 Welcome and thanks for joining us at the Virtual British Library for tonight's event with Mariana Matacato and Gillian Tett as they discussed Mariana's new book, Mission Economy. I'm B-Roll out of the cultural events team and we're delighted to welcome Mariana back following her two sold out lecture series for the library in 2018 and 2019. This event is part of the programme for our current exhibition, Unfinished Business, The Fight for Women's Rights, which charts two centuries of that battle and the extraordinary women who led it. Our galleries are of course currently closed but we are open online and all of our brilliant events past and future are available there. Please look at the website. I'm very grateful to Gillian Tett for hosting this conversation and she joins us from New York where she's the US editor-at-large for the Financial Times. Over to you Gillian. Well, thank you very much indeed and good evening to all of you who are watching this event in London or if you're sitting where I am right now in New York where it's actually snowing out the window. Good afternoon or good morning if you're in Asia and a fan of Mariana or anywhere else in the world. It's great to have you with us and it's particularly great to have a chance to be here chatting with Mariana about such an incredibly timely topic, which is how on earth do we actually get out of the current mess we're in by harnessing not just the private sector which we keep talking about so much, or you certainly do if you're with the Financial Times, but also going back to that seemingly quite old-fashioned idea of the state. Now Mariana's official biography sounds fabulous. Her official biography reads, She is a professor in the economics of innovation and public value at University College London, where she is founding director of the UCL Institute for Innovation and Public Purpose and advises policy makers around the world on innovation-led inclusion and sustainable growth. She is particularly advising the Italian government insofar as the government is a government, it keeps changing the Scottish government and the South African government as well. So amazingly poor brush, but that official bio doesn't really explain her significance because I've seen Mariana for years striding around the corridors of events like the World Economic Forum in Davos, which normally should be happening right now. In fact, it's now happening on Zoom, but it's not quite the same. And Mariana is amazing because she's a trained economist, she knows how to speak the lingo of economics, geek speak, writ large, but she has a way of lighting up the debate and the room by tossing out some pretty controversial ideas and still making sure the policy makers keep speaking to her. She has a way of challenging and sometimes being quite provocative or very provocative and yet staying in the debate. And that's what I think this book is going to be doing and that's what we're going to be talking about now because very cleverly she's rooted it in an event from history, which frankly everybody loves to love. No one can say they hate the idea of Jack Kennedy. Nobody can say they dislike the idea of his amazing effort to revitalize America back in the 1960s. In fact, her book, which I've got a gaeliol, which is covered in scribbles right here, a very old fashioned, very 20th century, a bit of paper, but I still love paper, starts off by saying in 1962 in a famous speech at Rice University, President John F. Kennedy announced the US government was set out on the quote, most hazardous and dangerous and greatest adventure on which man has ever embarked. And it goes on to talk about the moon landing and how that occurred against all odds. And she talks about that being in some ways a parallel of what we need today in terms of the boldness of ambition, the vision, the commitment, the spending of the money, and one hopes the ultimate success. So that's the gist of the book, but let me start by saying, Marianna, welcome, great to see you. Where are you from? I'm talking to you from Camden, where I've got four kids in the house zooming so hopefully the broadband will be strong enough. If they can join the party too. But thank you, Gillian, for agreeing to host this. It's wonderful to be with you. It's great. It's great to be talking to you. I'm just very sad we can't be either face to face in London or Camden all sloshing around the snow in Davos eating garsi canapes and poking fun at all the cabbage patch dolls I call them the middle aged men running the world. So there we go. But let me start by asking you, great book. Why do you write it and why now. Maybe I'll start with Davos, because I really wrote it for two reasons. One has to do with government and one has to do with business. So given that you've just talked about the snow and the men in Davos. There's a great man, I should say. I'm not. Definitely. So you'll know, and you know, I'm sure the audience has heard that there's all this talk about purpose that we need a more purposeful type of business. This week with the Davos agenda, I was actually on a session in the opening session with cause Schwab about his wonderful new book called stakeholder capitalism. And, you know, for me, what this book does and part of the reason I wrote it is to say fine. Fantastic. Of course, we need a new form of corporate governance. We know all the reasons why the current form isn't working. There's a trillion dollars having been spent just on buying back shares in the last 10 years by large global companies instead of reinvesting it back into the economy. However, we need to go beyond this notion of purpose as a corporate governance issue and bring it really to the center of the system. How we actually design our capitalist system because we should always remember that there's varieties of ways of doing capitalism. It's really interesting about the Apollo program and just kind of what it represented. And I do hope we have a chance to talk about why the book is not about cutting and pasting that is that there was a real kind of central purpose and how business and government. So NASA alongside, you know, General Electric, Honeywell, Motorola, many different companies invested and innovated and actually, you know, accomplish this amazing feat, which is almost hard to think of today, and all the problems we have even just of, you know, producing enough PPE on earth of going to the moon and back again in one generation. And, you know, that notion of purpose at the center means how government and business relate one to another. So it's a question of governing the private sector and the public sector and their interrelationships. But, you know, my main work in terms of the applications of my research, I'm an academic, it has been mainly in the past with governments. The other reason I wrote the book is that I feel that there's a real thirst for doing things differently. There's a dissatisfaction with how really policy has been designed or misaligned, misdesigned in terms of not really being able to play a proactive role in the economy. You know, all the challenges we face where, whether it's climate change, the health pandemic, the digital divide or any of the 17 sustainable development goals, which we should remember every country in the world basically signed up to, that requires organizational competence. And if you have bought into the idea that government at best is to fix market failures at best, you know, some say worse, get the hell out of the way. So at best, fix market failures when they arise, it actually becomes quite hard to even have a justification for investing within your public organization to develop, you know, innovative potential, knowledge creation activities, ability to learn through trial and error and error and error, right? Venture capitalist always brag about how they experiment and fail as many times as they succeed. When government fails, it's in the front page of the Daily Mail or the equivalent in New York