The COVID19 crisis is a chance to do capitalism differently Mariana Mazzucato

[Applause]

Maryana let’s start for the present

moment June 20 2006 months into the cog

19 pandemic you recently published an

essay and the title was the coveted

crisis is a chance to change to do

capitalism differently so lay out the

case for us

what is the chance and how do we do

capitalism differently sure so I mean

the temptation given that we’re all

struggling is to do everything we can to

go back to normal and really my view is

that we need to do everything we can not

to go back to normal because normal was

part of the problem and so in the essay

that you talked about I looked at three

different types of crises that were

undergoing the obvious immediate one

which is the health pandemic but also

underlying that is a real economic

crisis we have problematic types of

business structures corporate governance

we have a problematic type of financial

structure which has basically been

financing itself you might talk more

about that later

we have problematic forms of government

which really in some ways are oh is kind

of too little too late because Roe was

just trying to fix market failures and

so that’s kind of how it would call the

economic crisis but also third we have a

massive climate crisis you know just in

January we weren’t clapping on Thursdays

or whichever day of the week the health

workers we were all you know doing all

we could to support all sorts of other

services like fire workers who were

working in California and Australia

against the damages which are being

inflicted on us by climate change or in

Venice where my family’s from the flood

workers so we have a climate crisis and

economic crisis and a health crisis so

really the question is what do we do to

go to the source of those problems

versus just constantly fix our way path

or way out from one crisis to another

and I think in that sense this really is

an opportunity to rethink its underlying

sources but especially to do capitalism

differently and and by that what I mean

is we often go to this kind of dichotomy

of state or

market and you know as you said in my in

your introduction I wrote a book about

this state but really what we’re talking

about is collaboration and markets as

outcomes of how business is structured

how government is structured how civil

society institutions are not only

structures but relate to business and

the public sector and this focus on

relationships the kind of ecosystem the

partnership is what I hope that this

crisis makes us rethink partly also

because the mantra we keep hearing is

we’re all in it together so what does it

mean to work together differently

to solve the biggest problems of our

time whether they’re health related or

climate related and to do so by looking

at the underlying structures the

contracts literally how does business

interact with government and how might

we learn to do that better especially in

a moment now where government is

completely back you know flooding the

system with liquidity and unless we get

those structures right we’re gonna

repeat the problems that we caused in

the financial crisis where lots of money

came in to save the day but it more or

less ended up back in the financial

sector well let’s take one at those

points one after after the other so

maybe about the role of government there

is this brother mainstream notion the

government’s needs to stay out of the

way of business and of markets and

basically just intervene in order to fix

problems and problems arise you have

built most of your career and you have

devoted most of your research into

making the opposite case that

government’s actually need to intervene

shape create markets explain us that

sure so I think it’s not so true that

the mainstream ideas that government

sort of doesn’t play a role it’s exactly

what you said which is that the

mainstream view is this kind of lame

boring view of what that role is in this

idea that at best government is there to

fix market failures means you literally

have to wait for things to mess up the

markets are going to break down or to

make a mistake before you enter and so

what I’ve been advocating really kind of

specifically is that we need a different

framing one that’s much more about

market co-creation and market shaping

not market

Singh and what that really means is both

of course you know investment in all

those things especially public goods but

not all need that we need from public

education public health care but also

shaping that process so that citizens

benefit from it I mean if you look at

for example all the investments that I

talked about in my book the

entrepreneurial state you know the

internet GPS touchscreens Siri all the

things that make our smart products

smart and not stupid it’s not really

enough to just make those investments we

need to think how do you govern that

process how you you know how do you

govern digital platforms or some people

call it platform capitalism in such a

way that really benefits citizens or

take healthcare it’s not enough to spend

as much as many countries do through

public budgets and health innovation if

then the drugs that come out of that

process or either too expensive that the

same citizens we paid for it can’t

afford it or that we miss govern the

process for example allowing

intellectual property rights to be

abused so the market shaping process is

really also a call to arms to govern to

govern state investments not just to

spend not just to invest but to govern

those investments which are needed in

such a way that you know really benefit

the public so that means really making

public administrations more innovative

more courageous bolder and deputy

recovered crisis has shown that there

are problems we cannot solve it out

governments right but at the same time

we look around the world and you see a

sort of degradation of public

institutions so how do we we cannot

conjure up effective governance so how

do we start rebuilding the capacity of

public administrations to play the role

you just outlined right well in fact

it’s a great question it’s the reason

I’m also very tired when I go to bed at

night because I’ve set up a whole

institution here in London to do that

and in fact we focus really also on the

training and the education for that we

need kind of a new way of thinking it’s

not enough to have new policies it’s

exactly what you said we need more able

capable public institutions and I call

this the dynamic capabilities of the

public sector

really though it’s related to the

