How can governments prepare for a future beyond the forecasting horizon? Singapore is leading the way.

The conundrum of the planner and the policy-maker is how to make plans and policies that are robust enough to stay valid over the long term, even as assumptions, conditions and technologies change. This challenge is made worse by black swans and other strategic surprises, game changers that are low-probability but high-impact events. Such disruptive shifts occur everywhere – in technology, in geopolitics and in society. The last two decades have seen some big shocks — such as the Asian financial crisis of 1997, the al-Qaeda attacks of September 11, 2001, the SARS crisis of 2003 and the global economic and financial crisis of 2008-09 — that set in motion new dynamics, creating new challenges and fresh uncertainties.

In 2002, Donald Rumsfeld, then US secretary of defense, pithily summarized the problem of strategic surprise. “There are known knowns, these are things we know we know,” he said. “We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns — the one we don’t know we don’t know.”

How can governments prepare for the future when it is fundamentally unknowable, and likely to be punctuated by black swans, unknown unknowns and other strategic surprises? The obvious answer is that there must be built into plans and policies an expectation of change, a capacity to adapt to change and a capacity to change. Deconstructing this statement, an expectation of change requires foresight and futures thinking; a capacity to adapt to change is about resilience; a capacity to change is about experimentation, risk and transformation.

I will touch on each of these aspects, drawing on the Singapore experience.

“[Because] we are not only living in a world of accelerating changes but also of changes which are global in scope and which permeate almost all aspects of human activity [and since] change is about the future,” observed Sinnathamby Rajaratnam, Singapore’s first minister for foreign affairs, “then only a future-oriented society can cope with the problems of the 21st century.” This insight is fundamental to Singapore’s efforts to understand and plan for the future.

Finding ways to better anticipate changes in technology and in the operating environment is particularly imperative for the Singapore Ministry of Defence (MINDEF) because many of its large capital projects have to be sustained over decades. In the late 1980s, it adopted scenario planning techniques first developed by Royal Dutch Shell. Then in 1991, after MINDEF’s positive experience with scenario planning, the Scenario Planning Office (now called the Strategic Policy Office) was set up in the Prime Minister’s Office, to apply the technique to issues affecting the entire government, not just the defence and security agencies.

Today, scenario planning is a key part of the Singapore government’s strategic planning process and is incorporated into the annual budget cycle. National-level scenario planning exercises are run every few years. The results are used by ministries and agencies for their own strategic planning. Apart from these efforts, which deal with issues on a national scale, focused scenario studies on specific topics like climate change and the new media are also conducted from time to time.

The big benefit of scenario planning is that it surfaces otherwise hidden assumptions and mental models. In the Singapore experience, we have discovered that when scenarios are well crafted and articulate imaginative yet plausible ways in which the future could evolve, planners and policy-makers will move out of their comfort zones, begin to think the unthinkable and more willingly explore fresh strategies.

Planning units in ministries and agencies in the Singapore government are now familiar with the key vocabulary and concepts of scenario planning. This has helped forge a common language and frame of reference for civil servants to think about the future. More important, it has helped to inculcate an “anticipatory” mindset in planners and policy-makers so that they instinctively raise what-if questions on the issues they deal with.

Notwithstanding these benefits, scenario planning has its limitations. Scenarios alone cannot adequately reflect the complexity of the operating environment. Scenario planning also undervalues the impact of the irrational on future outcome, and cannot anticipate black swans and unknown unknowns. “One thing a person cannot do, no matter how rigorous his analysis, or heroic his imagination,” observed the economist and Nobel laureate Thomas Schelling, “is to draw up a list of things that would never occur to him.”

The benefit of scenario planning is that it surfaces otherwise hidden assumptions and mental models: when scenarios articulate imaginative yet plausible ways in which the future could evolve, planners and policy-makers will move out of their comfort zones and explore fresh strategies.

To address this deficiency, even if partially, the Singapore government has adopted other tools for strategic planning and futures thinking. While scenario planning remains the base, a wider range of foresight tools such as “horizon scanning,” “backcasting” and “causal-layered analysis” are now deployed. Collectively, these tools are referred to as Scenario Planning Plus (SP+).

In 2004, the Singapore government developed a unique computer-based suite of software tools called the RAHS (Risk Assessment and Horizon Scanning) system. In the parlance of today, RAHS is a big-data system, with the data analytics to do horizon scanning, scenarios-to-strategies and sentiment analysis. RAHS helps analysts to detect and investigate emerging strategic threats and opportunities. It is a shared platform that enables analysts from different agencies to collaborate on research, modelling and perspective sharing. RAHS is the first significant deployment of technology in Singapore to aid foresight and futures thinking.

In 2009, the Singapore government set up the Centre for Strategic Futures (CSF), a think tank that promotes a whole-of-government approach to strategic planning. It identifies, adapts and develops foresight and futures thinking concepts and tools for the SP+ toolbox, as well as analyzing emerging issues for the Singapore government. Although a small outfit, the CSF is a catalyst for better foresight and futures thinking in the Singapore government and its agencies. Since the establishment of the CSF, several ministries and agencies of the Singapore government have set up their own futures units. By giving a small group of people the latitude and the bandwidth to think systematically about the future, the Singapore government is going some way to reducing the frequency of strategic surprise and mitigating the impact of such shocks.

Land is a limited resource in Singapore. Long-term land use is guided by a “Concept Plan” that is translated into a statutory “Master Plan.” By looking far ahead, the Concept Plan guides the staging of major development works, such as the reclamation of land, opening up of new areas for development, redevelopment of existing land and the construction of transportation and infrastructure to support land development. This ensures that land is available and ready to support development when the need arises.