or globally. So really the book is about kind of looking at the Apollo program and all the investments that occurred through the public sector, and how it actually directed the challenge and how it partnered with business in a really confident symbiotic way, and all the experimentation that it required, including how to actually design our budgets differently, right? How to think about the outcome, so outcomes-based budgeting. Instead of saying, oh, we have this amount of money, what can we do with it? What's the goal? And then working backwards, how much money do we actually need? And how do we catalyze as much private sector investment along the way? I mean, these are, I should say by the way, anyone who's watching, do feel free to start sending in questions really as soon as you want, because I want to try and open it up to the audience and bring in questions as early as I can, because it's such a provocative ideas and they have to get out to such a wide range of people that I'd love to try and open this up to dialogue. But a point you make about, you know, saying, OK, let's think about government. I mean, that has been staggeringly unfashionable for the last couple of decades. In the US, that wonderful tag, the worst eight words in English language or some words are, I'm from the government, I'm here to help, you know, or the very fact that, you know, almost everywhere you look, you know, government's been taken out of the equation in terms of what people respect. I remember the late Paul Volcker, the former chair of the Federal Reserve, one of the things he did in the last few years of his life was to create and support this training academy at Harvard to try and get civil servants trained up and respected and smarter, and he could barely find anybody who was willing to get one input. Really? Oh, yeah. Oh, that's fascinating. Yeah, yeah, yeah. No, he, in fact, he talked a lot about it. So I'm kind of curious, you know, how do you get that zeitgeist shift? You know, is there any chance of people taking government seriously? Well, first of all, I think, you know, people do take government seriously. The problem is, what do they take government seriously for, right? So already with the financial crisis, we know that, you know, governments basically bailed out the capitalist system. Unfortunately, most of that money that went in, which was welcome, everyone, you know, welcomed the liquidity injection, which you yourself, you know, wrote a lot about post financial crisis. Most of that money just ended up back in the financial sector. In the UK, where, you know, where I live, where you sometimes live, something like 80% of finance ends up back in the financial sector, only about 20% even goes into the real economy. But so many different types of government programs, whether it's grants, loans, procurement, don't actually catalyze anything really interesting. They don't make what economists would call additionality happen. So making investments happen that wouldn't have anyway. So it's not that government, you know, that people or businesses, for example, don't believe in government. They believe in it for, you know, helping them out when they have problems, whether that's a financial crisis and they need to get bailed out, or whether it's, you know, the steel sector, which today is begging for money globally to get bailed out, not because of COVID, but because it's a sort of dying industry unless it transforms. The question is, how do we transform the everyday that government does do, even those that don't believe in government are benefiting from the everyday things that government does, to actually be really ambitious and bold, you know? So just an example that I'm working on just to kind of bring it down from the moon to super-earth kind of neighbourhood level. I'm chairing the Camden Renewal Commission with Georgia Gould, who's a Labour councillor, leader of Camden Council, which is a part of London, and we've set up the Camden Renewal Commission. So what we're trying to do is to focus on really concrete problems that London has, for example, knife crime, which has been really growing in terms of its incredible rise, and it's just terrible, it's afflicting particular types of young, mainly boys. And there's just so little support. I mean, this is an era for the last 10 years, as you'll know, that we've had lots of austerity, but the word austerity kind of misses the point. We need to look at what has been cut, so mental health services, youth centres, local libraries, and so on. So what does it look like to tackle a problem like knife crime, not simply by saying, oh, spend, you know, give a bit of money here to use services, give a bit of money here to schools and after school programs and policing, but actually to say this is a problem, we need to have a mission around it. So zero is not a bad number, zero knife crime amongst young teenagers, because the boys who are dying are between the age of 13 and 17. And what does that mean for how we work together, for how we do the budgeting, for how we resource it, for how the procurement of different government services works in terms of actually being goal oriented. You can bring it up a notch and say what does that mean for a city when it has a carbon neutral kind of sustainable city agenda. Even another notch up if you bring it globally to the fact that, you know, we have so much plastic in the ocean. One of the SDGs is about life underwater, but if you just leave it at that very broad challenge, like life underwater or climate change, it's really hard to know what to do. There's no kind of clear investment pathway. So when you create a really clear mission, like going to the moon and back again, the challenge of course at the time was Sputnik and the space race and beat the Russians. Had they left it at that, nothing would have happened, right? So a very clear targeted mission, which however then is designed, and this is the key point I bring back the word designed, designed in such a way that really catalyzes as much intersectoral innovation and investment across the economy. To get to the moon it was not just aeronautics, there was huge amounts of investment in materials, nutrition, electronics, the whole software industry as we know it today, the modern software industry basically traces its history to that mission. So equally any sort of climate related mission today would involve investment and innovating in construction equipment and transport and nutrition, of course in renewable energy and so on. But then again the design question is, you know, what does it mean about doing things differently? So instead of just giving out money to random categories like small media enterprises or the life sciences strategy or a list of sectors in the UK for example, we had a list of sectors up until recently that included life sciences, automotive, aerospace, creative industries and financial services. It's like to do what and why didn't you include all sorts of other sectors, right? So instead of focusing on sectors, what does it look like to focus on problems? So this is one of the real kind of big policy impacts I had recently with my team as we convinced the UK government to really choose concrete challenges that they were facing instead of focusing on sectors and they chose clean growth, aging, future mobility and the kind of opportunities around data. And then we worked with them to formulate different again missions underneath those. But the real issue here is how do you get, you know, activity occurring across the economy, crowding in as many different types of investment and innovations kind of bottom up. And here I'll pause in just a second. I think this is where the biggest misunderstanding is sometimes with the book unless one actually kind of reads the whole book. This is not about top down, big government, heavier government, more money in the state kind of telling everyone what to do. It's more about setting a direction for