out, I hope we’ve actually sorted out the fact that data is not just something to play around in Excel spreadsheet on your laptop. Data is actually something you need to take really seriously if we’re to use it in a general way. Data has an infinite number of uses for everybody and in many, many different contexts. Every single bit of data needs to come with information about where it came from, how it got to you, its fitness for the purpose you want to be able to use it for, and after you use it, the data product needs to come with guidance restrictions or prohibitions. All of that is metadata. All of that metadata or all those frameworks are ultimately the safety standards, just like electricity, the safety standards we need to put in place in order to appropriately use data for those infinite possible future use cases.

My bold prediction is that in 10 years’ time, we’ll have realized, that we have put the tools in place. We’ll be sailing along with all these incredible uses of data and data-driven tools such as AI. We’ll be doing amazing things. We’ll have personalized health. We’ll have all these incredible applications we’ve dreamed about for so long, and we’ll be doing it safely because we finally have invested in that fundamental infrastructure associated with data.

Entwisle: Yes. That’s fantastic. It’s great to hear the excitement in your voice and I definitely feel it as well, really capitalizing on the value of data but also doing it in a very safe and secure way, offers such a world of possibility, so that’s great. Thank you, Ian, for joining me today. It has been a pleasure as always. We wish you the best of luck on ServiceGen and your new endeavor and no doubt, you’ll have a lot of success and we look forward to following your journey. Thanks again for your time today, Ian.

Oppermann: Thanks, Ghislaine.

Entwisle: Over to you, Joe.

Kornik: Thanks, Ghislaine, and thank you for watching the VISION by Protiviti interview. On behalf of Ghislaine Entwisle and Dr. Ian Oppermann, I’m Joe Kornik and we’ll see you next time.

The World Bank’s Ed Olowo-Okere: Let’s reimaging government for good

Joe Kornik: Welcome to the VISION by Protiviti interview. I’m Joe Kornik, Editor-in-Chief of VISION by Protiviti, our global content resource examining big themes that will impact the C-suite and executive boardrooms worldwide. Today, we’re exploring the future of government, and we’re thrilled to welcome the World Bank’s Ed Olowo-Okere, the former Global Director of the Governance Global Practice, and now Senior Advisor in Equitable Growth, Finance, and Institutions. Ed is the director of the World Bank’s Future of Government report, a call to action for the governments around the world to reinvent themselves as they face unprecedented health, economic and fiscal challenges. Today, I’ll be sharing interview duties with my colleague, Charles Dong, Global Public Sector industry lead for Protiviti. Charles will join us in just a few moments, but now I’m going to welcome Ed. Thank you so much for joining us today.

Ed Olowo-Okere: Glad to be here, Joe, and thanks for having me.

Kornik: So, Ed, let’s start at the beginning. This Future of Government report is not an annual or regular report. It was your brainchild. So, why did you and the World Bank think a Reimagining Government for Good report was necessary?

Olowo-Okere: Thank you, Joe. You’re absolutely right that this is not a regular report or an annual report. In 2020, we discovered that governments across the world were facing multiple crises, including health, social, fiscal, and economic. As you know, these crises were triggered or exacerbated by the COVID-19 pandemic. They were also coupled with the climate change crisis. So, we know from history that crises have often driven reforms in governments, and we reckon that the 2020 crises were not going to be an exception. So, the real question was, what kind of reforms would be undertaken by governments? So, we wanted to be able to help or support governments to make reforms that are truly transformational, reforms that are well-coordinated, and also draw on lessons about what has worked and what has not worked in the past decades.

Kornik: Right. You make the point in the report that many governments can’t meet just the basic needs of their citizens because of unresolved governance problems. So, what do you see as the biggest problems of governance, and how do we solve them going forward?

Olowo-Okere: Okay. So, let me clarify that the basic needs that we’re talking about, really, are things like basic health care, clean water, basic education, shelter, social safety nets, and simple kind of security of lives and livelihood. So, when we talk about the governance problems that are responsible for this, there are many of them. In the interest of time, I will just focus on two, and the two I’ll focus on are corruption, and lack of voice and participation. So, if you look at these two problems, you will see that they are responsible to a large extent for the legitimacy and trust deficit that most governments suffer. If you look at a number of countries as well, where there are violent conflicts and fragility, you will see that these two problems are really the main contributors to these issues of fragility and conflict.

