Once again, Policy Horizons Canada has prepared exclusively for CGE a list of “wicked issues” for public servants to think about in the coming year. They address the broader context in which governments function, and raise issues about future policies, programs, and the role of government.

The age of smart everything
Everybody knows about smart phones, but in the coming years we may witness the mainstreaming of smart cars, smart lamps and even smart shoes. This phenomenon of devices interacting together with or without human assistance is now being referred to as “the internet of things.” While not entirely a new concept, Cisco Internet Business Solutions Group estimates that there are now more digitally networked inanimate objects than people. This is only bound to increase; they predict that 25 billion common devices will be connected to the Internet and will be able to interact with one another (i.e., if and where applicable) by 2015, and 50 billion by 2020.

But why would you want your fridge talking with your wallet? In other words: what is machine-to-machine communication going to accomplish for common mortals? Sensors can help to manage inventories and buildings will reduce the amount of wasted energy by darkening their windows on hot days. Human interaction with inanimate objects will also change: discreet sensors could help us monitor our vital bodily functions, making managing our health more than just the annual physical examination.

Having sensors and smart objects surrounding us is not without challenges. Do we want constant reminders of how we should behave? And if our appliances and personal objects start relaying enormous quantities of personal information to companies and governments, what will it mean for marketing and privacy?

Printing beyond the page
3D printing – also known as additive manufacturing – involves using computer-aided design software to produce a wide array of products from furniture, clothes, bones and prostheses to auto, airplane and building parts. The technology has been around for several years, but is getting cheaper, incorporating more user-friendly software and utilizing a growing number of materials (e.g., stainless steel, glass, ceramics, or certain combinations thereof). This allows highly customized, personalized and sophisticated parts and products to be printed on demand, anywhere.

The expanding use of 3D printing processes has the capacity to change the economics and location of manufacturing. All you may need is a computer and a “printer.” In 2012, the U.S. government established the National Additive Manufacturing Innovation Institute (NAMII) in partnership with the private sector to promote innovation in 3D printing and help transform the manufacturing sector.

Today, manufacturing is increasingly using 3D capacities on the shop floor. And in 2013, there are plans to bring 3D printing to a handful of Staples stores in Europe. Where will it go from here? What kinds of strategies will firms, large and small, use to extract profit in this revolutionary new manufacturing world? And how will government policy have to adapt?

Experimenting with innovation
Governments around the world are increasingly using experimental innovation labs to design and test policy and program prototypes. Innovation labs are both a process and a work space that break down hierarchy and engender divergent and creative thinking. Using collaborative technology such as Web 2.0 and highly visual approaches like story boarding, labs enable participants from all parts of society and with varied skill-sets to come to a common understanding of a policy challenge, and explore, design and test user-centered solutions for potential use across the system. They offer the opportunity to test designs on a small scale before making large investments in programs.

Innovation labs tailor space usage to the nature of the work to foster a collaborative and creative innovation ecosystem. The surroundings, combined with cutting edge collaboration tools and technology, sends the message that the lab is an experimental place where traditional thinking, a risk averse nature, silos and resource flows are deliberately interrupted, encouraging participants to look at problems in new ways.

Several innovation labs already exist internationally, including Mindlab in Denmark, the Helsinki Design Lab in Finland and Australia’s Centre for Excellence in Public Sector Design. In Canada, the MaRS Solutions Lab and sLab at the Ontario College of Art and Design in Toronto are examples. The B.C. government is considering a lab for social innovation as a result of recommendations from the B.C. Social Innovation Council. 2013 may prove to be an interesting year for the future of innovation labs, with an increasing number of governments embracing the concept and considering establishing an international network of public sector innovation labs.

What motivates behaviour?
Policy tools and instruments often aim to change behaviours. Regulations and financial incentives remain important tools, appealing to rational human motivations to make choices favourable to one’s well-being. That said, as noted by behavioural economist Dan Ariely, when it comes to decision-making, human beings often behave more like the emotional and fallible Homer Simpson than the hyper-rational and wise Mr. Spock. Consequently, there is growing interest among governments in understanding the hidden forces of human decision-making in order to design policies to “nudge” individuals to act in a socially, economically and environmentally responsible manner.

The Behavioural Insights Team in the U.K. Cabinet Office has applied behavioural insights in a variety of policy areas, including paying taxes, reducing fraud and encouraging healthy behaviour. California has also launched similar efforts to encourage recycling and energy-saving and Denmark has established the Nudging Network – a forum for policy-makers, practitioners and researchers to share and experiment with initiatives using behavioural insights.

Games with rewards are another emerging policy tool aimed at impacting behaviour. Examples include the Agriculture and Agri-Food Canada-sponsored Invitational Drought Tournament (an interactive game to help institutions prepare for droughts), Richard Branson’s X Prize for climate-saving technologies and the UN’s Food Force video game. This idea, of changing behaviour through fun, is not going to go away, as industry and educational institutions continue to embrace and explore it. 2013 will see further advancements, including summit events in the United States and Europe, where individuals can, among other things, become certified in gamification. Clearly this is a growing phenomenon, and as we learn more about behavioural influence and gamification, new avenues will likely open in finding ways to help achieve policy objectives.

