The Wake-Up Call | How Can Entrepreneurs Fix Governments

As the second wave of COVID-19 cases is in full swing and governments are dealing with the economic fallout of the first lockdown earlier this year, everyone is looking for solutions of how to tackle the gigantic challenges ahead. Founders Forum brought together a select group of entrepreneurs, policy makers and business leaders to discuss how entrepreneurs can get more involved and bring (tech) innovation — which mostly unfolds in the private sector — to government.

Camilla Cavendish (FT Columnist, Fellow Havard Kennedy School) set the scene with a panel discussion starring John Micklethwait (Editor-in-Chief, Bloomberg News) and Adrian Wooldridge (Political Editor, The Economist); further contributions came from Megan J Smith (SHIFT CEO & former CTO under President Obama), Toomas Hendrik Ilves (former Estonian President), Daniel Korski (Founder, PUBLIC), Peter Mandelson (Chairman Global Counsel) and Andrew Griffith (MP, British Conservative Party).

This was, above all, a call to arms for entrepreneurs to get involved in making government and public services work, but equally for policy makers and public servants to adopt entrepreneurial mindsets and be open for innovation. An effective government that delivers for its people is the probably the strongest weapon against populism in the West: it is time to overcome 20th century divisions between those who believe in government and those who don’t and get on with making public services work for people who need them.

Beyond that there were three key takeaways:

(Big) government isn’t going anywhere, we might as well make it work

One key observation from how different countries handled the pandemic is that government matters, maybe more than ever in our lifetime. It matters who is in government and how they approach problems. It matters because it can unfortunately become a matter of life and death.

The challenges ahead will require not just a big but above all a functional government. The pandemic is far from over and the economic and social consequences will require more government intervention for years to come.

Countries across Asia (and some places like Germany) have shown the upside of effective governments. The death toll of these countries is often 20–30x better than Britain or America, a massive performance difference that we wouldn’t have thought possible a few decades ago, when America was putting man on the moon while the majority of Asian countries faced high levels of poverty.

Looking at the challenges ahead, these countries may equally outperform whether it’s in getting their economies back on track, in education or in innovation. John Micklethwait was very much on point, saying:

“COVID was like an examination, some governments did well, some governments did not.”

Western countries have long been caught up fighting about the acceptable size of governments — those arguments now fade in comparison to the vast interventions made during 2020. But there’s often a sense among the entrepreneurial community that they’ve succeeded despite the power of government and not because of it. Silicon Valley is traditionally critical of big government, often oblivious to the fact that many key innovations are a direct result of government funded basic research.

Wherever you stand on this, the reality is that governments in the West will continue to have a strong role to play in the coming years — and big government is likely only going to get bigger in the short term — so entrepreneurs might just as well get involved to make it work.

We’re living in a knowledge economy, and we need to bring this knowledge to government

There’s a huge disconnect between government and the private sector in many Western countries that has emerged in the last decades. While previously it was common for business leaders to serve in government, many successful business leaders and the best talent now turn their back on it, looking for challenging environments and bigger rewards in the private sector.

That doesn’t need to be the case: Estonia is a prime example of how a revolving door between government and the private sector can be hugely beneficial, and other countries like Singapore manage to attract the best talent into government. As Camilla Cavendish put it:

“When you’re meeting with the top civil servants in Singapore it’s like having a meeting with Goldman Sachs.”

There’s obviously a huge potential conflict of interest issue whenever business and government become too intertwined, and Western democracies have typically been rightly suspicious of business leaders who get too active in politics (with some notable exceptions).

But the challenges ahead can only be solved if we use the collective brainpower of our top talent — and today, that is often found in the tech sector. Governments need to make it attractive to work in the public sector — that includes higher financial upsides and a more risk-taking environment. Governments should also spend some time fixing the image of the public sector so that people take pride in working for the government, like they used to. Undoubtedly this goes hand in hand with making the public services work, creating a chicken and egg problem.

“You don’t want Jeff Bezos to become a cabinet minister, but you want a cabinet minister to have Jeff Bezos on speed dial.” (Camilla Cavendish)

While technologists like Mark Zuckerberg or Jeff Bezos might be outstanding innovators who are able challenge and change entire industries, we’re currently witnessing an inability of the same Silicon Valley elite to deal with the social and legal consequences that come with the changes they spearhead. Asking technology entrepreneurs to run government is clearly not the answer: broadly speaking, they’re not equipped to navigate the democratic process and might also lack an understanding of policy making and the law, let alone the philosophy upon which it’s based.

The answer is rather to get entrepreneurs and business leaders to support government and invite them to pitch solutions to the major challenges that the government is trying to solve. Having entrepreneurs in the room and playing an active role is key — and that doesn’t mean letting them call the shots. Megan J Smith put it this way:

“Government is only whoever shows up. (…) And if certain sectors are so busy in the private sector and not rotating in to serve the way lawyers, policy makers or others do, then the technical people are always not in the room, which is a mistake.”

Public servants and policy makers should also adopt some of the entrepreneurial traits that enable them to be innovative, namely being less risk-averse, creating a culture of experimentation and adopting a problem solving mindset.

Of course there’s an inherent limit on how much risk governments should take: these decisions often have huge consequences. But then ‘the biggest risk is not to take any risk’ also applies to governments, how they procure services and reward contracts and how they approach big challenges. Governments need to be in a position to experiment safely with new solutions.

What’s next?

The fact that Founders Forum is able to bring together a group of entrepreneurs to discuss innovation in government is a sign that the entrepreneurial community wants to get more involved and I am happy to see this happening in Germany and in the UK. It is now up to politicians to give entrepreneurs the ability to participate and be heard.

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Hendrik Jandel

Founders Intelligence | Strategy Consulting, Technology Investments & Acquisitions, New Ventures