WEBVTT - Landing on the Moon Is a Great Lesson for Modern Miracles 0:00:09.039 --> 0:00:11.600 Hello, and welcome to Stephanomics, the podcast that brings the 0:00:11.640 --> 0:00:14.320 global economating you, and we have a special episode this 0:00:14.360 --> 0:00:17.200 week featuring a conversation I had a few weeks ago 0:00:17.280 --> 0:00:20.480 for RESET, a special two day conference on the future 0:00:20.520 --> 0:00:24.000 of the US economy that Bloomberg Economics co produced with 0:00:24.040 --> 0:00:27.440 the Aspen Institute. This exchange I wanted to play you 0:00:27.840 --> 0:00:32.080 was with my friend Marianna Matsukata, professor in the economics 0:00:32.080 --> 0:00:35.800 of Innovation and Public Value at University College London. Her 0:00:35.840 --> 0:00:40.479 first book, The Entrepreneurial State, was very influential change the 0:00:40.520 --> 0:00:42.680 way we think about the role that the public sector 0:00:42.720 --> 0:00:46.240 has played in some of those great business success stories 0:00:46.280 --> 0:00:49.479 of our time. And another one, The Value of Everything, 0:00:49.680 --> 0:00:53.199 Making and Taking in the Global Economy, absolutely nailed the 0:00:53.200 --> 0:00:57.760 way that a particular narrow conception of value had permeated, 0:00:58.040 --> 0:01:01.160 indeed distorted the way we think about the economy and 0:01:01.240 --> 0:01:04.760 society over the last hundred years. And she's just produced 0:01:04.760 --> 0:01:07.360 a new book which also seems well timed for the 0:01:07.400 --> 0:01:10.319 position we find ourselves in right now. It's called The 0:01:10.400 --> 0:01:15.280 Mission Economy, A moon Shot Guide to Changing Capitalism. I 0:01:15.280 --> 0:01:18.240 started by asking her about some of the big ideas 0:01:18.280 --> 0:01:20.800 that had got her thinking about the moon shot as 0:01:20.840 --> 0:01:31.440 a guide to policy. This extraction of value which I 0:01:31.440 --> 0:01:33.440 talked about in the book The Value of Everything, the 0:01:33.560 --> 0:01:36.479 kind of record level share buy backs in the last 0:01:36.520 --> 0:01:40.120 ten years, for trillion dollars have gone to bind back 0:01:40.200 --> 0:01:43.480 shares by the Fortune five companies. This is not the 0:01:43.520 --> 0:01:47.360 way to run a society in terms of a corporate 0:01:48.080 --> 0:01:52.880 business model. So, whether it's Larry Fink or the Business 0:01:52.960 --> 0:01:56.279 Roundtable putting out the statement over a year ago about 0:01:56.320 --> 0:01:58.720 you know, we need to rethink that model in terms 0:01:58.800 --> 0:02:03.080 of reinvesting back into long run areas that help people, planet, 0:02:03.360 --> 0:02:06.400 working conditions, and so on. And this conversation is a 0:02:06.480 --> 0:02:09.880 very important one. We shouldn't dismiss it if we remind 0:02:09.880 --> 0:02:13.400 ourselves that markets are not the same thing as business. 0:02:13.520 --> 0:02:17.160 Markets are outcomes of how we govern business and how 0:02:17.200 --> 0:02:20.560 we govern other types of value creating institutions. We also, 0:02:20.680 --> 0:02:23.000 you know, present ourselves with the problem, which is how 0:02:23.120 --> 0:02:26.640 is government governed? How is the public sector government? And 0:02:26.639 --> 0:02:28.640 what I've been writing about now for some years is 0:02:28.639 --> 0:02:30.640 that we also have a problem there. It's not just 0:02:30.760 --> 0:02:33.760 corporate governance that needs to rethink itself. It's also kind 0:02:33.800 --> 0:02:37.320 of government governance. The fact that economic theory, and I 0:02:37.320 --> 0:02:40.040 don't want to blame economists, of which I'm one for everything, 0:02:40.080 --> 0:02:43.560 but the fact that economic theory itself has at best 0:02:43.760 --> 0:02:47.120 framed the role of the public sector, the state and 0:02:47.200 --> 0:02:51.880 policy as simply fixing market failures is part of the problem. 