WEBVTT - Mariana Mazzucato Thinks We Need More Moonshots 0:00:02.720 --> 0:00:14.000 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:18.440 --> 0:00:22.040 Hello and welcome to another episode of the Odd Lawns Podcast. 0:00:22.120 --> 0:00:24.360 I'm Jill Wisenthal and I'm Tracy Alloway. 0:00:24.440 --> 0:00:26.279 We're still here in Madrid. Tracy, how are still here? 0:00:26.360 --> 0:00:27.080 You have a good time? 0:00:27.360 --> 0:00:30.080 I am. I've eaten a lot of ham and cheese 0:00:30.120 --> 0:00:31.920 and that's pretty much all I can say. 0:00:32.000 --> 0:00:34.080 Yeah, I'm going to turn into a hormone by the 0:00:34.120 --> 0:00:37.040 time I leave. I'm certain of that. So we are 0:00:37.080 --> 0:00:40.040 at the Bloomberg City Lab conference. You know, it's funny, 0:00:40.159 --> 0:00:43.360 like the mayoral level of politics, not something we spend 0:00:43.400 --> 0:00:47.000 a ton of time typically on, but I would say, 0:00:47.080 --> 0:00:49.320 like it definitely. You know when I think about it, 0:00:49.360 --> 0:00:51.120 when I'm like here and like listening to a lot 0:00:51.120 --> 0:00:54.320 of the conversations, it's just so obviously like connected to 0:00:54.360 --> 0:00:56.520 a lot of the themes we talk about, because so 0:00:56.680 --> 0:00:59.480 much of our discussions have to do with something related 0:00:59.560 --> 0:01:04.560 to you know, innovation or technology or implementation of policy 0:01:04.840 --> 0:01:07.720 and how it spans both the public and private sectors. Yeah. 0:01:07.800 --> 0:01:09.480 I mean also when I think about a lot of 0:01:09.520 --> 0:01:13.800 a thloughts topics like AI or housing affordability or inequality 0:01:13.959 --> 0:01:17.000 like cities, I think City lab actually use this phrase 0:01:17.000 --> 0:01:19.000 at one point, but cities are really at the front 0:01:19.040 --> 0:01:22.080 line of all of those challenges, right, and trying to 0:01:22.080 --> 0:01:24.520 implement policy in that local level in a way that's 0:01:24.600 --> 0:01:28.360 like very easy to see and observe and also to 0:01:28.480 --> 0:01:29.280 judge totally. 0:01:29.480 --> 0:01:32.680 Yeah, no, it's exactly right. And I think maybe there's 0:01:32.720 --> 0:01:35.920 something like, you know, I don't it feels like to 0:01:35.959 --> 0:01:39.520 some extent, the mayoral level of any governance to sort 0:01:39.560 --> 0:01:43.160 of maybe the least ideological and the most like, you know, 0:01:43.240 --> 0:01:45.560 we talked to the Baltimore mayor, for example, and so 0:01:45.680 --> 0:01:48.600 much of his theme was just like talking to other mayors, 0:01:48.600 --> 0:01:51.000 like what's working in your town, that's working in your city, 0:01:51.120 --> 0:01:53.240 and what's not working and so forth. They all have 0:01:53.320 --> 0:01:56.440 such similar challenges, so many things have been like repeated, 0:01:56.680 --> 0:01:59.360 you know, one time after another that like they all 0:01:59.400 --> 0:02:01.880 can sort of speak the same language and all have 0:02:01.880 --> 0:02:02.560 the same issues. 0:02:02.720 --> 0:02:04.960 Yeah, it's funny. You kind of got that local idea 0:02:05.120 --> 0:02:07.720 swapping at a mayor a level that I cannot imagine 0:02:08.080 --> 0:02:11.200 necessarily happening in national politics. Like can you imagine Trump 0:02:11.280 --> 0:02:13.240 and Chi Himpin getting together and be like, oh, we 0:02:13.280 --> 0:02:17.680 implemented this really cool, like national transportation program. Have you 0:02:17.760 --> 0:02:18.120 tried it? 0:02:18.280 --> 0:02:20.639 Yeah, you know, know you hear like these stories right 0:02:20.639 --> 0:02:23.640 of a governor sometimes or a mayor will go to 0:02:23.680 --> 0:02:25.760 like another country like oh we can like learn from 0:02:25.760 --> 0:02:28.440 what the city did on transit or whatever. But no, 0:02:28.560 --> 0:02:31.240 you don't really hear that the same way at the 0:02:31.280 --> 0:02:34.359 real national level, where a lot of our discussions tend 0:02:34.360 --> 0:02:34.679 to sit. 0:02:34.880 --> 0:02:36.520 Absolutely Anyway, I'm really. 