Podcast Summary
Mission-led government missions: Clear, unambiguous missions with specific criteria and metrics are crucial for mission-led governments to drive real change and inspire private sector investment. Learning from successful countries can help create effective mission-led policies.
For a mission-led government to be effective in driving real change and inspiring private sector investment, it's crucial that the missions are clear, unambiguous, and accompanied by specific criteria and metrics. Professor Marianna Matzakato, who coined the term "mission-led government," emphasizes that not all missions are created equal. The mission to make Britain a clean energy superpower, for instance, has the potential to foster growth and inspire investment due to the large market opportunities in the green economy. However, other missions, such as the goal for the highest economic growth, may not be effective as standalone missions since growth is a result of investment. To ensure the success of mission-led policies, it's essential to learn from countries like Germany, where economy-wide green transformations have been successful, and apply clear and conditional public investment strategies.
Missions for societal transformation: Clearly defined missions with ambitious goals can drive societal transformation through effective use of institutions, such as NHS, public wealth funds, and innovation agencies.
For effective policy-making and societal transformation, it's essential to set clear and ambitious missions, rather than focusing solely on institutions. The German green steel example illustrates how public funding and conditions can drive innovation. In the UK context, a mission to reduce health inequalities by a significant percentage within a specific timeframe could be more impactful than focusing solely on the NHS. Institutions like the NHS, public wealth funds, and innovation agencies are tools to achieve these missions, not the missions themselves. By addressing societal issues like health inequality, child poverty, and climate change through well-designed missions and the appropriate use of institutions, we can create a more equitable and prosperous society. The US example of DARPA demonstrates the power of missions to drive technological innovation. It's crucial to identify the problems we need to solve and create missions that address these challenges effectively.
Public funds reinvestment: Public funds should be reinvested back into the economy, not just privatized or distributed to shareholders. Proper governance structures and a shift in mindset are crucial to ensure long-term benefits.
When creating or managing a National Wealth Fund or a business investment bank, it's crucial to ensure that the returns from successful investments are reinvested back into the economy and not just privatized or distributed to shareholders. The Green Investment Bank in the UK serves as a cautionary tale, as it was successful but ultimately sold off to a private investment vehicle, leading to potential negative consequences. It's essential to have the right governance structures and metrics in place to ensure that public funds continue to invest in projects that benefit the public and contribute to economic growth. Additionally, there's a need for a shift in mindset, moving away from viewing the public sector as merely filling gaps created by the private sector, and instead recognizing its role in shaping markets and creating economic opportunities.
Budget cuts: Thoughtful budget cuts that prioritize long-term growth and productivity are essential for economic success, while hasty cuts can harm social fabric and decrease productive capacity, leading to greater costs in the future.
Smart, strategic, mission-oriented investment is crucial for economic growth and reducing debt to GDP ratio in the long term. However, hasty cuts to the budget without thorough analysis can lead to decreased productive capacity and harm the social fabric, resulting in greater costs down the line. The example of the "pigs" countries, such as Portugal, Italy, Greece, and Spain, shows that focusing solely on reducing deficits without considering the impact on growth and long-term productivity can be counterproductive. Instead, governments should prioritize investments in areas like health, climate, reducing the digital divide, and sustainable mobility to lead private sector investment and stimulate economic expansion.
Economic growth vs. Fiscal constraints: Collaboration between governments and businesses is crucial for addressing long-term environmental and economic challenges while prioritizing economic growth and implementing fiscal constraints may hinder investment in green and circular economies. A shift from focusing on gross debt to net assets and potential returns can help justify long-term investment.
Prioritizing economic growth while implementing fiscal constraints can hinder long-term investment plans, particularly in areas like green and circular economies. To effectively address environmental and economic challenges, it's crucial for governments and businesses to work together, collaborate, and share rewards. This long-term perspective requires a shift from focusing on gross debt to considering net assets and the potential returns from investments. Additionally, making a strong intellectual case for this approach before elections can help garner support from businesses and the public.
Mission-led collaboration: Effective missions require tangible goals, collaboration, and contracts with conditions. Public banks and procurement can foster business investment and bottom-up innovation. Mission-led decisions by local leaders, with citizen input, can lead to positive outcomes.
Successful missions require tangible goals, collaboration, and contracts with embedded conditions. The collaboration needed to complete the mission can only be achieved when all parties contribute and benefit. This concept can be applied to various sectors, including climate change, and should be intersectional. To catalyze business investment and foster bottom-up innovation, public banks and procurement can be used. At the local level, mission-led decisions made by mayors or councilors, with input from citizens, can lead to positive outcomes. For instance, using public sector tools like procurement for school meals can stimulate the local economy and improve children's welfare. This participatory approach is often easier at the local level, where attention to citizen involvement is more feasible.
Outcomes-oriented procurement: Shift procurement budgets towards locally needed projects, foster interministerial collaboration, invest in civil service training, design long-term institutions, and evaluate investments beyond cost-benefit analysis for transformative change in the public sector
In order to drive innovation and positive change in the public sector, it's essential to shift the focus of procurement budgets towards locally needed projects with an outcomes-oriented approach. This not only benefits people and the planet but also makes missions more inspiring and impactful. The success of such initiatives relies on interministerial collaboration, investment in civil service training, and the design of long-term institutions. Additionally, the evaluation of investments should go beyond traditional cost-benefit analysis to include dynamic spillovers and citizen participation. By doing so, we can create a movement towards transformative change that goes beyond political cycles.
Green movement's impact on German policies: The green movement's pressure on the German government led to the implementation and sustainability of green policies, demonstrating the power of grassroots movements in shaping political agendas and driving change.
The implementation of green policies in Germany, such as the Energiewende, was not a result of government decisions in a vacuum, but rather a response to a strong and persistent green movement pushing for change from society. The pressure from this movement ensured that these policies were not only enacted but also sustained over time. It's a powerful reminder of the impact that grassroots movements can have on shaping political agendas and driving meaningful change. Despite the many fascinating topics we touched upon during our conversation, time has run out, leaving us with many questions to explore further for the next discussion.