This paper presents the results of a scan of available futures' material to identify the cross-cutting challenges facing New Zealand over the next 20 years and considers the ability of the current public management system to address those challenges.  The paper identifies powerful global forces that will shape the context for New Zealand – increasing international connectedness, geopolitical power shifts,  continued rapid technological developments, climate change, demographic changes, especially population ageing, growing resource scarcity and values shifts. The paper also identifies influences that are unique to New Zealand, such as the extensive exclusive economic zone and continental shelf, and the completion of the Treaty of Waitangi claims settlement process.

The NZ public management system was designed to operate in stable and predictable conditions. Looking ahead to the conditions likely in the 21st century, the paper identifies four key challenges and a range of possible responses:

• affordability, which requires the capability for trajectory change;
• more complex problems involving many players which require the capability for leadership of issues, co-construction and co-production;
• a more diverse and differentiated population which requires the capability for differentiated responses;
• and a world of faster, less-predictable change which requires the capability for constant scanning and learning the way forward.  

The paper identifies two deeper system shifts that may be necessary to support these four responses: rebalancing the focus towards whole-of-system performance; and supporting multiple modes of operating so that management approaches can be matched to context. 

From this analysis, the paper identifies priority areas for future IPS research, including ocean governance, the enduring relationship between the Crown and Māori, citizen-centred alternative service delivery, reframing the practice of policy, and directions for reform of the public management system.

Future State 2 (http://ips.ac.nz/events/completed-activities/Emerging%20Issues%20Programme/Future%20State.html)
includes a number of further research papers.

Key words – future, futures, foresight, public management reform, oceans, Treaty of Waitangi claims, citizen centred, alternative service delivery, public policy.