Sometimes we understand systems and organisations best not through what they say or what they do, but rather through what they do not say and what they do not do. There are many examples. But here is one that is very relevant to anyone working in the fields of government or international affairs, and may help to explain why they are so often a lot less smarter than they could be, why so many struggled with the pandemic, and why so many are ill-prepared for climate action.

Let us start by taking a look at the list of the most capitalized companies on the planet. In January this year, the list looked like this: Apple, Microsoft, Saudi Aramco, Alphabet, Amazon, Tesla and Meta.

What is striking about this list? One is an oil company. However, all of the others are digital companies – essentially based on data and knowledge. None is a bank. None is a car company (except, partly, Tesla). None is attached to a particular sector like food or education or health.

What is striking about this list? One is an oil company. However, all of the others are digital companies – essentially based on data and knowledge.

Now compare the public sector. In a typical national government the dominant department is the ministry of finance, which dispenses money. Around it sit a series of line departments, responsible for defence, education or welfare. This pattern of relative power has hardly changed in half a century or more.

The digital revolution is not completely invisible in the public sector. Many governments will have a few people with titles like CDO or CIO. There will be plenty of programmes to digitize services or deploy AI, and there will be small digital teams. But none have even a fraction of the relative might of their equivalents in business.

The same pattern can be found at the global level. Our institutions were mainly designed in the 1940s. So we have a World Bank and an International Monetary Fund. But despite the explosion of global digital firms, we have no global public institutions focused on data or knowledge and, again, just a scattering of small teams – usually set up on a temporary basis – and the occasional committee or working group.

Despite the explosion of global digital firms, we have no global public institutions focused on data or knowledge and, again, just a scattering of small teams – usually set up on a temporary basis – and the occasional committee or working group.

The European Union is just as striking an example. Faced with a big challenge, it can be energetic in mobilizing huge sums of money (as with the recent European Green Deal). It is also good at passing laws. Yet it has almost no capacity to handle data or knowledge. And so, for example, these are almost entirely missing from its strategies for net zero. 

COVID showed this gap strikingly, too. Governments moved with alacrity to deploy draconian laws and to deploy money. But most were feeble in their organization of data. In the UK, they did relatively well within hospitals and the health service (where there were strong existing structures), but hardly at all in care and for mental health. South Korea, Taiwan and Singapore did quite well in linking data to track infections. Still, most governments lacked any systematic capability to mobilize all of the different kinds of intelligence – data, evidence, tacit knowledge – that they needed. Instead, most organized intelligence in anachronistic and haphazard ways.

South Korea, Taiwan and Singapore did quite well in linking data to track infections. Still, most governments lacked any systematic capability to mobilize all of the different kinds of intelligence – data, evidence, tacit knowledge – that they needed.

Half a century ago, business was dominated by car companies and oil companies. Carbon was everything. Then the economy shifted toward data, software and knowledge. They did so because of the combination of innovation and competitive pressures. There are many things at which markets are bad – but they are quite good at this kind of change. By contrast, governments are strikingly bad in this respect, lacking the competitive pressures that force change in business.

As a result, our public structures and institutions lag – by at least a generation. And, so too, as a consequence, our governments are a lot less intelligent than they could be.