The pensions industry leading the global conversation on the need to fundamentally change how capitalism is viewed and the way finance is organised “would be a great thing”, according to economist and author, Professor Mariana Mazzucato.

Addressing the PLSA Annual Conference 2021, Mazzucato said that pension schemes need to find a meeting point between “patience” and “impatience” to redirect the way investments are made.

“The economy doesn’t just have a rate of growth, it has a direction of growth,” she stated.

“I ask it back to the sector, what is the conversation the pensions industry is having on the direction of the investment itself and do you feel that it is serious?

“How can we have a much more aligned, systemic, mandatory disclosure transparency, and relationship and conditionality, that really fosters that directionality that is talked about at conferences, but in terms of the structures themselves of how the pensions are organised, then doesn’t actually deliver?

“That requires a bit of a mapping exercise: what are your goals, what is being done, why is change not happening, and what can be transformed at the level of both contracts and the design of the tools themselves to deliver on the objectives?”

Mazzucato added that having a global perspective and assessing how certain pension systems deliver on their goals better than others could be beneficial.

Furthermore, she noted that there seemed to be little collaborative feeling between employees and their pension schemes in terms of how pensions can be used as a catalyst for collective value creation.

“You need patient, long-term finance, combined with an urgency for change and redirection,” she continued.

“I don’t think there is any better sector than pensions to be both long-termist but with an urgency in terms of the redirecting of finance business investment and government investment.

“It would be a great thing if the pensions industry could be leading the global conversation of this need to fundamentally change how we view capitalise and organise finance.”

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