Mission Economy

Mission Economy Plot Summary

Introduction

The traditional narrative about the roles of government and business in driving innovation and economic growth has long been misguided. Public sectors around the world have been depicted as slow, bureaucratic machines that should simply fix market failures and then step aside to let private enterprise innovate and create value. This pervasive misconception has led to an economic system that is plagued by short-termism, excessive financialization, and growing inequality. By examining transformative projects like the Apollo moon landing, we gain profound insights into how government can take on a leadership role in tackling society's greatest challenges. Instead of merely fixing markets, government can actively shape and create them, driving innovation through ambitious, purpose-oriented missions. This paradigm shift reframes economic thinking around collective value creation, symbiotic public-private partnerships, and dynamic organizational capabilities. Rather than asking "what can we afford?", we begin to ask "what needs to be done?" and reshape budgeting and governance accordingly. The potential implications extend far beyond theoretical economics, offering a practical roadmap for addressing urgent challenges from climate change and public health crises to digital inequality and sustainable mobility.

Chapter 1: Rethinking Government as Value Creator in Innovation

Government's role in innovation and economic progress has been profoundly misunderstood. The conventional wisdom portrays the public sector as a sluggish bureaucracy that should limit itself to fixing market failures, providing basic infrastructure, and then stepping out of the way. This narrative suggests that only private businesses take risks, drive innovation, and create real economic value. Yet this perspective ignores the tremendous historical evidence to the contrary. The Apollo moon landing program represents perhaps the most dramatic counterexample to this flawed narrative. In 1962, President Kennedy set forth the audacious goal of landing a man on the moon before the decade's end. This mission involved immense technological uncertainties and financial risks, with NASA coordinating over 400,000 workers across government, universities, and private contractors. The public sector led this vast enterprise with vision, purpose, and dynamic management that adapted to emerging challenges. NASA didn't merely fix market failures—it created entirely new markets by establishing ambitious goals and deploying funding strategically. The technologies that emerged from this government-led initiative transformed the world far beyond space exploration. The miniaturization of computing, advances in materials science, innovations in telecommunications, and countless other spillovers became the foundation for modern industries. The Apollo program exemplifies how public investment can catalyze innovations that the private sector, focused on shorter-term returns, would never undertake alone. Rather than crowding out private investment, bold government missions crowd it in by creating new technological opportunities and markets. This leadership role of government as an entrepreneurial, risk-taking, market-creating force extends well beyond the space program. From the development of the internet and GPS to breakthroughs in pharmaceutical research and renewable energy, public agencies have repeatedly funded high-risk, early-stage innovations that later became commercial successes. The notion that these achievements somehow happened despite government intervention rather than because of it represents a fundamental misunderstanding of how innovation actually works in modern economies. Understanding government as a value creator requires shifting our thinking from a market-fixing framework to a market-shaping one. It means acknowledging that the most transformative innovations often emerge from missions with clear direction and purpose, rather than from unfettered market forces alone. This reframing challenges us to build public sector institutions with the capabilities, funding mechanisms, and organizational structures needed to drive ambitious innovation—not by mimicking business, but by embracing government's unique capacity to mobilize resources toward solving complex societal problems.

Chapter 2: Debunking Myths: Government as Market Shaper, Not Just Fixer

The idea that government should only intervene to fix market failures has become economic orthodoxy. This perspective suggests that markets are optimal allocators of resources except when specific failures occur—such as information asymmetries, externalities, or public goods that the private sector won't provide. Government's role is thus limited to reactive correction rather than proactive direction-setting. This market failure framework has fundamentally constrained our thinking about what public institutions can and should do. This orthodox view of government stems from several interconnected myths. First is the belief that the private sector creates value while government merely facilitates or "de-risks" private activity. Second is the notion that government should mimic business practices to achieve efficiency, leading to excessive outsourcing of core functions. Third is the claim that government "picking winners" inevitably leads to failure and waste. These myths have steadily hollowed out public sector capabilities and confidence, resulting in administrations that react to problems rather than boldly addressing societal challenges. Historical evidence thoroughly contradicts these limiting perspectives. Far from simply fixing markets, governments have repeatedly created and shaped them through strategic investments, procurement policies, and regulatory frameworks. Silicon Valley itself is largely the product of decades of public investment in technologies like the internet, GPS, touchscreens, and countless other innovations initially funded by agencies like DARPA. The high-risk, long-term investments that led to transformative technologies were precisely those the private sector was unwilling to make—not because markets were "failing," but because the direction and purpose needed to be established first. What's required instead is a market-shaping framework that recognizes government's essential role in setting ambitious goals, investing in capabilities, and tilting the playing field toward solving societal challenges. This isn't about supplanting markets but rather giving them direction through missions that mobilize diverse actors toward common objectives. By focusing on problems to be solved rather than failures to be fixed, government can catalyze innovation across sectors and create new economic opportunities that wouldn't otherwise exist. The consequences of continuing with the market failure mindset are severe: anemic responses to urgent challenges like climate change, rising inequality, and technological transformation. When government agencies lack the confidence, resources, and capabilities to lead, they inevitably defer to external consultants and private contractors, further diminishing their ability to act in the public interest. Breaking free from these constraining myths requires both new economic thinking and practical reforms in how public institutions operate, invest, and collaborate with other sectors.