As to your question regarding how we can solve these problems. We know, if we take the case of corruption, corruption is an age-long issue. It has been around for a long time, but we know also that there are countries that have effectively managed to be able to control corruption. So, the problem can be solved. Now, the question then is, okay, how do you solve it? This is really about countries deliberately ensuring that there is greater and enhanced transparency and accountability, and undertaking reforms to block all possible avenues for corruption. Strengthening institutions, and the institutions to be strengthened are institutions for accountability and justice. Then we need strong country leadership. I must say, in the case of corruption, there is also a need for international collaboration, because we know that corruption doesn’t just take place within the borders of a country. You have the international dimension to it.

Now, with respect to lack of voice and participation, what governments need to do is to deliberately go about educating citizens on how they can participate, and the needs to participate in the democratic process and decision-making process. In addition to that, governments also need to open the civic space up for citizens and civil society organizations to be able to express their minds, and to be able to contribute to the decision-making process. We know that governments can facilitate this by using tools and approaches that have worked and are known to have worked, including, for instance, leveraging on technology.

Kornik: Thanks, Ed. I’m now going to welcome in my colleague, Charles Dong, to ask the next few questions. Charles.

Charles Dong: Thanks, Joe. Thanks, Ed, for the time today.

Olowo-Okere: My pleasure, Charles.

Dong: In the report, you talk about governments renewing the social contracts with the citizens and highlight some key questions governments should ask themselves. What is the role of government? How can government deliver? How can government be more productive? How can governments build trust? So, let’s talk about them briefly. So, what is the role of government in the future?

Olowo-Okere: This is a big question, and the most fundamental question. It’s a question that every government needs to work through a process to come at, and this will be different in different contexts. Really, it is about the governments moving from the old assumptions about their roles, and listening to what it is that citizens expect them to be able to deliver, and then adjusting their roles accordingly to that. This is also about them looking at their capacity to be able to deliver what the citizens are expecting from them. It is also about redefining the roles across levels of government. I will say that in this process it is important that governments not just look at their roles in terms of service delivery only, but also look at the roles that they’re supposed to play in terms of regulation, leadership, and coordination.

Dong: How can government deliver?

Olowo-Okere: This is really about rethinking how governments deliver public services. So, for example, how can governments deliver social outcomes with support from non-state actors like the private sector, religious-based organizations, and community-based organizations? Okay. It is also about governments developing new capabilities, collaborating, and ensuring equity and quality in the service delivery process.

Dong: How can government be more productive?

Olowo-Okere: We know that citizens’ demands are high, and their expectations are ever-increasing, but then public resources are limited. So, there has to be a consistent quest for efficiency. So, this is really about how government can use scarce resources efficiently to meet citizens’ expectations, and it involves developing capacity, using appropriate tools, improving their systems, and leveraging technology.

Dong: So, how can governments build trust?

Olowo-Okere: How can governments build trust? We know that currently most governments suffer from trust deficit. So, this is really important because lack of trust in governments affects government effectiveness. So, three aspects of this. The first one is really having a new social contract that can then form the basis of citizens having a really deep level of trust towards governments. So, a renewed social contract is fundamental. We know there are two critical factors for securing and maintaining trust. The first one is really delivery of services that meet the expectation of citizens, and the second aspect is transparency and accountability in the service delivery process. So, the question is, how can governments meet those two factors? Then the important element in terms of securing trust is for a government to be able to identify those factors outside of its control that may impact on trust, and then determine how it is going to be able to manage that.

Dong: So, the report highlights building a coalition of teams. What role could business leaders in the private sector play in helping governments to solve the challenge of reimagining itself?

Olowo-Okere: This question is important because of the criticality of the private sector to any economy. Now, there are two different roles that we can envisage for business leaders and the private sector. The first one is really for business leaders and the private sector to take the lead in building coalitions for change. This involves reflecting on where their government is, their role in the government of the past, the potential roles that they could play in the government of the future, and then it’s also about reflecting on the parts that they can play in the collective journey to make happen the reimagining of government. These, for instance, involve them thinking about and identifying who they share interests with, who they can influence, who they can have conversations with, and then start building that coalition for change. So, that’s the first part.