previous point if you don’t have the

view or framing of the public sector as

a co-creator of value and at best think

of it as an enabler a facilitator a

de-risk er then there isn’t really the

justification to invest in house in

those capabilities that allow you to

create value to take risks to welcome

uncertainty to be an investor first

resort not just a lender of last resort

and what’s striking and again the reason

I’m spending so much time on the

educational side as well as on the

policy and the kind of thought

leadership research side is if you look

at any Business School you know where as

top managers go from the private sector

they get to take the coolest classes

just look at the titles it’s like

strategic management organizational

behavior decisions Sciences and you know

they’re all trained to think out of the

box

especially when companies become big

there’s books called

rethinking the mature corporation and

yet when governments are a bit too

mature and large we just say oh that’s

because they’re bureaucratic as though

there’s something in the DNA of the

public sector in governments which kind

of by definition are gonna make it slow

inertial and you know not very flexible

and so in order to be an active market

shaper market co-creator we need

capabilities and capacity to create to

think out of the box to be dynamic to be

flexible to be a bit crazy and hungry as

Steve Jobs told those Stanford students

back in the day and so but that needs a

new curriculum and unfortunately the

curriculum we currently have has been

fed through kind of ideology which is

called I mean the actual theory is

public choice theory new public

management but it’s very much an outcome

of this idea that you know again fix

market failures then get out of the way

because you might be crowding out

business and so this co-creation Co

shaping agenda actually needs new

economic theory but also a new

curriculum for bureaucrats I am gonna

bring up a question from audience

actually in which just came in and I

hope that team can activities gonna

appear on the bottom of the screen I’m

Patrick Adams and she asked he asked can

you give an example of a

the fifties actually getting it right in

terms of moving along the way of fixing

capitalism sure so you know it’s

interesting because we work a lot with

organizations in other words we don’t

say that country that government is

perfect but we look at different types

of public organizations around the world

and in fact one of the you know

governments or types of administration’s

that I’ve also critiqued quite a bit is

the very UK government which in some

ways has bought into this notion of you

know small government and don’t crowd

out business and yet in the UK there’s

really interesting organizations which I

don’t want to say have gotten it right

but in some ways really provide

leadership on some of these questions

and one of those would be the BBC the

BBC is a public institution and in order

to in some ways justify the fact that it

hasn’t just done the kind of classic

public sector market fixing role you

know so great documentaries and great

high-quality news but also invested in

soap operas and talk shows by definition

it’s been a market shaper and creator in

all of those different formats and to do

that it had an internal debate it still

does around this concept of public value

and I don’t know many public

organisations around the world that

actually have kind of had that really

dynamic internal heated debate about

public value so I do look at the BBC in

some ways for leadership but just the

fact that you know they say we are value

creators is very interesting and has

caused internal discussions that are

that I find fascinating similarly in the

UK there’s a an organization called

government digital services which

actually created an award-winning

website for government and the first

thing they did was say you know citizens

are not clients they’re not customers

this kind of again brainwashing that

we’ve all accepted so students are

somehow clients of schools

or patients customers of hospitals they

are citizens they have human rights they

have to access the welfare state in a

way that is really user friendly

precisely in order to enrich their

experience when they you know

participate whether it’s getting a motor

vehicle license a passport registering

to vote

so those are two UK institutions in the

public

that I found really interesting and yet

the country is not one that I would say

you know look at the UK for a for an

interesting model of the state and also

in Germany there’s an interesting public

bank called the case they’ll be you that

we’ve done work with and again it’s a

very active public bank which has not

seen its role as just handing out money

like some other public banks I would

argue my own country Italy where you’re

from as well dude Bruno has

unfortunately often had kind of a

handout mentality through its public

institutions whereas that particular

public bank I have found interesting

because of its way of really Co

investing sharing risks seeing itself as

a risk taker in the different areas

that’s invested in but we’ve worked more

yeah let me believe have another

question on the point which is mention

because whenever I go to another chapter

and the question is from Maria Mohit

because you mentioned the public sector

for the scope crater of value and she

wonders ok the public sector basically

barely appears in GDP so how do we

measure for the contribution of the

public sector well that’s really

interesting it’s a great point it’s the

point that I kind of begin my you know

new book on value about because

unfortunately because we confuse price

with value then we have a very hard time

to know how to value in GDP as the

question asks those services which are

free but it doesn’t mean that the public

sector doesn’t appear in GDP

unfortunately it means it only appears

as a spender only in terms of the costs

so the costs of the schoolteachers goes

in but the value of a well-structured

and ambitious public education system

doesn’t and by the way there you know

there’s also bad public education system

so I’m not saying that by definition

it’s good value but we should have a way

to measure that value that’s actually

produced given precisely that we benefit

from that or similarly with public

health systems which today we realize

are incredibly important because we are

all only as healthy as their neighbors

so it’s a real awakening to the

importance of global health systems and

so I think you know it’s absolutely

