UAE. During the ongoing U.S. presidential campaign, presidential hopeful Mitt Romney lamented that incumbent president, Barack Obama, spent too much time at Harvard. Romney, who has two degrees from Harvard, does not doubt the value of intellectual life, but knows well that today’s heroes are successful business leaders, like himself, and not the men or women of ideas.
Amid a global economic crisis that seems to be without an end, policy innovators with the ability to link the world of ideas with the real world are increasingly missed. The world’s attention seems to have shifted from policy innovators to the “technopreneurs” - celebrity technology entrepreneurs - such as Bill Gates, Steve Jobs, Mark Zuckerberg, Sergey Brin and Larry Page.
Around the world, these Silicon Valley-styled technopreneurs are given hero status. Their opinions and advice are sourced at summits, conferences and by media outlets while politicians compete for photo ops.
Technopreneurs think profits not jobs
Successful as they may be, technopreneurs are in the business of making money and not solving socio-economic problems. Profits are good for the pockets of shareholders and governments, but will not necessarily translate into new jobs, at least not in the short run.
The objectives of the technopreneur and the public are not always aligned. Profit-making and job creation are increasingly at odds. The technopreneur is not without vested interests.
This rise of the celebrity technopreneur as a model for success has been at the expense of the policy innovator. The latter seems to have retreated to think-tanks and consultancy firms, preaching less to government and more to fan groups on social-media channels such as Twitter, LinkedIn and Facebook.
The influence of policy innovators in solving major socio-economic challenges is increasingly diminished. Instead, politicians are seeking safety in the advice coming from successful individuals who enjoy credibility in the minds of the public.
This has not always been the case. After World War II and throughout the Cold War era between the 1950s and the 1980s, ideas from policy innovators helped reshape the world. John Maynard Keynes, a British economist, pioneered the idea of government spending to counter business cycles at their downturns.
William Beveridge, also British, laid out the principles of a modern welfare state in his “Beveridge Report”, which spread across Europe. Gösta Rehn and Rudolf Meidner, two Swedish trade union economists, introduced the economic policy model, whereby wages, prices and profits are capped, creating the Nordic economic miracle.
Likewise, Wilhelm Röpke, a German economist was widely seen as the innovator of social market capitalism that sparked post-war economic recovery in Germany and later Bill Clinton’s and Tony Blair’s Third Way economic policy.
Outside Europe, Raúl Prebisch, an Argentine economist, brought to life the theory of structural-dependency that kept the centre rich and the periphery poor in the world economy, influencing the creation of the United Nations Conference on Trade and Development (UNCTAD).
From the U.S., there was Milton Friedman, whose multitude of ideas included “monetarism” that advocated the use of money supply to counter business cycles, inspiring the policies of many governments, including, the U.S.’s Reagan Administration and Britain’s Thatcher government.
There have been instances where influential policy innovators advanced to becoming heads of state, as was the case of Fernando Cardoso the 34th president of Brazil, who as a finance minister introduced the policy innovation of Plano Real, a virtual currency with fixed exchange rates aimed at curbing rampant inflation.
More recently, there was the selection of Jim Yong Kim, a physician and the president of Dartmouth College, to the helm of the World Bank. Jim Yong Kim is known for his innovations in health care delivery, particularly through an organisation called Partners in Health, (PIH) which he co-founded. PIH provides community-centric health services in areas of deprivation and need.
Through integrating community members in the provision of health care, PIH facilitates the effective delivery of services at an affordable price, a model adopted by the World Health Organisation.
Philosophers and Kings
Plato, the Greek policy innovator, writes in the Republic, “There can be no good government until philosophers are kings and the kings, philosophers.”
With an elongated crisis like the one we continue to experience, conventional solutions - austerity and bailouts - are not working. It’s time to think outside the box and politicians will do well to seek and reach out to policy innovators.
Note: Sami Mahroum is the Director of INSEAD’s Innovation & Policy Initiative on the Abu Dhabi campus.
This article is republished courtesy of INSEAD Knowledge
Copyright INSEAD 2012