Mariana Mazzucato: Governments must embrace failure for innovation, the UK’s COVID-19 spending revealed inefficiencies, and a mission-oriented industrial strategy is essential | Odd Lots

Government reliance on consultants exposes critical weaknesses in state capacity and economic strategy.

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Add us on Google by Editorial Team May. 8, 2026

Key Takeaways

• Governments need to embrace a culture that accepts failure as part of the innovation process.
• The UK’s reliance on consultants during COVID-19 highlighted inefficiencies in government spending.
• Industrial strategy should focus on solving significant societal challenges rather than supporting specific sectors.
• Government spending alone does not equate to effective industrial policy.
• Dynamic capabilities in government are essential for responding effectively to challenges.
• Inter-ministerial coordination is crucial for addressing complex societal issues.
• Traditional economic views limit the development of dynamic capabilities in government.
• The widespread use of consultants in government reflects a failure of state capacity.
• ‘Consultification’ has weakened businesses and distorted economies.
• Effective governance requires a shift from reactive to proactive economic policies.
• Governments often lack the capabilities needed for effective policy-making.
• The reliance on consultants is a symptom of underlying weaknesses in state capacity.
• Mission-oriented approaches can redefine industrial strategy to tackle big problems.
• Economic dogma has hindered the development of effective government capabilities.
• Collaborative governance is essential, especially in times of crisis.

Guest intro

Mariana Mazzucato is Professor in the Economics of Innovation and Public Value at University College London and Founding Director of the UCL Institute for Innovation and Public Purpose. She is the author of Mission Economy: A Moonshot Guide to Changing Capitalism, which draws on the Apollo program’s model to advocate for bold public-private missions tackling challenges like climate change and inequality.

Embracing failure in government innovation

• Governments need to change their narrative to support innovation and accept failure as part of the process.

• They really wanna ask me you know what does that mean what does it mean for actually even being able to fail for example right so venture capitalists are always bragging about all the failures that they had in order to get a success… whereas as soon as a civil servant or a minister fails or a prime minister fails front page of the papers.

  — Mariana Mazzucato

• Understanding the cultural differences between private sector risk-taking and public sector accountability is crucial.
• This insight highlights the need for a shift in how government officials perceive failure.
• Governments should adopt a mindset similar to venture capitalists regarding failure.
• Accepting failure can lead to greater innovation and success in public sector initiatives.
• The stigma surrounding failure in government needs to be addressed.
• Embracing failure can foster a more innovative and resilient public sector.

Inefficiencies in government spending during COVID-19

• The UK government wasted significant resources on consultants during the pandemic.

• Instead of you know hiring deloitte during covid and giving them 1,500,000 a day to do test and trace which they failed at in the uk.

  — Mariana Mazzucato

• Knowledge of the UK’s COVID-19 response and the role of private consultants is important.
• This claim underscores the inefficiencies in government spending.
• Outsourcing critical public services can lead to significant pitfalls.
• Government reliance on consultants reflects a lack of internal capacity.
• The pandemic highlighted the need for more efficient government spending.
• Effective use of resources is crucial for successful public health initiatives.

Rethinking industrial strategy

• Industrial strategy should focus on solving big problems rather than specific sectors.

• What I’ve been trying to do is to say stop focusing on sectors technologies and firms focus on big problems right as bold as going to the moon and back at a short amount of time this is the mission idea.

  — Mariana Mazzucato

• Understanding the distinction between traditional and mission-oriented approaches is key.
• This insight emphasizes a strategic shift in industrial policy.
• Addressing significant challenges requires a broader focus beyond individual sectors.
• Mission-oriented strategies can lead to more impactful industrial policies.
• The focus should be on societal challenges rather than specific technologies.
• A mission-driven approach can redefine the goals of industrial strategy.

The complexity of government roles in innovation

• Government spending does not automatically equate to a strategic industrial policy.

• Just because government’s spending a lot of money… that means that industrial strategy is back or that you know government is being really strategic it depends.

  — Mariana Mazzucato

• Recognition of the nuances in government investment is necessary.
• This claim highlights the complexity of government roles in innovation.
• A more thoughtful approach to industrial policy is needed.
• Effective industrial strategy requires more than just financial investment.
• Strategic planning is crucial for successful government innovation.
• The effectiveness of government spending depends on strategic alignment with policy goals.

The importance of dynamic capabilities in government

• Governments often lack dynamic capabilities essential for responding to challenges.

• What states are often what governments are often lacking are those kind of dynamic capabilities… capacity is you know number of people working in your administration the budget that’s been allocated perhaps also the training you know that the civil service actually has but capabilities are what you actually then do with it.

  — Mariana Mazzucato

• Understanding the distinction between state capacity and capabilities is important.
• This insight provides a clear distinction between structural aspects and capabilities.
• Effective governance requires more than just resources and personnel.
• Dynamic capabilities enable governments to adapt and respond to challenges.
• Building capabilities is crucial for effective policy implementation.
• Governments need to focus on developing dynamic capabilities for better governance.

The need for inter-ministerial coordination

• Inter-ministerial coordination is crucial for addressing complex societal challenges.

• That inter ministerial coordination which we saw during covid… because we had these really difficult challenges but as soon as covid stops we go back to very siloed ways of thinking.

  — Mariana Mazzucato

• Recognizing the importance of collaboration across government sectors is key.
• This opinion highlights the need for collaborative governance.
• Effective coordination can lead to more comprehensive solutions.
• Siloed thinking limits the ability to address complex issues.
• Collaborative approaches can enhance government effectiveness.
• Coordination across ministries is essential for tackling significant challenges.

Shifting from traditional economic views

• Dynamic capabilities in government require a shift from traditional economic views.

• As soon as you say actually it’s about shaping and cocreating a different type of economy and society that works for people and planet then the question is what does that mean for the capabilities that you need.

  — Mariana Mazzucato

• Understanding the limitations of traditional economic theories is crucial.
• This insight highlights the need for a fundamental change in government approaches.
• Proactive strategies are needed to address economic and social challenges.
• Traditional views limit the development of dynamic capabilities in government.
• A shift in economic perspectives can lead to more effective governance.
• Governments should focus on shaping economies that work for people and the planet.

The impact of ‘consultification’ on economies

• The widespread use of consultants in government reflects a failure of state capacity.

• I always wonder how we got to the point where consultants are so big anyway because it feels like every time you hire a consultant it’s almost an admission of failure on your part to be able to do something right.

  — Mariana Mazzucato

• Understanding the role of consultants in government is important.
• This insight critiques the reliance on consultants in governance.
• ‘Consultification’ has weakened businesses and distorted economies.

• My last book actually was called the big con so con for consulting and the subtitle was how we’ve weakened businesses and infantilized our governments and warped our economies basically due to this consultification.

  — Mariana Mazzucato

• The reliance on consultants highlights underlying weaknesses in state capacity.
• Effective governance requires building internal capabilities rather than outsourcing.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.