0:02:36.320 --> 0:02:39.080 Excited about today's episode. We're going to be speaking with 0:02:39.120 --> 0:02:41.040 a guest who I would say, like, since we've been 0:02:41.040 --> 0:02:45.119 doing Odd Lives, is actually one of the more frequently requested, 0:02:45.320 --> 0:02:47.920 long requested, and so it's sort of a failure on 0:02:47.960 --> 0:02:50.360 our part that like we just like never made it 0:02:50.400 --> 0:02:54.360 happen before. But yeah, someone who like really like those 0:02:54.440 --> 0:02:57.040 whole career is like dedicated to a lot of odd, 0:02:57.080 --> 0:02:57.840 lozzy things. 0:02:57.880 --> 0:02:59.960 Well, we waited until we could do it at Madri, 0:03:00.120 --> 0:03:00.440 but I. 0:03:00.400 --> 0:03:03.160 Didn't want to just do it at any other random venue. Yes, 0:03:03.200 --> 0:03:06.320 it was all very strategically designed. So we really do 0:03:06.440 --> 0:03:08.200 have the perfect guest. Some of that A lot of 0:03:08.200 --> 0:03:10.080 guests have wanted to listen to here from for a 0:03:10.080 --> 0:03:12.919 long time. We're going to be speaking with Mariana Matzicato, 0:03:13.000 --> 0:03:16.000 professor a University College London, founder of the Institute for 0:03:16.040 --> 0:03:19.280 Public Purpose, author of several books sort of touching on 0:03:19.360 --> 0:03:23.799 these themes of technology, public sector, private sector, the roots 0:03:23.800 --> 0:03:28.000 of innovation, how these things actually get deployed. So, Professor Matzakato, 0:03:28.080 --> 0:03:32.799 thank you so much for coming on ODL. Finally, finally, 0:03:33.800 --> 0:03:37.160 are completely our fault for not having made it happen sooner. 0:03:37.160 --> 0:03:38.960 But what do you just started? Like, what are you 0:03:39.040 --> 0:03:42.160 doing here? What brings you to this particular conference a 0:03:42.920 --> 0:03:43.960 what attracts you here? 0:03:44.120 --> 0:03:46.760 Well, first of all, I'm here also because the government 0:03:46.800 --> 0:03:50.040 of Spain is really kind of leading the way in 0:03:50.360 --> 0:03:52.920 many areas that I'm very interested in, especially the kind 0:03:52.920 --> 0:03:55.760 of new economic thinking that needs to underpin how we 0:03:55.760 --> 0:03:58.600 rethink government. And so I was meeting with both the 0:03:58.680 --> 0:04:03.040 Prime Minister and the Minister for the Economy, Carol Squerpo, 0:04:03.120 --> 0:04:05.920 who I'm on a panel today with about a council 0:04:05.920 --> 0:04:07.560 that we've just set up. It's called the Global Council 0:04:07.600 --> 0:04:10.320 for a Common Good Economy anyway, And besides that, I'm 0:04:10.320 --> 0:04:13.760 also here to speak at the Bloomberg City Labs event 0:04:13.880 --> 0:04:16.680 about this new public sector Capability index that we've been 0:04:16.720 --> 0:04:19.680 developing with them, as a partner, which is really about 0:04:20.080 --> 0:04:23.600 reinvesting inside the civil service so that they can really 0:04:23.640 --> 0:04:26.880 tackle those wicked complex problems instead of you know, hiring 0:04:26.920 --> 0:04:29.360 Deloitte during COVID and giving them one point five million 0:04:29.600 --> 0:04:31.960 a day to do test and trace, which they fail 0:04:32.040 --> 0:04:32.719 at in the UK. 0:04:33.360 --> 0:04:36.040 I definitely want to get you to go off on consultants. 0:04:37.040 --> 0:04:39.039 But before we do, like when you meet with someone 0:04:39.080 --> 0:04:41.320 like the Prime Minister of Spain, what is it that 0:04:41.360 --> 0:04:43.680 they want to know from you? Like, what information or 0:04:43.680 --> 0:04:44.800 expertise are they seeking? 