The received wisdom is that States are no good at entrepreneurial activities and they should avoid doing so at all costs; leave it to the market to balance the risks and take the rewards, or else…
This article outlines the challenge cited in a new book called the Entrepreneurial State by Mariana Mazzucato form the University of Sussex UK. Also, a great audio interview can be found here produced by the BBC”s Peter Day – interesting listening.
Advanced economies have become near-obsessed with stimulating innovation in their economies to drive growth. This has included setting up structures in their national innovation systems to bridge the well-known “valley of death”.
I find the analysis both right and wrong, but certainly interesting.
Commercial firms can innovate well and in a sense are set up to take the risks. Good ones identify and seize opportunities over an appropriate timescale. The interesting perspective is that states have gone out of their way to stimulate new technologies often decades ahead of commercialization; as would a benevolent parent nurture their child unconditionally, without notice or thanks. Commercial firms are driven by quarterly, yearly at most a few years when it comes to betting on innovation.
However it can take many years for a government to identify “it really should do something about (whatever)…”
This might suggest that we need to thing about the interplay between states and commercial ventures in a systems way?