The Entrepreneurial State: Debunking Public vs. Private Sector Myths Paperback – October 27, 2015

Mazzucato sheds light on the little talked about and often underestimated role that governments play in innovation. Her overall messages - that the state makes keystone contributions to the innovation process across industries and that the rewards of this innovation accrue largely to the private sector - add a new perspective on a number of public debates. It's an enriching read.But do not expect a comprehensive treatise on the balance between public and private sector participation in innovation. Mazzucato focuses largely on how the state drives innovation. She is careful not to dismiss the importance of businesses, and in the case of Apple she concedes the company deserves credit for the innovative way it integrated various technologies in a well designed and marketed product. But what I missed in this book is a model of how innovation occurs that could help us understand more precisely the interplay between the actors and their relative contributions. This is not to say the book is unfair or imbalanced. I simply see it as the first volume in a new, more nuanced public discussion on innovation that Mazzucato aims to launch with her book.Mazzucato is a clear writer and the book is exceptionally accessible, even though Mazzucato is an academic. What irked me though is that she is at times repetitive. Perhaps you couldn't blame her for trying to drive home her message given how underrepresented it is in public discourse.

I first learned about this book when I heard an hourlong podcast where Mariana Mazzucato, the author, is interviewed by Stella Creasy who is a London School of Economics trained Labour Party member of parliament, about Mazzucato's research findings and policy proposals.Lately, we have been hearing some bold proposals about a Green New Deal. Many have dismissed this idea as pie in the sky. Some have supported it as crucially necessary to the survival of the planet, but have been vague as to how to actually bring this about. Well, Mariana Mazzucato, Chair in the Economics of Innovation and Public Value, and Director of the Institute for Innovation and Public Purpose at University College, London, addressed this very issue in her 2015 book, "The Entrepreneurial State." She points out that our current economy is built around fossil fuels, and that to address climate change will require a large restructuring of our basic economy. This will include building new Public-Private partnerships, and innovation that will create new jobs, new security and repair infrastructure. To accomplish this, we first have to let go of false myths we hold about the responsibility as well as the competence of the state. Mazzucato does a superb job of debunking those myths in this book. While parts of the book are fairly dense, even a non-economist like me can understand most of her points. This is a must read by anyone interested in saving the planet and by all policy makers.

Mariana casts the government as an important actor in technological innovation. She argues strongly and clearly that the government should not just be a mediator who corrects market failures; instead, the government does and should invest directly into technologies that take a while to bear fruit (>5 years). She highlights many interesting examples (e.g. Apple, computing) and offers actionable directives for green energy.Largely, I enjoyed this book, but it's too long. It gets awfully repetitive. It could have easily been 1/3 to 1/2 the length while making the same strong points. That said, I still recommend it to anyone interested in the topic.

I enjoyed the examples and laws cited in this book, which argues that the state’s role in economy is not solely as a regulator or remedy for market/allocation failures. It provides justification for why more states should sink their teeth deeper into the economy, with some good counter-examples and examples that debunk popular myths about innovation. I particularly enjoyed the the elaboration of why and how Apple was able to revolutionise mobile consumer electronics.However, I did find some rebuttals lean (if not weak) as a reader with basic economics knowledge and would have appreciated footnotes or references at those points. I also would have appreciated a more meaty the “solutions” segment including examples from state investment in countries like Japan (mentioned elsewhere but not in this section), China, and Singapore.A worthy read, but written to debunk the ideology of libertarian Americans. In my part of the world (East and Southeast Asia), where the appetite and political will for state capitalism is greater, encouraging innovation may require a markedly different approach than the policies recommended.

Too repetitive

The importance of the public sector as a key player in an innovative ecosystem is not often acknowledged nor well understood. In a brilliant book, the author has made the case for the public sector role persuasively. In a world that glorifies individual entrepreneurs and venture capitalists as the risk takers who drive the innovative economies, readers of this book will be led to realize that it is quite often the public sector investors who have been the true risk takers with respect to the innovations that have made the most impact on society. Another key insight provided is that when the rewards for innovation and risk taking are disproportionately allocated to those whose risks are relatively modest (i.e. venture capital) this creates an innovation system that increases inequality and is less sustainable than one which rewards risk takers (public and private) more fairly. Unless the public sector can reap rewards that recognize its role in the creation and regulation of new markets, the innovation system will be less likely to create major breakthroughs like the internet, nanotechnology, etc. The clear message of this book is that a true innovation system that is sustainable and that will create transformational change requires the full participation of the private sector and the public sector working together to do what each does best.

