Why the coronavirus recovery is the perfect opportunity to enact change

As cities reopen even while global COVID-19 cases continue to grow, most people are wondering when things will truly get back to normal. In a TED2020 talk on Monday, economist Mariana Mazzucato said that it’s the wrong question to ask.

“Really, my view is that we need to do everything we can not to go back to normal because normal was part of the problem,” she told the virtual audience.

The “normal” healthcare system was broken. The economy, with problematic corporate governance and business structures, wasn’t working, as inequality has skyrocketed over the last few decades in places such as the U.S. The climate crisis hasn’t gone away. “This is really an opportunity to fix those underlying sources, but also to do capitalism differently,” she said.

So, how can we use this time as an opportunity to restructure our world? One way is changing the role of the government. In her book The Entrepreneurial State, Mazzucato looked at examples of technology like the smartphone and the fact that core tech that enabled it—the internet, touchscreens, GPS, voice control—came from public investments and scientific research, not entrepreneurs. She argues that governments need to see their role differently, focusing on co-creating value with businesses, rather than only intervening if the market fails, and investing more in innovation.  

Investments could be structured differently so the government can benefit rather than only taking risks, for instance. If the U.S. government had taken shares in Tesla when it invested, it would have offset the losses when Solyndra, a solar company it also invested in, later went bankrupt.

Governments can also set targeted goals to tackle pieces of social problems such as climate change or affordable healthcare, catalyzing new innovation. Mazzucato points to NASA’s procurement contracts for the original moon mission as a good example. “If you look at the procurement contracts, they were really dynamic, very ambitious,” she said. “They’re also quite short, which is interesting. And when the private sector didn’t deliver, NASA just threw the stuff back and said, ‘Nope, doesn’t work. Do it again.’ So there was much more ambition and in some ways, confidence.”

Companies are beginning to talk more about creating social value, like when the Business Roundtable’s 200 CEOs said last year that the purpose of a business isn’t only about creating value for shareholders. But statements aren’t enough to drive true investment back into communities, workers, and sustainability, Mazzucato says. What we need is government investment so that companies can focus on realistic goals that will help transform our society.

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