The wicked problems of the 21st century are too complex and systemic to be solved by one sector alone.
Global organisations need to reframe the way they approach innovation into missions to create equal partnerships where all sectors share the risks and rewards.
Who is speaking here? Anyone who has read policy papers issued by UCL’s Institute for Innovation and Public Purpose (IIPP) will recognise the language. So will readers of the books published by Mariana Mazzucato, IIPP’s charismatic director. But this was a speech by Theresa May, not Mazzucato. The Prime Minister was unveiling – at Jodrell Bank in May 2018 – how the UK was going to think big about societal challenges, namely artificial intelligence, ageing, clean growth and the future of mobility.
May is not the only leader to rapidly adopt the language and paradigms of IIPP. Here’s First Minister of Scotland Nicola Sturgeon on innovation and public purpose: “We want Scotland in the future, just as we have in the past, to be inventing, designing and manufacturing the innovations and the products that will shape the world of tomorrow. We want to ensure those innovations don’t just benefit big business but wider society as well.”
And European Commissioner Carlos Moedas: “In the European Union we are very good at defining our challenges. But often we are not able to explain them or to find a solution for them. That is precisely why we have come up with the idea of missions: to create a link with people; to trace a path to solve problems.”
In all three cases the rhetoric of ambition and bravura are straight from the IIPP handbook, which encourages those in public service to remember that they direct society and should take pride in this responsibility, especially when it comes to tackling the biggest challenges. Success requires a lot of time, capital and expertise across disciplines; and the government alone has the capacity to direct missions.
Meaning is use
The adoption by political leaders of IIPP’s language should come as no surprise. Plato said that those who tell stories rule the world. Those who tell stories of invention, bravery and togetherness get re-elected.
Look at the united nations sustainable development goals. something like 140 countries sign up to them because it makes everyone feel good but nothing happens
But politics is a slippery business. Buzzwords such as ‘missions’ and ‘moonshots’ – originally used for the Apollo missions in the 1960s – could be deftly packaged and transmitted with no substance to follow. If IIPP were a PR firm, that would not matter. But Mazzucato and
Deputy Director, Rainer Kattel, recognise the risk of hollow promises. “Look at the United Nations Sustainable Development Goals,” says Mazzucato. “Something like 140 countries sign up to them because it makes everyone feel good but nothing happens.”
So while IIPP is delighted that governments are rediscovering inspirational language to describe their own work, the substance has to be there too. In the case of the UK’s four industrial challenges, one source of substance is the Commission for Mission-Oriented Industrial Innovation Strategy (MOIIS). Administered by IIPP and comprising bright minds from academia, business, science, IT and healthcare, MOIIS liaises with the Department for Business, Energy and Industrial Strategy (BEIS) as inspiration, wayfinder and sounding-board.
In 2018, MOIIS discussed the challenge of putting the UK at the forefront of the AI and data revolution in the context of medical diagnoses. Britain has an enviable healthcare ethos but the NHS is far from unified when it comes to information-sharing – personal and genomic data are not currently combined, for example. Free-market theory would suggest at this point that private companies will devise the best information systems to combine the necessary data and consequently improve diagnostics. But the most successful data companies, from Google down, tend to monopolise. It is questionable who, apart from the data company’s owners, would want it to control a nation’s medical data. Medical records are highly personal – London’s Royal Free Hospital has already been criticised by the Information Commissioner for how it passed patient data to Google’s AI subsidiary, DeepMind, in a joint venture.
MOIIS’s Dan Hill, Global Digital Studio Leader at Arup and a member of the IIPP advisory board, mentioned the DECODE project being piloted in Amsterdam and Barcelona to develop a data commons, but with control for each citizen to anonymise their own personal data. Could the DECODE paradigm work on a grand scale for patient records in the NHS? Kattel compares DECODE to a public library: “No one wants to own a library but everyone wants to use it.” And of course, everyone understands what a library is, whereas most would struggle with the blockchain technology underlying DECODE and protecting citizens’ interests.
Public support is essential for any mission fulfilment. Often, however, politicians have a habit of pumping money into or taking it away from any cause of immediate public concern.
Nowhere is this more evident in the UK than the NHS, where government responses nowadays are almost always expressed in terms of cash. The manner in which these responses are announced and the sums of money involved are born of fear. To use management-speak: the government has ‘lost the room’.
Mazzucato reckons even Barack Obama, a great orator, was culpable on healthcare. “When the Tea Party accused him of meddling, he didn’t go on the front foot and point out that caring for 60 million uninsured Americans is a multi-billion-dollar boost for the whole country in terms of costly medical operations avoided and labour fit to be active in the economy.”
