Rockstar of the international business community….?

We were able to glimpse the answer for ourselves on Monday 28 September, when we organised a webinar with Mazzucato, a celebrated professor in the Economics of Innovation and Public Value at University College London who holds dual Italian-US citizenship. She spoke for 45 minutes, followed by a 45-minute Q&A session with over 400 representatives from a whole range of institutions, including Invest-NL, the Regional Development Corporations, the Ministry of Finance and the Ministry of Economic Affairs and Climate Policy, plus a host of other stakeholders.

The switch from a seminar here in Amsterdam to a webinar was of course necessitated by the ongoing COVID-19 pandemic but that did not prevent Mazzucato from captivating her online audience from start to finish. She is an outstanding communicator with plenty to say. Her central recurring message is that the public sector and the private sector need each other. And that both sectors have a shared responsibility to create a better world. She points out that what appear to be the most successful private innovations would in fact never have got off the ground without public investment. There is no need for the public sector to be modest about its contribution in this regard, she insists. Instead of restricting its role to intervention in the event of market failures, the public sector should become involved far earlier, when the market is in its infancy or even when it has yet to be created.

In passing, she also took a swipe at the Dutch approach to such matters. She noted our tendency to shape much of our innovation policy through taxation, while her own research has shown that countries which emphasise public investment are far more effective innovators than countries where the government limits its involvement to tax incentives. All was not lost, however, and she went on to give the Netherlands a pat on the back for the innovation fund recently launched by the ministries of Finance and Economic Affairs, which she said was very good news!

Another critical note was reserved for a previous Dutch innovation policy which focused on parts of the economy identified by the government as ‘top sectors’. This, she said, was a policy primarily designed to protect and support existing interests, while her vision for success is based on a mission-driven innovation policy that prioritises a social task and then seeks out the companies that are able and willing to work on the solution. In her view it’s not about ‘picking winners’ but ‘picking willing’ so that the government can harness the innovative capacity of businesses to address major social challenges. Her recommendation to investors with public capital, such as Invest-NL, is therefore not to prioritise a particular market or technology, but to focus on a transition and then drive the innovation needed to make it happen. It’s the very same view set out in the law that led to the creation of Invest-NL. And precisely what we are currently doing in our work by focusing on the transition to a carbon-neutral and circular economy.

By coincidence (well, perhaps not entirely), I attended another seminar later the same day where Mazzucato had also been invited to address a wide and varied audience including the leaders of Dutch industry. The seminar centred on the question of whether the current crisis has also presented opportunities, a favourite topic in her publications. Here, too, her message was crystal clear: it may not be easy but – with huge sums of public capital being pumped into the economy to combat the crisis and aid recovery – it is vital to use the momentum generated to make the economy more sustainable and inclusive.

In itself, this is nothing new, of course: many current publications on the topic are saying the same. But there is no denying the energy and enthusiasm with which Mazzucato draws on her academic expertise. I was even more struck by the response: all of the industry leaders present roundly agreed with her. This is all the more remarkable given that the automatic reaction in any crisis is to protect existing interests first; only logical given that those interests have the most influential lobbyists and face the biggest job losses. Deciding to embrace the new and the unknown at such a critical moment is not an easy option.

This truth gradually came to the fore during the break-out sessions. That no matter how right Mazzucato is, the path she advocates is fraught with difficulty. How do you get your US shareholders on board? How do you convince voters? Do you have the courage to opt for a European approach? How do we combat polarisation and learn once again to value consensus and compromise?

Perhaps the most striking thing of all was hearing the two conclusions that most of the company directors had reached by the end of the afternoon. Firstly: politicians need to show vision – a conclusion I find hard to accept. Perhaps it’s the knee-jerk defensive response of a former politician, but I am convinced that most politicians do have vision. The point is that their visions differ and, in the current political landscape, no single vision can count on a clear parliamentary majority. The compromise game that follows is often a murky cloak-and-dagger business in which visions get diluted and wither away. But that process has a name: democracy. So perhaps the accusation that politicians lack vision fails to do them justice.

The second conclusion was more to my liking: politicians can’t do it all on their own. The business community also needs to speak out. Against polarisation and for Europe. For sustainability and against exclusion.

It would have brought a smile to the rockstar’s face.

Wouter Bos
CEO of Invest-NL