Paying for Outcomes: Innovative Funding Tools for the Public Sector

5/17/2021

Ashley Putnam: Welcome to our third episode of Workforce Realigned, a special five-episode podcast series within Economy Matters that explores how innovative finance is reshaping the future of work. Workforce Realigned is a production of the Federal Reserve Banks of Atlanta and PhiladelphiaOff-site link in partnership with Social FinanceOff-site link. My name is Ashley Putnam. I direct the economic growth and mobility project at the Federal Reserve Bank of Philadelphia, and I'm delighted to be your host. Last episode, we spoke a little bit about the impact revolution and innovative partnerships around outcomes-based financing that are driving companies and investors away from just thinking about profit to thinking about investments in impact.

Today, I'm excited to dig in a little more about some specific tools and the way that government can be a partner in this impact revolution. I'm thrilled to welcome two very impressive guests today, Deval Patrick, the former governor of Massachusetts and founder and chairman at the Together Fund, as well as Paul Ryan, the former speaker of the U.S. House of Representatives and president of the American Idea Foundation. Governor Patrick and Speaker Ryan, we're happy to have you. I'm going to have my first question to Governor Patrick. As governor of Massachusetts, you supported the nation's first state-level social impact bond, and that was huge. Can you tell us a little more about why this was interesting and how you got this idea started?

Deval Patrick: Thank you very much for the invitation. It's an honor to participate alongside Speaker Ryan. Great to be with you. I think there are two things that jumped out at me as real opportunities around social impact bonds. The first, a general observation, which is to say that in public programs just like anything and everything else, we should be open to innovation, but successful innovation in my experience requires we raise our tolerance for failure and politics tends to punish failure. So I think we get less innovation in public policy than sometimes we like, so I thought here's a great opportunity to try something using not public funds to get a proof of concept which then could be brought to our legislature and other decision makers about scaling things that work. So that, to me, responds to the promise of social impact bonds. The other has a lot to do with political leadership because one of the things you find, I'd be interested in whether the speaker has seen this at the federal level, is the new thing comes in on top of the old thing rather than instead of the old thing because every line item has its own advocacy groups. So trying really to take that proof point and use it to substitute for what we used to do and scale programs is a big, big political challenge still, and it certainly was at the time when I was in office.

Putnam: Oh, fantastic. And I think you're touching on something that is very near and dear to my heart, which is how can we get to innovation if we are so afraid of taking risks and so afraid of failure, in the public sector particularly. I came from public sector background before my role at the Federal Reserve Bank, and a lot of my job has been to try to help people think about innovations. And speaker Ryan, you have been a huge proponent of these kinds of innovations, of paying for what works, right? Of poverty programs that are actually achieving their goal. And in the book, you wrote a bit about this precedent of the social impact bonds that Governor Patrick mentioned. What can we learn from that history of that work and some of the other things you've really looked into around performance-based contracting?

Paul Ryan: Yeah. Well, Ashley, thanks for having me—appreciate it. And Governor Patrick, it's nice to be with you. Yeah. We looked at this. I've been working on this for years, and we looked at the history of sort of pay-for-performance models. And there's been a lot of trial and error and a lot of error and not enough trial, I would say. And we wanted to address some of the shortcomings that pay-for-success programs have had in the past, namely sort of the cherry-picking. Inside of these program designs, you can build a bias for trying to just cherry-pick the people that will give you the best outcomes or to rig the results so that you get the desired outcome on paper but not necessarily in a person's life. And so we wanted to learn from the mistakes of the past on what pay-for-success programs have had in the past and build new models that really truly get us toward an outcome-based policymaking. And I think we're really turning the corner on this.

