It 's hard to believe that it 's less than a year since the extraordinary moment when the finance , the credit , which drives our economies froze .
A massive cardiac arrest .
The effect , the payback , perhaps , for years of vampire predators like Bernie Madoff , whom we saw earlier .
Abuse of steroids , binging and so on .
And it 's only a few months since governments injected enormous sums of money to try and keep the whole system afloat .
And we 're now in a very strange sort of twilight zone , where no one quite knows what 's worked , or what does n't .
We do n't have any very clear maps , any compass to guide us .
We do n't know which experts to believe anymore .


What I 'm going to try and do is to give some pointers to what I think is the landscape on the other side of the crisis , what things we should be looking out for and how we can actually use the crisis .
There 's a definition of leadership which says , `` It 's the ability to use the smallest possible crisis for the biggest possible effect . '' And I want to talk about how we ensure that this crisis , which is by no means small , really is used to the full .


I want to start just by saying a bit about where I 'm coming from .
I 've got a very confused background which perhaps makes me appropriate for confused times .
I 've got a Ph.D. in Telecoms , as you can see .
I trained briefly as a Buddhist monk under this guy .
I 've been a civil servant , and I 've been in charge of policy for this guy as well .


But what I want to talk about begins when I was at this city , this university , as a student .
And then as now , it was a beautiful place of balls and punts , beautiful people , many of whom took to heart Ronald Reagan 's comment that , `` even if they say hard work does n't do you any harm , why risk it ? ''


But when I was here , a lot of my fellow teenagers were in a very different situation , leaving school at a time then of rapidly growing youth unemployment , and essentially hitting a brick wall in terms of their opportunities .
And I spent quite a lot of time with them rather than in punts .
And they were people who were not short of wit , or grace or energy , but they had no hope , no jobs , no prospects .
And when people are n't allowed to be useful , they soon think that they 're useless .
And although that was great for the music business at the time , it was n't much good for anything else .
And ever since then , I 've wondered why it is that capitalism is so amazingly efficient at some things , but so inefficient at others , why it 's so innovative in some ways and so un-innovative in others .


Now , since that time , we 've actually been through an extraordinary boom , the longest boom ever in the history of this country .
Unprecedented wealth and prosperity , but that growth has n't always delivered what we needed .
H.L . Mencken once said that , `` to every complex problem , there is a simple solution and it 's wrong . '' But I 'm not saying growth is wrong , but it 's very striking that throughout the years of growth , many things did n't get better .
Rates of depression carried on up , right across the Western world .
If you look at America , the proportion of Americans with no one to talk to about important things went up from a tenth to a quarter .
We commuted longer to work , but as you can see from this graph , the longer you commute the less happy you 're likely to be .
And it became ever clearer that economic growth does n't automatically translate into social growth or human growth .


We 're now at another moment when another wave of teenagers are entering a cruel job market .
There will be a million unemployed young people here by the end of the year , thousands losing their jobs everyday in America .
We 've got to do whatever we can to help them , but we 've also got to ask , I think , a more profound question of whether we use this crisis to jump forward to a different kind of economy that 's more suited to human needs , to a better balance of economy and society .


And I think one of the lessons of history is that even the deepest crises can be moments of opportunity .
They bring ideas from the margins into the mainstream .
They often lead to the acceleration of much-needed reforms .
And you saw that in the '30s , when the Great Depression paved the way for Bretton Woods , welfare states and so on .
And I think you can see around us now , some of the green shoots of a very different kind of economy and capitalism which could grow .
You can see it in daily life .
When times are hard , people have to do things for themselves , and right across the world , Oxford , Omaha , Omsk , you can see an extraordinary explosion of urban farming , people taking over land , taking over roofs , turning barges into temporary farms .


And I 'm a very small part of this .
I have 60,000 of these things in my garden .
A few of these . This is Atilla the hen .
And I 'm a very small part of a very large movement , which for some people is about survival , but is also about values , about a different kind of economy , which is n't so much about consumption and credit , but about things which matter to us .
And everywhere too , you can see a proliferation of time banks and parallel currencies , people using smart technologies to link up all the resources freed up by the market -- people , buildings , land -- and linking them to whomever has got the most compelling needs .


