Economist Mariana Mazzucato - The Entrepreneurial State and the Future of Innovation
Jan 9, 2024
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Economist Mariana Mazzucato discusses the important role of governments in driving innovation and shaping the economy. Testimonials highlight the impact of her entrepreneurial state concept on policy making. They discuss working together in an entrepreneurial way, frustrations of governments losing talent, and the relevance of embracing this approach. The chapter explores the need for long-term thinking, the influence of media on perception, and the value of recognizing work done by individuals in various sectors.
The state plays a crucial role in driving innovation and shaping the economy through public investment and outcomes-oriented procurement.
Governments need to prioritize the public good, invest in social structures and communities, and empower citizens through inclusive policies.
Changing mindsets towards long-term thinking and problem-solving, and rethinking the institutional design of public sectors are necessary for sustainable and inclusive growth.
Deep dives
The Controversial Case for the Entrepreneurial State
In this podcast episode, economist Marianna Mazzucato discusses her groundbreaking book, 'The Entrepreneurial State,' which challenges the perception of the state as a hindrance to innovation. She argues that the state plays a crucial role in driving innovation and shaping the economy. Mazzucato emphasizes the need for governments to be active participants in creating and shaping markets, rather than just fixing market failures. She discusses examples from Silicon Valley and highlights the importance of public investment, outcomes-oriented procurement, and citizen participation in achieving inclusive and sustainable growth. Mazzucato also addresses the importance of changing the narrative around growth and creating a long-term, stable approach to policy-making that transcends political cycles.
The Need for Bold Public Investment and Co-Creation
Mazzucato emphasizes the relevance and importance of her ideas in the current political and economic context. She calls for bold public investment and the co-creation of solutions to tackle pressing global challenges such as climate change and social inequalities. She advocates for an entrepreneurial state that not only fosters innovation but also prioritizes the public good. Mazzucato discusses the need for governments to invest in social structures and communities, ensuring inclusivity and empowering citizens. She highlights the value of citizen participation in setting goals and driving change, as well as the significance of socializing risks and rewards within the economy.
Moving Away from Short-Termism and Shaping Mindsets
One challenge highlighted by Mazzucato is the short-termism prevalent in both the public and private sectors. She suggests that changing mindsets and promoting long-term thinking is essential for lasting impact. Mazzucato discusses the importance of education and curriculum reform, as well as changing the narrative around the role of the state in driving innovation. She underscores the need for stability and continuity in policy-making, even when governments change, and emphasizes the role of problem-solving institutions like DARPA. By fostering a long-term, problem-oriented approach, Mazzucato believes it is possible to create an entrepreneurial state that transcends political cycles and continues to drive sustainable and inclusive growth.
Importance of Rethinking Institutional Design
Rethinking the institutional design of public sectors and organizations is crucial. This involves shifting from a focus on being facilitators, enablers, and market fixers to actively addressing social problems. By rewriting the education for the civil service, public organizations can work ambitiously with businesses to solve big public problems and be held accountable to public value. There is a need to strengthen public interest tests and embrace institutional and organizational designs that prioritize societal well-being.
The Role of Media and Storytelling
The stories we tell, especially through the media, play a significant role in shaping perspectives and understanding of the state's role. Conventional narratives often prioritize private sector innovation and wealth creation while undermining the role of public sector institutions. However, it is essential to recognize that the public sector, including sectors like social work, contributes to wealth creation and societal well-being. A new movement, with a different perspective on state capabilities and public value, is needed to challenge prevailing narratives and emphasize the importance of the state in driving inclusive economic growth.
Mariana Mazzucato’s ideas have changed how governments see their role in the economy - but where do we go from here?
Regular listeners will have heard the economist Mariana Mazzucato on this podcast before -- with George the Poet on modern-day moonshot programmes to can transform the economy, and with journalist Kamal Ahmed with a searing critique of the consulting industry. She recently returned to How To Academy to celebrate the tenth anniversary of the groundbreaking book that launched her career in the public eye - The Entrepreneurial State. The book that makes the compelling case that the state is not a bureaucratic machine standing in the way of progress, but a powerful force for innovation. What does that mean for the world in 2024 and the decades to come? She joined Hannah MacInnes to tell us more.