Chapter 3: The Apollo Program: Lessons in Public-Sector Leadership

The Apollo moon landing serves as a powerful case study in what government can achieve when it adopts a mission-oriented approach. Kennedy's 1962 commitment to "landing a man on the moon and returning him safely to Earth" within the decade established a clear, ambitious goal with a defined timeline. This mission provided a focal point around which NASA could organize resources, talents, and technologies from across society. Kennedy was forthright about the tremendous costs and uncertainties involved, yet he framed these not as obstacles but as necessary investments in an "act of faith and vision" that would transform technological capabilities and inspire the nation. NASA's approach to this mission embodied principles that remain relevant for tackling today's complex challenges. Rather than micromanaging the specific technological pathways, NASA established the overall direction while encouraging bottom-up innovation and experimentation. This created space for the emergence of multiple solutions to complex problems. When faced with the fundamental question of how to reach the moon, NASA evaluated three distinct approaches before selecting lunar orbit rendezvous as the most feasible strategy, despite its inherent risks. The organization embraced failure as a necessary part of the learning process, even as tragic events like the Apollo 1 fire demonstrated the stakes involved. What made Apollo successful was not just technological innovation but organizational transformation. Under George Mueller's leadership, NASA developed new management systems that broke down traditional departmental silos and improved communication across the vast network of contractors, scientists, and engineers. Mueller introduced a "matrix management" system where teams reported both to their direct superiors and to central leadership, ensuring information flowed horizontally and vertically throughout the organization. This organizational innovation allowed NASA to coordinate complex, interdependent projects while maintaining flexibility and adaptability in the face of emerging challenges. The contracts between NASA and private companies were structured to align incentives with mission outcomes rather than merely maximizing contractor profits. Moving away from cost-plus contracts that provided little incentive for efficiency, NASA developed procurement approaches that rewarded performance while ensuring quality wasn't sacrificed for cost savings. Importantly, NASA maintained strong in-house expertise and capabilities, enabling effective oversight of contractors and preventing capture by private interests. The agency could speak the technical language of its partners while keeping mission objectives paramount. The Apollo program's spillover effects extended far beyond space exploration. Technologies developed for the mission spawned entire new industries, from integrated circuits that revolutionized computing to advances in materials science, telecommunications, medicine, and countless other fields. But perhaps more significant were the organizational and managerial innovations that emerged from the mission-oriented approach. These demonstrated that public agencies could be dynamic, adaptive learning organizations capable of managing complex undertakings with remarkable effectiveness—a lesson too often forgotten in contemporary discussions of government's capabilities and proper role.

