Trends in Local Government

Trends in Local Government
March 2016
Ron Steinkamp, CPA, CIA, CFE, CRMA, CGMA
314.983.1238
rsteinkamp@bswLLP.com

Alliance for Innovation
Forces
Trends
Solutions
© 2016 All Rights Reserved Brown
Smith Wallace LLP 2
Table of Contents

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Smith Wallace LLP
Alliance for Innovation

• Mission = Inspire innovation to advance communities with
the help of Arizona State University and the International
City/County Management Association.
• Goal = impact organizations and communities, changing the
way local government performs.
www.transformgov.org
Smith Wallace LLP 4
Background

• Looked at the next 20 years in local government to identify
the next big things.
• Worked with experienced and emerging professionals, a
global panel of subject matter experts, all lots of data.
• Identified 4 forces and 44 trends.
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Report

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Smith Wallace LLP
Forces

Resources Technology
Demographics Governance
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Four Forces

• Availability of resources is tied to survival, so it is the most
important force.
• Includes food, water, air, habitat, and other natural
materials/resources.
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Resources

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

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

• Distribution and management of society’s assets (resources,
technology, people).
• Administered through the rule of law and the rule of markets.
• The most reactive force – changes in resources, technology
and people often run ahead of governments capability to deal
with them.
Governance

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Trends

1. Climate Change - Climate change events (rainstorms, hurricanes,
tornados, etc.) are growing more intense and the cost of damage is
increasing.
2. Food Insecurity – As the planet gets hotter, droughts will drag on
longer and with greater intensity leading to decreases in food production
and increases in food prices.
3. Water Shortages & Access – Droughts will become more
severe and have a huge impact on water availability. By 2030, half of the
world’s population will live in “high water stress” areas.
Resource Trends

4. Energy Grid Disruption – The U.S. energy grid is very
complicated, unreliable and at risk from attack and natural disaster.
5. Mining – New sources of mining (fracking, deep sea) will unlock
greater energy resources, but could cause environmental concerns.
6. The “NORC” Shift – The Northern Rim countries (Canada,
Denmark, Finland, Iceland, Norway, Russia, Sweden and 13 U.S. States)
north of the 45th parallel will realize longer growing seasons, increased
food production, less ice enabling easier shipping routes and access to
resources. These areas may also see massive immigration from other
hotter and drier parts of the world.
Resource Trends (Cont.)

7. Digital Citizens – More and more citizens are relying on the
internet through computers, phone and web ready devices.
Government must learn to leverage technology to become more
relevant to citizens.
8. Sharing Economy – Eliminating the middleman to share
resources, products and services between users via technology will
become more prevalent. Government must figure out how or if to tax.
9. Education Reform – Student achievement in the U.S. is slipping
compared to other countries. New models of teaching and learning will
transform education and technology will enable it.
Technology Trends

10. Open Innovation – Utilizing technology enabled participatory
platforms to engage the public to solve community issues.
11. Behavioral Insights – We are wired to behave as others do. How
government communications, forms, etc. are designed will impact
outcomes.
12. Unmanning – New technologies will eliminate the need for some
human workers. Research indicates that by 2035, almost half of all
occupations in the U.S. could be automated.
Technology Trends (Cont.)

13. Decentralized Manufacturing & 3-D Printing – 3D
printing will replace manufacturing for many products having an impact
on employment, commercial space and taxes.
14. Global Digital Currency – Global digital currency will become
more prevalent transforming how assets are transferred and fees
collected.
15. Carless Communities – The new generation no longer
considers car ownership important for social acceptance. Bus, train,
taxi, bicycle and car-sharing will increase in popularity.

16. Infrastructure Overhaul – The U.S. infrastructure is failing and
needs investment. It is estimated that it will cost $57 trillion to build and
maintain worldwide infrastructure needs through 2030.
17. New Financial Partnerships – New partnerships will need to
be formed to fund the infrastructure investments. Some examples are
new investors (global investors, Public Private Partnerships, Crowd
Funding, etc.)
18. Microgrids – We will see more microgrids (self-contained energy
grids) because of State incentives, cheap electricity storage, increased
likelihood of superstorms and cyberattacks.

19. Off-Gridding – Local communities will generate more energy from
renewable sources.
20. Electric Vehicles – We will see more electric vehicles.
21. Water Recycling – Due to higher temperatures and water
insecurity, we won’t be using drinking water to flush toilets.
22. Desalinization – The demand for fresh water will attract new
attention and investors.

23. Nanotechnology – Increase in use of nanotechnology could result
in changes in manufacturing.
24. Tech-Enabled Health Care – Transformation of healthcare
based on technology.
25. Biomimicry – This is the study of nature to solve human problems.
Research in this area will increase.