right there’s an accounting problem we

don’t know how to put in a GDP but

there’s also this narrative kind of

storytelling problem that when we do

talk about it if it’s just about fixed

then there’s a feedback into the kind of

tools and instruments and and

capabilities that we think the public

sector needs just to patch things up and

get out of the way let’s talk a little

bit about the money or the table now so

there are literally trillions of dollars

depending on the accounts anywhere

between five and twelve trillions of

dollars that governments and central

banks are putting on the table to

restart the economy through stimulus

packages bailouts different forms how

should the money be spent or should that

help be structured so you’re absolutely

right that the problem currently is not

at least in many developed countries the

lack of funds it’s potentially the

structure of those funds and again just

like as I was mentioning at the

beginning and the financial crisis 2008

there was lots of there was trillions

put into the system the problem was how

it was structured and you know the

degree to which then it didn’t have the

effect it should have had and in fact a

lot of that funding went back into the

financial sector so I believe that first

of all I would kind of break it down

into two one is that we need to be

making sure that we are investing in new

structures in the real economy have a

real kind of investment led innovation

driven recovery that is improving those

very systems the so-called essential

work and essential parts of the economy

that we’ve thank god woken up to as

being essential precisely those that

we’ve undervalued so again healthcare

systems global healthcare systems have

to be strengthened so if this funding

that’s being injected in the economy

doesn’t strengthen health systems

that’s a terrible mistake but similarly

public education systems as all these

kids are home from school I’ve got four

of them in that sense I’m happy to go

back to normal so they get out of the

house you know we need to make sure that

these public education systems are as

strong and resilient as can be so when

students are home in case there’s

another lockdown we don’t produce the

digital divide that really we are

experiencing today because unfortunately

those investments haven’t been made and

so these are kind of real economy you

know investments that we need and that

itself would help us avoid the financial

crisis mistake where

a lot of their investment that went in

didn’t actually create new structures in

the real economy but second we need to

make sure that especially those funds

that are going to businesses and there’s

many different businesses in different

sectors receiving funds especially those

say in the sectors that are really on

their knees like the you know the

Airlines the hospitality industry these

bailouts or different types of

assistance can really be structured in

such a way to have conditions attached

that look more at the long term so you

give an immediate you know support

because we can’t wait you can’t sit

there and philosophize an immediate

support but with contracts that look at

the future so the airlines for example

really should be committing to in

exchange for the government support

reducing their carbon emissions or

companies that we know have been in

sectors which have overly used you know

tax havens for example should commit to

stop doing that or those types of

business practices which have been

overly extractive you know overly using

things like share buybacks could

actually also be made to question their

corporate governance structure in

exchange for this assistance and what we

do see around the world is that some

countries are being quite bold on that

you know Denmark has done just that

they’ve said that those companies using

tax havens will get support in France

there was pressure for the airline Air

France to make the commitment to

reducing its carbon emissions and you

have Elizabeth Warren and the US and

others in the u.s. you know putting

forward bills that would make sure that

those companies that receive you know

bailouts don’t just squander it around

dividend payouts and share buybacks so

there is this global discussion about it

unfortunately it’s not actually meeting

enough action and there’s lots of

lobbying by companies to avoid that so

you know easyJet just got a huge support

from the UK government with no

conditions attached Fiat a company that

has received very large amount of public

investment over the years both in terms

of worker salary support but also some

investments in the plants that Fiat has

benefited from from the state and yet

there was no conditions attached really

at least

explicit and direct to the bailout that

they’ve received so it’s you know that’s

unfortunate but I do think it’s it’s a

time where even the financial times you

know more mainstream paper is calling

for conditionalities or in some cases

equity stakes you know those companies

that are really going under if the

government’s going to save them why not

consider giving government some equity

in those very companies so you’re not

just socializing risks but also

socializing rewards Marie I want to talk

about your next book and the idea I need

about missions but there are many

questions coming in so let’s take some

of them maybe with some short answers

and is there you know on different

topics the first one is from Africa Hana

what is the role of small business

rebuilding Society you just thought

about different kinds of pieces getting

help small business seems to be the

category that doesn’t get that much help

so what is the role of small business in

rebuilding post comic ok so you know

it’s very interesting because there is

that impression that small business

doesn’t get help and and it’s actually

not true at least the countries I’ve

looked at small businesses do get quite

a bit of help in some ways I’ll say

something Pro you know there’s a bit of

a complication in some ways you could

argue they get too much help why because

they’re just seen as small businesses

and small businesses actually don’t need

to be simply condescendingly

taken care they need real help right and

so I’m I’m someone who advocates for

picking the willing and this might

actually you know kind of go into the

next question you were gonna ask me but

it’s appropriate to bring it up with a

small business question too often

governments are asked to support a type

of business of small business for

example a type of sector let’s say the

creative sector the life sciences sector