change. The government providing kind of an investor first resort role, but then designing its instruments to be as catalytic to drive bottom up innovation across the business sector as well as charities. Right, right. Interesting. So basically it's about ambition, targeting, collaboration and government as catalyst rather than implement it all the time or execute it all the time, which is an interesting combination. I'm getting some really terrific questions already from the audience. So please do keep sending them in because I'm going to read them together. And it's always great for someone like me to kind of get a broader vision about what we want to ask Mariana. But before I do two quick questions, one, is there any government in the world which is actually doing this that we can look to and say, I want to be just like them? Because many of us have got new needs and envy these days or think that parts of Singapore look fabulous apart from the authoritarian nature of it. Is there anywhere that you think actually gets it more than anywhere else that we should be looking to for encouragement? And secondly, which sectors or topics or issues would you start with right now? Or do you not want to start with any particular static area of focus? Is COVID-19 going to be the area? Because even in Trump's America, we managed to get a modicum of collaboration between public and private over making from PPE pretty inefficient people it was there. Should we be saying COVID-19? Or is climate change going to be the big moment when we actually are forced to bang heads together and get public-private partnership? Great questions. I just realised I didn't answer your previous one so I'll just quickly answer that one in terms of what Volcker advocated for. That's the reason I actually set up the institute that I'm running at University College London which is what is the curriculum, what is the new training, the new mindset that we actually need within the civil service globally in order to move forwards in this direction. Because the current training has basically been done through this idea of public choice theory, which is not only driven by this notion as I mentioned of at best fixing markets, but even the idea that even worse than market failure is government failure. Occupy as little space as you can and then get the hell out of the way. What does it look like to design a curriculum as we have around four different big areas around collective value creation, challenge led innovation, creative bureaucracies and really governing our digital platforms for the public good. Coming to your question, in terms of government. Where and what? Those are the two questions. I've been working actually quite closely with Sweden because Sweden has a really interesting mission which goes to the heart of something that I really believe in, which is we need to reinvent and resource the welfare state. But not in a folkloric way, just the beverage moment of saying, oh, we need to invest more in public education and public health. Of course we do, but how? And they have this wonderful mission of a fossil free welfare state. So the idea that actually everything that government does from public education, which of course includes very specific things including school meals, which as you'll know or some of your audience may know in the UK now is a very hot topic because we actually needed a footballer from Manchester United, Marcus Rashford, a fantastic footballer to remind the government how important resourcing school meals is in the holiday periods in such a crisis moment where that's often the only meal that some kids get during the day because of child poverty. How do you transform something like school meals to be an avenue for innovation? An avenue for actually reaching our carbon neutral targets? So instead of thinking of carbon neutrality, sustainability and the green new deal as this area in the economy that we call green, something as simple as the school canteen. But I think Sweden has been really interesting around that. But also I mean I was really surprised in how Greg Clark was the minister of Bays, the ministry here for business environment and the industrial strategy in the previous government of Theresa May. They really opened up to some of these ideas so we work very closely with them to bring again a challenge oriented approach instead of a sector driven approach in the industrial strategy. And today, still now Boris Johnson's government, even though they're so distracted with Brexit or globally as many governments are with COVID, but there still are teams within the ministry for business and industrial strategy focused on challenges. So the clean growth agenda, the healthy aging agenda. And in some ways they're experimenting with it in a way that's really quite path breaking. So for example, there's been discussions within the Treasury so the Ministry of Finance to actually evaluate public investments in a different way. One of the key points in my book that I make is that had the moon landing been evaluated ex-post but also ex-ante by the cost-benefit analysis or the present value calculation, it would have never begun. So what does it mean when we think about all it took to get to the moon and all the different spillovers that happen along the way including most of the things that make our iPhone smart and not stupid, what does it need to actually be able to evaluate those dynamic spillovers as a government a Treasury team in order to know kind of did something succeed or not. And so I don't like to say any one country is perfect. I think what's really interesting is at the organizational level whether a particular team within a government or a particular type of collaboration on a project is really being done in a fundamentally radically different way from what we're used to. And what we're used to again is this notion that first you need to say where the market is failing and that then justifies your intervention. And the BBC, lastly I should mention I've personally been learning a lot from the BBC, the public broadcaster in Britain as an organization that has thought about some of these issues. They've never accepted to just fix the market. They've always said actually we're also going to invest in areas where business is investing so soap operas and talk shows not just documentaries and high quality news but in doing that they've had a discussion about notions of public value something I come to in the conclusion of my book and so that doing a soap opera about the working class EastEnders is very different from the dynasty kind of Dallas form of soap opera and the conversations that occurred within the BBC when they were making those investments was very much at the core of the kind of things we're talking about. Wow, I bet everyone wishes they were flying the walk and it's fascinating and that really is where our sort of binge watching of television confronts public policy writ large but it's not getting a great question. Sorry COVID, I'll just say something really quickly with COVID. COVID and climate change. Throughout the book I keep saying that that's a false dilemma but look at again the question of the how. Not the what, government is always investing it's always pouring money in but it's the how that matters. If you look at the COVID recovery schemes globally which are huge in Japan it was over a trillion dollars worth and the US close to depends what actually is negotiated but let's just say two trillion dollars in Europe we have this big European recovery scheme what we're seeing this time around which we didn't see with the financial crisis is the greater willingness to create conditions attached to these recovery packages which are COVID-19 recovery packages to be conditional on transformation and you know this is something I've been arguing for for a long time pre COVID and it's been so interesting to see it implemented and the question is what does it look like to the normalize that