Mission Economy

1. Reimagine government as an entrepreneurial force for innovation

Government can build the cathedrals of mission-oriented innovation in the twenty-first century if it is recast with courage, dynamic competency, leadership, resilience and creativity.

Entrepreneurial state. Contrary to popular belief, governments have been behind many of the most important innovations in history, from the internet to GPS. The public sector can and should take risks, invest in long-term research and development, and actively shape markets to drive innovation.

Moonshot thinking. The Apollo program demonstrates how ambitious government-led missions can catalyze innovation across sectors. By setting a clear, inspiring goal and providing resources and direction, government can mobilize diverse actors to solve complex challenges.

Examples of government-led innovation:

• DARPA's role in creating the internet
• NIH funding for biomedical research
• NASA's space exploration programs

2. Shift from market-fixing to market-shaping policies

Markets are not outcomes of individual decision-making but of how each value-creating actor is governed – including government itself.

Beyond market failures. Traditional economic theory views government's role as merely fixing market failures. This narrow view limits the public sector's potential to drive innovation and shape markets in pursuit of societal goals.

Proactive policymaking. Governments should actively co-create and shape markets, not just react to their failures. This involves setting clear directions for innovation, using policy tools to incentivize private sector engagement, and creating new markets around societal challenges.

Market-shaping policy tools:

• Public procurement to create demand for innovative solutions
• Regulation to set standards and level the playing field
• Direct investments in high-risk, early-stage research
• Mission-oriented innovation policies

3. Adopt a mission-oriented approach to tackle grand challenges

Missions offer an opportunity to reverse this trend by involving citizens in solving grand societal challenges and creating wide civic excitement about the power of collective innovation.

Grand challenges focus. Mission-oriented policies align public and private efforts around ambitious, concrete goals that address major societal challenges, such as climate change or inequality.

Cross-sector collaboration. Missions require collaboration across different sectors, disciplines, and organizations. They provide a framework for coordinating diverse efforts and stimulating innovation in multiple areas simultaneously.

Examples of potential missions:

• Achieve 100 carbon-neutral cities by 2030
• Reduce plastic in the oceans by 90% by 2040
• Halve the burden of dementia by 2030

4. Foster dynamic capabilities in public organizations

To co-create value and shape markets, public and private organizations need dynamic capabilities of experimentation and learning.

Organizational transformation. Public sector organizations need to develop new capabilities to effectively lead mission-oriented innovation. This includes the ability to take risks, learn from failures, and adapt to changing circumstances.

Skill development. Governments must invest in developing the skills and competencies of public sector employees, fostering a culture of innovation and experimentation within bureaucracies.

Key dynamic capabilities for public organizations:

• Leadership and engagement
• Coordination across departments and sectors
• Administration of complex projects
• Risk-taking and experimentation
• Dynamic evaluation of outcomes

5. Implement long-term, patient finance focused on outcomes

Missions require long-term thinking and patient finance.

Rethinking public investment. Rather than focusing solely on short-term costs and benefits, governments should view public spending as long-term investments in society's productive capacity and well-being.

Outcome-based budgeting. Shift from input-based budgeting to focusing on desired outcomes. This allows for more flexibility in how resources are allocated and encourages innovation in achieving goals.

Benefits of patient, mission-oriented finance:

• Enables high-risk, long-term research and development
• Crowds in private investment by reducing uncertainty
• Allows for learning and adaptation over time
• Focuses on societal impact rather than narrow financial metrics

6. Create symbiotic public-private partnerships with shared risks and rewards

If value is created collectively through societal effort, all actors should be getting their fair share in proportion to their risk-taking, input and creativity.

Beyond outsourcing. Move away from the model of government outsourcing to private contractors towards true partnerships where both public and private sectors share risks and rewards.

Stakeholder approach. Embed public purpose into the governance of public-private collaborations, ensuring that societal benefits are prioritized alongside financial returns.

Elements of symbiotic partnerships:

• Clear alignment of public and private objectives
• Sharing of both financial risks and potential rewards
• Governance structures that protect public interest
• Mechanisms for knowledge sharing and collaborative innovation

7. Engage citizens in co-creating solutions for societal challenges

Establishing estates and streets as places where missions can root themselves makes for long-term citizen governance and stewardship, for the accumulation over time of public value and public innovation and ultimately for local prosperity and economic growth.

Participatory policymaking. Involve citizens in defining missions, setting priorities, and designing solutions. This ensures that policies address real needs and builds public support for ambitious initiatives.

Local empowerment. Create opportunities for communities to engage in mission-oriented projects at the local level, fostering innovation and building social capital.

Approaches to citizen engagement:

• Citizen assemblies to deliberate on complex issues
• Participatory budgeting for local mission projects
• Co-design processes for public services and infrastructure
• Digital platforms for crowdsourcing ideas and feedback

Last updated: September 19, 2024