The Fifth Industrial Revolution (5IR) that escorts a humanity of deep multi-layered cooperation between machines and humans is already an overlay on the present Industrial Revolution. As we unravel the trials of the 4IR, we witness that the tools of the 5IR, an immersive 3D version of the internet, have already crossed the Valley of Death into makerspaces. Apple unveiled its M1 Ultra SoC (system on a chip) for developers compiling code, and creatives working in 3D environments, in March 2022. The chip is loaded with 114 billion transistors. The 4IR is even now building the 5IR.
Exploring barriers to and drivers of innovation while conquering the Valley of Death remains an unescapable peculiarity. Innovation is not linear, but three features are noticeable: (1) ideation, (2) research and development, and (3) acceleration or commercialization. The challenges of the last phase, aiming to develop a physical artefact of an implemented and scaled solution, is where the Valley of Death is encountered. The Valley of Death is the gap between innovation and commercial application.
In bureaucracies, the shortage of commercialization skills and the structure of the establishment itself can contribute to the Valley of Death’s formation. Transformation attracts energy. But change is disruptive. It saps energy. Innovation begins with a burst of energy. The energy radiates rapidly. Then comes the Valley of Death. Energy evaporates. Energy begins to dissipate away from the change effort. The team grows impatient with the opacity of perceptible outcomes. Enthusiasm bows to cynicism. Once inside the valley of death, most change management efforts never fully recover: Most either fail outright or deliver merely mediocre results. But the Valley of Death is not an unpredictable phenomenon that perceptive leadership can’t foresee.
After investing a lot of agile capacity to generate fresh ideas and create prototypes, squads may still be unable to visualize how sprints interlink. The solution to the gridlock is to realign the transformation effort to make it more agile. The first adjustment is to reduce the number of initiatives by about sixty per cent and to articulate a clear vision of how each solution would contribute to the overall transformation.
Working inside cloistered departments also precipitates into encounters with the Valley of Death phenomenon. To mitigate the perils of the Valley of Death, bureaucracies sometimes use: a user focus, iterative problem reframing, visualization, and sandboxes. Each of these themes have specific principles and practices. Governments have narrow manoeuvrability to reshape the internal boundaries of their organizations, and struggle to coordinate across agencies. This is worsened by budget and financing vehicles that cannot cut across departmental and agency boundaries. Citizen-centred, cross-agency initiatives with positive cost benefits, get mired inside multiple agencies’ governance requirements or are weakened by brooding uncertainty, around the final home of an initiative.
Digital ways of working require novel models of financing. When fast, adaptive digital teams encounter slow-moving, rigid financial processes, the result is undertow. Digital is not an overhead. It is a strategic investment. When planners see DT as a cost centre, the focus becomes cost control not value creation. Digital services have a complex cost profile. Some digital services, such as a new digital offering, may add cost but create new value. Other digital services are cheaper than the manual processes they replace. Some new open source digital services replace more expensive legacy licenced software solutions.
A vigorous digital portfolio may range from strategic investment to tactical cost reduction. Multi-agency initiatives using joint-teams require not just Generation 5 (G5) Collaborative Regulations but clarity about funding, and accountability. Too often bureaucratic services mirror the existing structure of governments or custom unions like the EU rather than the requirements of the problem to be solved. The mission of G5 Regulations is to convene stakeholders – from different circumstances and sizes – into one living network for all to participate in decision-making, and to shape inclusive momentum. A CARICOM Single ICT Space is imperative.
Digital projects benefit from agile sprints and flexible funding models that may not match rigid budget cycles. This modality encourages the development of artefacts that better meet citizens’ needs, and reduces the risk of cost overruns. Moreover, agile finance allows the digital products to demonstrate value early; empower teams; and allow citizens to receive faster and better service. This in turn allows governments to respond more swiftly to changing priorities and evolving user needs. This model is new but not unprecedented in the public finance. The UK’s Government Digital Service (GDS) and Australia’s New South Wales (NSW), have adopted it, and the US has launched the Technology Modernization Fund with similar priorities.
Traditional portfolio funding of discrete departments of state with shielded allocations, hinder the ability of squads comprised of talent from different departments, or different levels of government to share a common platform. The result is that shared horizontal platforms for services remain rare in government. As change accelerates, governments need to develop resilience so they can respond to Next. Traditional models of government finance remain stage-gated, sequential, and inflexible. These practices mesh poorly with the agile feedback sequences essential to building digital services that must accommodate uncertainty, and fast-feedback loops that permit course correction.