post COVID but in some countries it hasn't happened at all so whereas in France the recovery package that went to Air France and Renault was conditional on those companies reducing their carbon emissions as part of literally the contract or in Denmark and Austria their recovery package was conditional on not using tax havens in the UK we gave a condition free massive bailout to EasyJet so this comes back to the issue of varieties of capitalism so how can green and sustainability targets be at the core of how we design that public private interface whether it's a bailout a grant or a loan and I mentioned the steel industry before way pre COVID about three years ago the German steel industry was asking for money to the German government and I found it really interesting how because they had a mission imperfect it's not perfect it's not about glorifying any government but they had a mission on green for the energy of the loan that was provided to the steel sector through their public bank was conditional on the steel sector lowering its material content which then the how how they did it was up to them so they innovated massively to repurpose, reuse, recycle of the entire steel chain and today they have one of the most innovative steel sectors not because they went to Davos and talked about purpose but because they had to in order to access that loan and that's what I mean by bringing purpose to the center of the system instead of just a corporate governance issue and this is you know this is what we're seeing with COVID right now also the conditions on the vaccine is very interesting and that's not happening by the way so it's not enough to invest in something as great as a vaccine is and we all are hoping and praying you know that everyone globally can get vaccinated but unless you govern that process again at the public private interface to make sure that patents are not abused that the prices of the dosages are actually reflecting the huge also public contribution to the vaccine so citizens benefit from something they've also you know financed you know all those different types of issues which have always been plaguing the health industry because it's a problematic partnership we've seen in the past this is the moment to get that right right well by the way I forgot to mention earlier that if you want to buy Marianas book mission economy is available to purchase by visiting the books tab at the top of the screen so I have a message from the organisers to remind me of that it wasn't my message I don't know no I can actually let you all know where to find the book if you want to buy it but anyway we got terrific greater questions so let me start working through some of them which is some of these are economics some of the about economics some of these are practical some of these are a bit questioning some of the theories behind it some of it are asking about what this means for private sector but let's start with a really one from someone called Paul who says you speak so much common sense but what obstacles are there in the government and public slash private sectors that stop outcomes based governance and I should say that this actually doesn't matter another question from Edward saying are silos departmental sectors interest groups actively preventing focus on outcomes how can those silos be busted so take them separately or together interesting so they're related yeah I mean my experience is that the bottleneck what's kind of impeding government from moving forwards is that they or they you know civil servants or the leaders also on the top have bought into this notion that at best as I mentioned they're there to fix markets or using more sexy lingo derisk the private sector and already that is a problem right this notion that you're enabling leveling the playing field fixing markets derisking derisking who the risk takers you know what the Apollo program was about was sharing a huge amount of risks taking risks you know you'll know from the astronauts that died through the different mission so you know really remembering that in order to co create value which by the way thing has to be at the center of any stakeholder governance approach it's not about just sharing the value it's actually about admitting that the actors in the economy not just business create value what does that actually mean for your organizational governance what does it mean for your risk averseness your also investments that you're making and here it's really interesting in again in the UK I live here so that's why unfortunately many of my examples will be from here but I see trends of this all over the world this huge amount of outsourcing that governments have made to the private sector to consulting companies in particular the Deloitte, the KPMG the Pricewaterhouse Coopers to do kind of the project management of so many different challenges they face that in itself is not a problem as long as you are also investing in your own brain along the way and it was a Tory Lord recently Lord Agnew I hope I'm pronouncing it right who you know said look you've outsourced so much that you have infantilized government you've infantilized Whitehall he argued you've turned government into a baby that doesn't know what to do and I think this is really one of the biggest impediments that if government stops actually investing in its own brain it actually has no idea not only what to do but even how to partner with the private sector and again there's a whole section of the book where I go through what that actually looked like in the 1960s and what was so interesting was that there was a the head of procurement in NASA thing his name was Ernest Brackett he said we need to be careful basically about that problem he said we need to be careful about brochuremanship simply kind of you know bringing in the private sector for the sake of it just because of a sexy today we would you know call it a PowerPoint they didn't have PowerPoints back then we need to really partner with businesses that are going to engage with us with the mission that we have and they really then focus on procurement how to design these procurement contracts that were goal oriented but really keeping it very open on the how and so that again is unimpediment and the silos you know are related to that so if you have you know each department thinking about its role so the department of energy here department of innovation and the ministry of finance which in the end always rules the roost right as always comes down to the treasuries and the ministries of finance to decide how much money is available for any program you know that's already a problem instead of getting a real kind of horizontal discussion of the challenges that are that a country or globally that we're facing around health around the digital divide around climate and so on and then working backwards what does that mean for the economy what does that mean for how we think about our budget what does that mean for how we design procurement grants and loans and so forth that's missing and that's you know a silo and you know sometimes it's also technological issue I mean I've experienced this here again where we had government digital services try to create a common website called gov.uk it was actually created by an iPlayer team iPlayer being a technology for for where the BBC puts all its programs radar and TV on the internet it was actually an iPlayer team that set it up and won an international design award but what they really wanted to do through that was to change how government could really work outside of its silos and use the power of technology and digitalization to get a much more horizontal and dynamic communication between departments which actually never happened that's a tragic because each department wanted to continue to work with their own system that's an absolute tragedy I mean I've read a whole book myself about the problems of silos and how you break them down and how hard that is