UCL Institute for Innovation and Public Purpose


IIPP launches “Inclusive and sustainable British Columbia” report

31 March 2022

Following the collaboration between IIPP and the B.C. government, the report, authored by Prof Mariana Mazzucato, explores how a mission-oriented economic policy can look, what its benefits are, and how it can be implemented in B.C.'s context.

British Columbia

The new report “Inclusive and sustainable British Columbia: A mission-oriented approach to a renewed economy” by Professor Mariana Mazzucato was launched on the 31 March during the Globe Forum 2022. At a fireside chat with Hon. John Horgan, Premier of British Columbia, and Hon. Ravi Kahlon, Minister for Jobs, Economic Recovery and Innovation, Prof. Mazzucato discussed the rationale and recommendations of the report.

The report seeks to clearly lay out how a mission-oriented economic policy can look applied to B.C.’s context and what its implications are for the implementation of the recent Stronger B.C. Economic Plan. Prof. Mazzucato and her team at the UCL Institute for Innovation and Public Purpose (IIPP) argue that a mission-oriented approach can help the region foster green and inclusive growth.

In the report, Prof. Mazzucato highlights how three areas — public procurement, Treasury assessment methods and public finance — can be most effectively used to support the delivery of B.C.’s mission-led economic plan. She also considers issues that will be key to the implementation and governance of B.C.’s economic plan, such as citizen engagement, breaking down government silos and strengthening public sector capabilities.

The report is available here.

The three areas:

Public procurement
Public procurement represents a significant component of public spending for all governments, including in B.C. Therefore, a dynamic use of government purchasing can play an important role in directing demand and driving innovation. By embracing a functional approach to procurement rather than a product-oriented approach, the B.C. government can describe the function, the objective or, even better, the mission that it wants to achieve instead of outlining the precise products the government intends to purchase.

Treasury assessment methods
A fundamental reappraisal of the role of the public sector is required that goes beyond the traditional ‘market failure’ framework to a ‘market-co-creating’ and ‘market-shaping’ role. Such a change in policy focus requires a different kind of analytical framework for policy appraisal and evaluation – one that is able to capture the dynamic aspects of market-shaping and mission-oriented policy.

B.C. should seek to develop a new suite of Treasury assessment methods focused on systemic change to achieve missions that aim to capture the creation of public value, dynamic efficiency and additionality.

Public Finance
Finance is not neutral; the type of finance available can affect both the investments made and the type of activity that occurs. Short-termism and risk-aversion mean that the private sector will often not invest in higher-risk areas until future returns become more certain. Furthermore, innovation is highly uncertain, has long lead times, and is collective and cumulative, meaning it requires not just any type of finance but patient, strategic, and committed finance. In B.C., an independent strategic investment fund recently created by the B.C. government, is well-positioned to lead here.

The report recommends that in B.C.’s mandate and investment strategy be aligned with the challenges and mission areas outlined in B.C.’s new economic plan. This would provide directionality and additionality to B.C.’s investments and would act as a powerful catalyst for accelerating clean and inclusive growth.

It must take a strategic approach to sharing risks and rewards, establish new monitoring and evaluation frameworks beyond the narrow market failure framework, and overcome historic barriers surrounding access to capital for Indigenous communities.  

Commenting on the report release, Prof Mazzucato said:

'The effectiveness of mission-oriented policy is intimately tied to specific tools, including procurement, assessment methods, and public finance. These tools cut across all areas of public policy and require a joined-up, coordinated approach across different government departments. Used effectively, these tools can help B.C. strengthen productivity, decrease inequality, and decarbonize its economy. B.C. has the opportunity to rethink its economic model and encourage directed growth that delivers inclusive and sustainable outcomes by design. The government has developed two mission areas and now requires bold, clear, ambitious, and cross-sectoral missions to bolster its approach. This, however, will only be the first step. Whether or not the plan succeeds will depend on how the missions are designed, implemented and evaluated.'

The “Inclusive and sustainable British Columbia: A mission-oriented approach to a renewed economy” report is available here. Watch here the plenary session.