Chapter 4: Mission-Oriented Policies: Creating Markets for Societal Challenges

Today's global challenges—from climate change and public health crises to digital inequality—demand the same bold, mission-oriented approach that characterized the Apollo program. Unlike purely technological moonshots, however, these "wicked problems" involve complex interactions between technological, social, political, and behavioral factors. The United Nations Sustainable Development Goals (SDGs) exemplify these multifaceted challenges, spanning issues from poverty and health to climate action and gender equality. Addressing them requires not just fixing market failures but actively creating and shaping markets toward purposeful outcomes. Mission-oriented policies begin by identifying grand challenges and translating them into concrete, ambitious, measurable goals. Rather than focusing on supporting specific sectors or technologies, they organize diverse actors around problem-solving. For example, a climate mission might target "100 carbon-neutral cities by 2030," mobilizing innovations across urban planning, energy, transportation, construction, and digital technologies. This cross-sectoral approach avoids the limitations of traditional siloed policymaking while providing a clear direction for both public and private investment. Implementing such missions requires new policy instruments and governance approaches. Traditional grant programs and tax incentives must be complemented by outcome-focused procurement, prize competitions, and blended financing mechanisms that reward problem-solving rather than simply subsidizing research or businesses. The European Commission has embraced this approach by incorporating missions into its Horizon research program, identifying five mission areas including cancer, climate adaptation, ocean health, climate-neutral cities, and soil health. Each mission area brings together diverse sectors and stakeholders around specific, measurable goals. These missions must be designed to engage citizens as active participants rather than passive beneficiaries. Unlike the top-down Apollo program, contemporary missions addressing social challenges require meaningful public engagement in both defining goals and implementing solutions. Sweden's street-based mission to ensure "every street is healthy, sustainable and vibrant" exemplifies this approach, involving local communities in reimagining public spaces. Such citizen participation enhances both the legitimacy and effectiveness of missions by incorporating diverse perspectives and fostering collective ownership. The real power of missions lies in their ability to catalyze investments and innovations that wouldn't otherwise occur. By signaling clear directions for solving societal problems, missions shape expectations about future opportunities, helping to "crowd in" private investment. They create new markets rather than simply fixing existing ones. Germany's Energiewende (energy transition) exemplifies this market-creating approach, setting clear targets for renewable energy adoption while reforming regulatory frameworks and financial support mechanisms to enable a systemic transformation of the energy sector. Though not without challenges, such mission-oriented policies demonstrate how purposeful direction-setting can mobilize collective action toward ambitious goals that market forces alone would not achieve.

Chapter 5: Purpose-Driven Public-Private Partnerships: Sharing Risks and Rewards

Traditional public-private partnerships often fail to deliver on their promises, resulting in higher costs, diminished service quality, and private profits at public expense. Many governments have pursued outsourcing and privatization based on the flawed assumption that the private sector is inherently more efficient and innovative than the public sector. Yet these arrangements frequently lead to what might be called "parasitic" rather than "symbiotic" relationships, where value extraction displaces genuine value creation. Mission-oriented partnerships require a fundamentally different approach—one focused on common purpose and equitable sharing of both risks and rewards. During the Apollo program, NASA's relationships with private contractors exemplified this alternative model. Rather than simply outsourcing work, NASA maintained strong in-house capabilities that enabled effective oversight and direction. Contracts were structured to reward performance and quality rather than merely cutting costs. When Grumman's initial designs for the Lunar Module proved inadequate, NASA pushed the company to fundamentally rethink its approach, spurring innovations that might never have emerged in a conventional contracting relationship. The principle of shared risks and rewards is essential to purpose-driven partnerships. When public investments lead to commercial successes, taxpayers deserve a fair return on their collective investment. This might take various forms: equity stakes, revenue-sharing agreements, or conditions ensuring that publicly funded innovations remain affordable and accessible. For instance, when pharmaceutical companies commercialize drugs developed with substantial public research funding, pricing and patent arrangements should reflect this joint contribution. The COVID-19 pandemic highlighted this issue as governments invested billions in vaccine development without corresponding mechanisms to ensure equitable access to the resulting products. Conditionality represents a powerful tool for aligning private activity with public purpose. Rather than providing unconditional subsidies or contracts, governments can attach requirements related to pricing, reinvestment in research, worker training, environmental standards, or other public interest objectives. Denmark, for example, excluded companies using tax havens from COVID-19 relief programs. Such conditions help ensure that public support fosters behavior consistent with mission objectives rather than subsidizing business-as-usual or value extraction. The digital economy presents particularly challenging partnership questions. Tech giants like Google, Facebook, and Amazon have built their businesses on technologies initially developed with public funding, from the internet itself to artificial intelligence algorithms. Yet the economic value generated by these platforms is distributed highly unequally, with data—collectively created by users—becoming a source of monopoly profits rather than public benefit. Cities like Barcelona have begun exploring alternative approaches, creating "data commons" that ensure citizen control over collectively generated data while enabling innovation that serves public purposes. Reimagining partnerships requires moving beyond the false binary of "public versus private" toward recognizing their fundamentally complementary roles in addressing societal challenges. Neither sector alone possesses all the capabilities, resources, and legitimacy needed to tackle complex problems. Purpose-driven partnerships leverage the unique strengths of each sector while ensuring that collaboration serves public objectives rather than narrow private interests. This represents not a retreat from market economics but rather a more sophisticated understanding of how markets can be shaped to deliver both innovation and public value.