Then the second part or the second role that business leaders and the private sector can play is really participating in a process that governments may lead to build coalitions for change. If you look at the four questions you asked me earlier on about how the new social contract can be developed, governments cannot really renew the social contract without listening to and having conversations with non-state actors like business leaders and the private sector.

Dong: Thanks, Ed. I’m going to turn it back over to Joe now.

Kornik: Thanks, Charles. I have two more questions from me, and they both require you to look out to the future, maybe a decade or more. I know that you did that in the report, so you’re the perfect person to ask. First, what are the implications if governments don’t heed this advice? What if we get this wrong? What are the implications of that?

Olowo-Okere: That will be a terribly missed opportunity to take advantage of a serious crisis to make transformational changes, and to begin to build capability to be responsive to the expectations of citizens. So, if that were to be the case, we can imagine a future where governments will launch from crisis to crisis, will not be responsive to the needs of citizens, will be unprepared for crisis, with suffer legitimacy and trust deficits, and will not be as effective as they should be. I really hope that will not be the case.

Kornik: You and me both, Ed. So, let’s end on a positive note, if we could. What are the possibilities for the planet and for the people of the planet if governments do get this right? What could be the ultimate impact? Take us out a decade or more and talk to me about that future.

Olowo-Okere: Yes. Thanks for that. We will have a new social contract that governments and citizens are really excited about, and we can then look forward to governments that will increasingly meet citizens’ expectations and deliver on their promises, will be better prepared for crises, and governments that will be innovative and productive. This will lead to a situation where governments will be trusted by citizens, and they will have high legitimacy, which will further help their capability to deliver on the renewed social contract. So, you can call that a virtuous cycle, and I hope that this is really what we will get. [Laughter]

Kornik: Yes, I think I speak for everyone when I say, we all agree that I hope that’s what we get. Thanks, Ed, for the time today. I really enjoyed our conversation and your insights.

Olowo-Okere: Thank you very much, Joe and Charles. Thanks for the opportunity to discuss the Future of Government initiatives with you.

Kornik: Thank you for watching the VISION by Protiviti interview. On behalf of Ed and Charles, I’m Joe Kornik. We’ll see you next time.

Will quantum computing be a game changer for governments?

Joe Kornik: Welcome to the VISION by Protiviti podcast. I’m Joe Kornik, Editor-in-Chief of VISION by Protiviti, our global content resource examining big themes that will impact the C-suite and executive boardrooms worldwide. Today, we’re exploring the future of government and I’m happy to be joined by my Protiviti colleague Konstantinos Karagiannis, Director of Quantum Computing Services, helping organizations get ready for quantum opportunities and threats. He’s been involved in the quantum computing industry since 2012 and is the host of Protiviti’s popular podcast, The Post-Quantum World. Konstantinos, thank you very much for joining me today.

Konstantinos Karagiannis: Yes, it’s great to be back. Thanks.

Kornik: Konstantinos, the last time we talked for VISION, I think it was back in 2022, and since then the quantum drumbeat I think has certainly gotten louder and we continue to hear more and more about its possible impact. I’m curious about quantum and its potential to transform governments. Is there a quantum game changer for governments that you sort of see coming?

Karagiannis: Well, it’s best summarized in how the White House put it when they did the NSM-10 memorandum a couple of years ago. They said that in order to maintain our leadership position in the world, we have to make sure that we get ahead of the quantum technology space. There’s a lot there, right? To maintain being a scientific and technological leader, you can’t let go of the thing that’s going to be the biggest technological advance. This and AI are pretty much the twins that are going to take us into the future. Since I’ve been on, of course, AI has stolen a little bit of the thunder but it’s funny because one of the big pillars of quantum is machine learning.

You’ve got optimization, machine learning and simulation, and these three areas are going to affect all aspects of the private sector and the government sector as well. It’s partly about maintaining leadership, which is what a government wants to be able to proclaim in the technological field. That’s part of it. But then, it gets right down to the grassroots level of what’s actually happening. You have energy sectors being revitalized, chemical manufacturing, all types of optimization. Obviously, if you have a government, there’s all sorts of little cogs in the wheel that that could get in the way if you’re not optimizing right. It’s a technology that will just transform all aspects.

Kornik: Realistically, when do you think it’ll have the impact? When do you think some of that could become reality?

