Not Mind-Stretching Enough
Originality in policymaking is hard. Predicting how a new policy will work in practice, its strategic effect, is even harder. And maybe the hardest thing of all is knowing when to adjust a ‘go-to-market vision’ after it engages with reality, to sift the signals and understand the feedback loops set in motion by a new theory.
The world has reached its Omega Point, a place of maximum complexity and unification.
We have effectively killed off the independent sphere: there is no “out there” that separates the observer from the observed, no clean breaks between systems, no “center” around which to congeal and hold things together, to position the PowerPoints that pretend to portray prescience. What’s changed is the world around us is now within us. The future-that-is-already-here-and-evenly-distributed is featureless, a topography notable more for its unstable character, a place of psychic disintegration, hyper-fragmentation, perpetual crisis and high-velocity evolution.
The European Union last week published a long-awaited draft of its proposed overhaul of laws governing the EU’s $148 billion pharmaceutical market, aimed at reviving investment and boosting access to affordable drugs at a time when health budgets have been drained by the costs of treating COVID-19. “It’s the biggest overhaul of medical laws in two decades, aimed at ensuring all Europeans have access to both innovative new treatments and generic drugs, and ending huge divergences in access and price between countries,” EU health commissioner Stella Kyriakides told reporters after publication.
"There are many things we can do [at the EU level] to influence the ecosystem of pricing," echoed European Commission Vice President Margaritis Schinas, describing the rewrite of pharmaceutical legislation as "epic" and "enormous".
I don’t see the epicness.
If dragged into the daylight and subject to sustained challenge, the EU’s drug reform feels under-conceptualized: it covers a small “surface area” of the $16.6 trillion in EU GDP that is dependent on the ‘production of affordable health’ as the foundation of all economic activity.
Schinas uses the word “ecosystem” in the same buzzy way that many do, as a new word to slap onto an old thing, to replace “complexity” and feign expansiveness. Like “value” in healthcare, “ecosystem” is the vague word that has become the vogue word — here’s the Google Trends search for “business ecosystem” from 2004 to 2014, which I got from a piece in Forbes (The Next Big Business Buzzword: Ecosystem?):
But the EU’s strategic vision is not qualitatively unique, the sort of root and branch reform that will generate a different kind of economic system (“ecosystem”). It is the end result of a conventional thought process that assumed away complexity and the entanglement of connections between markets, and between markets and governments, staying safely in the narrow and well-trodden lane of “drug pricing” as the easy-to-grasp and conventional economic concept for how to think about improving “access” to healthcare and lowering its “cost.”
At a system level, the EU’s drug reform is also policy born from mental fantasy: the idea that any one piece can be isolated from its context and measured with precision. The ‘drug market’ is an input, not an outcome.
“The method of freezing the frame, and including in it only measurable moves, works well enough in the analysis of individual markets in isolation, but it breaks down when applied to a whole economy,” explains Robert Skideslky, a British economic historian in What’s Wrong With Economics?: A Primer for the Perplexed, his critique of mainstream economic theories. Skidelsky takes aim at the way that economics is taught and practiced, particularly models which are “beautiful to behold but of little practical relevance.” Economists, he says, “are forced by the requirements of their own reasoning to squeeze their explanations of human behavior into absurdly narrow channels.”
“Luck Surface Area” by Visualize Value
It’s almost as if economic theory assumes away reality.
Economists almost never start with the facts; there are too many. Their general approach is to represent individual choices as parallel straight lines….to ‘make the crooked timber of humanity straight’….by expanding the zone of exclusion in order to make the subject matter of the enquiry “work” within the requirements of the model. So the thing being studied is forced to fit the math, the analytical model serving as a starting point that leads to an unrealistic destination: that an 'optimum equilibrium' is out there waiting to be discovered and proven.
Healthcare is a ‘nested market’ — its main feature is the density of structural linkages and interactions that cut across domains. By not understanding how to create with complexity, we are missing the moment to develop policy for market interoperability, to cohere the ‘commercial determinants of health’ in a way that positions the ‘production of affordable health’ as a new economic objective.
Stuck in a Low-Earth Orbit
We are, it seems, collectively stuck in a low-Earth orbit of small ideas and zero-sum competition, trapped by the kinetics of cliche and linear solutioning, “space junk” and orbital debris spinning around obsolete definitions of economic progress. Everyone is launching their own satellites, leaving it to someone else ‘out there’ somewhere to manage their interaction and coordination, to figure out the problem of value alignment and outcomes for marketspace shared by everyone.
Assume everybody starts wrong. The art of shaping ‘strategic fit’ (and, conversely, preventing strategic collapse) is to not even bother trying to be right at the outset, or investing too much in expert knowledge of the past. The former is an impossible task; the latter is an inadequate compass to navigate the known unknowable that everyone knows.
Across the arc of human + technology activity and ambition, the ‘large language model’ to shape large-scale change is fluency in systems thinking. It is semantically and conceptually agile, transcontextual and value neutral, able to change orientation as vision and theory interact with the new and unfamiliar environment it created.
Modern strategies think in terms of biology and ecology, an orientation for creativity and competition that works with the laws of nature, not against it, as an infinitely recursive cycle of production and progressive integration of contexts and capabilities. The end state is a new economic system feeding itself with its own energy, a process where markets self-generate and new pools of value form in the space ‘in between’ the words (“ecosystem-centered market strategy”).
Increased life expectancy is the secret sauce behind economic growth. But our vocabulary is ill-suited to guide us through multiple shifting paradigms, wicked problems for a world that has no center and no clean breaks between systems. We need a different orientation to link economic health with public health.
If the objective is outcomes, strategy to shape competitive advantage and financial stability of health and human services organizations, which means everyone, then our innovation agendas will need to start bigger.
In a speech last week, Michael D Higgins, the President of Ireland, gave a blistering critique of policy born from obsolete economic concepts:
“Many economists remain stuck in an inexorable growth narrative, or at best a ‘green growth’ narrative,” he said. “A fixation on a narrowly defined efficiency, productivity, perpetual growth has resulted in a discipline that has become blinkered to the ecological challenge – the ecological catastrophe – we now face.
“That narrow focus constitutes an empty economics which has lost touch with everything meaningful, a social science which no longer is connected, or even attempts to be connected, with the social issues and objectives for which it was developed over centuries. It is incapable of offering solutions to glaring inadequacies of provision as to public needs, devoid of vision.”
The answer is to start at the other end, with outcomes at the center of economic innovation, not “patients”. And the framework to start that new process for creative leadership is one that happens at a system level, through policy innovation to enable the interplay of markets (‘market interoperability’) within the context of new industry ecosystems.
Said differently, healthcare is the Real Wealth of Nations. And industry and government would be better served working collaboratively, around a different set of concepts to guide executive perspective, a new kind of “epic roadmap” that connects the production of economic health + the production of population health into a single unit of value.
The kind of innovation agenda that mind stretches across a larger surface area.
/ jgs
John G. Singer is Executive Director of Blue Spoon, the global leader in positioning strategy at a system level.
Dig Deeper Into Blue Spoon Thinking
