CogX 2020: Rethinking technological innovation

Key transformations

She added: “What’s interesting is that the narrative of the successes often ends up being ‘that was a private sector success’, and then when things go wrong we’re very quick to look at what the state did wrong.”

For Mazzucato, this obfuscates the historic role of the state in financing “key transformations,” and stops people from being able to see the government as a risk-taking investor.

“The current narrative is actually quite toxic and doesn’t actually allow us to do what I think needs to be done, which is to set up really dynamic public-private partnerships that can co-invest, take risks together, [and] welcome uncertainty,” she said, adding a major roadblock was “inertial” nature of current government bureaucracies that are not “able to adapt and act in a flexible way.”

“I think the biggest challenge is realising that this actually requires a new, not just economic framing from market fixing to market shaping and a redesign of the tools in procurement, but within that then literally a new curriculum for civil servants.”

Speaking about this year’s World Economic Forum in Davos, Mazzucato said there was a lot of talk about how “maximising shareholder value hasn’t worked” and the need to “think of new corporate governance structures that really reward the fuller set of stakeholders.”

In her view, the stakeholder value cannot simply be about corporate governance however, “it has to be about rethinking how public and private institutions… work together so that purpose is at the centre of that system.”

“To do that by the way we need metrics which don’t exist. This is what I mean by the new curriculum. We need metrics… for defining what a symbiotic, mutualistic versus predator-prey, parasitic public private partnership looks like,” she said.

Reimagining capitalism

Rebecca Henderson, an American economist who teaches a module on ‘re-imaging Capitalism’ at Harvard Business School, similarly told CogX attendees that capitalism is “broken,” but instead focused on how ordinary people have been left behind economically, socially and politically.

“Many people can’t compete in today’s world, and most people haven’t seen a pay raise in 20 years. So I see stakeholder capitalism as really as a response to a form of capitalism, an overwhelming focus on shareholder value at any cost, that is past its prime and needs to be reimagined,” she said, adding the onset of the Covid-19 pandemic, whether for good or bad, has shifted people’s perspectives.

“I’m really noticing a change. Six months ago when I talked about the need to systemically re-think capitalism, everyone would look at me uneasily, like ‘yeah right, Professor Henderson’. Now people are super-curious. I think there’s a sense that things can go wrong, that they are going wrong, that the system is not working. The pandemic’s like a huge flashlight that’s shown what’s wrong with our society – issues of exclusion, of government incapacity, of firms not stepping up to do the right thing.”

Speaking on the same panel about ‘Stakeholder capitalism’, CEO of the Employee Ownership Association Deb Oxley said government would have a “hugely important” role to play in widening participation in and control of the means of production.  

“The opportunity that Rebecca talks about to broaden capitalism – so instead of it being just about a narrow group of owners owning the well-being of the farm, the production process – actually spreading that it will require governments to start paying, because it will require governments to incentivise, when it’s appropriate, but also to use those incentives wisely,” she said.

“Rebecca has talked about inequality and we’ve got a levelling up agenda in the UK, so you can clearly see the opportunity to incentivise firms to step up to more employee ownership as a means of repairing some of that inequality in society.”

In a separate conversation between TechCrunch journalist Steve O’Hear and Skype founder Niklas Zennström about VC’s role in the next decade, the latter said technology companies and startups would be much more focused on “society and the planet” as a result of the tensions created by ever-widening inequality.

“In the old world, we used to think that progress and purpose were something that could build a great company and have financial success, [but] There was a cost to society. What’s happening today with a lot of companies is you can actually build companies which are using technology that is benefiting all different types of stakeholders, so purpose and profit are no longer exclusive - they are now mutually reinforcing,” he said.

“I think the big opportunity for entrepreneurs [is] to step up and build companies that are not only long term sustainable in a financial way, but can also help to build a sustainable society.”

He added that access to talent was the most important part of a technology companies success, and that this would increasingly force them to adopt more ethical positions that take into account a wider range of views when producing new innovations.

“More and more tech workers around the world care about where they work - if the company they’re working for is doing something that is ethical or not ethical, and there are many people… leaving companies they consider to be doing unethical things. So, for companies to be able to continue to attract great talent they need to think about whether are they doing things that are fundamentally ethical with the technology and the practices,” he said.

Henderson added that, while these “moment of transition” are always difficult, “we know how to run firms in a different way – in ways that are much more equitable, profitable and productive – we can get there, and as more and more people see that we’re going to see this transition.”

Reimaging citizen participation

While reimaging the state as an investor and giving more people ownership or control over the economy’s productive forces can help spread the benefits of technological innovation, removing it from the reserve of private technology companies, there still needs to be ways of including people that are not in the civil service or who do not work at tech firms and making them stakeholders too.

According to Simon Burall, a senior associate at public engagement charity Involve, the current pandemic offers a “perfect case study” for why we need citizen input when debating the wisdom of developing or implementing new, particularly data-driven, technologies.

“Just focusing in on the track and trace app, at the moment it’s largely being presented as a technical technology and data problem – ‘if we can get the app right, if we collect all the data we need then we can solve the problem’,” he said, adding public engagement can and should go beyond questions of privacy or security.

“For example, how do we balance the health of the young versus the health of the old, the needs of those two very different populations. How do we balance the needs of different geographic communities, we’re seeing the R at different rates in different parts of the country, what does that mean for different lockdowns, and so.

“These aren’t technology problems, these aren’t problems you can answer with getting the data and tracing right. There aren’t technical solutions to this, there are only social solutions.”

For Burall and others on the Ada Lovelace Institute’s panel on citizen voice, the answer is in ‘deliberative consultations’, whereby the public are engaged early and continuously throughout the innovation process.

Decision makers

When explaining why this was not already the case in Britain, Burrall said it’s “because we have a very narrow set of the population making up our decision makers, who are very scared by the state of the public debate, which is extremely black and white.

“They imagine that any form of public engagement is going to replicate that as opposed to being thoughtful… and we have to help them understand that they can engage a thoughtful public, because they are thoughtful when you put them in the right space, and you will learn something new and grow as a policymaker, as much as the public will grow as a participant.”

Chris Carrigan, an expert data advisor at health data firm useMYdata, said while many would dismiss deliberative consultations as ‘slowing things down’, he does not see this as a valid concern.

Referring to the NHS contact tracing app, Carrigan added “having engagement right at the outset would have saved you time, would have been far better in terms of value, and it would have instilled a greater degree of trust in how things operated.”

However, the process of deliberative consultation must be carefully considered to ensure the groups do not replicate existing power structures. According to UCLA associate professor Safiya Umoja Noble, who was speaking on the ‘What does ‘good’ look like in technosociety?’ panel, the current problem is the vast majority of key decision makers are “people who went to the same schools; share the same socio-economic class background for the most part; are demographically, racially, ethnically and gender similar.”  

However, while stressing its importance she noted the process must go further than “representation in the room” to include dedicated regulation of technology companies and their data-intensive business models to stop the harms from happening in the first place.

“I think we’re going to have to sit down and figure out as a public, as varying publics around the world, how we will allow these types of platforms to ultimately, in my opinion, undermine democratic institutions,” she said.