0:04:44.960 --> 0:04:47.400 Right? Well, I'm actually quite lucky that my books actually 0:04:47.440 --> 0:04:50.320 get read by the Prime minister. So usually what happens 0:04:50.400 --> 0:04:53.320 is that they've especially the Entrepreneurial State, which I know 0:04:53.360 --> 0:04:55.240 rud in twenty thirteen that had quite a bit of 0:04:55.279 --> 0:04:57.760 an effect here. They even wrote a report called el 0:04:58.880 --> 0:05:02.200 Espae and they we really want to ask me, you know, 0:05:02.240 --> 0:05:04.560 what does that mean? What does it mean for actually 0:05:04.600 --> 0:05:06.560 even being able to fail? For example? Right, so a 0:05:06.640 --> 0:05:09.680 venture capitalists are was bragging about all the failures that 0:05:09.720 --> 0:05:11.680 they had in order to get a success, you know, 0:05:11.720 --> 0:05:13.719 whereas as soon as a civil servant or a minister 0:05:13.760 --> 0:05:16.080 fails or prime minister fails. Front page of the papers, 0:05:16.440 --> 0:05:19.640 So they're very interested in the kind of narrative change, 0:05:19.680 --> 0:05:25.000 but also well the cultural change, but especially the theoretical underpinning. 0:05:25.120 --> 0:05:27.960 Would then say, a finance ministry or an economics ministry 0:05:28.040 --> 0:05:30.720 that needs to then a company rethinking government, because otherwise, 0:05:30.720 --> 0:05:33.280 if you continue to have the old economic models where 0:05:33.279 --> 0:05:36.640 we judge things by cost benefit analysis and at present value, 0:05:36.640 --> 0:05:39.400 all these really static metrics, we would have never even 0:05:39.440 --> 0:05:41.800 bothered going to the moon. Okay, first of all, in 0:05:41.839 --> 0:05:43.839 the nineteen sixties, had we thought of it as a 0:05:43.839 --> 0:05:47.560 cost benefit calculation and so what should replace that? Right? 0:05:48.000 --> 0:05:51.520 So you mentioned the Entrepreneurial State being published in twenty thirteen, 0:05:51.600 --> 0:05:53.680 and I feel like I need to emphasize this because 0:05:53.960 --> 0:05:56.360 there has been this mind shift since the twenty twenty 0:05:56.680 --> 0:05:59.600 pandemic on industrial policy, and we kind of take it 0:06:00.040 --> 0:06:02.560 almost as a given, especially on this show, that there 0:06:02.600 --> 0:06:04.600 is a role for governments to play when it comes 0:06:04.600 --> 0:06:08.960 to innovation and entrepreneurialism. But you were there very early. 0:06:09.560 --> 0:06:13.200 Did you feel vindicated by the twenty twenty shift. 0:06:13.360 --> 0:06:15.279 Well, I think there's a bit of a misunderstanding that 0:06:15.400 --> 0:06:17.800 just because government's spending a lot of money, investing a 0:06:17.839 --> 0:06:20.040 lot of money, whether it's the IRA or the next 0:06:20.080 --> 0:06:24.279 GENUU to trillion recovery plan in Europe. That that means 0:06:24.279 --> 0:06:26.880 that industrial strategy is back, or that you know, government 0:06:26.920 --> 0:06:30.000 is being really strategic. It depends, And I mean that's 0:06:30.000 --> 0:06:31.719 the whole point, right, you know, how are we actually 0:06:31.720 --> 0:06:33.960 framing it? Is it just a lot of tax incentives? 0:06:34.040 --> 0:06:36.919 Are we focused too much on sectors? To what degree 0:06:37.480 --> 0:06:41.600 is industrial strategy actually helping to create a more inclusive, sustainable, 0:06:42.080 --> 0:06:45.880 innovation driven, you know, economy, or is it just another 0:06:45.920 --> 0:06:49.080 wave of handouts and subsidies to particular sectors and then 0:06:49.120 --> 0:06:52.599 we end up socializing risks and privatizing rewards. And also, 0:06:52.640 --> 0:06:55.040 I mean I used to joke that the US government 0:06:55.040 --> 0:06:57.200 has always had an industrial strategy, but you know, pretended 0:06:57.279 --> 0:06:59.960 not to. And they've always talked to the Jefferson talk 0:07:00.160 --> 0:07:04.159 but acted the Hamilton talk or the Hamiltonian kind of 0:07:04.680 --> 0:07:09.880 more proactive government strategy. But by pretending that wasn't there, 0:07:10.320 --> 0:07:12.800 they kept a lot of things under the radar. And 0:07:13.000 --> 0:07:15.120 the joke bit is just that finally people understood what 0:07:15.120 --> 0:07:17.840 the hell was talking about because of the musical before 0:07:17.840 --> 0:07:21.800 the musical came out Hamilton anyway, So I think that's 0:07:21.800 --> 0:07:25.240 really important to recognize that industrial strategy has always been there, 0:07:25.720 --> 0:07:29.160 except that in certain phases, including now in some countries, 0:07:29.600 --> 0:07:32.760 it's not really strategy in terms of being driven by 0:07:32.840 --> 0:07:35.520 public purpose, which as you said, is the title in 0:07:35.560 --> 0:07:37.840 this Institute for Renovation of Public Purpose that I direct. 