From classrooms to chat rooms
As we prepare for the knowledge economy, the digitization of education is shifting the roles of students, teachers and institutions. Students can now leverage mobile devices to access information anytime, anywhere. While these tools may be distracting in the traditional classroom setting, teachers are adapting by using technology to better connect with their students and tailor their classes accordingly. And teaching need not be limited to teachers; “social learning” – students teaching students – can now occur in spaces created by collaborative technologies.

The place of learning is also shifting from a physical to virtual space. The Khan Academy offers a virtual video library, interactive challenges and assessment in a range of subjects. Codecademy is fostering virtual peer-to-peer learning and instruction of computer coding skills. At the same time, the world’s leading universities are going virtual, including Harvard (Open Learning Initiative) and the Massachusetts Institute of Technology (OpenCourseWare). If this trend continues, could students miss out on the social conditioning that comes from interacting with their peers? What does this mean for traditional universities? How could we adapt physical places of learning to become more conducive to group discussions, projects and intellectual exchange? Are employers well positioned to use e-education tools to support training and life-long learning?

What internet trolls are lurking on your cyber wall?
Trolls are no longer relegated to Norse mythology or the latest Peter Jackson movie. Whether it is the bashing posts in online media comment sections, cyber-bullying causing distress among teenagers or hateful neo-Nazi groups’ web pages, Internet trolls are infiltrating the World Wide Web. Many observers are questioning if we should try to tame the Internet and implement strong rules about hateful or disrespectful content. Others argue “e-expression” is as fundamental as freedom of expression.

Presently, each company is responsible for its own code of conduct. In the fall of 2012, Google refused to remove an anti-Islamic video from YouTube after repeatedly being asked by the White House to do so. In 2011, British Prime Minister David Cameron considered banning rioters from social media websites during the London Riots. Late in 2012, international forums were held to explore changes to how the Internet is governed; the multi-stakeholder, open model that had always existed was being challenged as some countries sought more control and oversight. We may see further developments in 2013 and beyond that could impact how the Internet is used.

A new kind of caregiver
With an aging population, the future may simultaneously see more people requiring care and fewer people able to deliver it. This is a problem in many countries and examples of innovative approaches to remedy the situation are beginning to appear. Take for example exploration in health-aid robots. In response to a growing percentage of the Japanese population that are either elderly or infirmed and who require mobility assistance, car manufacturer Toyota has developed a family of robots to help. The robots serve different functions, such as assisting paralyzed patients to walk or bathe. Not only will this reduce the physical demands on caregivers, but patients gain independence as they become more mobile.

Similarly Denmark is exploring human-robot interaction possibilities in health care. The entire region of Southern Denmark is striving to create an international centre of excellence in “welfare technology,” the implementation and distribution of assistive technology and services within the social and health areas. Examples of current projects include working to advance telemedicine and Ambient Assisted Living, a program to improve the quality of life for elderly citizens through the development of age-sensitive information communications technology solutions.

While robots and other advanced technologies are proving more and more vital to healthcare, they are not cheap. As society increasingly demands access to these technologies, will we be forced to develop preferences and make trade-offs for other aspects of healthcare? Will publicly funded systems be able to keep up with the new possibilities?

Lifting the chill over the Arctic
As melting ice gives way to both opportunities and challenges, the Arctic may become the new setting in the ongoing struggle for geopolitical power. And, Canada may be in a strategic position, as it is set to take over as Chair of the Arctic Council in May 2013.
For the most part, there is already considerable collaboration and cooperation between Arctic states, barring the odd spat over rocky outcroppings and the like. The wealth of energy and mineral resources in the Arctic offers great opportunities but also poses potential for conflict. Huge too are the technical risks and costs of extraction, not to mention the economic, environmental, political and social implications for Northern peoples.
Non-Arctic states are also interested in the Arctic as melting ice opens up potentially lucrative shipping lanes. Some are investing heavily in Arctic infrastructure and polar research capability. China has been operating the world’s largest non-nuclear icebreaker – the “Snow Dragon” – since 1993, with a sister dragon set to be operational in 2013. And China, India and South Korea, among others, already have a physical presence in the Arctic through their respective Yellow River, Himadri and Dasan scientific research stations located in Ny-Alesund, Norway. As the demand for natural resources continues to intensify, it is inevitable that the interest of other emerging powers will also turn to the Arctic.

Space exploration is more than just rocket science
The India Space Research Organization is planning on sending an orbiter to Mars in 2013 at an estimated cost of US$90-million. Sending a probe to Mars means India enters the exclusive club of space-faring nations. Ghana – one of the fastest growing economies in Africa – is also venturing into space through the establishment of the Ghana Space Science Technology Centre. The growing presence and immense capital being invested in private space exploration and tourism, such as that by Virgin Galactic, is further evidence of non-traditional actors getting in on the space game.

Fundamentally, there are a number of tangible economic benefits for investing in space exploration. NASA actively seeks partnerships with private companies to create “spinoffs” in areas of health (e.g., medical devices that increase the effectiveness of chemotherapy treatments), consumer goods (e.g., screening devices for the detection of vision problems in children), and transportation (e.g., blended winglets, the upturned ends on many airplane wings, have saved the airline industry billions in fuel costs), just to name a few. The positive economic spinoffs for India could be similarly impressive, possibly helping to cement its position within the BRIC nations, but also its global competitiveness.

