Economist Mariana Mazzucato makes new recommendations for B.C. innovation policy at Globe Forum conference

British Columbia must combine economic strategies with societal and social concerns to build a more inclusive economy, says Mariana Mazzucato, the head of a world-famous team at University College London that advised the B.C. provincial government on its recovery plan.

That means awarding a contract even if the bid was not the lowest and working with groups who are willing to work with the government on achieving its long-term goals, not just sectors that are currently having the most success, Mazzucato, head of University College London’s Institute for Innovation and Public Purpose, said at the Globe Forum 2022 conference held in Vancouver.

“Often, countries, when they think about their industrial strategies, will make a list of their top sectors and then maybe brag about how well they're doing,” said Mazzucato.

“We've tried to reverse that with [the B.C. government], which is to say: What are your goals? And then what can be done to make sure that all your different sectors … can really become part of the solution also in terms of how they work together?"

Mazzucato’s appearance at Globe on Thursday came about a month after the B.C. government unveiled its Stronger B.C. plan that adopted a mission-based approach based on her team's advice. But the B.C. plan offered few details on implementation and no measurable benchmarks for success.

In conjunction with her appearance at Globe, Mazzucato issued her team’s report Inclusive and sustainable British Columbia: A mission-oriented approach to a renewed economy and said her team could continue to work with the province as the Horgan government attempts to reduce carbon emissions.

The province did not formally commit to implementing Mazzucato’s advice. In a statement released in conjunction with Mazzucato’s report, Minister of Jobs, Economic Recovery and Innovation Ravi Kahlon said the government looks forward to considering its recommendations.

Mazzucato advises clear mission targets, better use of government procurement

Appearing virtually from London, U.K., Mazzucato called for B.C.’s economic recovery to include new policies on government procurement, the civil service, consultation with Indigenous communities, and bottom-up problem-solving.

Mazzucato, who has advised policymakers around the world, has argued for years in favour of  “mission-oriented” government institutions that can create and shape markets. She called for the Horgan government to take an entrepreneurial approach to its recovery plan to create “additionality” or, in other words, make things happen that would not have happened otherwise.

Her report said missions need to be clearly framed, enable long-term investments, have specific targets that can be formulated in binary ways or quantified, and be long enough to allow the process to grow — but still be time-limited. It advised that the Horgan government focus on social innovations as well as innovative technologies, and establish ongoing engagement with the public, including Indigenous communities, instead of viewing consultation as a "one-off event."

In addition, the report said public procurement must be aligned with the government's missions, environmental and social governance ambitions, and key performance metrics, and the government needs to be more actively involved in purchasing strategies.

Stronger public sector required

But, Mazzucato said, “none of this can be done without a stronger public sector.”

She called for a better-trained and more entrepreneurial civil service, noting that business schools offer managers and executives courses on strategic management, decision sciences, organizational behaviour and creative thinking, but that public servants do not receive the same training.

When it comes to procurement, the province must also do less private-sector outsourcing, she added. “It's fine to do that a bit,” she said. “But when we do it too much, we really rid [the civil service of] the needed learning by doing."

Outsourcing too often can rid public servants of the creativity they need to redesign procurement, do outcomes-oriented budgeting and build a "dynamic mission-oriented public bank," Mazzucato said.

The province established such a public bank, the $500-million InBC fund, last year. According to an August 2021 press release from Global Public Affairs, Mazzucato was considering whether to recommend a new green investment bank. But the B.C. economic recovery plan does not contain provisions for one, and Mazzucato did not broach the idea at the conference or in her report.

She said InBC must provide patient long-term finance to groups aligned with missions and avoid catering to sectors that “lobby their way up” or are perceived as priority sectors.

B.C. Premier John Horgan pledged during the session to get small- and medium-sized businesses more involved in the procurement process. He later told Research Money that the province is already doing so.

“We have done that by breaking up larger contracts, particularly for telcos, breaking up larger contracts into more digestible parts so that smaller enterprises can constructively put in bids for for these [requests for proposals],” he said.

“We're creating lists of small, medium and large companies to participate as preferred bidders. So we're trying to break down what had been an increasing large market for large companies, trying to break these into digestible bits for smaller companies.”

Mission goals must be research-centred

Mission goals should be centred on ambitious but realistic basic and applied research, along with innovation, says Mazzucato’s report. The report also says that missions should spark activity across multiple scientific disciplines spanning several industrial sectors and address clear challenges that stimulate new private investment.

When asked by Research Money how the province will follow up on Mazzucato’s recommendations, Premier Horgan said the province is ensuring that it is inclusive and “making sure that we’re thinking about what the future holds, rather than waiting for it to happen to us.”

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