Health innovation has been the story of COVID, but economist Mariana Mazzucato says we’re still not doing it right. We need to redesign procurement, rethink old narratives and reassess the value of public investment.
Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
In a care[...]
“It’s absolutely mad if you think about it” — the need to rethink what we value
MaRS | Molly Shoichet | Sep 8, 2021
Health innovation has been the story of COVID, but economist Mariana Mazzucato says we’re still not doing it right. We need to redesign procurement, rethink old narratives and reassess the value of public investment.
Mariana Mazzucato is one of the world’s most influential economists — professor at University College London, founder of the Institute for Innovation and Public Purpose and author of books rejecting business’s monopoly on risk-taking and value creation.
Molly Shoichet: The COVID economy has had an outsized impact on women and racialized communities. What is the connection between public health and a healthy economy?
Mariana Mazzucato: We hear it’s important to invest in health, it’s good for the economy. But in my work as chair of the World Health Organization’s Council on the Economics of Health for All, we want to determine the actual goal we’re trying to achieve.
COVID-19 has woken us up to the fact that we don’t have health for everybody. It’s not enough to have a vaccine if not everyone has access to it. So, if our ambition is health for all, how do we set up our economy? Outcomes-oriented budgeting? Procurement processes and budgets?
See: Why a shift to Impact Investing will create big winners and big losers
So, the connection between health and the economy has to be about creating stronger health systems. But it also has to be about how we structure the economy to deliver on our goals, including the nitty gritty of tool design.
Shoichet: How can we ensure vaccines are equitably available around the world?
Mazzucato: I think we need to really question whether vaccines should be produced in a for-profit model.
With the pandemic, unless vaccines are available to everyone, we’re all going to remain unsafe. Otherwise we have vaccine apartheid, as WHO Director-General Dr. Tedros Adhanom Ghebreyesus calls it.
There is this idea of having a patent pool — we have to rely less on voluntary charity. Governments and philanthropies can also use prizes to encourage certain types of inventions. We don’t just have to rely on patents and pricing, especially in an area with such a strong “public good” dimension.
Read: Getting tangible about intangibles: The future of growth and productivity?
There’s also the concept of collective intelligence. One example is the “people’s vaccine” concept promoted by the Costa Rican government and others. And there are people like Dr. Tedros who are asking how we share knowledge, how we construct collective intelligence about tools and therapies in a pandemic, how to structure public-private partnerships.
Shoichet: Societal value is increasingly equated with financial value. How do initiatives like value-based care help create new frameworks that will truly help people?
Mazzucato:
In a system that confuses price with value — the thesis of The Value of Everything — we assume that just because someone is paid a lot, they are more valuable.
This is why Lloyd Blankfein, CEO of Goldman Sachs, had the guts to say after the financial crisis that his workers were among the most productive in the world. We laugh at that, but in a way, he was right. Because when we look at productivity in terms of output per labour, we don’t know how to value the output of public health workers. Their output might end up being free to the consumer, so we can only put a number on their inputs.
Also: Financial data unbound: The value of open data for individuals and institutions
We must value the work of women, caregivers, public health workers, school teachers, in such a way that validates them and the value of their labour. It goes beyond their incomes to the value of the output. GDP doesn’t include the value of a well-structured public education or health system because it’s free. It’s absolutely mad if you think about it. We currently just look at the cost of the teachers or the nurses.
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