Creative destruction – careful what you wish for?

Our director Henry Kippin writes for New Start magazine on ‘creative destruction’ and the need for a more collaborative approach to public policy.

Joseph Schumpeter’s concept of creative destruction has taken on a life of its own.  The economist – who famously described stablised capitalism as ‘a contradiction in terms’ – is now retrospectively (or rather theoretically) looming large over a period of massive flux in public services.

What he posited as an observation on the behaviour of markets has been appropriated as a contemporary metaphor for reform. Is this a problem? Yes and no.  Innovation, creativity and change are clearly vital, but we should perhaps be careful what we wish for.

We should be careful firstly because we are prone to misappropriating the idea of creative destruction.  Post-crisis reform in public services has been less about Schumpeter’s ‘incessant gale’ of reinvention, and more about the selective application of ideologically-driven principles to the role and shape of the state.  Examples are myriad and the chancellor’s recent autumn statement arguably makes the direction of travel clearer than ever.

We should be careful because some consider creative destruction as an end in itself; or, worse, as a means to reshape public services in ways that have nothing to do with the citizens they serve.  There is indeed something ‘creative’ about breaking up monopolies and designing new ways to deliver services to the public.  But only if it helps create value in our communities – and as our forthcoming research suggests, when price is king this message can easily get lost.

It is a problem because thirdly, and most importantly, we now are at risk of destroying the very parts of the public realm from which creativity is most likely to arise.  Eye watering efficiency targets are already old news to local authorities and public services.  But when Birmingham’s Sir Albert Bore is quoted for the umpteenth time stating that ‘local government as we know it is dead’, he is talking about destruction that will potentially strip away that ability of localities to act collectively and creatively in the face of escalating social demand.

Yet as many incipient frameworks for ‘what next’

have recognised, the language of markets is not enough

In his 2009 book on public strategy, Geoff Mulgan amusingly quotes a senior civil servant as saying visions are ‘the things you have before you get locked away’. Certainly this government and probably the next, whatever political combination – is less sympathetic than previous incumbents to top-down planning and systematising change.  The language of markets and entrepreneurialism is therefore alluring – it’s less about distributing and delivering (or what Alexander Stevenson has called ‘managing the unmanageable’), and more about creating the conditions for different types of value to emerge.  This is a good thing in a context in which we need to find new ways of working across the board.

Yet as many incipient frameworks for ‘what next’ have recognised, the language of markets is not enough. Most would accept this. The Big Society, the ‘post-bureaucratic state’, the ‘relational’ state and Jon Cruddas’s proposed shift from ‘transactional to transformative’ all point to a more obvious balance between competition and collaboration; and are founded on the notion that value is created through the strength of relationships. The destruction of monopolies and oligopolies is of course part of this narrative.  But stronger relationships based on supporting the livelihoods of citizens must be the cleaving force.

Policymakers have not yet found a language that links relationships and co-production to the harder edged debates about resource allocation and efficiency.  This should be a priority.  We need to recognise that the pressure to innovate in a harsh social and economic context is not a zero sum game.  The creation of sustainable markets for social goods will come in response to collaboration and interdependency as well as competition, and there is a role for all three sectors – and the diversity of organisations within them – to work together and innovate as part of a new post-crisis settlement for the long term.


This blog was originally posted on the NewStart magazine website. It is part of an article that asks five experts to give their verdicts on what good, if any, has come from this period of renewal and change. The above was contributed by Dr Henry Kippin.

Henry Kippin

About Henry Kippin

Dr Henry Kippin is executive director of Collaborate. He is a visiting fellow at the School of Politics and International Relations at Queen Mary University of London, and at the UNDP Global Centre for Public Service Excellence. Henry was previously a founding partner of the RSA 2020 Public Services Hub, an advisor to Accenture’s global Public Services for the Future programme, and head of research at an international development agency. He has a PhD from the University of Sheffield and is co-editor of ‘Public Services: a new reform agenda’, published in 2013 by Bloomsbury Press.

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