0:02:52.000 --> 0:02:54.120 We're not going to get there by simply putting different 0:02:54.120 --> 0:02:56.960 types of patches on the system and the market failure 0:02:56.960 --> 0:02:59.720 approach which forces government to always ask where is the 0:02:59.720 --> 0:03:02.079 market failure? How am I going to fix it? That's 0:03:02.080 --> 0:03:04.680 an important framework, but it's very hard to fix your 0:03:04.720 --> 0:03:08.799 way towards transformational growth. And by transformational growth, by the way, 0:03:08.880 --> 0:03:11.320 don't just mean these kind of big social objectives like 0:03:11.400 --> 0:03:14.120 health and and climate. I also mean literally in terms 0:03:14.120 --> 0:03:16.919 of the direction of growth. And in the UK we're 0:03:16.919 --> 0:03:19.880 on standing today the kind of growth we have continues 0:03:19.960 --> 0:03:23.200 to be consumption led growth, which has really led to 0:03:24.320 --> 0:03:28.040 a very high ratio, for example, of private debt to 0:03:28.160 --> 0:03:31.440 disposable income, not public debt, but private debt to disposable income. 0:03:31.639 --> 0:03:35.960 So shifting that growth model from consumption to investment led 0:03:36.200 --> 0:03:40.040 growth and innovation driven growth, and having that investment and 0:03:40.160 --> 0:03:44.480 innovation help us solve some really important problems like the 0:03:44.520 --> 0:03:47.440 ones around climate health and the sustainable development goals need 0:03:47.520 --> 0:03:50.480 a different approach to policy making, one that I call 0:03:51.480 --> 0:03:55.440 actively shaping and co creating markets alongside business, not just 0:03:55.720 --> 0:03:58.520 fixing markets. And one thing that I found very curious 0:03:58.520 --> 0:04:01.080 in the UK was is um you know, a lot 0:04:01.120 --> 0:04:03.640 of the data that's come out since Brexit and now 0:04:03.680 --> 0:04:06.800 with COVID has been showing just how much the government 0:04:06.840 --> 0:04:10.760 has been overly relying on consulting companies Deloitte that ended 0:04:10.840 --> 0:04:12.880 up being asked to roll out the test and trade 0:04:12.920 --> 0:04:16.040 system and didn't do too well. But also with Brexit, 0:04:16.120 --> 0:04:19.920 the KPMG, s Price Waterhouse Coopers and so on, which 0:04:20.040 --> 0:04:23.760 ended up almost managing project managing Brexit for the government. 0:04:24.120 --> 0:04:29.680 This over consultification of government. A Tory Lord Agnew said 0:04:29.720 --> 0:04:33.640 that this was leading to an infantilized public sector. And 0:04:33.640 --> 0:04:36.640 when you start outsourcing your brain, as I think the 0:04:36.720 --> 0:04:39.119 US government has done in the recent years, one could 0:04:39.400 --> 0:04:42.200 view the whole n Essay kind of Snowden scandal as 0:04:42.240 --> 0:04:45.560 an outcome of the government almost losing its capability to 0:04:45.680 --> 0:04:50.400 govern information computing in the technology revolution, that you have 0:04:50.600 --> 0:04:52.719 a problem. So this is the reason that in the 0:04:52.760 --> 0:04:55.479 recent book that I wrote, I asked, we'll hold on 0:04:55.520 --> 0:04:57.920 a second. You know, we could do better. And only 0:04:58.000 --> 0:05:01.160 fifty years ago, public and pri of its sectors worked 0:05:01.200 --> 0:05:05.360 together extremely ambitiously um to get to the moon and back. 0:05:05.440 --> 0:05:08.440 You know that that's a famous goal that Kennedy set 0:05:08.520 --> 0:05:12.320 back in nineteen sixty two. The problems we have today 0:05:12.520 --> 0:05:17.080 are much trickier. Actually, there's wicked problems. They require political, behavioral, 0:05:17.120 --> 0:05:21.000 regulatory change, not just technological change. But it was truly 0:05:21.080 --> 0:05:25.160 a partnership. There was both business and government doing incredibly 0:05:25.160 --> 0:05:28.680 difficult things. And what was especially interesting to me is 0:05:28.800 --> 0:05:32.520 how government, through NASA but also some other public institutions, 0:05:32.560 --> 0:05:35.920 paid a lot of attention to the how to partner 0:05:36.040 --> 0:05:38.240 with business, and they even looked at the contracts and 0:05:38.440 --> 0:05:41.280 undid the existing contracts. And will come to that in 0:05:41.279 --> 0:05:44.120 a minute. But the kind of leadership that was required 0:05:44.160 --> 0:05:46.520 by government to set the direction of change and then 0:05:46.560 --> 0:05:49.960 catalyze a lot of risk taking bottom up