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From Moonshots to Earthshots

Summary:
The pandemic has highlighted the cost of neglecting public investment, both in the welfare state and value creation. But the crisis has also created a huge opportunity to pursue industrial policies beyond traditional sectoral and technological silos, and to restore mission-driven governance in the public interest. LONDON – COVID-19 has exposed the myriad weaknesses of modern capitalism. And in many countries, past cuts to social services and public health have amplified the damage wrought by the pandemic, while other self-inflicted wounds to the state have led to inadequate policy coordination and implementation. Mass testing and tracking, production of medical equipment, and education during lockdowns have all

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The pandemic has highlighted the cost of neglecting public investment, both in the welfare state and value creation. But the crisis has also created a huge opportunity to pursue industrial policies beyond traditional sectoral and technological silos, and to restore mission-driven governance in the public interest.

LONDON – COVID-19 has exposed the myriad weaknesses of modern capitalism. And in many countries, past cuts to social services and public health have amplified the damage wrought by the pandemic, while other self-inflicted wounds to the state have led to inadequate policy coordination and implementation. Mass testing and tracking, production of medical equipment, and education during lockdowns have all suffered as a result.

By contrast, countries and states that have invested in their public-sector capabilities have performed much better overall. This has been most striking in the developing world, where Vietnam and the Indian state of Kerala stand out.

Instead of acting as investors of first resort, far too many governments have become passive lenders of last resort, addressing problems only after they arise. But as we should have learned during the post-2008 Great Recession, it costs far more to bail out national economies during a crisis than it does to maintain a proactive approach to public investment.

Too many governments failed to heed that lesson. Faced with another society-wide challenge, it is now clear that they have relinquished their proper role in shaping markets, allowing public institutions to be hollowed out through outsourcing and other false efficiencies. The retreat of the public sector has given way to the idea that entrepreneurship and wealth creation are the exclusive preserve of business – a perspective endorsed even by those who advocate “stakeholder value.”

In fact, the more we subscribe to the myth of private-sector superiority, the worse off we will be in the face of future crises. To “build back better” from the current one, as US President Joe Biden’s administration and many other governments have committed to do, will require renewing the public sector, not just by redesigning policy and expanding the state’s organizational capabilities, but by reviving the narrative of government as a source of value creation.

As I explain in my new book Mission Economy: A Moonshot Guide to Changing Capitalism, landing a man on the moon required both an extremely capable public sector and a purpose-driven partnership with the private sector. Because we have dismantled these capabilities, we cannot hope to repeat earlier successes, let alone achieve ambitious targets such as those outlined in the Sustainable Development Goals (SDGs) and the Paris

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