Chapter 6: Developing Dynamic Capabilities in Public Organizations

Public organizations often suffer from rigid structures, risk aversion, and fragmented responsibilities that impede their ability to address complex challenges. These limitations stem not from inherent features of government but from decades of ideologically driven reforms that have steadily undermined public sector capabilities. The New Public Management movement, with its emphasis on outsourcing, performance metrics borrowed from business, and structural fragmentation, has left many agencies unable to develop and maintain the dynamic capabilities needed for mission-oriented policies. Dynamic capabilities—the ability to integrate, build, and reconfigure competencies to address changing environments—are essential for organizations tackling complex problems under conditions of uncertainty. In the private sector, management scholars like Edith Penrose and David Teece have emphasized these capabilities as sources of competitive advantage. Yet public management theory has largely neglected their importance for government agencies, focusing instead on static efficiency and market-mimicking reforms. This oversight has real consequences, as agencies struggle to develop the skills, processes, and structures needed for adaptive problem-solving. The Apollo program demonstrates what dynamic public capabilities look like in practice. NASA developed organizational structures that balanced centralized direction with decentralized execution, enabling both coherent strategy and experimental problem-solving. Its matrix management approach facilitated information flows across disciplinary and organizational boundaries. The agency invested heavily in internal expertise, allowing it to evaluate contractors' work critically and avoid capture by private interests. Most importantly, NASA fostered a culture that valued learning, adaptation, and mission focus over rigid adherence to rules or procedures. Building dynamic capabilities in contemporary public organizations requires investment in several core competencies. First, agencies need strategic leadership capabilities that can articulate clear missions and engage diverse stakeholders. Second, they require coordination capabilities to work across departmental boundaries and policy domains. Third, they need robust administrative capabilities supported by diverse expertise and skills. Fourth, they must develop capacities for risk-taking and experimentation, including mechanisms for learning from both successes and failures. Finally, they need evaluation capabilities that can assess progress toward mission objectives using dynamic rather than static metrics. The hollowing out of these capabilities through outsourcing represents a particularly dangerous trend. When governments routinely rely on consultants for core functions, they lose not just immediate control but also the opportunity to develop institutional knowledge and skills. The UK's response to COVID-19 illustrates this problem: rather than building internal test-and-trace capabilities as Germany did, the UK government outsourced the system to private consultants at enormous cost with disappointing results. As Lord Agnew noted, this approach not only proves expensive but "infantilizes" the civil service by depriving staff of opportunities to develop crucial skills. Reversing this trend requires recognizing that effective mission-oriented policies depend on strong, capable public organizations. This means investing in recruitment, training, and retention of talented staff; creating organizational structures that facilitate cross-boundary collaboration; developing management systems that encourage appropriate risk-taking; and building evaluation frameworks focused on learning rather than compliance. It also means resisting the temptation to outsource core functions and instead building partnerships that complement rather than substitute for public capabilities. The goal is not to replicate private sector approaches but to develop distinctively public capacities for addressing complex societal challenges.