That's why we did SIPPRA. I think there are some new innovations and new efforts out there that truly show we can design outcome-based policies that truly rebuild upper mobility to get people out of poverty and as [the] governor mentioned a minute ago, the challenge is you stack the old on top of the new or the new on top of the old, and there's only so many resources to go around. What we're trying to do is break through is to replace ineffective programs with effective programs and I think this is bipartisan. And the last point I would make is, a lot of the poverty fights that I got involved in on trying to redesign programs to make them more effective, you end up getting in these partisan ideological clashes. Maybe it's just entrenched special interests that like the status quo that have organized their way around the status quo and want to keep the status quo, both parties get stuck with that, or it's just designs that are different, and you get into these big partisan battles and then you have stalemates and no outcomes. So having gone through a lot of those battles, I really believe focusing on pure outcomes is a better way of leapfrogging partisan ideological fights. Let's acknowledge we want to achieve these goals of getting people out of poverty and addressing these problems we have in our communities, and just go with what works. And so I think if we can shift the debate from a debate where you're taking on the status quo or you're in a partisan ideological fight to one purely based on just outcomes, I think we can do public policy a great service. We can reduce polarization. And if we can design these programs the right way versus the mistakes and the lessons we've learned from the past outcome-based programs, we can really move the needle. And that's basically what we're trying to achieve here.

Putnam: Very well said; and agree 100 percent. This is very much why we have put together this book, why we are doing this podcast, to try to encourage more actors out there whether they're at state level or federal level to think about how they're investing in outcomes. And Governor Patrick, I know before you left office, you were involved in the social impact bond on workforce development. And so that is really something we've been curious about. We're in a critical time for our labor market in terms of disparate outcomes of people needing to get back to work. So I'm curious if you could share how that's going and what you learned from that.

Patrick: So we did two while I was in office, one having to do with youth recidivism and how to reduce that in the criminal justice context and the other having to do with chronic individual homelessness. And then the third as you mentioned, we launched before I left, and the following administration continued and implemented it. And that one had to do as you said, with workforce development in particular, how to enable—I think the study said was 2000 immigrants and refugees—to get the English language skills and the job preparation skills so that they could move into higher-paying jobs at the other end of it. And actually, it's had just astounding success. Some $3,500 more in average income for folks who have graduated from this program, a program managed largely by Jewish vocational services, really terrific NGO [nongovernmental organization] in the Boston area, and evaluated independently so that no state funds were disbursed until the evaluator said actually the goals have been met, have been achieved.

So that level of risk-reward was built in. I'm encouraged by this program, Ashley, because I think the economy is changing rapidly. And one thing we do historically well in America is innovate. One thing we do historically poorly in America is transition, which is to say we get on to the new thing and we consider the consequences of the new thing later, if at all. And in an economy where innovation is disrupting the workplace—and frankly, we need to be prepared, our people need to be prepared to help drive that innovation—we need to be intentional about bringing people along and making them ready for the economy we're becoming. And I think this kind of program, this kind of initiative gives us some insight on how better to do that. I'd say one last thing and I don't mean to filibuster, but I don't think social impact bonds solve every problem. There are other ways to innovate and we should be open to innovation, and we should not limit that innovation to social programs. We should be open to that in terms of all kinds of government undertakings just as we have been and have had to have been in the private sector.

Putnam: Very valid point. And I think this leads well into speaker Ryan, your chapter touched on some of these histories and several different types of programs that have been innovating around workforce development and workforce outcomes. And I'm curious from your perspective, what is the role that you see for the federal government in catalyzing these kinds of outcomes funding?

Ryan: Yeah, so I spent 20 years in Congress sort of studying these issues. We've done two or three versions of workforce development job training overhauls with mixed results. So you've had, sporadically, pay-for-success projects at the Department of Labor, you had one at Justice, you had some at HUD. USAID I think did a few programs, and we decided to try and do things a little differently to see if we can really move the needle on results. More importantly, to Governor Patrick's point, we wanted to respect local government, and federalism, and people on the ground, and so we did SIPPRA. SIPPRA is the Social Impact Partnership to Pay for Results Act. Put it in a budget bill back in 2018. It's a $100 million Treasury fund to support local efforts to pay for success and to put together outcome-based programs.

So my belief and our goal in this, especially with 21st century technology, we have a better chance and opportunity to really move the needle on outcome funding. So I think what we're trying to do here is we need to develop projects that have strong evidence-based interventions, programs that are evaluated well, and the federal government should chip in to help make sure that this happens so that we can get good outcomes. Now, this most recent administration, there was a bit of a conflict between Treasury and OMB [Office of Management and Budget] on administering this. My real hope is that the Biden Administration gets this thing moving.