or you know sometimes a particular

technology so quantum computing and in

my view is that we shouldn’t be thinking

that way it’s not about the firm the

type of company the type of sector the

type of technology its the problems that

need to be solved you know whether it’s

the digital divide problem whether it’s

getting the plastic out of the ocean

whether it’s forming a carbon-neutral

city there’s plenty of room for small

businesses to find a role in that

process and what government should be

doing is helping businesses

best to innovate but just as much in

services as an you know goods to be part

of the solutions that we need to solve

public problems and if you’re small you

need extra support because you’re small

you might not have you know the kind of

equity and access that that large

businesses do to resources but your help

because you’re willing to help society

solve key problems that we might have

and you know there’s 17 sustainable

development goals out there underneath

them there’s a hundred and sixty nine

targets there’s plenty of room for small

businesses to become part of that

process and I really advocate for

governments to provide that patient

long-term committed strategic finance

not the impatient finance you might get

from the exit driven venture capital

model to companies that are willing and

again if they’re small they need extra

support there’s another question from

l’homme and Rebecca governments have the

hands full of coffee but if they want to

change where should they start well one

of the things that I guess you know you

and I have been talking about just now

is first they need to start by actually

investing in their in-house capabilities

and too often governments not only

haven’t done that but then they’ve over

relied on other actors whether it be the

big consulting companies you know the

Deloitte’s the KP n G’s the

PricewaterhouseCoopers to kind of take

the risks for them because they’re so

scared of you know getting in trouble

because if government is not explicitly

seen as a risk taker it also worries

about failure and so there’s been a

excessive outsourcing to consulting

companies especially in the product

management part of government investment

and the problem there it means that

you’re not really doing and if you’re

not doing you’re not learning by doing

and so you’re not doing trial and error

so you’re not learning you become

potentially stupid and so one thing is

to not to invest more in house - it’s

not so much to outsource less but to

partner properly you know also with the

private sector so private businesses

which of course will come into areas

that used to be mainly publicly governed

like transport education health or even

the space sector the problem is not the

private sector coming into these areas

its how does government

then collaborate with these companies

and what I’ve witnessed is the kind of

lack of again those kind of investments

I was talking about the lack of kind of

trusting your own also management skills

means that government has lost the

capacity even to write the terms of

reference literally the terms of

reference in the outsourcing contracts

are often kind of captured or written by

the same companies that are being

outsourced and that means that we no

longer have a public purpose - and kind

of a direction that kind of

directionality to what the public sector

is doing so you know to get them moving

them back again and years ago if you

look at the Apollo program they

outsource a lot there is plenty of

private sector activity Motorola direct

Noel you know these were really

important companies that helped NASA get

to the moon and back

but if you look at the procurement

contracts they were really dynamic very

ambitious they’re also quite short which

is interesting and when the private

sector didn’t deliver NASA just threw

the stuff back and said nope doesn’t

work do it again and so there is much

more ambition and in some ways

confidence and this notion that I’ve

been putting forward to be more mission

oriented again appeals to that notion of

moonshots but that’s not just for these

kind of big technological areas by

rethinking the welfare state rethinking

the kind of health systems we need

having really targeted goals around

those social problems is what like the

government should be doing you know what

are the goals what are the challenges

how do you then redesign government

tools and instruments to really welcome

and crowd in that bottom-up

experimentation by private public third

sector types of organizations but to do

what not just to commercialize or

produce economic value but to help

government and citizens solve again the

biggest problems of our time and I think

that kind of mission oriented lands the

dynamic capabilities within the ability

to redesign instruments to crowd in

private initiative all that requires new

tools and capabilities which

unfortunately governments currently need

to be thinking about better let’s come

back to missions in in a moment there is

a question by Rena Gleason and this may

be a bit political and you are in the

column is that how can we expect a

system that is the status quo to chain

status quo do we need a different system

yeah so you know it’s interesting

because I think many are calling for a

different system just last September the

Business Roundtable so 180 CEOs called

for a different system they said the

current system it’s being driven by you

know shareholder value maximization that

leads to short-termism we haven’t

invested enough in workers and

communities and they called really for a

more stakeholder driven system now you

know many of us have been writing about

this for a long time so we were very

happy to see that but not much has

changed so really the question is what

does it mean to move to actually walk

the talk of stakeholder capitalism which

means kind of really reinvesting the

value that’s created back into again

communities workers working conditions

the planet sustainability and not

allowing so much value to get extracted

out which kind of comes to the root of

many of the ills that we currently have

and my view is sorceress under this

what’s here yeah none of this happens

none of this happens just by waking up

and saying oh we need to be more Purpose

Driven we need to do stakeholder value

it only happens when it goes to the

center of the system and when it’s

mandatory so this is my point today

about Kovan you have huge amounts of

government investment coming into the

system make it mandatory

not just voluntary about you know

