Kimon Lycos


Death of the bureaucrat.

Let’s face it, not too many people grew up wanting to be a middleman designated to infuriate their fellow human beings at every opportunity between strict business hours. Yet we have a massive class of people who do just that. How did the bureaucrat get born? No one really knows for sure, but there is one thing that is becoming more certain, we know how they will be taken out. Hello, blockchain!

Pure market forces are conspiring to destroy a monopoly that governments have with citizens’ precious information and services — everything from what we own to what we owe, to who we are, social security numbers, tax, votes, and identities.

There are moments in every large monopoly-like market where ‘customer service’ is not innovated because there is no apparent need to, causing the start of a revolutionary feeling. This is much akin to what the French pulled back in 1789; when people get pissed-off enough they take action.

As with Uber, which has completely disrupted the corrupt and inept taxi industry, we can look forward to a revolution against governments and ironically enough it will be led by governments themselves. This will be thanks to globalisation and a need for countries to be competitive in the struggle for talent, tax revenues and innovation to maintain prosperity. As progressive governments seek the value of blockchain, it will be at the expense of someone who uses the word ‘no’ more than their heart beats.

Sweden’s land registry authority, the Lantmäteriet, wants to allow buyers, sellers, banks and authorities to track a transaction from beginning to end digitally instead of using paper contracts, thus making tracking and transparency easier; every party has information always accessible on the blockchain.

The Dubai government is going all in. It wants all government documents secured on a blockchain by 2020. It estimates its blockchain strategy has the potential to generate 25.1 million hours of economic productivity each year in savings, while reducing CO2 emissions.

Let’s pause and think what this all means. Governments can address the challenges of trust and transparency while meting the need for data protection and privacy. And you won’t need a department of people getting in the way while not adding value to the transaction.

I would like to thank the global movement that’s demanding high service-level innovation for this shift. How many times when dealing with a government department have you screamed, “Why can’t they make this easier, faster or simpler!” because you’ve had a better experience from a leading technology company? It’s just not people with bad haircuts who get in the way, but the entire government system is geared to grind any basic enquiry to a halt: conflicting data formats, woeful interoperability and trying to balance openness against privacy.

Government data can now be fully unleashed, because blockchain provides an immutable, transparent record of the truth, and it is changing how organisations carry out trusted transactions. But more than that, watch out for emerging countries who don’t have billions tied up in legacy systems, where bean-counters are desperate for ROI.

For once, it might really payoff to be behind, because poor governments can skip several generations of IT systems and avoid creating a bureaucratic class of public service to leapfrog developed nations and realise new competitive benefits.

The rocky road to transparency

Before we get too utopian let’s not forget that some realities will hit home. We know from supply chains that blockchain helps with eliminating counterfeit goods, but many organisations they are holding back because they don’t want to reveal the extent of their problem.

I expect governments to behave the same. It’s interesting that the two toughest and heavy handed approaches have come from China and the US. But I suspect their hands will be forced as other countries move ahead at warp speed to seize the innovation higher ground. When you start counting the cost of gross inefficiency and opportunity loss, the business case is very clear. But getting there will take time, even for the most dedicated.

You first have to build a foundation for the change, policies need to be in place, and education of the right people at the city, state and federal government levels needs to occur. But this has to be at the top levels, because the middle level is where trouble begins. I can’t imagine a lot of people in a cozy position welcoming the removal of their relevance with open arms.

Once the right people understand blockchain and the way it can solve existing problems, you then turn your sights to where existing technology infrastructure is inadequate — here you hit the sweet spot for blockchain change. It then becomes a challenge to attract the right partners to think through, build and deliver solutions.

Ultimately, it’s about improving the lives of citizens

I love the idea of ‘responsive open data’. Blockchain-based solutions will give people the ability — without having to wait in line — to automatically transact with the government, yet still have complete trust that the government has certified that transaction. Instead of going to the social welfare office or calling them up and waiting for an hour to get through to complete a transaction, you could use an app on your phone.

In Australia, the social welfare agency CentreLink is famous for terrible service. West Australian Alysia Kepert was caught in the so-called “robo-debt” crackdown. After being diagnosed with breast cancer in 2010, she received income support but missed reporting requirements during treatment.

Following a nine-month battle with the department — which involved going to the Administrative Appeals Tribunal — she reduced the debt from $4,000 to $500.

She waited 45 minutes on hold during one call and said the whole process took a psychological toll.

“It was actually reliving a very painful part of my life, with the cancer diagnosis, and all the hardship I experienced as a result,” she said. “And you could actually be handballed through quite a few people before you could get to the person that could actually help you.”

More by Kimon Lycos

Topics of interest

More Related Stories