Patrick: I just want to give kudos to the speaker and his colleagues for moving SIPPRA because I do think it catalyzes the kind of environment we need to try things like social impact bonds, and outcome-based policymaking.

Putnam: Oh, and Governor Patrick, I was going to pick up on something you said at the end of your last comment there, about thinking beyond just the social side of this and to what are the roles of the private sector? What are these private-public partnerships that we're seeing come together? I think a lot of this book and a lot of what we're seeing in terms of innovation is really people working across sectors and working together in new and innovative ways. And I'd like to ask that question to both of you, but maybe I'll start with Governor Patrick. What are you seeing in terms of some of those trends of that private-public collaboration to lead the emergence of these results-focused models?

Patrick: You know, Ashley, it's really interesting. I've done business all over the world, and the line between the public sector and the private sector is maybe brighter in the United States than it is almost anywhere else in the sense that collaborative problem solving is happening in lots of places. And frankly, the size and scale of the challenges we face as a people and as a nation I think can't be left to one sector or another. I mean, I'll give you just an example. We have huge infrastructure needs. We have funded our infrastructure needs in particular ways, and in many ways they work and that has worked. But you see in other parts of the world that there are public-private partnerships to rebuild and manage airports or to create new roadways and so forth. We've tried them here. They haven't always gone well, and if they don't go well early, we tend to say, "All right. That idea is dead to us." What can we learn from it instead, and do it better the next time? Again, I don't want to be heard to say that we should just turn over to the private sector every big challenge that faces us as a society. I still believe Barney Frank was right when he said government is the name we give to the things we choose to do together, and there are some things we should do together. But I think in that same spirit together can include not-for-profit, for-profit sectors that have common interests and really bright ideas on how we can leverage each other to get better and more lasting outcomes.

Putnam: Speaker Ryan, same question to you. What are you seeing in terms of that private-public collaboration, and this emergence of innovation, and particularly around the results-focused models?

Ryan: Yeah. I agree with everything the governor just said, so let me pick up where he left off. I think we've had this notion in the 20th century, throughout the war on poverty, inadvertent notion that told people in our society, "Poverty is government's problem and philanthropy's problem. Pay your taxes, don't worry about it, and let us figure it out." And we sort of marginalized the poor and displaced solutions. And he's exactly right. Around the world you have a better mixture of public-private sector partnerships because in the private sector, frankly, things move faster. More cutting-edge things occur, more discoveries happen quicker than they do in government, and there's no reason why we should not bring that kind of talent and that kind of dynamic to the fight of poverty and public sector problems. So he's 100 percent right on that.

We've dipped our toe in this water here and there, and when it didn't work, we just sort of abandoned it. He's exactly right about that. So I really believe that we need to do a better job of infusing private sector know-how, and incentives, and talent, and people, people, saying, "This is your responsibility. You need to get involved." I remember going to a Year Up over in Boston and just seeing the great work they're doing there by getting these private sector mentors into helping young kids find great lives and setting good examples and the rest. So long story short, I think with things like SIPPRA ... I also passed another law called Evidence-based Policy Act. I did this with Patty Murray, a progressive from Washington State. We designed a commission. How do you release data so that data and analytics can occur on federal poverty programs so we can do better research infused public-private partnerships to really move the needle? That commission gave us results. We put that in a bill. We made it law at the end of 2018.

So I really believe we're on the cutting edge, hopefully, of new discoveries. Of almost a new vocation of evidence-based, outcome-based policymaking because now we have the legal tools to do this. The tools in federal policy, at state levels, and infusions of private sector know-how and money to combine with the public and the philanthropy sector to really move the needle on this. So frankly, I'm very excited about this. I think it's brand new. There are plenty of universities and other entities that are working on this. I think the Fed is a perfect agency, frankly, because the Fed is on the cutting edge of digital currencies, and digital technologies, and all of those things that can bring a lot of technology and incentive structures to making these programs work well, to do a lot of RCTs [randomized control trials]. At Notre Dame, we're trying to do 70 random controlled trials on poverty programs across the country to find out what works so that we can scale and replicate. So I really think there is a whole new wave of poverty social science which necessarily infuses academia, the public sector, local, state, federal, private sector, all together to focus on outcome-based. If we can move our minds to that, then we can move the programs and the dollars to that. Then we can truly get at root causes of poverty, root causes of these problems, and bend the curve.