0:07:38.160 --> 0:07:42.480 It's been just kind of vertical strategies focused on sectors, technologies, 0:07:42.600 --> 0:07:45.680 types of firms, right, the whole focus on small, medium enterprises. 0:07:46.120 --> 0:07:47.480 So what I've been trying to do is to say, 0:07:47.520 --> 0:07:52.240 stop focusing on sectors, technologies and firms. Focus on big problems, right, 0:07:52.440 --> 0:07:54.520 as bold as going to the moon and back at 0:07:54.560 --> 0:07:56.760 a short amount of time, the mission idea, the missions 0:07:56.800 --> 0:08:00.360 that then require sexual support. But you're not getting support 0:08:00.360 --> 0:08:03.120 because you are a particular sector. You're getting support if 0:08:03.160 --> 0:08:05.800 you're willing. So moving away from picking winners to picking 0:08:05.800 --> 0:08:08.160 the willing, if you're willing to work with government around 0:08:08.200 --> 0:08:11.440 these very difficult challenges, which could be as I don't 0:08:11.440 --> 0:08:14.240 want to say simple, but as concrete as making sure 0:08:14.280 --> 0:08:17.800 that every child in a country has healthy, tasty, sustainable 0:08:17.800 --> 0:08:20.040 school lunch, right, not just school lunch. That was the 0:08:20.040 --> 0:08:21.880 Reagan thing where he said ketchup is a vegetable, So 0:08:21.920 --> 0:08:24.480 we can reduce the cost. We all had T shirts 0:08:24.480 --> 0:08:27.520 of Reagan and ketchup which was the vegetable is what 0:08:27.560 --> 0:08:30.840 the T shirt said. So having moonshots, even on something 0:08:30.840 --> 0:08:35.040 as simple as the cafeteria, that then requires innovation across 0:08:35.120 --> 0:08:38.319 many different areas. It requires government to wake up and 0:08:38.480 --> 0:08:40.960 not just have that be done. For example, from the 0:08:40.960 --> 0:08:44.640 Department of Education, you know, Department of Agriculture, Health, Education, 0:08:44.840 --> 0:08:48.360 Finance would work together on a moonshot of healthy, tasty, 0:08:48.400 --> 0:08:52.280 sustainable school lunch. So that interministerial coordination which we saw 0:08:52.360 --> 0:08:54.920 during COVID, right, so we had the war room, the 0:08:54.960 --> 0:08:58.839 situation room, you know, the military, education, health, and so 0:08:59.040 --> 0:09:02.160 on together because we had these really difficult challenges. But 0:09:02.200 --> 0:09:04.120 as soon as COVID stops, we go back to very 0:09:04.120 --> 0:09:05.280 siloed ways of thinking. 0:09:05.520 --> 0:09:07.640 As someone with two kids in the New York City 0:09:07.679 --> 0:09:12.960 of public schools, I can absolutely confirm that the degree 0:09:13.120 --> 0:09:17.160 to which they associate the mayor with school lunch policy 0:09:17.320 --> 0:09:20.520 is extremely real. And they like talk about like, oh, 0:09:20.559 --> 0:09:22.960 we used to have these like really nice waffles or something, 0:09:23.200 --> 0:09:25.280 and then Eric Adams got rid of home, or like 0:09:25.280 --> 0:09:28.920 they're really like key to single issue, the single issue. 0:09:29.160 --> 0:09:31.760 They're like, really pay attention to the degree to where 0:09:31.800 --> 0:09:35.000 school lunch policy shifts with administration, Like this is like 0:09:35.080 --> 0:09:38.959 the really they really think? What is state capacity? We've 0:09:39.040 --> 0:09:41.480 been using this term for years on the podcast and 0:09:41.520 --> 0:09:44.960 we're like during COVID, we're like, no, it took a took, 0:09:45.040 --> 0:09:47.319 you know, a long time to stand up testing facilities 0:09:47.320 --> 0:09:50.760 for since and people's like, oh, well, lot lack state capacity, 0:09:50.800 --> 0:09:52.360 But what is it? What's the definition? 