The time is ripe for a renewed vision of public-private partnerships and therefore for purpose capitalism

It is obvious that the current economic and social situation – as a result of Covid 19 – requires new perspectives. Opinions differ on what these should look like. That of the Italian economist Mariana Mazuccato is one that keeps ringing in my head.

At the end of July she presented her story during an intimate zoom session at De Balie in Amsterdam. The audience now sat on stage with the hostess and Mariana gave a short lecture from her living room in London and then entered into a discussion with the audience.

Using numerous examples, Mazzocano showed that over the past years of privatization and shareholder capitalism, the business community has been too focused on shareholder value and paying bonuses. As a result, a lot of value that could perhaps have been better retained in the companies has flowed out and not been optimally used for growth and innovation. In addition, she showed that a large number of governments no longer have the strength and self-confidence to discuss and negotiate with representatives of the private sector on an equal basis. While many innovations that the business community has benefited from, for example in the field of technology, almost all have been made financially possible by governments.

The core of her thinking is that the long-term solution to current problems lies in re-examining public-private partnerships and the role of governments in this. Public-private partnerships must play an important role in the recovery after the current crisis and in solving the major social problems of our time. We must move towards purpose capitalism in which business and government jointly focus on social problems in their choices and actions.

Now that Covid 19 has made it clear that the private sector in many cases has to rely on government support to survive, the latter should probably put on a bigger coat. There is no room for false modesty. In fact, there is a need for enterprising governments that play an active role in shaping our economic and social future together with the private sector, both in the short and especially in the long term. For the government, this also means that it must invest more in the training of its employees. Send them to management training at the major institutes, so that they are on a level playing field with the business community.

It is up to the private sector not only to gratefully accept this support, but also to show the willingness to work together towards a better, more sustainable future. And to create innovations that benefit us all, not just shareholders and top executives. And at the same time we take up the challenge that our planet remains habitable for future generations and that everyone has equal access to fundamental values such as well-being, healthcare and education. A future where we exchange shareholder capitalism for purpose capitalism.