rethinking purpose and stakeholder value

that businesses can only access that

whether it’s investment whether it’s a

grant loan guarantee even a procurement

contract unless it changes so bringing

purpose and stakeholder value to the

center of our ecosystems of the system

through which government and business

interact is what I think is going to

change things and the point now is

government has huge negotiating power

you know it has the upper hand it’s

being begged to intervene so this is the

moment that really we cannot waste and

it shouldn’t be seen just as a stick

that would be kind of a negative way to

frame this this really is about building

a more inclusive and sustainable type of

growth type of economy type of

capitalism if we want to stick with the

capitalist system right now and bringing

that need to change making it mandatory

not just voluntary not just a

Davos kind of talk but conditional this

issue of conditionalities for me is

actually key it means a new contract a

new social compact between what it means

for business and government to work

together

so you mentioned sustainability I made a

question from Ken Lacovara how can we

move the value of ecosystem services in

the cost of environmental degradation

actually into the books of business and

government right well I mean to be

honest this is the bit that there is a

lot of work on and it is quite

surprising than if it doesn’t get

implemented but you know ESG targets for

example I mean ESG targets so

environmental social targets are

important because they go beyond the

kind of corporate social responsibility

you know icing on the cake but not the

cake kind of story so how do you get

mandatory again not voluntary metrics

put into place in corporate governance

structures that become part of the

accounting system so you have to report

your ability to move forwards and to

improve on both carbon emissions on

different criteria in terms of how

workers are not just paid but also

conditions of work making sure that

these different targets and metrics

become standard mainstream and again

become part of that conditionality that

I was talking about before so I was

working in Scotland and they had this

wonderful business pledge there’s 10

couldn’t work not 10 I can’t remember

there’s a dozen conditions that

businesses sign up to which have to do

with paying the living wage with again

reducing their carbon emissions

reinvesting profits into research and

development and long-term ism but it’s

it’s just voluntarily it’s kind of like

enjoying the club show that you’re you

know part of the solution the more we

can make these systems mandatory in

order to access public funding I think

the more we will actually start reaching

this kind of you know value change but

we need to be valuing it we need to

actually have accounting systems that

move forwards I don’t know one more

question from the audience then maybe a

short answer because I want to keep the

time to talk about missions can you

comment on the decoupling of economies

from stock markets so the DL economy in

stock markets seem to be going in

different directions

is the first and exuberance the second

so how much is borne by the public and

not the private sector today so right so

there’s two different questions one is

the stock market and yes with covet as

with other crises we see that in some

ways I know it sounds simplistic but you

know what’s good for people is often bad

for the stock market what’s good for the

stock market is bad for people so

they’re obviously de linked and this is

really a huge problem we don’t have a

proper financial markets which are able

to capture the kind of you know

different again criteria and that need

to be in place in order to make both our

planet more sustainable but also lives

of people better also in terms of

working conditions I remember once there

was a time when Microsoft announced that

it was going to invest a large amount of

money and in some research and

development I can’t remember exactly

sorry for the lack of details here but

the the its stock price spell the next

day that is not strange right in other

words when you’re gonna make long-run

investments and and all the things that

I talked about need these long-run

investments that both is high capital

investment but especially there’s risk

there’s uncertainty it requires a

long-run view all the things that the

stock market doesn’t necessarily nurture

but what’s interesting is that again in

terms of the public private I mean

unfortunately what we’ve seen both with

the financial crisis and now unless we

get these structures right is that the

public sector comes in as I was

mentioning before socializes of the

risks puts in the investment when the

private sector isn’t and then when

things go bad again the government picks

up the bill when things go well you know

the returns are privatized so finding a

real way to socialize both risks and

rewards is fundamental and you know we

don’t do this so the example I often

give is the Tesla Solyndra story these

are two companies in the US that both

got five hundred million in a guaranteed

loan by the government everyone knows

this Solyndra story because Solyndra

went bust and the taxpayer was asked to

bail them out they don’t know that the

same amount of money went to Tesla which

didn’t go bust but what was interesting

was that what Obama said to Elon

at the time was you know if you don’t

pay us back below we’re gonna take three

million shares in your company had he

said if you pay back the loan and you’re

successful we’ll get three million

shares the government would have made a

lot of money from that and this is what

I mean by we need both the new narrative

of government as investor first resort

risk-taker but also new systems so you

know in that case they need literally a

portfolio and make sure that whether

it’s through equity or something else

these citizens also benefit from the

successes instead of just bailing out

the losses well that’s not quite a bit

about missions last time we met it

wasn’t on your table a big manuscript

that you were working on called mission

economics that’s your next book and it

makes the argument the government’s

should structure their interventions

both in terms of investing and on

procurement so the big tools they have

around this notion of missions let’s

start with the general notion what do

you mean by missions sure so missions

are their challenges but much more

concrete right so again coming back to

the Apollo mission the mission was going

to the moon and back again in one