Karagiannis: The industry is changing all the time and the timelines of the machine quality is changing and there’s some exciting stuff that’s happening right now. So, the timing of this interview is pretty good. For the first time, we have what are called logical qubits appearing, and these are quantum bits that are error corrected. You usually need some number, large number of physical qubits that you correct for errors and then you end up with these like pure ones that you could do amazing things with.

We’re about two years away from having more logical qubits than we could ever simulate with a classical computer, which means we will have physically the capability of working with these entities that we never could before. If we could only simulate 50, we’re going to have about 100 in two years. Once you have that, you can prove instantly, well, we’re in uncharted territory here. Any advantage that we get, any quantum advantage could be as short as two years away in gate-based, what we call gate-based quantum computing.

Kornik: Where do you see those impacts taking place within the government? What’s quantum’s impact going to be?

Karagiannis: Yes, we’re going to eventually talk in this interview about the threat to cryptography so we’ll put that aside. Before scary things like that happen, there will be an impact in more practical use cases. Right now, with AI becoming more and more important, I think the first thing you’re going to see is that quantum will help certain processes that are either AI or AI-adjacent. That will be some of the first use cases like optimizing information that will be fed to AI, compressing artificial intelligence so it runs better because these machines will always work in tandem, and we’re going to see that most likely in the AI world, too.

Quantum computers are not going to replace classical computers. They’re always going to be that, like extra device that’s really, really good at specific tasks and they’re always going to be in the data center alongside your classical clusters. I think government will, first, take advantage of that aspect of it before they were able to proclaim where the first government that can crack encryption – although, let’s be real, I don’t think any government will proclaim that. I think they’ll keep it as like a secret advantage.

Kornik: Right. We’re going to talk about encryption and sort of protecting classified information in just a minute. Before that though, I do want to ask you, you mentioned earlier about the US sort of m.a.intaining its leadership position. Where is the U.S. government on its quantum journey in terms of funding and R&D compared to other countries? Is it really a leader on the geopolitical landscape?

Karagiannis: Yes, actually we are in some ways. In 2018, President Trump signed a national quantum initiative, and it was supposed to be a five-year act to help boost funding to all aspects of manipulating and using information with quantum. So, quantum information science, basically. That was renewed in 2023. We have the path forward for new money to be given to areas. Two regions in the U.S. were deemed tech hubs for quantum, in Colorado and Chicago, which means there’s going to be extra money in research dollars for developing workforces and coming up with new technologies. So, that’s great. That’s all good. We have these little heartland areas where you can have stimulating quantum growth happening, which will help us as a country. That’s one way the U.S. is leading.

Some ways that we are facing slight challenges. There are other countries where, we’ll pick one, for example China, where we’re being outpaced in terms of scientific papers that are being published and cited. It’s an interesting time where some other countries are obviously generating enough QIS advancements that the world is taking note. It’s possible that we’ll see advantage in some areas come from another country too. Then, it’s a matter of can we reverse-engineer or can they reverse-engineer and how much of it will be scientifically shared with the world like we’re used to seeing in science, or how much of it will be instantly behind locked doors kind of like a secret, that kind of thing is impossible to speculate on.

Kornik: When it comes to encryption and protecting sensitive data, classified information, how important will quantum be in terms of our national security?

Karagiannis: It’s a two-edged sword here. This is all covered also in that NSM White House Memorandum. It’s the idea that we have to maintain our leadership in using quantum computers for things and also in defending against the quantum threat. Eventually we’re going to cross that line of about 4,000 or so logical qubits that can crack encryption. When that happens, overnight, certain secrets will be exposed, and you can’t just flip a switch and rewrite everything. We can’t just overnight have everyone be set up with new encryption standards and all that takes time. So right now, we’re working towards this new deadline. They’ve set one of about 2035 to be ready, and that’s what the federal government’s going to be following.

However, private sector should be getting a little ahead of that because I think 2035 is not really a great deadline. I’m seeing 2030 as being when we have a potential for machines being able to crack encryption. That’s the other aspect that governments have to be ready for and at least the U.S. is making some clear inroads there right now in establishing the things that have to happen. Once NIST publishes the new standards for post-quantum cryptography this year, probably around summer time, there’s certain actions that federal agencies are going to have to take, and regulators, we expect, will copy that.