I bought this book for a class and I thought it would be boring, I was pleasantly surprised that is not the case, is very engaging and critical about the topic.

Este livro foi responsável por modificar - lê-se melhorar - a forma pela qual enxergo a relação do Estado e o mercado.Quem diria, o mercado e seus atores andam vendendo uma imagem de autonomia e até superioriedade para com o Estado, mas, ao observar os fatos recentes e históricos, não é isso que se evidencia. Na verdade, o mercado é mais um fenômeno jurídico e, por conseguinte, gestado pelo Estado, do que um fenômeno autônomo.Isso tudo é escancarado com maestria pela Autora Mazzucato! ÓTIMA LEITURA!!

It almost felt the conclusions were predrawn, there is no presentation of research ( citations dominated by their own papers)There is cherry picking it examples, stories get dropped where the continuation of story doesn't suit the author.I agree that there is a scope for debating the role of government in research, but this book is a political manifesto and not a work of quality academia!

El libro está muy bien estructurado. La autora defiende el aspecto teórico de su teoría a través de ejemplos y todo queda muy claro. Te da una visión totalmente distinta sobre el rol que puede tomar el estado en la economía.La letra es un poco pequeña para mi gusto pero nada exagerado, se puede leer perfectamente.

This is an important book.Mariana Mazzucato persuasively argues that the state has a key entrepreneurial role in technical development and innovation and development. She contends that the central role that the State has played in kick starting the IT and pharmaceutical sectors in the US and the green technologies in Germany and China and the auto industry in Japan has not been adequately recognized and cannot be contested.Conventional theory is that the State 's role is to establish and enforce the rules of the game, to keep a level playing field, to build public goods such as infrastructure, defence, and basic research and to devise mechanisms to mitigate negative externalities such as pollution. If the state intervenes beyond that it is accused of picking winners. It should be up to private industry to innovate.But Mazzucato believes that the history of technological change teaches us that choosing particular sectors by the State is absolutely crucial. She contends that in practice the State in the US, and especially in China and Japan, has invested heavily in going way beyond basic research in providing for the explosion of innovation in certain sectors. She examines post-war period two US government agencies. The Defence Advanced Projects Agency (DARPA) was created in 1957 for space research as a panic induced reaction to the Soviets successful launch of Sputnik. But DARPA also included money for "blue sky thinking" which contributed heavily to semiconductor and the internet development. Then through the Small Business Innovation Research Programme heavily funded the development of companies like Apple and Google. Similarly, the US National Institute of Health invested heavily in R and D in the pharmaceutical sectors and also provided the ecosystem of innovation including loans, grants and government contracts.But she identifies a major problem in the West that when the State does invest in basic research and development and creates an ecosystem of innovation in any selected sector, one of the unfortunate consequences of modern-day capitalism is that risks are socialized and rewards are privatized.One of the refreshing aspects of the book are the practical policy recommendations that emanate. For example, to address her perceived issue of socialized risk and private reward, any loans or grants to private companies from the state should be repayable in the event of success, or States should take equity stakes in companies they help.The argument that tax recompenses States in returning them reward for their investment is undermined by the footloose nature of the Apples, Google's and pharmaceutical companies that allows them to play off one country against another. Mariana does not have an answer to this and prefers direct recompense through loan repayment or equity shares.China and Japan have been much more systematic in "sector selection". Their form of capitalism provides for the state sharing the rewards.There is no doubt that the State's role in technological development is underrated and subject to prejudice. My problem with Mariana's forceful advocacy of the role of the state - her belief that the state's responsibility goes beyond planting seeds via R and D at public institutions and must support technologies until they can be mass produced - is highlighted by her account of the experience of solar and wind industries where China outcompeted the US, Japan and European rivals. Heavy investment by these governments was not rewarded by thriving industries.The clear and proven historical risk is that sectors are picked for political reasons or for fashionable reasons, like wind and solar, and taxpayers shoulder risk but do not share rewards.Mariana’s answer to this is the state should accept that risk but ensure that the existing system of socializing risk (i.e. born by the state) but privatizing rewards is overturned. It is the only way the innovation cycle will be sustainable over time both economically and politically.I would applaud such an action. But since the stock market crash in 2008 is there any evidence that the UK State can effectively retain access to reward having shouldered the burden of the risk incurred by RBS and others? If we can address this then I would wholeheartedly support Mariana’s argument.You can see I found the book immensely stimulating!