but just turning to some other problems which might be impeding this we got two other great questions which is firstly from Edward politicians are giving little to no or even negative credit for thinking long term thinking big and then navigating their way to success through learning from mistakes along the way mostly they are dinged by the press if in doubt Labour journalists for failing to be across some detail that they have no control over so how can we change the turn of discourse so that we ask politicians to leave with vision and also humility and we have a related question which is actually very similar from Barry saying how might we effectively combine the concept of a government led mission economy with a five year general election cycle so how do you put your brilliant ideas in the practice when you have the mucky media and the reality of political cycles and elections getting in the way so great questions and I think the answer to both has both an organisational and kind of structural aspect and then a storytelling one so kind of the comms side of it I'll start with the latter I was really struck in the US when the US government after the financial crisis there was an 800 billion stimulus package that Obama set up he wanted initially to have it be green directed then all the tea party issues happen but at least initially was very ambitious and it was so ambitious that he managed to convince a Nobel prize winning physicist Steve Choo to come and direct the department of energy and the Nobel prize winning physicist at Stanford became a civil servant he would never have come in if the idea was come in and de-risk Elon Musk or create some sort of carbon tax what he was tasked to do was to help the government direct its stimulus package so that's a good part of the story second part is as part of that he set up ARPA-E which was basically a sister organisation to DARPA which is in the department of defence but this was in the department of energy you'll know that DARPA was on one of the main internet which again without that we wouldn't have anything smart and he ended up hiring a very ambitious guy called Arun Majumdar to run it and what they did then in the DOE was they started to provide guaranteed loans to different companies that would be part of this portfolio of activity for a green direction one of those companies was Cylindra and Cylindra became famous worldwide why because it failed and all the backlash against government this is the kind of communications part actually it's also a structural bit all the backlash was oh my god another picking winners problem another concord these examples that people seem to rehash out every time you talk about the state taking an ambitious role and two things are interesting there first yes Cylindra did fail yes it received a 500 million guaranteed loan but so did Tesla part of the portfolio was also Tesla there was lots of different companies that the government was thinking about how do we actually spread kind of the risk of the DOE in terms of its guaranteed loans across different types of organizations that are going to be helping the US kind of transform in a green direction so there was no talk about that you never heard an Obama speech saying oh yes sorry we screwed up there but you know it's inevitable every time you have a success you might mess up six or seven times but we need to be willing to take those risks if we're going to have a green direction second we didn't have a structure within that portfolio to make sure that the government could because it's taking risks the taxpayer had to bail out Cylindra any notion that we need to structure this portfolio in such a way that the government and so the taxpayer isn't just bailing out the losers but also getting some sort of upside from the successes and strangely even though he had all these Goldman Sachs guys in government what he ended up Obama saying Obama but obviously the people in charge told Tesla if you don't pay back the loan we get 3 million shares in your company had he said we get 3 million shares in your company if you're successful and pay back the loan which of course they did the price per share went from 9 to 90 that multiplied by 3 million would have more than paid back the Cylindra loss right so but you know just the fact that there was no kind of story telling about yeah yeah yeah okay guys don't worry you guys meaning citizens don't worry this is part of a portfolio to improve to build back better right post financial crisis and you know don't worry because we also have some successes and you will get back a share of that success that's kind of two sides of that same problem including the fact that when countries aren't doing that this is a country that is making the investments right the US has been as I talked about in my previous book the entrepreneurial state has actually talked the talk of you know free market but actually has been a very heavy investor the government has heavily invested in everything that became silicon valley and many countries they don't do that right and so that kind of fear of even making that first step of taking the risks is that other kind of you know problem and the fact that we have government organizations as the question asked that are wed to the electoral cycle is itself a problem because if you want to think about all the goals we have whether it's climate or all the different SDG related goals that's going to take more than four or five years that's why it's also really important to think about the structure of public organizations like DARPA which don't follow necessarily the electoral cycle and in fact welcome people to come in often scientists through secondment so they come in for five years are actually told explicitly to take risks that's how they're actually evaluated a bit over the last ten years to people running ARPA, E and DARPA how they actually attract really high level workers people who want to be a civil servants and how they structure their career in such a way that they're actually evaluated positively if they take those risks that's a complete exception and you know in Italy where I'm from we had an organization that was actually set up after Mussolini so not a great start but it had three phases it was a big public entity a state-owned enterprise called EDE most Europeans will know about it was the Instituto della Ricostruzione Italiana it had three phases public not politicized at all public super politicized so all the different parties put their hands in and the third phase was privatized and what's interesting is that the second and third phase were equally disastrous so the big point of the book is stop going back to this public versus private state versus business and really pay attention to the governance issue if we want purpose at the center both private and public need to change how they're operating and how they're governed and also relate to each other in a very different way from how they currently do that's fascinating it ties in very well if you want reasons to be cheerful the Biden administration one of the very interesting things they did when they got into position was basically immediately start the Office for Science and Technology Policy which had been left completely unstaffed under Trump for a long time they pointed ahead they made ahead a member of the cabinet putting emphasis on science and then wrote this letter to him basically more or less saying we want to replicate what Franklin Roosevelt did all those years ago by harnessing science and bringing together public and private in many ways it's an astonishing moment to have had that zeitgeist shift which suggests you might be tiptoeing picking up on this theme about treating government as a venture capital operation in a way accepting risk and success and failure we've got a very interesting question from Mauricio which says what kind of work is the IIPP doing or interest in doing support private sector players like venture