Kornik: Yes, you mentioned regulators. I’m just curious about skill sets and capabilities. Where do you think the U.S. government stacks up in terms of its quantum talent versus the rest of the world?

Karagiannis: Well, there’s definitely a talent shortage for what will happen as this industry keeps growing. That said, we are doing pretty well on the academic side. We do have a few solid programs here in the U.S. and universities and sort of like groups that are helping develop talent, like the Chicago Quantum Exchange is a great example which is obviously part of the University of Chicago too. We have that kind of growing talent approach, but we’re still not able to very quickly create teams and companies.

It’s still a little challenging to say, “We want to explore quantum. Let’s just build something.” It’s very hard to then go quickly find all the levels of technical skill you need to build something like that out. That’s why right now it’s still very much beneficial to have consulting when it comes to quantum sort of like help you work on your first use case and then start doing the educational path internally. Who can you train up? Who can you hire and bring in? So, there’s still a little bit of a challenge there when it comes down to the private sector.

Kornik: Right. I know you spend a lot of your time doing just that, right? You mentioned the private sector, and I’m curious how quantum in the public sector could impact the private sector. What do business leaders need to know or what should they be doing to sort of prepare for this future?

Karagiannis: Yes, that path towards post-quantum cryptography is a beautiful example of this. It literally says, okay, once these new ciphers are available, federal agencies have to create inventories. They have to show a timeline for how long it will take them to migrate, hopefully before 2030, but they have to establish that. They have to take very concrete actions as a result and we expect that private sector is going to copy that and that’ll be good for everybody because they’ll do the very same things.

They’re not going to do all the R&D required to understand the migration to post-quantum cryptography. We expect they’re going to do the exact same things with rolling out the new cryptography and not breaking anything. It’s that breaking thing that’s dangerous, that’s what we call crypto agility, the ability to implement new primitives and ciphers without destroying everything. The private sector is benefiting.

Kornik: You’ve already sort of taken us out to 2030 and 2035 and talked a little bit about that, but I’m wondering if you could sort of take us out that far or even farther, and talk to us about a post-quantum world and how that will have transformed global governments, or more specifically, the U.S. government or both.

Karagiannis: Yes. When you go out to 2035, of course, you’re in the realm of post-quantum cryptography needing to be rolled out. We’re going to have machines that can reverse RSA, other PK and even other types of cryptography like blockchain and things that we’re using right now. Hopefully, all that will have been replaced, but these machines will be so amazingly powerful by then that it’s hard to even imagine some of the use cases we’ll come up with in 10 years because we are very much scratching the surface right now.

In 2035, I don’t think we’re going to recognize it. I don’t think we’re going to recognize the world by 2030, maybe by 2027 quite frankly, with the acceleration we’re facing so it’s hard to imagine. Let me give you an example of how optimization can change many, many aspects of life. The more data we have to deal with, the more data points, the more moving parts. It starts to become an exponentially out of control situation as you try to make sense of these things. We’ve seen it with supply chain disruptions, the more moving pieces in the supply chain, if something goes wrong with one of them, it affects everything else with like a domino effect.

It all goes back to the traveling salesman problem. How can you visit every country, every city in the country without repeating. That starts to become an exponentially difficult problem to solve. Imagine optimizing the delivery of all sorts of services. They could be physical services like trucks getting to you or trucks getting to you in an emergency. We’ve already seen quantum edge in that. Imagine also delivering much needed resources to people more like digitally or delivering, let’s say things that people count on. For example, the right to vote, how are we going to protect that?

Can one day quantum computing make it more possible to better predict when people will show up, how to have the right amount of folks on hand physically. This isn’t even touching the voting machines. It’s just predicting when people will arrive and the flux and things that will occur. You can really get down to the nitty gritty like that, that things that really impact physical boots on the ground rather than some abstract like algorithm running in the distance, it’s all very visible.

Kornik: Right. Well, we’ll keep up with all those changes by listening to The Post-Quantum World. Thanks, Konstantinos, for your time today.

Karagiannis: Thanks.

Kornik: Thank you for listening to the VISION by Protiviti podcast. Please rate and subscribe wherever you listen to podcasts, and be sure to visit vision.protiviti.com to view all of our latest content. Until next time, I’m Joe Kornik.