amongst different 0:05:49.960 --> 0:05:53.479 actors in society. So you know, Kennedy's speech was very clear, 0:05:53.520 --> 0:05:55.400 this is going to cost a huge amount of money, 0:05:55.839 --> 0:05:57.960 but it's going to be worth it. And focusing on 0:05:58.000 --> 0:06:00.680 the goal and then backtracking on the budget, all these 0:06:00.680 --> 0:06:04.280 are just really interesting lessons I think today as we 0:06:04.320 --> 0:06:07.920 need to build back better that famous slogan, but especially 0:06:08.000 --> 0:06:10.760 rethink the organizations that we have in both government and 0:06:10.800 --> 0:06:13.279 in business. And you know what's quite striking is that 0:06:13.320 --> 0:06:16.560 when Kennedy, you know, did his speech, they had no 0:06:16.640 --> 0:06:19.040 clue how to get to the moon. So literally the 0:06:19.080 --> 0:06:23.600 innovation and risk taking, the experimentation that was that was 0:06:23.680 --> 0:06:26.360 required was immense. Uh. They ended up you know, landing 0:06:26.400 --> 0:06:29.000 on this lunar or a bit rendezvous way, but they 0:06:29.160 --> 0:06:32.760 were really exploring all sorts of different techniques. And on 0:06:32.800 --> 0:06:36.240 the tragic day in which Apollo one the fire occurred, 0:06:36.279 --> 0:06:38.960 one of the astronauts said something that I think is 0:06:39.000 --> 0:06:42.720 just so important, which was we can't even talk to 0:06:42.800 --> 0:06:46.520 each other through different NASA kind of mission control rooms, 0:06:46.600 --> 0:06:48.560 how are we going to get to the moon. He 0:06:48.600 --> 0:06:53.520 was talking about the very siloed, linear, vertical bureaucratic form 0:06:53.839 --> 0:06:56.080 in which the state itself was structured, and he was 0:06:56.120 --> 0:06:59.039 basically saying, if we're gonna be purpose driven, using today's 0:06:59.080 --> 0:07:01.320 words and get to the moon and back in the generation, 0:07:01.360 --> 0:07:05.040 we're gonna have to rethink actually how we communicate within 0:07:05.080 --> 0:07:08.480 our own structures and that kind of attention to organizational 0:07:08.600 --> 0:07:12.440 change with something that NASA, through George Mueller's leadership, really 0:07:12.440 --> 0:07:14.920 embarked on. And this is important, right because if you 0:07:14.960 --> 0:07:16.800 are going to be purpose driven, what does it mean 0:07:16.880 --> 0:07:20.320 for your own organizational culture, not just in business, but 0:07:20.400 --> 0:07:23.480 also in government and the purpose This notion of a 0:07:23.520 --> 0:07:26.240 partnership with a common purpose is really what I think 0:07:26.320 --> 0:07:29.720 is so important in terms of allowing us to give 0:07:29.840 --> 0:07:33.920 more substance to this notion of stakeholder capitalism. It was 0:07:34.000 --> 0:07:36.440 so curious that they paid attention not only to the 0:07:36.440 --> 0:07:40.160 procurement contracts in terms of how to devise them so 0:07:40.280 --> 0:07:43.640 government wouldn't be, uh, just if you want, vulnerable to 0:07:43.840 --> 0:07:47.040 paying any costs that were presented to them through cost 0:07:47.120 --> 0:07:51.160 price contracts, which they changed to fixed price contracts with 0:07:51.280 --> 0:07:54.800 incentives for innovation. But they also paid attention to making 0:07:54.840 --> 0:07:57.360 sure that this enterprise that they were going to do together, 0:07:57.720 --> 0:08:00.760 this wonderful, difficult mission, was it just going to become 0:08:00.800 --> 0:08:04.000 a gambling casino. So they even had clauses like no 0:08:04.240 --> 0:08:08.160 excess profits clauses in the procurement contracts, and of course 0:08:08.200 --> 0:08:10.440 profits were earned, but there was also a real kind 0:08:10.440 --> 0:08:13.920 of risk sharing and reward sharing in the process and 0:08:13.960 --> 0:08:17.320 so sharing both risks and rewards I think is incredibly important. 