26. Tribalism & Identity Politics – As communities become more
diverse, local government must work hard to make all citizens feel
included and represented.
27. Structural (Youth) Unemployment – Due in part to the
global talent pool and investments made to automate factory floors and
our lives, we could be facing a 20 year period of structural
unemployment.
28. Civil Rights Spring – A young generation aching for a better
future where rights, freedoms, and basic human dignity are upheld by
their governments, who rule wisely and control police militarization.
Demographic Trends

29. Mass Migration – Migration will continue to create dynamic
population shifts.
30. Middle Class Map – The U.S. middle class will decrease from 18%
in 2009 to 7% by 2030.
31. Elder Expense – Citizens over 65 will increase. When Social
Security was first rolled out, there were 14 workers supporting every
retiree. Currently, the ratio is 9 to 1 and it is projected that the ratio will
be 4 to 1 by 2050.
Demographic Trends (Cont.)

32. Urbanization – Mid-size cities (1-2million) are growing.
33. Rural vs. Urban – More people are moving to cities.
34. Smart Citizens – Progressive communities will focus more
attention on citizens who engage with technology to make their lives
more convenient or make their cities better.
35. Nomadic Workforce – Global recruiting will increase.

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

37. Declining Federal Government Effectiveness –
National governments are failing in the eyes of their citizens and are
running into budget issues.
38. Trust in Government – Trust in government is at an all time low,
especially at the Federal level.
39. City-to-City Collaboration – In the absence of national
leadership, local governments will need to become more reliable and
effective through collaborations.
Governance Trends

40. VUCA Leadership – VUCA = Volatile, Uncertain, Chaotic, and
Ambiguous. This is the environment in most local governments with
falling tax revenues, staff retirements, increasing citizen expectations
and more societal problems falling on local government to solve. Local
leaders need to embrace the opportunity to reinvent government.
41. Citizen Engagement – Next generation citizens will not show up
to place based events. Future-ready communities will need to
determine how best to engage these citizens.
Governance Trends (Cont.)

42. Direct Democracy – Residents are calling for more direct
democracy – for example, participatory budgeting.
43. Corporate and Special Interest Influence – Money
flowing into elections is up and will continue to increase. This will
increase the need to focus on and maintain public trust.
44. Fiscal Uncertainty – As the nation and states transfer more
responsibilities to local governments, budgets will be stressed resulting
in more debt. This is in addition to rising pension and health care costs.
Governance Trends (Cont.)

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Solutions

1. Determine your community’s resource threats and
opportunities
• Which resource trends (positive and negative) will have the greatest impact on
your community?
• How is your community responding to these trends?
2. After resources, determine next areas of greatest
vulnerability (Technology, Demographics, Governance)
• Does your community have plans to address these vulnerabilities?
• What other information do you need to know to develop plans?
• Who else needs to be involved?
Basic Solutions

3. Invest in leadership development for elected officials and
staff
4. Consider collective procurement
• Coordinate purchasing through a central purchasing department or work through
a consortium.
• How can additional savings be realized by extending this to other areas such as IT,
maintenance, professional development, etc.
Basic Solutions (Cont.)

5. Strengthen community networks
• When disaster strikes, local governments that have high-trust relationships with
organizations outside the bureaucracy rebound the most quickly and completely.
• Map your networks. What community networks and relationships do you have?
How strong are these connections?
• What connections are needed? How could you develop, expand and enhance
them?
6. Be a place for all people
• Provide “Bias Awareness” training.
• Make connections with diverse members of the community and invite to
participate.
• Increase community engagement.
Basic Solutions (Cont.)

7. Interdisciplinary, Innovative Local Government
• Create innovation teams across government departments to break down
governmental silos and use interdisciplinary groups to address some of the
biggest challenges.
• Convene broad community stakeholders to address cross-community issues.
8. Broaden your definition of Sustainability
• Go beyond traditional environmental components to include economic and social
justice factors.
• Consider a scorecard to report on environmental, social, and economic
sustainability goals.
• Consider working with other communities to share best practices.
Intermediate Solutions

9. Develop contingency plans for both rapid growth and decline
10. Balance the community’s focus on growth with quality of life
Intermediate Solutions (Cont.)

11. The Fifty-Year Plan
• Provides a set of guiding and enduring principles that can better withstand term-
by-term political pressure.
• Enables a government to make long-term investments in infrastructure in a way
that feels appropriate to the time horizon.
• Enables residents to think about their choices from their grandchildren and great
grandchildren’s perspectives.
12. Invest in Strategic Foresight
• Process to help a community assess trends, explore possible futures, and determine
its future vision.
Transformative Solutions

13. Invest in Open Government and Smart Citizens
• Share community data and engage citizens digitally and through “old school”
methods.
• Deepens trust.
• Facilitates social cohesion and breaks down tribalism
14. Reinvent Local Government
• Determine why the local government exists.
• Determine how its purpose has shifted since the City/County was founded.
• Determine what the role of government should be for the next generation.
Transformative Solutions (Cont.)

Questions?

Ron Steinkamp
rsteinkamp@bswLLP.com
314-983-1238
37
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2220 S. State Route 157, Ste. 300 │ Glen Carbon, Illinois 62034 │ 618.654.3100
1.888.279.2792 │ www.bswLLP.com
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Trends in Local Government

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