generation the challenge above it was

you know Sputnik and you know beating

the Russians but how they just say you

know let’s beat the Russians in space

that wouldn’t have galvanized the kind

of activity that we now know produced

all sorts of different spill overs

including the whole software industry

which was a spill over so having a

really concrete ambitious inspirational

targeted mission that you actually can

say yes or no did you achieve it which

is addressing a challenge a societal

challenge and I always go back to the

sustainable development goals as the

ones that today should be kind of the

eye on the prize challenge is the point

so but the next the next layer down

right so you start with challenge

emission the next layer down is the

sector’s right so instead of thinking in

a sectoral way like which sector are we

going to help Life Sciences finance

aerospace Aeronautics you need to design

these missions so they galvanize and

catalyze as much investment in

innovation across as many sectors as

possible and also again this word

inspirational that I use the more

interesting inspirational new

that can really kind of beyond the

frontier of creating new areas not just

kind of tinkering on existing ones the

more it can actually inspire new types

of investment and the next layer down

right so challenge mission sectors the

next layer down are kind of the projects

and this is where I talk about the need

for procurement contracts so government

as purchaser grants and loans to be

redesigned to really nurture and

catalyze inspire bottom-up

experimentation whether it’s by private

sector companies and those different

sectors also different types of public

organizations or increasingly in third

sector kind of voluntary organizations

which in different areas like health and

energy are important so you know that

means not thinking about guarantees

subsidies handouts but again designing

instruments in such a way that focuses

on the outcome that you want but then

how you get there is up to you so the

more you know the more difference is the

more trial and error you know the

attempts matter just as much as the kind

of successes and that’s why we also need

mission oriented organizations right so

in the US the classic one was DARPA

DARPA invested and innovated around what

later became the Internet which we all

need and and what’s interesting though

that DARPA didn’t just throw money at

the problem

it innovated within it was an innovative

public organization coming back to our

earlier discussion they welcomed in

certainty I once interviewed the head of

arpa-e so the equivalent organization

but in the Department of Energy the

woman Cheryl Martin and she said they

actually in arpa-e

measured their success by how much risk

they were willing to take and then how

much economy-wide impact their successes

have and that’s very different from how

civil service usually thinks you know

again that fear of failure because if

you mess up you’re in the front page of

the newspaper so it is also a cultural

change but missions are really about an

outcomes government let’s make it

concrete so let me mention two

challenges and tell us how to structure

attacking them or confronting them from

a missions perspective the first one is

climate change how you look at climate

change from the mission framework so

so first of all there’s different

missions for different challenges right

so climate change can have all sorts of

different missions and the one that I

worked with in Europe because I brought

this tool of missions to the European

Commission and I was very lucky I was

able to write a whole report that then

got voted on by the Parliament and the

council so now there’s legally a

missions instrument we use the climate

change kind of challenge as an example

to illustrate what this meant and you

know that again the challenge is climate

change but the mission could be we need

in the European you know Union 100

carbon neutral cities and in order to do

that we’re gonna have to have investment

in innovation across multiple different

sectors from transport to construction

materials to nutrition and you can

imagine all the different projects

within those sectors and new forms of

collaborations between those sectors and

so then the question is who are we even

talking to so if you’re talking to a

city mayor right you know assuming they

have a budget not all mayor’s have but

if it’s this then can become how they

think about really important questions

like the future of mobility and there

are mobility strategies how people move

around a city not just in terms of

public transport but from you know

literally all the different things that

citizens have to think about from the

moment they wake up to when to go they

go to bed to how they are moving and

attracting along the way and that itself

starts to have a strong kind of green if

you want a design lens to it and in fact

this notion of design I think is very

important because sometimes people they

think create a dichotomy between you

know kind of old-style planning the kind

of Soviet Chinese planning versus you

know the kind of cool design thinking

and I think what we really need is the

design lens on planning and a lot of

that means really redesigning the tools

that a mayor in a city has and

especially and this comes back to in

some ways what we’ve been talking about

along how the city views its

relationship with business so in

constructing that future mobility

strategy unless the city has a very

strong carbon neutrality strategy and

vision it can easily then along the way

kind of lose its its objectives and and

allow as I was saying

of reference of the relationship with

business partners to kind of you know

get lost but second example is actually

the example of the moment which is

vaccine development right a lot of

governments are putting actually a lot

of money into vaccine development and

preparing for potential production if

they turn out to be effective how do you

shape that process from a mission

oriented framework well that’s a great

question because often when I talk about

missions I look at it actually from

three different ways one is the public

sector kind of you know pools that we

were talking about then also the policy

is like a carbon neutral City policy but

then the question is production how do

we produce differently right so that’s

almost a different dimension and

vaccines have to be produced and there’s

no lack of public or private money going

into different areas in health

innovation it’s often just miss governed