0:08:17.560 --> 0:08:21.679 This idea that you know, mass itself required its own capabilities, 0:08:21.840 --> 0:08:24.840 investing within its own brain what I call the dynamic 0:08:24.880 --> 0:08:27.840 capabilities of the public sector in order even to know 0:08:27.880 --> 0:08:30.520 how to write the terms of reference with business to 0:08:30.680 --> 0:08:35.319 foster a symbiotic and mutualistic partnership. And what was so 0:08:35.400 --> 0:08:38.280 special about the moon landing was so much happened along 0:08:38.320 --> 0:08:42.400 the way, spillovers across many different sectors. It wasn't just aeronautics, 0:08:42.400 --> 0:08:46.200 it was nutrition, materials, electronics, the entire software industry in 0:08:46.240 --> 0:08:48.920 some ways was an outcome of that. And that really 0:08:48.960 --> 0:08:51.680 did happen because of a kind of top down, you know, 0:08:51.920 --> 0:08:55.360 mission setting, but lots of bottom up experimentation, and that 0:08:55.480 --> 0:08:58.840 kind of delicate balance between the two is really what 0:08:58.920 --> 0:09:03.079 I focus on in the book for allowing us to 0:09:03.120 --> 0:09:07.400 really create a concrete investment pathway in trajectory for the SDGs. 0:09:07.640 --> 0:09:10.440 The SDGs these are the earth shots. They're much harder 0:09:10.480 --> 0:09:14.000 actually than a purely technological missions. And what that really 0:09:14.040 --> 0:09:24.640 requires is again partnership with purpose, I guess, just to 0:09:24.679 --> 0:09:27.000 get one thing out of the way first, you know, 0:09:27.080 --> 0:09:30.920 there will be people listening, certainly people who have heard 0:09:30.960 --> 0:09:34.040 a lot about stakeholder capitalism before and indeed maybe sitting 0:09:34.040 --> 0:09:36.760 in businesses trying to make it work. Um, there will 0:09:36.800 --> 0:09:38.880 be others who are just used to managing people and 0:09:38.920 --> 0:09:42.119 getting things done, and they'll say it's not very complicated. 0:09:42.200 --> 0:09:44.719 If you actually want to make progress, you need to 0:09:44.760 --> 0:09:46.960 set a big target and then work as a team 0:09:47.000 --> 0:09:49.240 to meet it. Why do I need a whole book 0:09:49.280 --> 0:09:52.120 to tell me that? What? What is different about what 0:09:52.160 --> 0:09:58.440 you're actually what you're proposing? Because having a mission exactly 0:09:58.600 --> 0:10:02.920 so um for me at least, missions are about again, 0:10:03.000 --> 0:10:05.000 how do you partner in a different way? So let's 0:10:05.040 --> 0:10:08.360 even unpick for example, Um, you know any of the 0:10:08.400 --> 0:10:12.240 goals like you know STG fourteen around clean oceans, what 0:10:12.280 --> 0:10:14.880 does it mean actually to transform it into a very 0:10:14.960 --> 0:10:18.840 concrete goal like getting the plastic out of the ocean 0:10:19.160 --> 0:10:22.480 and make sure that the way that government interacts with business, 0:10:22.679 --> 0:10:26.360 which is constantly interact in terms of subsidies, guarantees, grants 0:10:26.360 --> 0:10:30.599 and loans becomes actually conditional on you know, business and 0:10:30.640 --> 0:10:33.680 different types of businesses which will actually require different types 0:10:33.679 --> 0:10:37.760 of support, uh, investing in that goal together. And even 0:10:37.800 --> 0:10:40.719 though that sounds really obvious. It simply doesn't happen. I mean, 0:10:40.840 --> 0:10:43.640 I've looked at so many different sectors, especially by the way, 0:10:43.679 --> 0:10:46.960 the pharmaceutical sector, which gets all sorts of benefits from 0:10:46.960 --> 0:10:50.680 government in the United States forty billion dollars a year 0:10:51.080 --> 0:10:53.920 goes towards drug innovation, and somehow then we don't get 0:10:53.960 --> 0:10:58.120 that kind of conditionality and partnership, right, So intellectual property 0:10:58.200 --> 0:11:01.800 rights in particular for that sector are often abused. They 0:11:01.800 --> 0:11:05.640 are to upstream, their too wide, used for strategic patenting, 0:11:05.640 --> 0:11:09.480 there too strong, so hard to license. The prices of 0:11:09.520 --> 0:11:14.160 the drugs don't actually reflect that collective value creation. And 0:11:14.240 --> 0:11:19.040 so you know, governing the partnership, governing innovation in such 0:11:19.080 --> 0:11:21.720 a way as serious as NASA was when it unpicked 0:11:21.720 --> 0:11:24.520 those procurement contracts and said, Nope, this isn't gonna be good. 0:11:24.640 --> 0:11:27.440 We're gonna be taken