Chapter 7: A New Political Economy: Seven Principles for Transforming Capitalism

The mission-oriented approach requires a fundamental reconceptualization of our economic system—one that goes beyond tinkering with existing structures to address their root dysfunctions. Drawing on both theoretical insights and practical experiences, seven core principles emerge that together constitute a new political economy for addressing society's greatest challenges. First, we must reconceive value as collectively created rather than the product of individual genius or market mechanisms alone. Markets themselves are outcomes of how organizations are governed and how they interact with one another. This means moving beyond the simplistic view that businesses create value while government merely redistributes it, toward recognizing the symbiotic relationships through which public and private actors together generate prosperity. The concept of public purpose provides a guiding principle for this collective value creation, focusing economic activity on addressing societal needs rather than maximizing shareholder returns. Second, government's role must shift from market-fixing to market-shaping. Rather than merely correcting specific market failures, public institutions need to actively set directions for innovation and investment by establishing ambitious missions. This involves deploying a full range of policy tools—from procurement and grants to regulations and taxes—to tilt the playing field toward solving societal challenges. The climate crisis, for instance, requires not just carbon pricing but strategic investments in clean technologies, regulatory frameworks that accelerate adoption, and new infrastructures that enable systemic transformation. Third, both public and private organizations need to develop dynamic capabilities for experimentation, learning, and adaptation. Static efficiency metrics focused on short-term outcomes must give way to more dynamic approaches that value long-term innovation and problem-solving. For public agencies, this means investing in skills, structures, and cultures that enable effective engagement with complex challenges. For businesses, it means moving beyond quarterly financial targets toward longer-term measures of success aligned with mission objectives. Fourth, finance must be reconceived as serving real economic outcomes rather than its own interests. Budget discussions should begin with what needs to be done rather than what can be afforded. Long-term, patient capital is essential for addressing challenges like climate change or infrastructure development, requiring new financial institutions and instruments aligned with mission timeframes. Public investment in particular must be evaluated based on its dynamic impact rather than through static cost-benefit analyses that fail to capture transformative potential. Fifth, a more equitable distribution of value requires attention to predistribution—the initial conditions under which value is created and shared—not just redistribution through taxes and transfers. If value is created collectively, its rewards should reflect the contributions of all stakeholders. This might involve new ownership models, broader participation in decision-making, or mechanisms ensuring public returns on public investments. The current system that socializes risks while privatizing rewards must give way to more balanced arrangements that recognize the collective nature of innovation. Sixth, partnerships between public and private actors need to be structured around shared purpose and mutual benefit rather than value extraction. This means moving beyond traditional contracting or subsidy approaches toward more genuinely collaborative relationships with clear conditions and fair sharing of both risks and rewards. In areas from healthcare to digital platforms, such purpose-driven partnerships can align private incentives with public objectives while preserving the distinctive strengths of each sector. Finally, genuine participation must be embedded throughout economic decision-making processes. Citizens should be engaged not just as consumers or beneficiaries but as active co-creators of solutions to societal challenges. This requires new forums and mechanisms for deliberation, feedback, and collective action, from citizen assemblies to participatory budgeting. The complexity of today's challenges demands drawing on diverse perspectives and experiences rather than relying on narrow technocratic approaches. Together, these principles outline not just incremental reforms but a transformative vision for reshaping capitalism around public purpose. By reimagining government as an entrepreneurial, market-creating force and reconfiguring public-private relationships around shared missions, we can build an economic system capable of addressing our most pressing societal challenges while delivering more widely shared prosperity.

Summary

The transformation of capitalism through mission-oriented innovation represents not merely a theoretical proposition but an urgent practical necessity. Our current economic system—characterized by short-termism, excessive financialization, and growing inequality—has proven woefully inadequate in addressing existential challenges from climate change to pandemics. By reimagining government as an entrepreneurial, direction-setting force rather than just a market fixer, we can harness the creative potential of both public and private sectors toward solving society's greatest problems. This approach doesn't abolish markets but rather shapes them purposefully, creating new opportunities for innovation while ensuring broader distribution of risks and rewards. The ultimate insight of mission-oriented thinking is that economic systems are not inevitable outcomes of natural laws but human constructions that can be redesigned to serve our collective purposes. Just as the Apollo program mobilized unprecedented innovation by focusing diverse actors on landing humans on the moon, today's missions can catalyze transformative change across sectors and disciplines. Whether creating carbon-neutral cities, developing accessible healthcare, or bridging digital divides, such missions provide both direction and purpose for economic activity. The question is not whether we can afford such ambition, but whether we can afford to continue without it. By developing new capabilities, governance structures, and partnerships guided by public purpose, we can build an economy that works for people and planet alike—a mission worthy of our greatest collective efforts.

About Author

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Mariana Mazzucato

Mariana Mazzucato (PhD) is Professor in the Economics of Innovation and Public Value at University College London, where she directs the Institute for Innovation and Public Purpose. Her best selling books include The Entrepreneurial State, The Value of Everything and Mission Economy. Her many prizes include the 2020 John von Neumann Award and the 2018 Leontief Prize for Advancing the Frontiers of Economic Thought. She is Chair of the World Health Organization’s Council on the Economics of Health for All and a member of the UN High Level Advisory Board for Economic and Social Affairs.

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