There 's a similar story , I think , for governments .
Ronald Reagan , again , said the two funniest sentences in the English language are , `` I 'm from the government . And I 'm here to help . '' But I think last year when governments did step in , people were quite glad that they were there , that they did act .
But now , a few months on , however good politicians are at swallowing frogs without pulling a face , as someone once put it , they ca n't hide their uncertainty .
Because it 's already clear how much of the enormous amount of money they put into the economy , really went into fixing the past , bailing out the banks , the car companies , not preparing us for the future .
How much of the money is going into concrete and boosting consumption , not into solving the really profound problems we have to solve .


And everywhere , as people think about the unprecedented sums which are being spent of our money and our children 's money , now , in the depth of this crisis , they 're asking : Surely , we should be using this with a longer-term vision to accelerate the shift to a green economy , to prepare for aging , to deal with some of the inequalities which scar countries like this and the United States rather than just giving the money to the incumbents ?
Surely , we should be giving the money to entrepreneurs , to civil society , for people able to create the new , not to the big , well-connected companies , big , clunky government programs .
And , after all this , as the great Chinese sage Lao Tzu said , `` Governing a great country is like cooking a small fish .
Do n't overdo it .


And I think more and more people are also asking : Why boost consumption , rather than change what we consume ?
Like the mayor of São Paulo who 's banned advertising billboards , or the many cities like San Francisco putting in infrastructures for electric cars .
You can see a bit of the same thing happening in the business world .
Some , I think some of the bankers who have appear to have learned nothing and forgotten nothing .
But ask yourselves : What will be the biggest sectors of the economy in 10 , 20 , 30 years time ? It wo n't be the ones lining up for handouts , like cars and aerospace and so on .


The biggest sector , by far , will be health -- already 18 percent of the American economy , predicted to grow to 30 , even 40 percent by mid-century .
Elder care , child care , already much bigger employers than cars .
Education : six , seven , eight percent of the economy and growing .
Environmental services , energy services , the myriad of green jobs , they 're all pointing to a very different kind of economy which is n't just about products , but is using distributed networks , and it 's founded above all on care , on relationships , on what people do to other people , often one to one , rather than simply selling them a product .


And I think that what connects the challenge for civil society , the challenge for governments and the challenge for business now is , in a way , a very simple one , but quite a difficult one .
We know our societies have to radically change .
We know we ca n't go back to where we were before the crisis .
But we also know it 's only through experiment that we 'll discover exactly how to run a low carbon city , how to care for a much older population , how to deal with drug addiction and so on .


And here 's the problem .
In science , we do experiments systematically .
Our societies now spend two , three , four percent of GDP to invest systematically in new discovery , in science , in technology , to fuel the pipeline of brilliant inventions which illuminate gatherings like this .
It 's not that our scientists are necessarily much smarter than they were a hundred years ago , maybe they are , but they have a hell of a lot more backing than they ever did .
And what 's striking though , is that in society there 's almost nothing comparable , no comparable investment , no systematic experiment , in the things capitalism is n't very good at , like compassion , or empathy , or relationships or care .


Now , I did n't really understand that until I met this guy who was then an 80-year-old , slightly shambolic man who lived on tomato soup and thought ironing was very overrated .
He had helped shape Britain 's post-war institutions , its welfare state , its economy , but had sort of reinvented himself as a social entrepreneur , became an inventor of many , many different organizations .
Some famous ones like the Open University , which has 110,000 students , the University of the Third Age , which has nearly half a million older people teaching other older people , as well as strange things like DIY garages and language lines and schools for social entrepreneurs .
And he ended his life selling companies to venture capitalists .


He believed if you see a problem , you should n't tell someone to act , you should act on it yourself , and he lived long enough and saw enough of his ideas first scorned and then succeed that he said you should always take no as a question and not as an answer .
And his life was a systematic experiment to find better social answers , not from a theory , but from experiment , and experiment involving the people with the best intelligence on social needs , which were usually the people living with those needs .
And he believed we live with others , we share the world with others and therefore our innovation must be done with others too , not doing things at people , for them , and so on .


Now , what he did did n't used to have a name , but I think it 's rapidly becoming quite mainstream .
It 's what we do in the organization named after him where we try and invent , create , launch new ventures , whether it 's schools , web companies , health organizations and so on .
And we find ourselves part of a very rapidly growing global movement of institutions working on social innovation , using ideas from design or technology or community organizing to develop the germs of a future world , but through practice and through demonstration and not through theory .
And they 're spreading from Korea to Brazil to India to the USA and across Europe .
And they 've been given new momentum by the crisis , by the need for better answers to joblessness , community breakdown and so on .