A good example is Marina Bay, a 360-hectare plot of reclaimed land next to Singapore’s Central Business District. Guided by the 1971 Concept Plan, land reclamation began in the 1970s and was completed in the 1990s. With the land reclaimed, the planning authority drew up a series of detailed plans that mapped out different scenarios for Marina Bay to accommodate the expansion of Singapore’s main financial hub once land in the Central Business District was exhausted. During this time, the road and mass rapid transit systems were built, together with a network of underground common service tunnels to house all essential building and telecommunications services. Development of the first site in Marina Bay began in the mid-2000s. Since then, some 140 hectares of land has been developed for offices, housing, hotels and a large city park.

Planning so far ahead and for multiple possible functions is inherently complex and invariably faces many uncertainties. To address this, both the Concept Plan and the Master Plan are regularly reviewed — every 10 and 5 years, respectively. This process of long-term planning and regular review of the Concept Plan and the Master Plan enables Singapore to anticipate its needs far in advance, and provides the flexibility to adapt to changes over time.

But such plans are possible only because of the embrace of a whole-of-government approach, in which trade-offs in land use are made among agencies. What is protected is not the narrow sectoral interests of the various ministries and agencies but the larger national interest. At its core, whole-of-government means finding consensus on strategic priorities and compromises, and brainstorming strategies and plans that require coordinated responses across agencies. However, the whole-of-government approach has to overcome the deeply ingrained bureaucratic instinct to operate within silos, rather than to collaborate horizontally across organizational boundaries. This is a big hurdle, because it requires a fundamental change of culture into one in which officials consider the spillover effects of what they do and their impact on the policies and plans of other agencies.

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The Singapore government is committed to building ample national reserves, giving Singapore a buffer to draw on in times of crisis. The ability to quickly and decisively deploy immediate responses to crises also helps to manage uncertainty. This was demonstrated when the Singapore government drew on the national reserves during the 2007-08 global financial crisis to put together the S$20.5-billion Resilience Package. This was primarily aimed at preserving and enhancing business competitiveness as well as promoting job retention during a period of great uncertainty. A key aspect involved encouraging firms not to retrench workers, but to support retraining programs as well as temporary part-time arrangements. While significant short-term pain was involved, there were many long-term dividends once the world economy began to recover, and Singaporean firms were able to respond with alacrity and speed and “catch the winds” of global economic recovery.

Given the uncertainty in the types of skills the jobs of the future will need, the Singapore government concluded that it is no longer possible to front-load pre-employment education, and then expect the skills acquired in the first 20 years of a person’s life to be sufficient.

“SkillsFuture” is an example of how planners in the Singapore government are trying to “future-proof” the workforce by establishing a norm of lifelong learning, and by creating the infrastructure to make quality continual education possible. Because it is not always possible to predict manpower trends accurately, having a system in place to encourage upgrading and a culture that encourages lifelong learning will help Singapore and Singaporeans ease through changes in the employment landscape.

The big challenge and danger facing planners and policy-makers is not incremental change but disruptive change. It is often difficult to anticipate such change. Sometimes it is even difficult to identify such change, much like the proverbial frog in boiling water, until it is too late.

Governments must be prepared to set aside practices that have worked well in the past, and adopt new ideas and concepts that may show little immediate evidence of success. Change should be a basic organizational imperative of government. This means constant change and transformation. There is no end point. It is a journey without a fixed destination. An organization must look forward to the future as an ever-shifting horizon, identify relevant challenges and change to meet these challenges. It must be geared for continuous change. Such change must go beyond mere incremental improvement. It must be transformational, in the sense that when implemented, it will transform the capability of the organization to fulfill its core mission.

Rather than plan exhaustively for every contingency before making a move, governments must be prepared to experiment, even if they cannot be entirely certain of the outcome. The approach is to probe, to sense patterns and to act, even in the absence of complete information. Governments need to operate not in a fail-safe mode but in a safe-fail mode. Pilot programs, prototypes and beta versions should be the norm. If they succeed, then they can be expanded. If they fail, then the damage is limited.

When confronted by uncertainty, experimentation, testing and prototyping should be on the top of the checklist of things to do for the planner and the policy-maker. Overreliance on analytical models or looking for the perfect, optimal solution may lead to paralysis. Technology often moves ahead of policy, which can create a lot of uncertainties. Looking at autonomous (or driverless) vehicles (AVs) as a potential solution to overcrowding on the roads, the Singapore Ministry of Transport and the Land Transport Authority will be setting up a test site for AVs in One-North, a high-tech business park, to test and evaluate AV technologies, encourage development of industry capability and assess regulations. This will be a significant experiment, and it is not without its risks. But such an expeditionary mindset is essential to prepare for an uncertain future.

Governments must also be able to manage the risk that is a natural result of operating under conditions of incomplete information and uncertain outcomes. No amount of analysis and forward planning will eliminate the volatility and uncertainty that exists in a complex world. There will always be threats to national outcomes, policies and plans. These threats constitute strategic risk.

In Singapore, a recent initiative is the effort to develop the Whole-of-Government Integrated Risk Management (WOG-IRM) framework. This is still a work in progress. But the aim is for the framework to capture the wider strategic risks that affect Singapore. It also plays an imperfect but important role in discovering the interconnections among risk factors. This in turn helps to reduce some of the complexity. It is not possible to eliminate every risk, but approaches like WOG-IRM can help us manage them in such a way that strategies and their premiums do not have to be front-loaded.

Good plans and policies acknowledge the uncertainties and complexities of the operating environment. Because the future cannot be predicted with any confidence, governments need tools of foresight and futures thinking, from which they can incorporate resilience and the capacity to change into their plans and policies.