On Friday 5 March Mariana Mazzucato gave an online lecture, ‘A Mission Oriented Approach to Stakeholder Value’ as part of the Cutting Edge Issues in Development Lecture series. Mariana Mazzucato is a professor in Economics and Public Value at UCL and founder and director of their Institute for Innovation and Public Purpose. Her latest book, ‘Mission Economy: A Moonshot Guide to Changing Capitalism‘ was published in January 2021 and was reviewed on the ID blog here. Read what Development Management MSc student Alejandra Finotto took away from the lecture below.
The way we live has been turned upside-down by the Covid-19 global pandemic. Not long ago, many countries were affected by deep financial crises. In the horizon, environmental challenges due to the advent of climate change are starting to materialise. With this picture in mind, it takes little to feel discouraged, to consider how we got to this point and why we have been so unprepared in facing these problems.
The failure certainly comes from a system that does not work, and that needs to be re-thought. During last Friday’s Cutting Edge Lecture, Mariana Mazzucato highlighted the urgent need for a deep change, and posed a simple but thought-provoking question: If we were able to get to the moon and back, which is certainly not an easy task, why are we not able to solve today’s problems?
How and why did we manage to get to the moon and back? According to Mazzucato, it was because we were driven by a sense of mission, and therefore, purpose. And these should be the characteristics of a new approach to stakeholder capitalism, which hence should be mission-led. She argues for a dynamic approach to value creation, where the government should be focused in co-creating and shaping the market rather than in fixing it. In fact, she claims that it doesn’t make sense to make a divide between a market-approach and a state-approach to issues, since markets derive from outcomes of state governance and the type of institutions we have. As such, we should think about relationships, and how the collective can create value.
Some of the key elements included in her mission-oriented approach are leadership, risk-taking innovation, agility and flexibility, serendipity and spillovers, outcome-focused finance, and partnerships with purpose. For instance, she claims that we need leaders to be explicit in saying how hard addressing some of today’s problems will be, and be honest in acknowledging that we may initially fail at the beginning in facing them. She also states that we need to re-think what our government budgets are for, shifting the investments towards building our own knowledge to avoid having an “infantilised public sector” which currently outsources most of its activity. Finally, she declares that we need to partner with purpose because in this way we will enhance our capacity through learning.
What does it look like to have this approach incorporated in designing public policy according to Mazzucato? Well, we need to change generic goals into clear targeted missions. We need to focus on cross-sectional innovation, combine top-down and bottom-up approaches, bring different voices to the table, and capture the spillovers. It’s not about spending more, it’s about spending smarter. It’s not about picking winners, it’s about picking the willing. This is not about ideology. It is about solving problems. It is about putting public value at the heart of innovation.
I couldn’t agree more with Mariana’s approach. Something that I have been thinking throughout my semester is how we, as development practitioners, really need to start adopting a holistic, multi-faceted and inter-disciplinary approach to solving today’s more pressing problems. As such, we should not think about economic development and wellbeing as two different things, but as interconnected; we should not think about monetary and environmental value as opposites, but as complementary; and we should definitely start to collaborate more between distinct fields such as government and technology.
In a world which has never been as globalised and interconnected as of now, policy makers should start understanding that complex problems need complex solutions too. Going to the moon was complex, but we designed a complex mission and accomplished it. Facing today’s challenges is equally complex, but, as Mariana proposes, if we are driven by a sense of mission, with value creation at the heart of it, and are able to build smart partnerships, we should end up being as successful as we were then.
This lecture was the final instalment of the 2020-2021 Cutting Edge Issues series. You can watch back all past lectures in the series on the ID YouTube channel.
The views expressed in this post are those of the authors and in no way reflect those of the International Development LSE blog or the London School of Economics and Political Science.