and it doesn’t have that mission

oriented lens so what a vaccine mission

oriented lens would do would be to first

of all focus on what the mission itself

is and having you know a globally

accessible free vaccine means that

you’re gonna start governing that

process in a particular way and what we

need to then to do is to really learn

the mistakes that have occurred with

miss governing the process around all

sorts of different disease categories

from you know diabetes to cancer where

you have huge amounts of public

investment going in just in the US forty

billion a year dollars goes into the

health innovation process but then the

patents arm is governed and the prices

themselves of the products don’t reflect

that public contribution we have Britain

reported all the people’s prescription

making the point more generally not just

on vaccines is that we need things like

patent pools so instead of allowing you

know patents to create so much secrecy

and patents to be so wide and strong

meaning hard to license you need the

patents themselves and the knowledge

underneath them to be pooled and also

the licenses in some ways to be

compulsory so you have to license in

order to really share that learning and

you know what’s interesting is that we

talked about collective intelligence

that’s the new trendy word I don’t know

if you’ve had a good TED talk on that

but collective intelligence is the new

buzz

but how do you govern the innovation

process from a collective intelligence

angle that really needs to govern that

kind of really wide sharing and openness

and transparency of the underlying

knowledge production and vaccines now

since we you know we all have this race

for a vaccine and we know that our lives

very much depend on it especially next

winter when there might be another

strain of this coated pandemic the virus

making sure that we don’t allow

knowledge to be so secret and and so

much abuse in some ways I was I would

argue the intellectual property rights

because what patents should be is a

contract between the state and a private

attorney in this in the state really is

giving a 20 year monopoly to the private

sector through the patent but the

exchange what the state gets back so

what citizens get back is more diffusion

more knowledge creation but if the

patents are badly structured we don’t

get that and I think with vaccines we

can’t get this wrong let’s take another

question from our audience because it

leads exactly into that point is from an

uncle about the partnerships to address

structural challenges she asked what are

some necessary tools for innovative

public-private engagements can you share

some good examples can we go practical

give you a couple of examples yeah I

mean you know interestingly again coming

back to the kovetz situation I’m seeing

you know at this point in Denmark of the

conditionalities being attached to tax

havens or in France with the airline

conditionalities where they had to

reduce their carbon emissions in order

to get bailouts that itself is a form of

partnership and I would argue again

coming back to the BBC example I think

it’s this is an interesting example of a

partnership that I think can give us a

lot of lessons of how to think in a

mission oriented way back in the 1980s

the government had a real ambition it

was basically a literacy ambition to get

adults and kids to know how to code and

in order to do that and the BBC in some

ways was on the frontier of this they

needed to invest in a computer that

would actually find its way in all the

classrooms and they needed businesses

they need

business partners to help produce that

computer which ended up becoming the BBC

microcomputer and the only two tech

companies that we even probably know

about today in the UK acorn and arm

actually came from that process they

were part of that procurement process

which then led to the BBC microcomputer

and that’s just an interesting

partnership because of course profits

were made this isn’t about charity or

corporate social responsibility this

partnership went to the core of what

they wanted to produce and they did make

profits from it but it was in order to

help the public sector achieve what at

the time was you know a real ambition to

get people and citizens in the UK to be

digitally literate and I think in the

lesson really today for example in the

space sector you know where you have a

lot of different companies in space you

know from Elon Musk or Richard Branson

but it’s not always clear how they are

helping the you know large amounts of

government funding in space which have

preceded their investments in some ways

crowded in their investments to achieve

kind of public objectives you almost

have the opposite you have astronauts I

hear today that are complaining they can

no longer see anything in space because

of all the the garbage that’s being left

up there lots of this private initiative

and the point again it’s not private bad

public good but how do you really

partner in a mutualistic symbiotic way

not in this kind of parasitic way on the

back of public investments without then

helping the public kind of achieve the

goals that it’s trying to meet Madonna

I’m gonna hijack one more question from

the public because my prime number is

asking it seems like your vision will be

perfect for the European Union to adopt

and provide leadership globally I

suspect he means rather than the u.s. or

China providing the leadership and he

asked do you think that’s possible I

know you are working with the European

Commission so I’m asking you how is that

work going to see real momentum actually

in that direction so first I should say

it’s not just in Europe I just had the

honor last week to give a talk to 40 US

mayors actually sorry they were there

were global mayors but lots of the

mayors were in the US and I spoke

specifically with one from Los Angeles

and New Orleans and they were you know

very up for this approach so I’m hoping

that the missions approach does also

diffuse throughout the US we’re also

working with the approach in Latin

America in South Africa where as Grunow

mentioned I’m an advisor in Europe

what’s been interesting is that the work

that I did actually as I mentioned

became kind of law I don’t know if we

can call it law but there’s a legal

instrument I had to be voted on by the

partner in the council what they did

next was to choose kind of five broad

mission areas of which you know climate

and clean growth and even the future of

the soil you know cancer or different

kind of mission areas and how to