I mean, I don't know if Deval Patrick and I agree on many other things—frankly, I don't know—but on things like this, I think the right and the left can totally come together and just get focused on outcomes. I really believe this can be one of those things that people are desperate for, which is common ground, outcomes, results. I think this kind of an effort—we're just scratching the surface, so I'm pretty bullish about this. This is why I spend a lot of my ... I spend all my vocational time on this project because I really think this is going to be something that's going to unify people. And I think getting the best and the brightest in all sectors of our society pulling in this direction, and then putting taxpayer dollars at work in this place, it's going to work. And frankly, America's behind, behind a lot of our peers in doing this, and it's about time we start catching up.

Putnam: I appreciate this, and I think a common theme for both of you has been about the collective benefit here. It's certainly something we talk about a lot at the Federal Reserve. We just had a study that came out showing the kind of losses to GDP of disparities in our labor market across race and gender. But I think sometimes this work we get into—it gets a little wonky. Right? It's really specific to the program. When I tell people [that] I'm recording a podcast on outcomes-based funding, they're like, "What?" So I'm wondering if you can help us kind of lift this up and say, "Why are we doing this? Why does this matter? What's the big purpose or idea behind this? And what's the greater benefit of this conversation we're having?" Governor Patrick, I'll turn it over to you first.

Patrick: I think it's a really important and provocative question, Ashley, because for me one of the things it does is drill down to whether we can find common ground about what the outcomes ought to be. And one of the reasons I think that the kinds of innovations in public policy we've been talking about have been stuck is that the one side doesn't necessarily trust the other side's motivations. You know, folks who say we should try some other ways. I think you'd probably agree with me, Mr. Speaker, that some of the folks who have argued against, if you will, if that's the right term, this or that antipoverty program are of the view that there shouldn't be programs to assist people to lift themselves and their neighbors.

So I really love this idea of an opportunity to get at whether we actually believe that the American dream is a thing to be built, a ladder to be created for everybody, and whether that serves the common good. I think when we get right down to it, we're going to find a lot of agreement on that. And then it'll probably be some combination of solutions that address the need for people to prepare themselves for the economy we're creating. That's going to be some training programs, for example, but it's also going to require industrial policy that we have not had in this country for a long, long time. This idea that growth is critically important, but we need to be growing out to the middle and the marginalized, and not just up to the well-connected. Those aren't mutually exclusive, but we have to be about both. Those are conversations and debates that at least from the perspective of this relative newcomer looking at federal politics and political debate does not seem yet really to be happening. So I'm hopeful that the kind of conversation that you're engendering through this podcast and the book enables us to really get at some of those fundamentals.

Putnam: And Speaker Ryan, same question to you.

Ryan: Yeah, I think Deval mentioned it, which is each side questions the other side's motives. When conservatives and Republicans get involved in these things, they think, "Oh, you're just trying to cut spending. And you're trying to just take money away." I think it's important that we operate, we start with the right premise. I kept telling—when I was doing this in Congress—"This isn't about saving money. Let's spend the exact same amount of dollars. Let's not reduce the actual, nominal amount of spending, but let's try and spend it more effectively, so that it gets better outcomes. So that this isn't a spending cut exercise, it's an effectiveness exercise." I think there are ways of framing debates so that we can respect each other's points of view and operate off similar premises. And that to me means, can we go from a policy where we basically measured success on inputs or efforts? How much money are we spending? How many programs are we creating? How many people are on the programs? Instead, let's try and say, let's measure outcomes. Is it working? Do these programs achieve the desired results? Can we measure and determine whether that is the case or not? And if not, let's not just stop the effort, let's put the resources where we can find proven results.

