1.1: Problem Detection & Understanding

Detect and understand problems before they become unsolvable

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The continuous struggle for evidence- based policy- making can have some important and potentially negative implications in terms of the capacity of quick prompt identification of problems. Policy- makers have to balance the need for prompt reaction with the need for justified action, by distinguishing signal from noise. Delayed actions are often ineffective; at the same time, short- term evidence can lead to opposite effects. In any case, government have scarce resources and need to prioritize interventions on the most important problems. For instance, the linear models adopted in econometric forecasts significantly underestimated the risks of the housing bubble in the late 2000s, and the systemic reaction that it would lead to, thereby leading to delayed reactions. The detection of the hozone hole was delayed because satellite detection instruments were calibrated to consider as "errors" measurement outside a certain margin; it turned out that correct low measurement of ozone were assessed as false negative. Systemic changes do not happen gradually, but become visible only when it's too late to intervene or the cost of the intervention are too high. For example, ICT is today recognized as a key driver of productivity growth, but evidence to prove this became available at a distance of years from the initial investment. The problem is in this case therefore twofold: to collect data more rapidly; and to analyze it with a wider variety of models that account for systemic, long term effects.

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Indicator:1

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