transform those mission areas into kind

of concrete missions one of the things

they’ve started doing is in fact forming

mission boards which then are you know

for each mission area and these

questions that have been talking about

about the willingness to experiment to

welcome risk-taking is something that’s

coming up in the boards in other words

do we actually have also the capacity in

the member states across Europe to

govern this process and so my experience

is especially my work with different

countries is that what really makes a

difference is not setting a mission and

by the way on setting the more we can

bring citizen engagement in ex-ante not

just expose the better and you know the

plastic free oceans mission itself in

some ways was inspired by the cultural

sector so that wonderful documentary

that Attenborough did not on Blue Planet

but what I was saying is it shouldn’t

just be relegated to kind of like a part

of government that thinks up a mission

right so say the Department of

innovation and Industry it really needs

to be seen as cross-cutting and that’s

what makes a difference cross-cutting

across government departments so in the

Treasury or the ministries of Finance in

different countries that’s often where I

see the bottleneck so if you continue to

see economic growth in this very siloed

way and not outcomes driven and not put

the citizen if you want at the core of

how we think about what the economy

should be doing so the economy should

serve people not people serving the

economy then this kind of mission

oriented thinking is harder in fact in

the European Commission itself I find

that it’s easier to talk about this in

the DG for innovation than say dgx fen

which is where all the kind of finance

you know an economic kind of discussions

take place however there’s definitely

improvement and the fact that the head

of the European Commission who sulla von

der Leyen has to put the Green Deal at

the center of European strategy and the

European Investment Bank kind of calls

itself now the climate bank in some ways

and the European Central Bank is

increasingly having discussions about

saying the Green Deal then I’m very

positive about what the future might

look like because that’s when change

happens change happens when we move the

kind of climate discussions outside of

the departments of the environment to

the Treasuries to the central bank to

the European Investment Bank and when

the head of the whole thing whether it’s

a president of a country or the European

Commission says this is gonna direct

growth because growth doesn’t just have

a rate it has a direction so putting the

Green Deal at the center of how we think

about economic growth is central it’s an

uphill battle it’s far from perfect but

I’m very optimistic at least in terms of

what I’m seeing and I do think the

Kovach crisis is gonna make all of this

much more urgent than ever there are

many other questions but we are running

out of time so I want to finish on a

question about another one of your

clients and he’s really funny and

strange to call him client because

that’s Pope Francis Pope Francis’s radio

broke the value of everything he has

publicly said it was a great reading and

he learned a lot and apparently now you

have weekly calls or bi-weekly calls

with his collaborators tell us about

that okay yes I I need to remind my

publishers to put the review on the back

that’s a good point

the review from the Pope what could be

better yes so I mean the discussions

with the Vatican actually began even

before that wonderful you know letter

that he wrote it was a letter he wrote

to an Argentinean judge which went viral

where he talked to my vibe

having some essential kind of you know

ideas and solutions for the crisis of

capitalism but I’d begin speaking to

them actually already in September when

they reached out because they had seen

the work that I had been doing in my

Institute’s doing around public value

and purpose these things that we’ve been

talking about and they said that has a

lot to do with how we in the Vatican

think about the common good right so and

if the common good just remains in the

kind of morality space and doesn’t have

an economic framework for it it kind of

doesn’t happen and so that’s my real

kind of interest in urgency to be

working with the Vatican but then you

know COBIT came along and all these

different countries started to set up

task forces around COBIT of which

different ones like in Italy in South

Africa and the Vatican itself that went

up so I was on the economics team and

it’s being run by a very inspirational

religious leader in the Vatican called

Auguste exampie nee he works in the

inclusive capitalism group and what

we’ve been doing over the last two

months is writing briefings for the

Vatican so I’m doing this through my

unit the Institute again here in London

for innovation of public purpose each

week with a different theme one was on

the conditionalities that we’ve been

talking about one was on the need for

debt relief one was on the need to keep

the Green Deal and the green transition

at the center of how we think about the

long-run recovery one was on working

conditions one was on health care

systems and so these are basically ways

to feed to the vatic and given that the

Pope makes his speeches often on a

weekly basis around the current crisis

to be as informed as possible both in

terms of kind of again long-run thinking

and the need to a vision but also in

practice you know what do we know what’s

working what’s not what’s the empirical

evidence around for example universal

basic income what are the different

types of income support that governments

could be thinking about for their

citizens and to give him options you

know any leader wants options and

instead of the Pope just kind of saying

you must do this kind of saying there’s

there’s a real moment for change there’s

there are options here is what’s being

done and let’s tilt the playing field

let’s move our economies in ways that

become more inclusive and sustainable

and obviously we’re sending him already

kind of economics briefings how it gets

interpreted the Vatican you know they

have their own system obviously but I

was

very encouraged after the first week of

our briefings it was on debt relief it

featured in the Easter sermon which is

another another good endorsement

Mariana thank you thank you very much

thank you for your work you’re looking

forward to the next book and to continue

the conversation thank you for being

with us today

at Ted 20/20 thank you very much was a

pleasure