for a ride. And truly sharing 0:11:27.559 --> 0:11:31.000 both risks and rewards means doing things quite differently. And 0:11:31.040 --> 0:11:34.720 the vaccine, which is a great example actually today of 0:11:35.200 --> 0:11:37.439 you know, both the public and the private sector putting 0:11:37.440 --> 0:11:39.480 in a lot of money, but also you know it 0:11:39.559 --> 0:11:42.120 was based on a lot of previous funding. The Oxford 0:11:42.200 --> 0:11:46.000 vaccine from also the European Commission, as was by the way, 0:11:46.000 --> 0:11:48.440 the fives are vaccine, which got money from the European 0:11:48.480 --> 0:11:51.600 Commission and the German government. Um so these are all 0:11:51.679 --> 0:11:55.720 kind of ecosystems public and private investments that produce something 0:11:55.720 --> 0:11:58.080 like a vaccine. But then if you don't govern it 0:11:58.600 --> 0:12:02.000 right to meet let's call it the common good, then 0:12:02.040 --> 0:12:04.640 that's a problem in terms of the deal. So the 0:12:04.679 --> 0:12:07.720 idea of a patent pool for the vaccine, but also 0:12:07.760 --> 0:12:11.120 making sure the vaccine is universally accessible so we don't 0:12:11.160 --> 0:12:15.240 have what Dr Tedris called vaccine apartheid, so countries just 0:12:15.280 --> 0:12:18.319 hoarding it. That's all about kind of governing that process 0:12:18.720 --> 0:12:21.160 right in a particular way. And you could unpick the 0:12:21.200 --> 0:12:24.320 same thing with digital platforms. You know, everything that makes 0:12:24.320 --> 0:12:30.440 our smart products smart and not stupid was funded by government, Internet, GPS, touchscreen, serrie. 0:12:30.800 --> 0:12:33.840 And yet then if you don't govern that innovation for 0:12:33.920 --> 0:12:36.520 the public good, you end up with what I was 0:12:36.600 --> 0:12:38.640 arguing in the beginning, kind of too little, too late, 0:12:39.080 --> 0:12:42.040 worried about privacy taxation as kind of in the back 0:12:42.080 --> 0:12:44.480 saying oh wait, wait, wait, hold on, as opposed to 0:12:44.520 --> 0:12:46.360 making sure you have kind of you know what I 0:12:46.440 --> 0:12:50.240 called predistribution, which is a nice term also that others use, 0:12:50.280 --> 0:12:52.559 which is how do we get the conditions right ex 0:12:52.720 --> 0:12:55.440 anti so you don't have to pick the up the 0:12:55.520 --> 0:12:58.440 mess x post. And that to me is central to 0:12:58.480 --> 0:13:01.760 a mission oriented approach where purpose is at the center 0:13:01.760 --> 0:13:04.400 of the relationship, as opposed to just kind of a 0:13:04.440 --> 0:13:08.280 siloed notion of how governments can improve. So we're going 0:13:08.320 --> 0:13:10.520 to try and be kind of ruthlessly practical in this 0:13:10.600 --> 0:13:14.040 session and think about how it applies to the new administration, 0:13:14.080 --> 0:13:16.400 But any any government who's trying to think about how 0:13:16.440 --> 0:13:19.400 to change the way we do these things. You say 0:13:19.440 --> 0:13:22.199 yourself in the book that there are there are ways 0:13:22.200 --> 0:13:25.960 in which the moon landings are not a helpful guide 0:13:26.200 --> 0:13:28.439 for now and for the challenges we face now. One 0:13:28.480 --> 0:13:31.120 of one is that it was sort of chosen by 0:13:31.200 --> 0:13:34.240 a quite narrow part of society that we were going 0:13:34.280 --> 0:13:36.120 to go to boon, and maybe not everyone would have 0:13:36.120 --> 0:13:39.080 signed up for that um. But another is that it's 0:13:39.120 --> 0:13:42.640 it is quite a sort of clear technical challenge, enormously 0:13:42.640 --> 0:13:47.120 ambitious and difficult, but easily explained and with a quite 0:13:47.120 --> 0:13:50.680 clear process leading up to it. Where and I think 0:13:50.679 --> 0:13:53.120 you could say the vaccines are actually an even better 0:13:53.120 --> 0:13:55.559 example of that, you know, a very clearly defined target. 