Here we come to valuing both formal and informal care, spanning healthcare and domestic support. In her latest book, The Value of Everything, Mazzucato shows how the predominant form of modern economics shies away from activities such as caring for relatives when there are no wages involved. The existence of wages means the activity has a price and thus a value. This is a monetary value, of course. Price-based economists don’t want to evaluate quality of care (or housework) and even when it is paid, as in the NHS, the fact that there are no ultimate profits means that public services end up getting viewed in terms of cost-savings alone.
This is why public innovation – so prevalent in current speeches by politicians – has hitherto sounded like an oxymoron. It is also why those announcements of new cash for the NHS don’t work: the public has got used to thinking good government saves money. If you want productivity, on the other hand, look to the private sector.
Raising the status of formal and informal care (in some countries these duties have never lost status) is a project within Theresa May’s designated Grand Challenge of ageing. Professor Sue Himmelweit, MOIIS Committee Member and Emeritus Professor of Economics at the Open University, points out that care has the biggest multiplier effect of all the Grand Challenges. What that means is that, while activities like AI get lots of attention because they are cool and futuristic, AI only occupies a small number of brainy people. If a society sorts out its care system, millions more people are healthy enough to work and spend, sustaining even more jobs and wealth.
Care is social infrastructure. it is seen as welfare provision but it is part of industrial strategy
Himmelweit wants to appropriate some language to give this project impetus. The public can usually be relied upon to get behind big infrastructure projects because we all know what a tunnel or bridge is for. But how about appropriating the language of construction to care? “Care is social infrastructure,” says Himmelweit. “It is seen as welfare provision but it is part of industrial strategy.”
If the BEIS can promulgate this message throughout the land, the work of millions of people – mostly women – gets greater recognition. If the Treasury matches the words with figures, by emphasising the multiplier effect of care in the national accounts, these will be big steps towards a society that does not rely just on cash prices or salaries to determine an occupation’s benefit to the economy.
Perhaps the greatest compliment one could pay the IIPP is that it is gently but firmly leading governments away from costing projects, occupations and services – not least their own – to valuing them.
The economics of change
For almost half a century, the UK’s civil servants have been turning to HM Treasury’s Green Book for guidance on evaluating public projects. The book has been updated over the years but a paper published by the IIPP in 2018 suggests a radical rewriting is required.
Constraints on government departments are born out of prevailing economic theory, which assumes that we are all price-sensitive and markets are the best determiners of price. In this ideal world, cost is king and so public projects have to undergo a cost-benefit analysis. Such analyses do not work well for missions, which by their nature are messy, span industrial sectors and whose benefits cannot be known in advance, even if there is a specified goal (e.g. the BBC’s attempts to make a micro-computer failed in the 1980s but the spillover effects led to the creation of ARM Holdings, one of the UK’s most successful tech companies).
This is the first problem with estimating each project’s worth in terms of cost. Much of the good in society for which governments are responsible cannot be rigidly priced. The authors of the IIPP paper argue that when it comes to augmenting the good in society via bold, expansive missions, an even deeper malaise is revealed: cost-benefit analysis in the public sector has come to mean ‘loss-limiting’. There is a presumption that only the private sector knows how to turn a profit. Government’s role, meanwhile, is to step in like a handyman to fix market failures.
Missions shatter such a theory because they crowd in financial, human and physical resources from both the public and private sector. In such a spirit of collaboration, innovation produces new markets and new profits. How can a new market be costed ex ante – as cost-benefit analysis invariably does? Which sub-projects within a mission should be valued most when each one’s value will develop distinctly and unevenly over decades?
Even at the level of strategic assessment, the Green Book wants to avoid ambiguity and interconnectedness, hence the demand for half a dozen Specific Measurable Achievable Realistic Time-Limited (SMART) objectives per project. In the spirit of single project management, it also favours faster completion – a reward for efficiency that only suits conventional efforts such as building a motorway. But for heroic missions, such as making all UK roads ready for autonomous vehicles, time preference and SMART objectives seem to be the wrong kind of measures.
IIPP’s Working Paper states that a more subtle evaluation system is required to encompass this kind of complexity: “An analytical framework to support mission-oriented policy-making should place a low priority on the ability to confidently quantify precise future outcomes,” it says. “Instead, they should have explicit and transparent ways of working with irreducible uncertainty, bringing it to the centre of consideration.”
Read the paper
- “The economics of change: Policy appraisal for missions, market shaping and public purpose” (R. Kattel, M. Mazzucato, J. Ryan-Collins & S. Sharpe, IIPP WP 2018–06)