capital firms to behave in a more symbiotic way with governments to have a fairer allocation of risks and returns in the innovation process between DC and state a more constructive role in the mission economy any thoughts on that it's a great question the broader question is what do we do about finance more broadly and what are the ideas about restructuring it A, so it actually fuels finance to the real economy and B, when it does that like VC does venture capital how to make sure that we structure it so there's a sharing of both risks and rewards and one of the problems with venture capital is this 220 model even when all goes wrong you still get 2% and then they get 20% when things go well isn't always necessarily fair in terms of who did what so of course venture capital has been central for example to the biotech sector but that was on the back of about 20 years of national institute of health funding and people sometimes forget how much funding that is that's about 40 billion currently a year of a public funding that goes into drug innovation and you'll have Kleiner Perkins a large venture capital company investing in a company like Genentech and if you look at where and sorry I'm making huge amounts of money and if you look at the success of Genentech and where a lot of the technology and the research came from it was also not only this isn't again about state versus private also massively from that kind of public investment that preceded venture capital because venture capital is often not really as risk averse as it pretends to be hardly ever comes in the really really early stage most of these government investments that I talk about in these different sectors what is interesting about them is that they're in the very early stage high risk high capital intensive phase before the private sector gets its guts up to invest in so the question is not state versus private but you know over the timeline given that the state often takes the biggest risk why is it that we haven't thought more clearly about how to share those rewards and one of the issues with BC would be you know can it be a profitable sector but take less of a cut because the cut it's getting is shared more broadly and you know the top BC managers that I've spoken to buy into this and it's really about also looking at the long run so if you aren't sharing the rewards those very public pots that BC itself and the companies themselves have relied on could potentially slowly get more and more diminished right if we're not refuelling the public budgets with a share of the you know of the rewards now of course one could argue especially if you look at the moon landing and I do talk about the whole MMT debate in the US right the MMT debate is where lots of people like Stephanie Kelton a good friend of mine say look stop talking about tax or rewards you don't need that government at least in a country with its own sovereign currency can as it does when we go to war just create the money you've never heard a government say oh god we don't have tax we can't go to Afghanistan we don't have enough tax revenue they just go they create the money and you know that's that's right actually the problem is that it's right theoretically politically it becomes a very hard thing to manage so I think that we need to always balance the argument what I tend to say is as long as what you're investing in whether it's again health innovation the digital divide kind of directed innovation or just AI in general if it's fueled by really dynamic well structured innovation system chances are that if you're creating the money to do that you will also create huge amounts of long run growth right the long run driver of GDP are these kinds of investments so even though in the short run you're increasing your debt and your deficit the relationship between debt and GDP will be kept in check if instead you're just throwing public money you know helicopter money out into the system without having that organizational capacity and the system of innovation across the whole innovation chain that I argue for then chances are that actually by creating this money and just flooding the system with liquidity or spending here and there it's actually not going to cause growth and that's where you get into a pickle so I would say here because you've simply increased the debt without increasing the GDP so another very relevant question from Ewan how if a tool does a Robert Gordon hypothesis on the quotes end of innovation or project does it require new technological innovation or the application of existing technologies so I've never been a fan of the whole concept of secular stagnation and this idea that somehow we have lower opportunities what's really interesting if you look at the data is that for example back in the day when there was the whole electrification revolution that wouldn't have actually affected productivity increases in innovation across the whole economy had there not also been big demand pull innovation so a colleague of mine called off the feds talks a lot about this she says that without suburbanization the mass production revolution wouldn't have created the growth that it did so in some ways this kind of stagnation of growth that we witnessed in recent years one could argue at least in the two decades the whole kind of productivity paradox computers are everywhere but not in the productivity statistics you know if you really look at the kind of lack of ambitious both supply side but also demand side policies to act as a funnel through which this immense power and opportunity of IT could have really affected how we produce how we distribute how we consume one could argue that it hasn't had that ambitious demand pull that previous decades have and that's one of the reasons why we have been arguing that the green agenda has to be just as much about demand side pull precisely so all this great opportunities around data AI and IT can really get completely diffused throughout the economy but the other thing is I speak also to a lot of corporates and when you do have these problems around financialization so these examples that I gave before of share buy backs right excessive share buy backs of some companies including Pfizer by the way sometimes are investing close to 100% of their net income on share buy backs actually dipping into capital reserves the answer is there's no opportunities for investment and I sometimes find that this argument the academic argument about secular stagnation is complimented in a problematic way by the argument within the corporate sector of justifying short termism and value extraction with this idea there's no opportunities and then you look at the SDGs you look at the crisis we're facing now you look at the green the lack of a proper green transition those are immense opportunities for innovation and investment there's no lack of opportunities the problem is that by not having those kind of conditionalities that I mentioned before which can also be conditionalities around tax and you know paying your fair share of tax paying workers proper wages but definitely investing in the green transition then you don't necessarily have the incentive to change and to invest and to innovate right well we got it we haven't got that much longer we got some really other great questions sort of you personally your views personally but also about some of the equity issues and about some practical examples where to apply this let me start with this question from Nancy two related questions I listened to you on start the week where there was some talk of wealth creators without defining carefully disappointingly it finished with Vince Cable's assertion that we need the rich imply I think that they were the wealth creators I'm interested in your thoughts on this and what you think the role of labour is in creating and then also related to that question from Kimmy how important is it to have a reasonable level of social equality of your plan