0:13:55.640 --> 0:13:59.120 Some of the sustainable development goals would have that characteristic, 0:13:59.120 --> 0:14:02.960 they're quite specific. But when you think about something that 0:14:03.000 --> 0:14:05.520 you're obviously very focused on and you have applied this too, 0:14:05.600 --> 0:14:09.000 I mean climate change, so many layers of that that 0:14:09.040 --> 0:14:12.360 are not just technical, they are also social. They're also 0:14:12.440 --> 0:14:14.480 about how we value you know, going back to your 0:14:14.480 --> 0:14:17.200 other book about how we value things. Um, So I 0:14:17.280 --> 0:14:20.360 just where do you get to the point where it's 0:14:20.440 --> 0:14:24.200 less helpful to have this kind of parallel Um, how 0:14:24.280 --> 0:14:27.560 can you use this approach for something which is more 0:14:27.680 --> 0:14:32.400 social and more multi layered. Thanks for that question. It's 0:14:32.480 --> 0:14:36.560 very important. So, um, you know what's interesting is, you 0:14:36.600 --> 0:14:39.960 know many people remember that that famous story that the 0:14:40.080 --> 0:14:42.920 janitor who worked and asked so when he was asked, 0:14:42.920 --> 0:14:44.400 what do you do? And he said, I'm helping to 0:14:44.400 --> 0:14:46.440 get a man on the moon. So in some sense, 0:14:46.480 --> 0:14:49.280 you know what also the moon landing did was really 0:14:49.280 --> 0:14:52.360 inspire so many different people, including lots of kids who 0:14:52.480 --> 0:14:55.680 ended up studying science, you know, because of the inspiration. 0:14:55.760 --> 0:14:59.560 But it wasn't you know, citizens weren't engaged in the design, 0:14:59.760 --> 0:15:02.120 you know, of the mission itself, you know, it really 0:15:02.200 --> 0:15:04.840 was top down. Some of the more interesting missions that 0:15:04.880 --> 0:15:07.160 we're working on in the institute that I run at 0:15:07.200 --> 0:15:10.240 University College London, which is called the Institute of Innovation 0:15:10.240 --> 0:15:12.600 and Public Purpose, you know, the whole notion of purpose 0:15:12.640 --> 0:15:16.960 at the center of political economy UM are on missions 0:15:17.000 --> 0:15:20.960 in countries like Sweden where the national mission is so interesting. 0:15:21.080 --> 0:15:24.520 It's about a fossil free welfare state. And then if 0:15:24.560 --> 0:15:27.720 you break down everything the state does and provides, from 0:15:27.720 --> 0:15:31.720 public transport, public education, public health, a lot of that 0:15:31.800 --> 0:15:34.640 is actually obviously in partnership with business UM. But what 0:15:34.680 --> 0:15:39.560 does it mean to land those those ambitions in concrete places. 0:15:39.640 --> 0:15:44.360 Take the the public education system. You know, if you 0:15:44.400 --> 0:15:48.880 have a carbon neutral agenda, a fossil free welfare state agenda, 0:15:49.080 --> 0:15:51.920 it can actually land in a place like school meals, right, 0:15:51.960 --> 0:15:54.920 so you can have the production, distribution and consumption of 0:15:54.960 --> 0:15:58.120 school meals driven by this carbon neutral agenda. But what 0:15:58.160 --> 0:16:00.360 would it look like to bring kids to the day, 0:16:00.520 --> 0:16:03.000 students in schools to the table to design that, but 0:16:03.040 --> 0:16:05.480 also to monitor it along the way. You know, if 0:16:05.520 --> 0:16:07.760 the food is sustainable but kind of sucks and it's 0:16:07.760 --> 0:16:10.480 not very tasty, that's not gonna work. Um, so that 0:16:10.640 --> 0:16:13.760 both the issue of code design but also monitoring along 0:16:13.800 --> 0:16:16.680 the way is an important point. And in Camden, the 0:16:16.680 --> 0:16:19.040 part of London where I live and I co chair 0:16:19.200 --> 0:16:22.560 the Camden Renewal Commission with Georgia Gould, the Leader of 0:16:22.560 --> 0:16:24.920 the Council, and one of the things we started doing 0:16:25.000 --> 0:16:28.640 is thinking about carbon neutrality with the place where it 0:16:28.720 --> 0:16:31.960 lands is the social housing estates what in the USA 0:16:32.000 --> 0:16:34.560 called housing projects and again, what does it mean to 0:16:34.560 --> 0:16:38.800 bring housing associations or citizen assemblies to the table to 0:16:38.960 --> 0:16:41.640 really talk and debate and contest about how do we 0:16:41.720 --> 0:16:45.000 want to live together in these places so that it 0:16:45.120 --> 0:16:48.240 is not just sustainable, but it's also an outcome of, 0:16:48.440 --> 