0:09:52.520 --> 0:09:56.640 We actually distinguish between the word capacity routines kind of 0:09:56.679 --> 0:10:00.480 administrative routines and then capabilities. Okay, so what states are 0:10:00.480 --> 0:10:02.880 often what governments are often lacking or those kind of 0:10:02.960 --> 0:10:06.600 dynamic capability. So capacity partly is like literally do you 0:10:06.600 --> 0:10:08.840 even have fiscal space? Do you have a budget? But 0:10:08.920 --> 0:10:12.080 also how are you thinking about that budget in terms 0:10:12.080 --> 0:10:14.160 of do you well put it this way? Capacity is 0:10:14.160 --> 0:10:16.480 you know a number of people working in your administration, 0:10:16.960 --> 0:10:20.480 the budget that's been allocated, perhaps also the training you 0:10:20.480 --> 0:10:24.160 know that the civil service actually has. But capabilities are 0:10:24.160 --> 0:10:26.200 what you actually then do with it. Are you agile? 0:10:26.280 --> 0:10:28.920 Are you flexible? Are you able to pivot during COVID 0:10:28.960 --> 0:10:32.200 and actually start working in this more again inter ministerial way. 0:10:32.720 --> 0:10:34.960 Do you know how to work with others, right, you know, 0:10:34.960 --> 0:10:38.120 do you set up good partnerships or they problematic partnerships? 0:10:38.520 --> 0:10:40.840 And also you were talking before about what you're learning here, 0:10:40.920 --> 0:10:43.760 which is fantastic about how mayors can learn from each other. Right, 0:10:44.160 --> 0:10:47.120 have you invested in your ability to learn to adapt? 0:10:47.640 --> 0:10:50.760 And so I think that Ladder, you know this, this 0:10:50.840 --> 0:10:54.520 concept of dynamic capabilities is a much more complex area 0:10:54.600 --> 0:10:56.760 to be investing in. And the only reason you would 0:10:56.760 --> 0:10:58.640 do it is if you actually have a theory about 0:10:58.679 --> 0:11:01.959 government that is more than what traditional economists think about government, 0:11:01.960 --> 0:11:04.079 which is at best, well, at worst, get out of 0:11:04.080 --> 0:11:06.480 the way, at best, fix the market failure. So as 0:11:06.520 --> 0:11:09.360 soon as you say, actually, it's about shaping and co 0:11:09.480 --> 0:11:12.520 creating a different type of economy and society that works 0:11:12.520 --> 0:11:14.800 for people in planet, then the question is what does 0:11:14.840 --> 0:11:17.280 that mean for the capabilities that you need. If you're 0:11:17.320 --> 0:11:19.320 just fixing, then you just need a lot of bandages. 0:11:19.320 --> 0:11:21.120 And that's in fact what we get. We get very 0:11:21.200 --> 0:11:23.800 reactive kind of filling the gap kind of. 0:11:23.720 --> 0:11:27.360 Policies, pendulum constantly swinging exactly exactly. 0:11:27.520 --> 0:11:30.080 But I mean capacity, of course is essential. Without a 0:11:30.080 --> 0:11:32.440 budget and fiscal space, you can do nothing. That third 0:11:32.440 --> 0:11:35.560 category that I mentioned quickly administrative routines, that's you know, 0:11:35.640 --> 0:11:37.720 are you also you know, do you have a stable 0:11:37.800 --> 0:11:40.920 environment where you can learn by doing? Because if you're 0:11:40.920 --> 0:11:43.199 constantly changing what you're doing, it's going to be hard 0:11:43.400 --> 0:11:45.520 to have a learning by doing dynamics. So those kind 0:11:45.520 --> 0:11:48.120 of administrative routines I even see this on my university, 0:11:48.360 --> 0:11:50.000 where as soon as you get a lot of turnover, 0:11:50.440 --> 0:11:53.400 even those kind of basic routines aren't there. But capability. 0:11:53.520 --> 0:11:58.160 So these three areas, capacity, routines and capabilities are equally important, 0:11:58.160 --> 0:12:00.960 but the capabilities are really what I find are lacking. 0:12:01.040 --> 0:12:03.320 And it goes back, as I was mentioning before, to 0:12:03.400 --> 0:12:07.280 the underlying economic dogma that has underpinned the way that 0:12:07.320 --> 0:12:11.280 we think about policy government at different levels that by design, 0:12:11.360 --> 0:12:12.880 not by coincidence, is reactive. 0:12:28.960 --> 0:12:33.320 Have consultants become a substitute for state capacity slash routine 0:12:33.600 --> 0:12:35.199 slash administrative ability? 0:12:35.679 --> 0:12:35.839 Right? 