Back in 2013, economist Mariana Mazzucato released The Entrepreneurial State – a book that made the case that governments, not private businesses, were responsible for many of the crucial innovations that have underpinned recent economic progress. Public money paid for some of the research behind the internet, GPS technologies, fracking and algorithmic search, Mazzucato explained. Far from just getting out of the way, as libertarians would like, these examples supposedly showed the state’s ability to think longer term and take bigger risks made it an important driver of growth. Governments should harness that power, she concluded, by directing resources towards some of the globe’s biggest challenges through public missions.
A new book, Questioning the Entrepreneurial State: Status‐quo, Pitfalls, and the Need for Credible Innovation Policy, punches a hole in this line of thinking. Drawing from work from over 30 scholars and academics specialized in business, economics, and history, it finds that attempts to drive growth through industrial policy in Europe has often backfired and put the dampener on progress, including in areas where there are clear government “missions.” There are stark differences between inventions and innovations that deliver things consumers want and need. The editors conclude: “while the idea of aiming high and leveraging large portions of society’s resources to address some fundamental human challenges may sound appealing to many, such ideas have limited scientific credibility.”
Cato’s Ryan Bourne was joined by one of the book’s authors, and co‐editor, Christian Sandstrom, as well as the Bruno Leoni Institute’s Alberto Mingardi to discuss.