0:16:50.800 you know, a discussion. You know, it's easy to pet 0:16:50.800 --> 0:16:53.040 Breta Tornberg on the head and say, oh, how cute. 0:16:53.040 --> 0:16:55.560 You know, sixteen or eighteen year old now cares about 0:16:55.560 --> 0:16:58.080 climate change. But what does it mean to listen to 0:16:58.160 --> 0:17:01.200 social movements? And that's really important, by the way, because 0:17:01.200 --> 0:17:03.800 it's not just you know, the green movement, it's also 0:17:03.840 --> 0:17:07.439 the labor movement. Labor at as a record labor is 0:17:07.480 --> 0:17:09.879 at a record low in terms of the labor share 0:17:09.880 --> 0:17:13.480 of GDP globally, the profit shares at a record high. 0:17:13.600 --> 0:17:17.879 Labor unions trade unions have historically been incredibly important for 0:17:18.000 --> 0:17:21.960 shaping markets to be more inclusive. We wouldn't have weekends, 0:17:22.040 --> 0:17:24.480 by the way, not bad as a social innovation. We 0:17:24.480 --> 0:17:27.480 wouldn't have the eight hour work day without trade unions. 0:17:27.480 --> 0:17:30.320 So you know, whether it's the labor movement, whether it's 0:17:30.359 --> 0:17:33.920 a green movement, whether it's Black Lives Matter, whether it's 0:17:34.000 --> 0:17:36.639 the care workers today and that movement, what does it 0:17:36.680 --> 0:17:40.040 mean for governments themselves to listen to actually allow that 0:17:40.560 --> 0:17:43.639 to be part of the process through which emissions are set. 0:17:44.040 --> 0:17:46.280 And in German, I think what's interesting is they've had 0:17:46.320 --> 0:17:50.760 one of the strongest green movements um across the globe, 0:17:51.040 --> 0:17:53.880 having risen slowly up to the to the very high 0:17:54.000 --> 0:17:57.160 level of government, and that ended up fostering a very 0:17:57.240 --> 0:18:00.640 different relationship between government and business. So couple of years ago, 0:18:00.640 --> 0:18:03.919 when the steel industry asked government for a loan and 0:18:03.960 --> 0:18:06.840 a bailout, as steel is more or less asking every 0:18:07.320 --> 0:18:11.119 government or bailout in Germany, they were confident enough to 0:18:11.280 --> 0:18:15.360 make that loan conditional on the steel sector reducing its 0:18:15.400 --> 0:18:18.879 material content, which it ended up doing. In its own way. 0:18:19.080 --> 0:18:21.320 Today the German steel sector is one of the most 0:18:21.359 --> 0:18:24.159 green and innovative in the world, not because you know, 0:18:24.200 --> 0:18:26.639 they went to the World Economic Forum and talked about purpose, 0:18:26.680 --> 0:18:29.359 but because they had to in order to access the 0:18:29.400 --> 0:18:32.760 public loan. And that's a really interesting thing that started 0:18:32.760 --> 0:18:35.960 to be applied with COVID nineteen recovery funds in some 0:18:36.040 --> 0:18:38.679 parts of the world, like in France, where both the 0:18:38.760 --> 0:18:43.600 airlines and automotive industries received their recovery bailout conditional on 0:18:44.200 --> 0:18:47.679 reducing or committing to reducing their carbon emissions, whereas in 0:18:47.680 --> 0:18:49.800 the UK we just gave a massive handout, you know, 0:18:49.840 --> 0:18:53.680 to easy Jet, no conditions attached. So that issue of conditionality, 0:18:53.840 --> 0:18:58.000 I think is a really interesting concrete example of how 0:18:58.040 --> 0:19:01.800 to foster this new partnership. And unfortunately the word conditionality 0:19:01.800 --> 0:19:03.640 sounds negative. So I do think we need to think 0:19:03.640 --> 0:19:07.600 the narrative as well around partnership, you know, purpose driven 0:19:07.960 --> 0:19:15.360 social contracts. Clearly, the really bigly tough challenge these days 0:19:15.400 --> 0:19:23.199 is the US, after decades of undermining the perceived value 0:19:23.240 --> 0:19:25.800 of government only little corners NASA and me. As Michael 0:19:25.840 --> 0:19:28.680 Lewis points out in his book It's NASA was sort 0:19:28.680 --> 0:19:30.320 of one of the few bits of government that was 0:19:30.320 --> 0:19:33.600 allowed to take credit as a public sector organization. If 0:19:33.600 --> 0:19:37.399 you're facing that which existed long before