If you can have a debate like that, I think you can bypass the partisanship. I think you can bypass the gridlock. And that, to me, is what we're trying to do to move the needle. That is what evidence-based policymaking is all about. I think if you can show at local levels that this works, and I think that's the easiest, fastest way of doing it, then I think you can really start replicating and start leaching out of this, the rhetoric that is dividing us and just get everybody focused on outcome and evidence. And that, to me, is where I think we can move this debate in a much, much better place. The first thing I did when I left the speakership in 2019 is, I didn't start a super PAC to go do some political thing. I started a foundation called the American Idea Foundation to focus on rebuilding the American idea the condition of your birth doesn't determine the outcome of your life. We believe in upper mobility. That's why I did what I did. Because I really do believe, and I see little kernels of this, that there are people of goodwill of all sides of the aisle, both sides, in the middle, and everything in between, that if you get to an evidence-based, outcome-based effort, and put these other partisan fights aside, I think we can really move the needle. And yeah, it is kind of wonky, it's data, it's analytics, it's economists, it's RCTs, it's Federal Reserve stuff, but it's through that, I think, that we can really find solutions.

Putnam: I was just going to say that I think that the power of imagining outcome-based policy making, I think, takes on a whole other degree of impact when we extend it to the rest of the way we spend public money. If we start to think about this, I mentioned infrastructure spending, think about defense spending, think about tax policy for that matter. Are we actually driving the outcomes and getting the results that the political rhetoric promises? And I think we would find that we're sometimes missing the mark. We're not actually getting what we say we're trying to get. As I said earlier, I think that what's so encouraging about this kind of conversation is that it could make us really examine what it is we want our government to do and not do, and why.

Ryan: You said something earlier that 10 years ago, I would have bristled at. Industrial policy. I was a guy who fought industrial policy. I helped kill the ethanol tax credit, and I'm from corn country in Wisconsin. So industrial policy in the 20th century, I would argue, didn't really work very well for lots of reasons. But I am now kind of a convert to, and it's not an oxymoron anymore, there is smart industrial policy that can be deployed. And I see [inaudible] on transportation, like asset recycling, which is I think what you're referring to, but also in the poverty space. I think we're beginning to see, and the thing that a guy like me 10 years ago, just a free-market advocate would have not seen is, you do need to integrate the private sector, the philanthropy sector, and the government sector together to work toward common goals. And building the right incentive structures with now, better tools we have, on data, on analytics, on designing programs and experimentation, I think is going to be a breakthrough for social policy in the 21st century. And policies like infrastructure and yeah, defense and things like that. I think we're going to need industrial policy with respect to our challenges confronted by China and the Great Powers struggle and other areas. I do think you confuse these things and guys like me, who, like I said, 10, 20 years ago, I would have said, "Heck absolutely not. It's just going to be another Symantec or Solyndra or something like that." I do believe we have better tools and methods these days and focus on outcomes to actually achieve these things. But the thing is the politicians, people like we used to be, we have to accept the fact that there are going to be some failures when you experiment. We have to be able to absorb the blows of those failures, own that, and then still prosecute on the policy. And that's going to be a little bit of a challenge.

Patrick: Yeah, I agree with you. And I think the effort is worthy, but you are right. And it's easy for us to say because we're former, recovering public people. But it is absolutely critical that we raise our tolerance for failure. We shouldn't accept it willy-nilly, but we should be willing to try things and a lot of things simultaneously toward getting better and more lasting outcomes.

Putnam: And I'd love to dig in a little bit on this, because I think this is such an important conversation when we talk about new partnerships or even just government innovation in general, right. That risk aversion, that "Well, if it doesn't go well, then I have to be responsible for something that doesn't necessarily achieve the outcomes." What advice would you give—I'm thinking, not just at federal and state government, but even to local leaders—on the necessity for that risk and the necessity for innovations around outcomes. Any thoughts either of you have, if you're speaking to people in your former roles.

