Everywhere you turn, organisations are desperately seeking new business models. The banks will have to make money in a very different way once they are rid of toxic debts. Media industries are in turmoil, due to the recession and the web eating away at advertising revenues. The car industry has been saved, but only to face long-overdue restructuring as it attempts to go green.
The price of saving the banks from disaster is a record fiscal deficit that will force public services to embark on their own search to do more with much less. The only way forward will be radical innovation of a kind that has been put off during the last decade of rising spending in the name of modernisation and reform. Whatever that approach has achieved - new buildings, better-paid staff, shorter waiting times, some improvements in school performance, less crime in some areas - it cannot be the recipe we adopt in the future.
The fiscal crisis has fully exposed the current model of public service reform - invest, modernise, set targets, review performance, eliminate failure - as having run out of steam. Public services may be more efficient, but all too often they are not joined up, leaving the people on the receiving end bewildered by what one elderly woman, who was being visited by four occupational therapists, described to me as a blizzard of services.
More efficient services quickly move in and out of people's lives, but they don't really change how people live. That is one reason why we have not made deep inroads into the most deprived communities, the most troubled families, the most intractable social problems. Services manage and process people and problems, but only rarely allow people to change their lives. Service solutions are ill-suited to the emerging challenges of the rise of long-term health conditions, diseases linked to lifestyle and diet, ageing or climate change. You cannot deliver a solution to an epidemic of diabetes the way that DHL delivers a parcel.
The UK government's new approach, unveiled at the beginning of July, to entitle people to personalised services, booked appointments and local policing is a step forwards, but it leaves hanging in the air the question of how people will enforce their rights without more direct, personal control over the budgets used to commission services. One of the main problems with public services is that the feedback loops between consumers who want something different and suppliers are so elongated. The government's entitlements will work only if the gap is closed.
Giving people a right to more services might not be the right starting point, however, because it is not what people want. Radical public services innovation will only come from a markedly different starting point. The key will be to redesign services to enable more mutual self-help, so that people can create and sustain their own solutions. The best way to do more with less is to enable people to do more for themselves and not need an expensive, professionalised public service. Enabling people to come together to find their own, local, solutions should become one of the main goals of public services. Services do a better job when they leave behind stronger, supportive relationships for people to draw on and so not need a service.
There are good reasons for putting relationships at the core of effective public provision. Relationships are at the heart of what makes for a good life. Living as a solitary individual, for most people, is a recipe for unhappiness. Much of what we most value - love, friendship, trust, recognition, care - comes from relationships with family, friends and social networks. People grow up well and age well if they have supportive relationships.
In Britain's largely service economy, earning a living turns on social skills, being able to understand and respond to a client's need. Innovation comes from our capacity to collaborate creatively. In an innovation-driven, service economy, basic social skills - how to listen, understand and work together - are as important as reading, writing and arithmetic.
Equally, relationships that collapse or turn sour are the main source of the bad life. Loneliness is reaching near epidemic proportions among older people: more than 50 per cent of people over the age of 60 say they are lonely at least some of the time.
Families that live in a constant state of crisis, with children caught up in the fracturing, centrifugal and sometimes violent relationships of the adults in their lives, are another significant source of long-term social costs. Much of the challenge of youth offending, knife crime and gang culture comes down to malign peer influences: the wrong sets of relationships. Even among the affluent, there is a pervasive sense that life is increasingly organised through fleeting, often impersonal transactions, rather than lasting relationships.
Many social ills come from relationships that are dysfunctional. It follows that public services, especially around such things as social care, long-term health conditions, education dropouts, offender rehabilitation and family breakdown, should be designed so people can form or restore relationships that will support them. The challenge of the future is how public services can support relationships, at scale, without being heavy-handed. This is where some of the most exciting radical innovation in public services is emerging.
Lonely and isolated older people need simple and trustworthy ways to connect with other people who might share their interests. Westminster council is involved in developing a platform called Get Together, which uses telephone conferencing to get older people who live on their own to talk to one another. If that works, they can start visiting and going out together. Older people with relationships stay fit and out of costly health and social care for longer.