0:12:35.880 --> 0:12:37.680 I always wonder how we got to the point where 0:12:37.679 --> 0:12:40.320 consultants are so big anyway, because it feels like every 0:12:40.320 --> 0:12:42.840 time you hire a consultant, it's almost an admission of 0:12:43.200 --> 0:12:46.440 failure on your part to be able to do something right. 0:12:46.520 --> 0:12:50.400 And nevertheless, it's a widely accepted practice across governments. 0:12:50.760 --> 0:12:53.960 So my last book actually was called The Big con 0:12:54.320 --> 0:12:58.040 So Confort Consulting, and the subtitle was how We've weakened 0:12:58.520 --> 0:13:02.360 businesses and fantalized governments and warped our economies basically due 0:13:02.400 --> 0:13:06.200 to this consultification. I wouldn't blame the consultants. I mean 0:13:06.520 --> 0:13:09.480 I actually blame governments, right, like, why are you opening 0:13:09.480 --> 0:13:12.680 the door so wide to consultants? And it's fine to 0:13:12.720 --> 0:13:15.280 have advisors and some consultants. The problem is when they 0:13:15.280 --> 0:13:18.440 are actually doing the core tasks that government should do. Again, 0:13:18.520 --> 0:13:21.880 test and trace during COVID was a core task. And 0:13:21.960 --> 0:13:25.920 so I think it really stems from i'd say the 0:13:26.000 --> 0:13:29.720 eighties when we you know, the kind of Reagan Thatcher years. 0:13:29.760 --> 0:13:32.120 If you want, it always goes back to yeah, but 0:13:32.280 --> 0:13:35.959 actually in the UK, for example, it even increased more 0:13:36.040 --> 0:13:38.800 during the Labor government. So it's not it's not you know, 0:13:39.040 --> 0:13:41.120 one party, but it did begin i'd say in the 0:13:41.160 --> 0:13:45.839 eighties with this kind of downsizing of governments, which then 0:13:45.920 --> 0:13:48.840 ironically cost them more. Because as soon as you start 0:13:48.880 --> 0:13:52.400 downsizing without really strategically thinking what you need and what 0:13:52.440 --> 0:13:54.000 you don't need, of course you should trim the fat. 0:13:54.040 --> 0:13:57.240 There's no reason to have, you know, a bloated government structure. 0:13:57.280 --> 0:14:01.560 But when it's done for ideological reasons and not strategic reasons, 0:14:01.640 --> 0:14:03.920 then you know, ironically, then you end up not having 0:14:03.920 --> 0:14:05.760 those capabilities that you need as soon as you have 0:14:05.800 --> 0:14:09.720 a flood or you know, Brexit or COVID, And so 0:14:09.920 --> 0:14:12.960 I think then what happens with the consultants is it's 0:14:13.000 --> 0:14:15.360 not their fault that they're invited in. I do think 0:14:15.360 --> 0:14:17.760 it's very problematic what they end up doing once they're in. 0:14:17.840 --> 0:14:21.080 So there's huge conflicts of interest. Well, the biggest conflict 0:14:21.120 --> 0:14:23.600 of interest being that they have no incentive really to 0:14:23.640 --> 0:14:26.440 make government better later because they wouldn't have no contracts. 0:14:26.560 --> 0:14:29.280 It'd be like having a therapist your whole life, that therapist, 0:14:29.360 --> 0:14:30.120 which they're very. 0:14:30.040 --> 0:14:33.280 Good, which is which is how the therapy models are. 0:14:33.560 --> 0:14:35.440 Well, do you remember this came up in the episode 0:14:35.480 --> 0:14:38.800 we did about construction in New York and this idea 0:14:38.840 --> 0:14:41.080 that like one of the reasons it's so expensive and 0:14:41.120 --> 0:14:44.120 takes so long for like public funded projects is because 0:14:44.120 --> 0:14:47.000 consultants have no incentive to actually get the project done. 0:14:47.200 --> 0:14:49.720 Yes, but also they're often working on both sides of 0:14:49.760 --> 0:14:52.240 the street, right, so they'll be for example, consulting for 0:14:52.320 --> 0:14:54.600 I don't know, a state own enterprise like ESCOM in 0:14:54.640 --> 0:14:57.200 South Africa as well as the treasury. We should be 0:14:57.240 --> 0:15:00.800 regulating ESCOM or in Australia. The it's a famous case 0:15:00.840 --> 0:15:04.160 with PwC where they were consulting for a medical device 0:15:04.320 --> 0:15:07.160 company as well as the regulators