XXI century will be the age of knowledge. Many private and public institutions heave already realized that knowledge is the most precious asset they have, but not all. There is a whole new generation of workers enetering the labor market, the N-Generation (thanks to Dale Arseneault from Bank of Canada for pointing this to me, see article here). They grew up online, use blogs instead of newspapers, are IT communication fluent, are members of democratic society 2.0 (unlimited freedom to blog and meet in web 2.0 world).

This poses new challenges for public institutions around the world. Let me raise just a few questions:

  • Internet made the world knowledge more accessible. Are we using this opportunity to make better decisions for our citizens?
  • Are we allocating tasks effciently? For example the is a project assigned to a gruop of workers in the public institution. But alnost surely there is formal and tacit knowledge somewhere outside the institution that would lead to better and faster results. By not tapping this opportunity we may incurr high opporunity costs (which are hard to measure, but I would not be suprised it the aggregate into percents of global GDP).
  • Are we aligning public institution preferences with social peferences. In democracy 1.0 verification of lack of such allingment came once every four years and was called election. In democracy 2.0 there are open source tools that could make this verification much faster. In other words it is entirely possible that social discontent about certain public activities (on marco or very micro scale) is publicly known very fast and leads to change in attitudes and behavior. This could force public institutions around the world to adopt “client service attitude” and lead to better public services in general.
  • Are we using this new paradign to create “client service” attitude inside public institutions (one department provides services to another department, one ministry to another ministry, and the quality of these services is assessed and has impact on wages and bonuses).
  • Innovation is key to sustainable growth in XXI century, those who fail to innovate will sooner or later be caught by producers and service providers from low cost countries. This applies to public institutions as well, which should begin to support and stimulate innovative activities in their countries. Are they doing this job well? Are they helping to “bring together” knowledge to crate a “creative creation mass” that leads to “innovation chain reaction” (one that happened in Findland and made Nokia). What should change in public instutions knowledge management practices in order to kick off this innovation chain reaction. Standard answer I am getting from my Finnish colleagues is that you need to invest properly in education and wait 10-20 years. Sure, but in XXI century this happen faster, much faster. Korea repeated Japanese car success story in half the time Japanese needed, China will do the same in half the time Korea needed.

I can go on with these questions. I think that public sector can learn a lot from central banks experience, as many transformed themselves into very efficient learning institutions (See John Mendzela article for a general discussion). I am planning to launch a research project that looks at central banks experience in this area and draws lessons for the entire public sector. Dale Arsenault from Bank of Canada has already expressed his interest. I would welcome others to join, my intention is to run this project in the knowledge open source technology, where, as in Wikipedia, everyone can contribute to the global knowledge pool, for the benefit of the mankind.

Please leave a comment and your coordinates below, I would like to establish the research agenda first, and then see what empirical research can be done (what central banks we can analyze).