Mariana Mazzucato, an Italian-American/British economist and academic, and author of The Big Con: How the Consulting Industry Weakens Our Businesses, Infantilizes Our Governments, and Warps Our Economies ,says that the time has come for businesses and governments to take a new approach. By design, she asserts, everyone is in a reactive mode.
“We need a new economic theory, a new economic practice, but [we especially need] new partnerships, new ecosystems, entrepreneurial ecosystems,” Mazzucato said Thursday, during ULI Fall Meeting’s “General Session: Inclusive and Sustainable Economic Growth: Moonshot Approach.” “Instead of obsessing about entrepreneurship in garages in Silicon Valley and over glorifying individuals or companies, what does it mean to actually work together in a more entrepreneurial way?”
To that end, according to Mazzucato, we must embrace taking risks as well as living with the uncertainty that “underpins all the collective investments” needed to handle crises in a proactive manner. She pointed to COVID-19 as one example. Mazzucato said that the pandemic should have served as a “huge wake-up call.”
The beginning of the crisis—when governments clearly failed to deliver basics, which led to some early deaths among medical professionals—emphasized her point, she said. There was a widespread lack of personal protective equipment, even in industrialized nations.
Mazzucato, who was born in Italy, said that her home country especially suffered because it was 100 percent dependent upon Chinese personal protective equipment.
Italy resorted to using a wartime tool, like one that was also then used in the United States (the Defense Production Act), to galvanize investment in companies to produce what was needed. As a result, Italy was able to produce, within just three months, 100 percent of its personal protective equipment through Italian enterprises, according to Mazzucato.
Although COVID-19 woke up the country, Mazzucato said that it has since fallen asleep again, as wartime procurement is no longer being used. Italy’s experience is just one example of a lesson that should have been learned. Focusing on “pandemic preparedness” is important for countries worldwide, as the world could face another lockdown in the future, Mazzucato said. Many other challenges also loom.
The crux of her book, cowritten with PhD student Rosie Collington, “was to blame the governments,” not consultants, Mazzucato said. “These challenges: net zero, healthy cities, gender parity,” she added. “These are problems that need to be governed. Policies need to be implemented. We need partnerships. We need ecosystems.”
Otherwise, in her estimation, we will meet even greater difficulties when tackling such issues.
Mazzucato said that there are lessons to be learned from the NASA-led Apollo program, which she refers to as a “massive private-sector innovation,” as NASA focused on designing public and private partnerships that collaborated to make its missions happen, according to Mazzucato. They worked together on the clear goal of traveling to the moon and returning in a brief span of time.
Mazzucato called participation vital. All parties must be willing to work collaboratively to reach a successful outcome. “Really finding ways to think about what [it means] to work well together in hotels, in real estate, in how we build, in how we think of cities, [about] that relationship between the planners, the architects, the designers, the industry,” she said. “What does it mean for actually thinking of a common-good approach, where the ‘how’ matters as much as the ‘what’?”
She also stated that public-private partnerships need to be closely examined, and questions should be raised. Mazzucato gave one example: “You would never say, if there’s a marriage, that just because people are married, and they have a partnership, that it’s a good partnership. You would start asking all sorts of interesting questions of what they do on weekends.” She added, “We don’t do that with public-private partnerships. We don’t have rigor.”
