The economy got you down? Mariana Mazzucato is on a mission to change that

If we’ve learnt anything during the upheaval and disruption caused by the pandemic, it’s that things around here are changing. “Normal” is a relic of the past; the time for transformation is now.

The climate is changing at a frightful pace, with B.C. experiencing record-breaking temperatures, drought, and wildfires last summer and more unprecedented climate impacts looming on the horizon. Nature is changing, with biodiversity loss worldwide threatening the sixth mass extinction, and half of monitored wildlife species in Canada declining 83 per cent on average from 1970 to 2014. Society is changing, with equity, diversity and inclusion emerging as key priorities for institutions like Simon Fraser University as Indigenous and Black communities continue to call out the ugly truths of Canada’s history and the ongoing legacies of colonialism and institutional racism. 

The question is, how is the economy changing? Or better yet, how does the economy need to change to advance—rather than undermine—socio-ecological wellbeing?

You will probably agree that the “old economy,” the one that prioritized profit at the expense of ecosystems and people, is not working. In fact, the old economy is the problem—the root cause of the climate, biodiversity, and inequality crises facing us today. But what if someone told you that the economy can also be the solution to these crises? 

Well, that someone is Mariana Mazzucato and that solution is a mission economy.

On October 20, 2021, SFU’s Stephanie Bertels, VanDusen Professor of Sustainability and Director of the Centre for Corporate Governance and Sustainability at the Beedie School of Business, moderated a virtual conversation with Mariana Mazzucato on what is needed to create a new economy that puts people and the planet first. Mazzucato, Professor in the Economics of Innovation and Public Value and Founding Director of the Institute for Innovation and Public Purpose at University College London, advises policymakers worldwide on innovation-based inclusive and sustainable growth. Recently, B.C. joined Mazzucato’s mission when the Minister of Jobs, Economic Recovery and Innovation enlisted her as an advisor to inform B.C.’s post-pandemic economic recovery plans. 

Mazzucato didn’t dwell long on the problem, preferring instead to dive into the solutions. Nonetheless, she laid the foundation for the discussion by illustrating key shortcomings of the current economic system. She highlighted three facts: 

• 56 per cent of G20 countries’ pandemic recovery funds were given to fossil energy projects;
• 80 per cent of the financial sector goes to financing itself and not the real economy; and
• shareholder profits are at a record high while inequality and polarization soar.

The current shareholder primacy model leaves governments responding with market fixes and band-aid solutions while society lurches from crisis to crisis.

Instead, Mazzucato advocates for a purpose-led economic transition that builds resilience by investing in communities and putting stakeholders at the centre of decision-making. Because the economy is an outcome of society’s decisions, she calls for better societal decisions that set the economy in the direction of resilience, sustainability, and equity. Doing so requires us to adopt “missions” to address the grand challenges of our time. This is the mission economy.

You’re not alone if you’re wondering what Mazzucato’s mission economy would look like in practice, and how we can get there. During the event, the Zoom chat was alive with questions, critiques, and words of caution. Mazzucato provided some answers and participants weighed in with others.

First and foremost, governments have a crucial role to play in a mission economy. In shifting from a market-fixing to a market-shaping role, the “entrepreneurial state” can build the new economy with common good as the common goal. For Mazzucato, highlights of the entrepreneurial state in a mission economy include: 

• big, bold policies and investments to address socio-ecological challenges—framed as missions;
• mobilization of cross-sectoral collaboration and innovation to advance those missions;
• public spending and procurement with sustainability conditionalities attached;
• internal experimentation and capacity-building for government leaders; and