of the medical device 0:15:07.200 --> 0:15:09.560 companies that come on. So that should just be illegal, 0:15:09.920 --> 0:15:12.320 right and again you know, getting the right kind of 0:15:12.320 --> 0:15:14.360 regulation that makes sure that we don't have these kind 0:15:14.360 --> 0:15:17.040 of scams. So what we also argued was, you know, 0:15:17.080 --> 0:15:20.320 the first thing is start investing back inside government so 0:15:20.400 --> 0:15:22.680 you don't need so much consulting. But also when you 0:15:22.720 --> 0:15:25.280 do bring in the consultants, make sure the contract's actually 0:15:25.280 --> 0:15:27.760 in bed learning within them and that you are also 0:15:27.760 --> 0:15:29.720 bringing in the right people. You know, if you have 0:15:29.760 --> 0:15:32.000 an oncology strategy, of course you should get the top 0:15:32.000 --> 0:15:35.880 doctors and consultants and cancer to advise. So the other 0:15:36.080 --> 0:15:38.400 huge problem is that these consultants when they're coming in, 0:15:38.440 --> 0:15:40.800 they often actually don't know very much and they end 0:15:40.920 --> 0:15:44.200 up really bothering the poor public servants that end up 0:15:44.240 --> 0:15:46.800 emailing oh would you mind telling me what you think 0:15:46.840 --> 0:15:49.160 about or sending me your you know, plan that we 0:15:49.200 --> 0:15:51.320 can study. It's like, why are you even working with 0:15:51.400 --> 0:15:54.240 government if you don't have within the consulting companies that 0:15:54.360 --> 0:15:57.080 deep expertise, which you know, I'm not saying this just 0:15:57.080 --> 0:15:59.280 because I'm an academic, but I don't think academics are 0:15:59.320 --> 0:16:02.160 used enough. You know, if you have a research center 0:16:02.200 --> 0:16:05.280 that's been thinking about climate change for the last forty years, 0:16:05.760 --> 0:16:09.400 use them. Don't ask McKenzie as Australia did to design 0:16:09.400 --> 0:16:11.960 your climate strategy, which ended up, by the way, being terrible. 0:16:12.360 --> 0:16:14.640 So there is a bit of why is it that 0:16:14.720 --> 0:16:18.160 governments A don't invest in their own capacity capabilities, and 0:16:18.200 --> 0:16:20.320 B when they do go out there and look for 0:16:20.360 --> 0:16:23.200 the advisors and consultants are kind of getting the ones 0:16:23.240 --> 0:16:26.240 that simply kind of provide a rubber stack right that 0:16:26.280 --> 0:16:28.200 makes them feel more secure. They haven't even done the 0:16:28.200 --> 0:16:30.360 homework to make sure they are getting the top people 0:16:30.760 --> 0:16:33.840 in the world to help advise them on doing. 0:16:33.920 --> 0:16:36.360 The process, just to take the other side of the client. 0:16:36.440 --> 0:16:39.400 So recently in New York City it was I don't know, 0:16:39.520 --> 0:16:41.400 I think scandal is too strong a word, but there 0:16:41.400 --> 0:16:43.840 are a lot of headlines about how much the city 0:16:43.840 --> 0:16:47.720 had paid consultants for working on redesigning the trash collection 0:16:48.200 --> 0:16:50.520 system in the city. And on the one hand, it's 0:16:50.560 --> 0:16:53.400 a trash collection core city function, why do you have 0:16:53.440 --> 0:16:57.040 to bring in a consultant. On the other hand, reimagining 0:16:57.080 --> 0:16:59.760 the trash collection system is like, that's a one time 0:17:00.240 --> 0:17:04.040 so maintaining it, implementing it, servicing it, okay, that's like 0:17:04.080 --> 0:17:07.159 a permanent government function. But the actual like, okay, we 0:17:07.240 --> 0:17:10.520 have to do a redesign. That is that necessarily something 0:17:10.520 --> 0:17:13.280 that like we need to have in house in government 0:17:13.480 --> 0:17:17.600 that capacity, because do you want to permanently have that 0:17:17.840 --> 0:17:20.960 muscle because that's a one shot thing, doesn't it? Like 0:17:21.080 --> 0:17:23.400 to me, that makes sense? Is the time to bring in. 0:17:23.320 --> 0:17:25.760 At argue for something like that. There's a value to 0:17:25.800 --> 0:17:28.120 having an external viewpoint, right, that makes sense. 