system to work effectively there must be brought by him from the population for a government to be able to implement it and widening inequality would be a hindrance good great points one on labour one on what I'll talk about a citizen engagement so I couldn't agree more with the point being made in the first question and this is actually a point I made yesterday with this session where there was all this talk about stakeholder value but it seemed to be tinted by this idea that stakeholder value is about corporates giving back that you know the value that they're creating and the rewards from that to different actors whether it's workers you know investing in worker training programs communities planet and so on and I kind of stopped the conversation there I said hold on if you actually believe that value is only created in business and then can be shared through the stakeholder value notion that I don't think that stakeholder value stakeholder value is about actually having an idea a belief but has to be a true belief it can't be tokenistic that value is actually created collectively and so must also be shared collectively and of course we can also bring in other concept of justice so even if someone isn't creating any value for whatever reason we can also bring in reasons for ethics and in morality that we would want to make sure that everyone is sharing in those rewards but that's also why I think that the narrative in the story matters so much so if you think of universal basic income something that's being talked about globally I might and I do I am supportive of the policy but the narrative around it is the old one it's like a handout right wealth creation is done by the entrepreneurs by you know global finance and then we need to make sure that everyone gets a check in the mail to make sure they have some sort of you know basic income to live on it's very different to transform that to the idea of a citizen's share or citizens dividend just the word citizens share citizens dividend is very different from universal basic income in terms of the narrative of who's kind of creating wealth and then just focusing on labour I mean this is the real stakeholder capitalism right and we know how to do it Scandinavia has been doing it for a long time but it's been doing it for a long time and it's been doing it for a long time but it's been doing it for a long time so I'm coming back to the next question because there are many companies in Germany workers are actually on the board of companies they help make these long run decisions about investment or any sacrifice that workers might have to make for a given year in terms of not getting a pay rise that's always in exchange for something that they will benefit from Some companies that do talk at Davos about purpose and stakeholder value would never agree to having workers on the board right so I think we need to get much more serious about the kind of the walk of the talk of stakeholder capitalism and you know that's not necessarily something that every company has to do but how do we really disrupt the status quo not only in terms of these issues of distribution but really in terms of how we understand that wealth creation process in the first place. ac, oherwydd, dylai lle i'r cwm ymddangos ymddangos dyfodol yn y fwrdd, mae'r cyffredin a'r ysgol yma, dylai yma sy'n gwneud yma eich bod yn y tyredig ymlaen y wych yn gwybod ar gyfer y Llywodraeth, ac ydych chi'n oed yn ymddangos ymddangos ymddangos ymddangos, mae'r gweithio ar y cyfrifio'r gweithio ar gyfer amddangos ymddangos ymddangos ymddangos, mae'r newydd yn cael ei gweithio'r gweithio'r gweithio I'r cyfrannu ofr o ysgol sydd wedi'i gilydd ar y cyfrannu arno ddechrau, efallai yn dweud hwnnw, a'r dweud hwnnw i'r parwydau llyfriau. Mae'n meddwl i'r ddweud eich gael y cyfrannu, ychydig cyfrannu yn y newid. Rwy'n meddwl, y cyfrannu wedi'i gydag, ydych chi'n ysgrifennu yn y cyfrannu cyfrannu. Dyna'n amlwyd i'r ffordd. Mae'r ddechrau newyddau yn gyflawni, yn cyfrannu cyfrannu, Cymru'n gweithio y gallwn i'r cwmniwr Rhannuol, ac yn ychydig i gweithio eu cyd-dweithio yma gyd-dweithio'r cyflawn o'r cyflawn i'r cwmniwr cwmniwr, ac ym mwyn i'r ddweud yma'r cyflwyntau yw i'ch gweithio'r cyfrifol sy'n gweithio'r cyfrifol, gallwch yn Y Americyn, y pryd-rhywbion ar y gyfer y gweithfyr cyflawn ar dyfodol. Yn yr tyff ychydig, mae'n gweithio'r cyfrifol yma, Cyngor y gallu gyddo i gyddo ar hyn o'r hwn, ac mae'n cyd-dweithio atahanol o'r sydd a chymru, mae'n cael ei bod yn ei gyddo i chi'r archif yn ymlaen. Ydyn ni'n petr iawn hwnnw. Rydyn ni'n gwybod gyda'r ardal a pethau ymlaen. A wedyn ni'n rhai gweithio mi, a'r momentau sy'n ymlaen yr ymlaen. Mae hyn sydd ar hynau i rhaid i chi uchio gawdd bwysig i ni. Mae'n rhaid i chi i'ch chi ar hwnnw. Mae hi'n golygu o füfwnolaeth sydd i yn dweud i'r ffeilio'r ddeud o'r ddysguysgau o'r ddeud sydd i'w ddweud bod yn ffynol iawn, ond nid i'r ddorachol yn gweithio'r ddweud sy'n gyntaf, dweud, ymrwyster o Greda Tormberg ymdodd, mae eich bynnag mae'r gyffredigau o'r ffordd cyfleoedd cyffredig? Mae'r lleisio'r ddeud i'r ffeilio'r ddweud, â byddwch ei ddweud i'r ddeud i ymddangos i'r ddweud i'r ddweud i'r ddweud, those into the design, this kind of social innovation part of it. Well, I got sort of three other quick questions I want to get to if we can before we run out of time. One of which is someone called Claudia, who is a great fan of yours, is very upset about the fact that you recently appeared on an Italian talk show, I think it's Ote Meze, mezo, excuse my language, and halfway through the conversation it was clear that the panellists thought you were talking about communism. You couldn't quite understand their place, but how do you keep your cool and keep on fighting with your arguments when there are people who just don't get it and assume that what you're talking about is communism? Well, I mean, it's not a coincidence that we began this conversation by saying this is about getting a better capitalism, there's varieties of capitalism, the whole notion of stakeholder capitalism means we need a different form. And that is what I'm talking about, regardless of what my views might be of all the sort of different types of setups we might have, what Mark's called the mode of production, regardless what anyone might think, we're currently living in a capitalist system and we can do much, much, much better. And the fact that we have businesses talking about it, we have governments at least pretending to be interested in things like climate or having signed up to this long list of countries on the SDGs, that's where I was bringing it back to. I would say, look, are you really interested in the SDGs? Are you really interested in purpose? Well, then let's start actually implementing that. And you have to learn from the ground, it's not about a big theory about communism or capitalism. How can we learn on the ground from, for example, doing procurement differently or doing budgeting differently in an outcomes oriented way and then start scaling up the lessons at a higher level. And we call that in the Institute, I run practice based theorizing. Through practice, you learn how to do things better and then you bring it back to the theory of how the system works. And so when I get that pushback, which of course the Financial Times and the Economist will often argue that same line, which is yes, the status needed, but hey, be careful, big state, that's Soviet, that's the great leap forward, that's going back to the Concord, which failed. That is just such an easy critique that I think we always have to push back ourselves and say, well, let's look at Concord actually and what exactly went wrong. Right. Well, we get a very interesting question from David Bent saying, what do you think is the strongest argument made in good faith against the core thesis of your book? Who's making it? How do you respond? So that's a fantastic question. I like how it's framed. There's all sorts of critiques