Ryan: I was involved in Ticket to Work, getting that up and running. It didn't really work. There was a lot of cherry-picking, there was some design flaws but I'm passionate about its goal. So I think there are better ways now to do it, but you get a little burned when you try to set these things up and they blow up in your face. I think expecting the government only to do this, is probably the mistake. This is what we do at LEO [Lab for Economic Opportunities] at Notre Dame. So that is private dollars, it's nonprofit dollars, getting a team of economists and undergraduates to go alongside poverty programs like the Padua Program at Catholic Charities in Fort Worth, which is a case management model, I'm enamored with this, and finding out through RCTs what works, what doesn't work. And I think if you can have some nongovernment entities deploy this stuff, these things, and then prove what works, that becomes contagious. So I think we need to involve the nonprofit sector, local government and federal government altogether so that there's a sort of an ecosystem of experimentation. And that we trust in this ecosystem of experimentation, there will be some footfalls, there will be some failures. Knowing that starting on the way in, setting those expectations, I think can give sort of political coverage, so to speak, to the politicians and the government workers who worry that their careers are over if they don't make this thing work the right way, which means they'll cook the results from the beginning. So I think starting with the right expectations and then having examples set in other spheres is probably the best way to go on this.

Patrick: I think what I would add to that, Ashley, is that what I've found as governor is that my greatest power was the convening power. Which is to say, I could invite all these folks to come sit around our conference table, who would not normally talk to each other, they'd be at blows otherwise, and problem solve together. We did this around education where we had teachers unions and the charter folks and the parents and the business community and a whole variety of folks coming together to kind of pierce through the debate, which is often about what's best for the adults and not about what's best for their children. And how that answer is going to be different from community to community, school to school, and frankly, child to child. So how we enable a more tailored response through government programs, partnering with the private and with the business and not-for-profit sector, I think is incredibly powerful and fun and when you actually get it done, you pierce through to a new way of thinking about things. You see that the person across the table from you doesn't have the horns and tail that you'd always been told and always told everybody else they had. It's a pretty empowering kind of breakthrough and I think a great discipline, a muscle to exercise for the next problem that has to be solved.

Putnam: Very well said. So Speaker Ryan, you spoke to something that the Federal Reserve nerd in me loves to talk about, RCTs or randomized controlled trials. But this is one way of measuring innovative things that are happening. And I'd love to hear, actually from both of you, what's something that you're currently involved in that you're really excited about that maybe is still in the works or still being measured? What's something else that you started looking into that you think would be beneficial for our audience to hear about.

Ryan: I'm kind of enamored with earned wage access right now. And I actually found a company to advise, called Earnin. The problem with the pay cycle, it occurs every two or four weeks. A person who is working poor, if they have some problem in the middle of that pay cycle, it can really disrupt their lives. The car can break down and they can't get to work and then they lose their job or childcare falls through and they have no solution. And so what do they do? They go to a payday lender, they pay these exorbitant rates, or they have these massive overdraft fees, if they have a bank account. So fintech solutions to the working poor's problems is something I'm kind of enamored with, and earned wage access, I think. is really kind of a brilliant solution. So I'm working on that issue. And then I mentioned before, I'm on the board and I teach at Notre Dame, I teach in the Economics Department there, the Laboratory for Economic Opportunity.

There's one at MIT, University of Chicago, Baylor, a lot of good universities doing this. We're trying to get up to 70 RCTs across the country on poverty programs, to find scalable models that can be scaled and replicated and redone. In my foundation is, the evidence that we wrote is sort of making this easier to do. We are building a central database that anybody who wants to go solve a poverty problem, whether you're a government or charity or whatever, can go to a central database to look at every RCT in this space that's ever been done, to go find out, I don't want to reinvent the wheel and make ... I want to learn from other people's mistakes and other experimentation, so that I can build the best homeless program in my community, or I can build the best recidivism program. And so we're building at the American Idea Foundation, a huge central database on poverty solutions. So it's one- stop shop, and that's something, that's one of our passion projects that we're working on, that I'm really excited about.