Assemble your own city
The year 2013 will be ushering in a neighbourhood run not by a government, but by a corporation. Swedish furniture giant IKEA has moved beyond designing furniture, to creating and operating a neighbourhood in London called Strand East. IKEA’s private neighbourhood will not be your typical community. The streets will be vehicle-free, all 1,200 townhouses and apartments will be rentals, and 40 percent of the units will be for families. The neighbourhood is to be mixed-income with smart designs that will allow for good quality at reasonable prices. IKEA will also have a strong hand in the activities held on site and will aim to keep “undesirable activity” at bay. However, it is unclear whether such a strong hand will be welcome by the city’s inhabitants.

As more large companies begin building and managing cities, it raises important questions about the power and control they exert over the lives of their citizens, and the impact this could have on democracy and civil liberties. In Honduras, the Supreme Court recently struck down a proposal for Charter cities on the basis that it would violate sovereignty and territorial integrity. The proposal would have seen the creation of semi-autonomous cities run by corporations or foreign governments, with their own sets of laws, taxes and judiciaries. Paul Romer, one of the Charter cities’ initial advocates claimed that citizens would “vote with their feet” by choosing to live there. However, without the right to vote at the ballot box, there could be a lack of accountability and high potential for abuse.

While a city or neighbourhood run by a corporation is a novel concept that could create better opportunities for its inhabitants, there is also the potential for it to infringe on their rights and freedoms. Although voting with their feet may not be a bad thing, citizens may also wish to retain the option of using the ballot box.

Uncertain times for commodities?
World commodity prices may be rising as supplies of the things we most like become limited. While the rumours about products like bacon becoming unavailable in 2013 abound, the likelihood is that we will have to pay more for a number of products.  

All of this is evidence of what happens when expanding populations increase their demand for something. We see this now, as emerging economies have developed an increased taste for many food items very familiar to Western diets. Take meat for example: the ability to buy meat has generally been a sign of wealth. With economies roaring in recent years, so are their collective appetites. However, livestock is very much input-dependent – one pound of pork requires three pounds of grain feed; beef requires seven. This rising demand for meats, and the grain needed to produce them, has made countries like China a net importer of foods for the first time in decades.

So where will grain come from? Canada and the U.S. are grain producing and exporting countries. But 2012 also saw significant droughts that hampered parts of North American feed grain production. A shortened supply of grains due to poor growing conditions, coupled with rising global demand, raises input prices and cuts profitability for meat producers. What might these Canadian producers do to minimize costs? They may be forced to reduce the size of their herds to be able to stay afloat. As such, potential shortages and higher prices for commodities could result.

Is the cashless society taking over?
The world is moving to a cashless society; transactions around the world are becoming increasingly electronic, driven by the increased prevalence of mobile finance. Canada was declared a “trail-blazer” by the U.S. when it announced the elimination of the penny; 71 percent of the population is comfortable with never having to handle cash to make a purchase. Google has developed GoogleWallet, an app that allows consumers to carry their wallet in their phone. Starbucks’ own mobile payment app has been used for over 70 million transactions since January 2011, and going forward will allow consumers to pay (and tip) for coffee by swiping their phones at the till, thanks to a partnership with Square, a California start-up that enables mobile-payments between consumers and retailers.

Many critics of going cashless argue that it unfairly discriminates against those without access to the type of technology, but this may not be the case. E-vouchers, like the ones used by rural farmers in Zambia, and mobile payments in Kenya provide greater security and flexibility over their finances, and allow for greater financial inclusion for people without access to formal financial services.

There is an upside of dropping cash from our lives: cost savings, speed and security, new market access and economic development. For governments, cash is expensive to move, store, print and resupply, while, for better or worse, electronic cash could help track consumer habits and purchases. It is already impacting government services and delivery. Electronic cash could also decrease physical robberies and counterfeiting, though it could raise cybercrime and privacy concerns. Though cash may likely never fully disappear, its role in our lives is certainly diminishing.

Surprise is on the horizon…
The ease with which informal networks organize, due in part to social media, has given rise to many social movements around the globe (i.e., the Arab Spring and the Occupy movement). “What next?” we may ask ourselves. What movements or new technologies will potentially disrupt the way we work and design public policy? How can we better anticipate possible impacts and ensure a robust and adaptable policy environment? And what skills and tools do public servants need to help do this? Developing a longer term vision and foresight capacity may be one answer. Whatever happens, every year holds surprises and we cannot predict what they will be. All we can do is keep an eye on the weak signals, try to anticipate change and help prepare public servants at all levels to be more resilient and adaptable to change.

Policy Horizons Canada is a foresight organization within the government of Canada. The authors are Imran Arshad, David Cavett-Goodwin, Andrew MacDonald, Cara Vanayan, and  Jean-Philippe Veilleux  with contributions from other Horizons staff. The views expressed do not necessarily represent the views of the government of Canada.