to any argument one can make, but I think the ones that I find less useful are the ones that I was just mentioning, which goes back to, oh, this is capitalism versus communism, or it's a picking winners problem. Concord this, British Leyland, examples of projects or Cylindra, which I went over before. The more interesting ones are, what do you do, for example, in countries that have just really weak states? You can think of some African countries that I'm currently working with like South Africa. This is a huge dilemma. Isn't it just much easier just to privatize? One can argue all against privatization, but if you currently have a high degree of corruption or lack of capacity, what do you do? Those questions are really smart and they're really interesting because it's a dilemma. What do you do? Those are the questions that we're working with right now with President Emma Paul's team and the advisory council. It's a wonderful team. What does it mean to change how you think about ownership, state ownership, for example, SCOM, a large energy company in South Africa owned by the state, which hasn't been owned through a lens of transformation, of a green transformation of the country, and the fact that you own a state asset could actually give you more leeway to actually cause that transition. If instead you're using that ownership for staying in place, for giving power to the incumbents, what does it look like to change how you govern? This, of course, was a huge question also here in the UK when we went back to the dichotomy of Corbyn wanting to nationalize, say, transport or other sectors and other ones saying, no, this has to remain free market. That's an old debate. What does it mean to govern even private ownership, for example, of state, sorry, of transport in a way, though, that is conditional on the private sector actually investing in making the transport system here modern green and so on, which again is not part of how we're currently governing UK transport. I always find those questions really challenging because it requires you to stop and think and to experiment to ask, you know, what are you actually learning on the ground? What I don't find useful is just the usual, you know, you can just almost close your eyes and know it's coming, which is, oh, this is about picking winners. And it's not about picking winners. It's not about picking one project, one technology, one sector that then you go back to and say, look, that was a mess up. It's about choosing a direction, you know, a green direction, for example, and then picking the willing, not picking the winners. Again, designing procurement grants and loans that really crowd in all the different types of companies that are willing to move with you, but not to just stay in place and get some sort of government handout. Well, just very briefly, because we're almost out of time, I wanted to get granular at the end and specific and certainly say we got one question from Luciana saying she's riding from Venice, Italy, and wants to know whether you think the Italian government's aware of the scale of climate change threatening Venice. And a question, a very practical question from Steve, which I think will probably touch many people watching, which is how should places like Rotherham, where I live, fix their disintegrating high streets, town centres? Sorry, was the city Rotterdam? No, Rotherham. Rotherham, sorry. So Venice, yeah, I mean, everyone knows that there's a climate problem all over Italy. And Venice, of course, you'll remember that just before COVID hit, which for many of us was in March, even though it was, you know, in the previous months, we were just blind to it. In February, there is huge floods in Venice. They were all over the papers just the month before. You know what's talking about that anymore? It's not that their problem is not there, right? We've just been kind of blinded by this other big crisis. And if you look at the failures in Italy, but I don't think it's fair just to point to Italy, but definitely in the Veneto region, which by the way is where I'm from, my family is from Fadova, which is 10 minutes from Venice. It's often really been a massive governance failure. You know, and this is actually why the whole moon landing thing is interesting. You know, if we could get to the moon and back, we can surely solve at least some of these problems, at least those that aren't wicked, right? So there's this famous book called The Moon and the Ghetto written by a friend of mine, Richard Nelson. That's, you know, that poses a really important question, which is we got to the moon and we still haven't solved the ghetto problem inequality. The answer to that is different from the one I'm, you know, that we're talking about here, where there's floods. There's definitely scientific and technological solutions to that, but we're not treating them with the urgency that we treated, you know, going to the moon and back because it was to beat the Russians. And sorry, I've already forgotten the second one. What was the second one? Well, the high streets. Oh, yeah, the high streets. So we actually wrote a report for the London mayor around the high street and argued that we really could benefit from this concept that I mentioned before around public value, which has in some, you know, organisations like the BBC been debated, but not really like how do you create value together in a high street, right? So with all the, for example, the land and the business rates that, you know, companies are paying back, say to the high street, you know, to a part of a city, what would it look like to actually really have a debate and a discussion of what we're even trying to achieve on a high street beyond just kind of retail that sort of comes and goes often increasingly driven by private equity funding, which by definition is just looking for a short term return. What would it look like, again, to have that place based innovation in the same way that I talked about a school meal as a place through which you could just galvanize all sorts of different innovation investment, but at that high street level. So it's on the web, you look, I think it's called London High Streets, and it's funded by the mayor, Sadiq Khan, and we have a chapter on it that brings this mission-oriented approach. Well, thank you. That's really fascinating. Sadly, very sadly, we are out of time. We got through most of the questions. Apologies to anyone who didn't get that question answered, because they were terrific questions. And it just reminds me to say a big thank you, Mariana. I think I find it very inspiring both to hear about the scale of the ambition that you're calling for us to adopt, which has been there before, but has often been forgotten recently, but also about the specific granular implications of what it can mean, whether it's in a high street, whether it's on something like Venice, whether it's a BBC, all these very specific granular areas of our life that could become so much better if only we thought big, and also, frankly, thought lateral, because the other point you make, it is no good thinking about so-called stakeholder capitalism, the new buzzword of the age that we've both been talking about in Davos, unless you recognise that stakeholders all need to try and interact and basically all sides learn from each other. And that's been rather a missing piece in the last few years. But thank you very much indeed for a very uplifting, inspiring fashion. I have to tell everyone watching that you can give your feedback about the discussion at the feedback button on the screen and tell the British Library what you think about this event. Be as rude if you like, because that won't be a problem if you can't see it. But in the meantime, very best of luck in getting this message out for all of our sakes. And good luck with the book. Thank you. Thank you, Gillian. And such a great summary, as always. You're wonderful. And thanks to the British Library.