Some of the ideas are strange .
These are complaints choirs .
People come together to sing about the things that really bug them .
( Laughter ) Others are much more pragmatic : health coaches , learning mentors , job clubs .
And some are quite structural , like social impact bonds where you raise money to invest in diverting teenagers from crime or helping old people keep out of hospital , and you get paid back according to how successful your projects are .


Now , the idea that all of this represents , I think , is rapidly becoming a common sense and part of how we respond to the crisis , recognizing the need to invest in innovation for social progress as well as technological progress .
There were big health innovation funds launched earlier this year in this country , as well as a public service innovation lab .
Across northern Europe , many governments now have innovation laboratories within them .
And just a few months ago , President Obama launched the Office of Social Innovation in the White House .


And what people are beginning to ask is : Surely , just as we invest in R and D , two , three , four percent , of our GDP , of our economy , what if we put , let 's say , one percent of public spending into social innovation , into elder care , new kinds of education , new ways of helping the disabled ?
Perhaps we 'd achieve similar productivity gains in society to those we 've had in the economy and in technology .


And if , a generation or two ago , the big challenges were ones like getting a man on the moon , perhaps the challenges we need to set ourselves now are ones like eliminating child malnutrition , stopping trafficking , or one , I think closer to home for America or Europe , why do n't we set ourselves the goal of achieving a billion extra years of life for today 's citizens .
Now those are all goals which could be achieved within a decade , but only with radical and systematic experiment , not just with technologies , but also with lifestyles and culture and policies and institutions too .


Now , I want to end by saying a little bit about what I think this means for capitalism .
I think what this is all about , this whole movement which is growing from the margins , remains quite small .
Nothing like the resources of a CERN or a DARPA or an IBM or a Dupont .
What it 's telling us is that capitalism is going to become more social .
It 's already immersed in social networks .
It will become more involved in social investment , and social care and in industries where the value comes from what you do with others , not just from what you sell to them , and from relationships as well as from consumption .
But interestingly too , it implies a future where society learns a few tricks from capitalism about how you embed the DNA of restless continual innovation into society , trying things out and then growing and scaling the ones that work .


Now , I think this future will be quite surprising to many people .
In recent years , a lot of intelligent people thought that capitalism had basically won .
History was over and society would inevitably have to take second place to economy .
But I 've been struck with a parallel in how people often talk about capitalism today and how they talked about the monarchy 200 years ago , just after the French Revolution and the restoration of the monarchy in France .


Then , people said monarchy dominated everywhere because it was rooted in human nature .
We were naturally deferential . We needed hierarchy .
Just as today , the enthusiasts of unrestrained capitalism say it 's rooted in human nature , only now it 's individualism , inquisitiveness , and so on .
Then monarchy had seen off its big challenger , mass democracy , which was seen as a well-intentioned but doomed experiment , just as capitalism has seen off socialism .
Even Fidel Castro now says that the only thing worse than being exploited by multinational capitalism is not being exploited by multinational capitalism .
And whereas then monarchies , palaces and forts dominated every city skyline and looked permanent and confident , today it 's the gleaming towers of the banks which dominate every big city .


I 'm not suggesting the crowds are about to storm the barricades and string up every investment banker from the nearest lamppost , though that might be quite tempting .
But I do think we 're on the verge of a period when , just as happened to the monarchy and , interestingly , the military too , the central position of finance capital is going to come to an end , and it 's going to steadily move to the sides , the margins of our society , transformed from being a master into a servant , a servant to the productive economy and of human needs .


And as that happens , we will remember something very simple and obvious about capitalism , which is that , unlike what you read in economics textbooks , it 's not a self-sufficient system .
It depends on other systems , on ecology , on family , on community , and if these are n't replenished , capitalism suffers too .
And our human nature is n't just selfish , it 's also compassionate .
It 's not just competitive , it 's also caring .
Because of the depth of the crisis , I think we are at a moment of choice .


The crisis is almost certainly deepening around us .
It will be worse at the end of this year , quite possibly worse in a year 's time than it is today .
But this is one of those very rare moments when we have to choose whether we 're just pedaling furiously to get back to where we were a year or two ago , and a very narrow idea of what the economy is for , or whether this is a moment to jump ahead , to reboot and to do some of the things we probably should have been doing anyway .
Thank you .


( Applause )