From Moonshots to Earthshots
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.