Donald Trump and 0:19:37.440 --> 0:19:40.040 but now coming in as the Biden administration with the 0:19:40.080 --> 0:19:43.920 particular record of the sort of acceleration of the undermining 0:19:43.920 --> 0:19:47.000 of government that's happened over the last few years, I 0:19:47.040 --> 0:19:49.280 guess there were there is. There is a sort of 0:19:49.560 --> 0:19:53.200 debate obviously ongoing within the administration in lots of areas 0:19:53.200 --> 0:19:55.000 about whether the best thing to do is to be 0:19:55.080 --> 0:19:57.680 quietly competent and just remind people that the government can 0:19:57.680 --> 0:20:00.000 be quietly competent and doesn't need to ruin your life 0:20:00.640 --> 0:20:04.280 um and is actually quite important, or does it need 0:20:04.320 --> 0:20:06.320 to be visionary. And of course a lot of people 0:20:06.320 --> 0:20:08.679 would say you have to be competent and visionary, but 0:20:08.840 --> 0:20:11.399 they might sense, in the kind of way that you 0:20:11.480 --> 0:20:14.120 talk about this a real risk for them that if 0:20:14.119 --> 0:20:17.280 they try, if they set those enormous targets and seem 0:20:17.359 --> 0:20:20.080 to signal that they're going to completely transform the way 0:20:20.119 --> 0:20:22.520 we think about government and have your kind of approach, 0:20:23.119 --> 0:20:26.160 they'll be setting themselves up for this failure, for a failure, 0:20:26.200 --> 0:20:30.040 an equally grand failure, which could undermine the battle kind 0:20:30.040 --> 0:20:31.800 of longer term. So I just wonder, when you think 0:20:31.800 --> 0:20:34.440 about the challenges that the administration faces and this trade 0:20:34.480 --> 0:20:38.359 off between being competent and being visionary, how would you 0:20:38.400 --> 0:20:42.520 apply your approach um great question, And you know, and 0:20:42.560 --> 0:20:44.920 first of all, we should remember that Trump was quite 0:20:45.000 --> 0:20:49.119 unique in case people didn't now. Trump was actually the 0:20:49.119 --> 0:20:53.119 first president that really attacked what I called the entrepreneurial state. 0:20:53.400 --> 0:20:55.119 But one of the things I've been arguing is that 0:20:55.160 --> 0:20:57.520 in the US especially but also globally, we need to 0:20:57.560 --> 0:21:00.600 bring together these concepts of the well first state in 0:21:00.640 --> 0:21:03.119 the innovation state that can actually work together, and the 0:21:03.160 --> 0:21:06.320 welfare state can also be a demand pull for what. 0:21:06.440 --> 0:21:09.520 Then the innovation state also feeds into the U S. 0:21:09.560 --> 0:21:12.440 It's very dysfunctional. You have again forty billion a year 0:21:12.760 --> 0:21:16.160 going in from the National Institutes of Health, and then 0:21:16.160 --> 0:21:18.440 at best you have Medicare and Medicaid on the sort 0:21:18.480 --> 0:21:20.680 of demand side, but they're not really aligned. And that's 0:21:20.720 --> 0:21:23.760 why we get this whole kind of hyper inflated system 0:21:23.800 --> 0:21:26.120 where the prices and the fees don't reflect at all 0:21:26.440 --> 0:21:29.840 that public sector is taking. Biden's bringing back the attention 0:21:29.880 --> 0:21:33.440 to an industrial strategy and innovation strategy and the investments 0:21:33.440 --> 0:21:38.080 that we require in both social physical infrastructure innovation. That's 0:21:38.119 --> 0:21:41.320 an important first step. What he needs to avoid is 0:21:41.359 --> 0:21:44.200 making this kind of an old style just list of sectors, 0:21:44.200 --> 0:21:46.639 you know, make America great again in X, Y, and 0:21:46.720 --> 0:21:50.879 Z areas with the mission oriented approach suggests is that 0:21:50.920 --> 0:21:53.000 we need to remember that some of the best innovations 0:21:53.040 --> 0:21:55.560 in the US, like all the ones that I mentioned before, 0:21:55.960 --> 0:21:59.119 making this thing smart and not stupid, Internet, GPS and 0:21:59.160 --> 0:22:02.040 so on, the where outcomes of the U. S Government 0:22:02.080 --> 0:22:04.399 trying to solve a problem. So the Internet was a 0:22:04.440 --> 0:22:08.840 solution to trying to get the satellites to communicate. GPS. Similarly, 0:22:08.880 --> 0:22:11.480