Politicians and Bureaucrats – Friends or Foes of Innovation?

by Dimis Michaelides

Politicians
and bureaucrats are condemned to coexist with each other and with the other
pivots of entrepreneurship: businessmen. Sweet or toxic their symbiosis is
necessary, as they are both key players in the innovation game.

A private
company in a capitalist system will innovate by starting up a new enterprise,
or by improving its products and services, or by launching new products and
services, or by extending its markets, or by reducing its cost base, or by changing
its business model, strategy and structure. In competitive systems, private
companies are learning to adapt to faster change because the alternative is to
wither and die.

Government
has many roles in innovation. First, a direct role in innovation through public
institutions such as universities and research centers. Government can
undertake fundamental research which has large costs and few immediate
commercial benefits like the large Hadron collider, space travel and renewable energy.
Or it can subsidize such research or promising areas. Mariana Mazzucato, a public innovation expert, has shown how 6 of the 8 most important
features of the first smartphone (Apple’s i-phone) were generated by government
or with public funds.

Second,
government is an essential part of the ecosystem for innovation. Government is
fundamental in providing a framework for innovation, including legislation and
regulation on issues of public interest such as personal privacy and genetic
engineering.

Third,
government has a duty to offer citizens the highest possible quality of service
at the best possible cost. The public sector in many countries has innovated
extensively in the areas of health, education, defence, tax collection, public
transport, managing public spaces, and so much more. Many things are far better
accomplished online than in long lines.

Fourth,
many brilliant examples of social innovation, targeting specific groups and
not-for-profit are spearheaded by local or national governments.

Unlike
private firms government does not wither and die. Neither do politicians and public
servants. The question do they address innovation actively or passively or not
at all? Countries where the public sector is open to innovation and change have
proven to be worthy of their citizens’ trust and have boosted their economies
too.

Worthy
businesspersons, politicians and bureaucrats are forward-looking and envision
the tremendous benefits of progressive change as well as the risks involved.
Their appetite for change and risk, however are not the same.

Businesspeople
have learnt they must change at least as fast as their competitors and those disruptive
upstarts, those who are changing the rules their industries. Whilst they too
face resistance to change, they are also more ready and able to overcome this
resistance. As they go through one round of change they brace for another and they
make change part of the life of their organizations. Otherwise they shall
perish.

Public
servants are more change-averse. They are less likely to lose their jobs because
they are often both unionised, 100% secure in their jobs, without meritocratic
performance management and mindsets firmly stuck in the past. They do not
easily welcome deep, innovative.

Politicians
of the vote-mongering type will bend to the wishes of change-averse people,
especially if they come from powerful constituencies, such as the civil
service. And in every change of government new people are quick to denounce
whatever their predecessors have achieved or not.