0:17:28.280 --> 0:17:31.600 There's like the redesign that's a one time job. Like 0:17:31.760 --> 0:17:33.760 to me, I was like, all right, that doesn't seem 0:17:33.800 --> 0:17:36.040 crazy to bring in a third party to like help 0:17:36.080 --> 0:17:37.960 figure out what that plan is exactly. 0:17:38.000 --> 0:17:40.760 So that's the myth, right that somehow we're talking about 0:17:40.840 --> 0:17:44.520 either government does everything, yeah, right, or even nationalize everything, 0:17:44.960 --> 0:17:47.320 or it does nothing and it privatizes and brings them 0:17:47.320 --> 0:17:50.359 the consultants. So the truth is obviously somewhere in the middle. So, 0:17:50.440 --> 0:17:52.920 of course you're absolutely right. Government doesn't have to have 0:17:53.040 --> 0:17:55.840 all those skills. It definitely needs the skills to know 0:17:56.080 --> 0:17:58.840 who to work with outside of government, but it also 0:17:58.920 --> 0:18:02.960 needs to even under stand that kind of outside landscape 0:18:02.960 --> 0:18:06.400 to even think about what might we need, how might 0:18:06.480 --> 0:18:09.240 we start developing a strategy that reimagines, say the trash 0:18:09.240 --> 0:18:12.840 collection process. So that's why you talk about missions. So 0:18:13.200 --> 0:18:15.560 when you know NASA wanted to go to the moon 0:18:15.600 --> 0:18:17.040 and back at a short amount of time, they didn't 0:18:17.040 --> 0:18:18.639 say we're going to do it all by ourselves. And 0:18:18.680 --> 0:18:20.159 they also didn't say we're just going to do it 0:18:20.160 --> 0:18:22.200 with the aerospace sector, right, They said, we're going to 0:18:22.280 --> 0:18:24.440 have to work with so many different private sector people. 0:18:24.640 --> 0:18:26.600 They ended up working with something like four hundred thousand 0:18:26.600 --> 0:18:29.000 people in the private sector. They said, we have a 0:18:29.040 --> 0:18:31.320 lot of problems, but we don't know the solutions, but 0:18:31.359 --> 0:18:35.600 we're going to set very clearly a direction for working 0:18:35.600 --> 0:18:38.119 with the private sector in a problem oriented way. So 0:18:38.160 --> 0:18:40.800 the first thing they did was change procurement. Procurement, you know, 0:18:40.840 --> 0:18:43.800 government purchasing is often like thirty percent of a government's budget. 0:18:43.920 --> 0:18:47.040 It's a very important part of their budget, whether it's Barbados, 0:18:47.080 --> 0:18:50.360 a small island state, or the US a very large government, 0:18:50.720 --> 0:18:53.440 procurement is there. How were we using it? So they 0:18:53.480 --> 0:18:55.399 realized they had the wrong type of procurement. It was 0:18:55.440 --> 0:18:58.720 just again minimizing costs. It was cost plus procurement. They 0:18:58.800 --> 0:19:01.320 changed it to outcomes into procurement and they started to 0:19:01.320 --> 0:19:03.639 ask themselves, what are the outcomes that we need. We 0:19:03.720 --> 0:19:06.040 need to figure out how are the astronauts going to 0:19:06.040 --> 0:19:07.840 go to the bathroom? Right, which, by the way, was 0:19:07.880 --> 0:19:10.560 just a problem again with Artemis the toilet, Oh is 0:19:10.560 --> 0:19:12.960 a problem up in space? What are they going to eat? 0:19:13.119 --> 0:19:15.119 What are they going to wear? How will we communicate 0:19:15.160 --> 0:19:18.119 with them? And it was the solutions to those problems 0:19:18.600 --> 0:19:22.320 that happened within mainly not only private sector institutions, with 0:19:22.600 --> 0:19:26.320 NASA's also kind of leading investment, but especially leading kind 0:19:26.359 --> 0:19:29.240 of thought process of what the problems were that ended 0:19:29.320 --> 0:19:32.760 up getting US camera phones, foil blankets, home insulation software, 0:19:33.240 --> 0:19:38.880 so many different innovations across many different sectors, aerospace, nutrition, materials, electronics. 0:19:39.400 --> 0:19:42.000 That itself is what we're talking about, right, So, whether 0:19:42.000 --> 0:19:44.160 it's going to the moon, whether it's trash collection, whether 0:19:44.200 --> 0:19:47.720