Patrick: When I left my second term, I founded an impact investing fund at Bain Capital. And I wanted to demonstrate what I believed to be true, which is that trading return for measurable impact was a false choice, and that we could invest in middle-market going concerns, scale those concerns, and manage both to the financial bottom line, as well as the environmental and social bottom line and get a comparable return as a regular way, private equity fund. We're on our second fund now, I've stepped away from that last year, but I'm really, really proud of what we've been able to do, of the value we've been able to create and the impact it has had in terms of replicated models in lots and lots of other larger PE firms now. But the impact it's had on how we are beginning to think about long-term value rather than just short-term financial gain.

Putnam: Amazing. Thank you. And I think those are both really exciting projects. I'm wondering if we can wrap today thinking about some of the lessons both of you have learned. Particularly, we started this conversation around social impact bonds. I know we mentioned some of the challenges. So I'm wondering if you can think about the lessons you learned from those projects and how they translate into future outcomes based funding that, maybe hasn't even gotten started yet.

Ryan: The government's got to get its act together. Getting government agencies, I'm talking federal level, getting government agencies to recognize these new trends and to move just literally with SIPPRA, I think is important. I'm hoping the new administration will do that. There are legitimate frictions between government agencies, I used to oversee these frictions all the time. So the government's got to do a better job of harnessing this and embracing this. I guess that's point number one. Point number two, it's back to the other point we made, which is, there is a lot of great work that's being done out there. It just needs to be stitched together, there's a lot of work that is being redundant, so the next phase of this, in my opinion, is scaling and replicating success. And right now, we haven't done enough to scale and replicate success, so that we can really move the needle. And I think because of technology and frankly, the fed knows this stuff. Because of technology, I think we can do a lot of that. We have new tools of econometrics and data and economics, that I believe can be employed in this sector, to scale, replicate and move the needle, and that's what I'm excited about. But the government has got to allow that to happen and allow the experimentation to occur. And it's the fear of failure that I think is sort of paralyzing some of these efforts inside of the government.

Patrick: I would agree with all of that, including and most especially about the tools we have through data analytics, to understand some of the functionality of programs and new innovations. I guess I would also add the importance of making room for the voices of the people we are trying to serve, as it were at the ground level. I feel like there's a lot about government that is disconnected from the way people actually live. We used to talk about this when we were trying to do transportation reform back in Massachusetts, you ask somebody who lands at Logan Airport, who then takes a bus to the water taxi, and a water taxi across to downtown Boston, and then walks to South Station and takes the commuter rail out to an outlying community and collects their car from the local parking facility and drives home. they're not thinking about which agency is responsible for which part of that trip.

They just want the whole trip to be safe, to be modern and up to date, to be efficient. And so how is it that we organize our government and our solutions, so it's responding to real lived experience and not just to the siloing that we've done historically. I think there's a lot of work there, yet to be done, but a huge amount of opportunity. And I think when we listen to people on the ground and frankly, when we listen to some of the very bureaucrats, so often derided by people in elective office, there are lots and lots of great ideas about how to do all of this better.

Putnam: Oh, this is fantastic. Thank you both. This has been a great conversation. I don't know if you had any other closing thoughts, but I thought that was a fantastic thought to end on there, Governor Patrick, and really have enjoyed this. So thank you both, I appreciate this and I'm excited. It's great to have these conversations and leave optimistic, right? And know that there's innovative and exciting things happening and that both of you have really paved the way for some exciting new models in terms of how government and the private sector can work together, particularly around workforce development. So thank you for joining for the conversation.

Ryan: Our pleasure. Thanks for having us.

Patrick: Thank you. Thanks for having me. Mr. Speaker, great to be with you.

Ryan: Hey, you too, you too, Deval—absolutely.

Putnam: Well, I think we can agree coming away from today's conversation—if you need any more evidence of how important this discussion is, look to this episode—a former governor and a former speaker, talking across political party lines about the need to invest in outcomes. Today, we learned about the importance of government taking risk and avoiding that typical fear of failure, the need to measure and invest in what is working, and the need to scale innovation to reshape the future of our economy and ensure that our systems are working for everyone. On our next episode, we'll hear about one such innovation, a college in Texas that is rethinking how to best provide impact for their students. Thank you for joining us for our third episode of Workforce Realigned. You can find more online at workforcerealigned.org.Off-site link. I'm Ashley Putnam, and it's been a pleasure to be your host.