Abstract

For more information please see the book website:

www.entrepreneurialstate.anthempressblog.com

This book debunks the myth of the State as a large bureaucratic organization that can at best facilitate the creative innovation which happens in the dynamic private sector. Analysing various case studies of innovation-led growth, it describes the opposite situation, whereby the private sector only becomes bold enough to invest after the courageous State has made the high-risk investments.

The volume argues that in the history of modern capitalism, the State has generated economic activity that would not otherwise have happened, and has actively opened up new technologies and markets that private investors can later move into. Far from the often heard criticisms of the State potentially 'crowding out' private investments, the State makes them happen, shaping and creating markets, not only 'fixing' them. Ignoring this reality only serves ideological ends, and hurts effective policymaking.

This book examines case studies ranging from the advent of the Internet to the emergence of the biotechnology and nanotechnology industries. In particular, the volume debunks the myth that Silicon Valley was created by entrepreneurial venture capital. A key chapter focuses on the State investments behind Apple's success, and reveals that every major technology behind the iPhone owes its source to public funds. Thus, while entrepreneurial individuals like Steve Jobs are needed, their success is nearly impossible without their ability to ride the wave of State investments. And if Europe wants its own Googles, it needs more State action, not less.

Two forward-looking chapters focus on the emergence of the next big thing after the internet: the 'green revolution'. Both solar and wind technology are currently being led by State spending, whether through the US ARPA-E programme or the Chinese and Brazilian State investment banks. The discussion refreshingly moves beyond the usual division between proponents of austerity vs. the proponents of fiscal stimulus. It argues that State investments not only help kick-start growth during periods of recession, but that they also, even in boom periods, lead to productive investments in radical new technologies which later foster decades of growth.

The book ends with a fundamental question: if the State is so important to investments in high-risk innovation, why does it capture so little direct return?

This bestseller from leading economist Mariana Mazzucato, named by the New Republic, as one of the 'most important innovation thinkers' today is stirring up much-needed debates worldwide about the role of the State in innovation. Debunking the myth of a laggard State at odds with a dynamic private sector, Mazzucato reveals in case study after case study that in fact the opposite situation is true, with the private sector only finding the courage to invest after the entrepreneurial State has made the high-risk investments. Case studies include examples of the State, role in the 'green revolution', in biotech and pharmaceuticals, as well as several detailed examples from Silicon Valley. In an intensely researched chapter, she reveals that every technology that makes the iPhone so "smart" was government funded: the Internet, GPS, its touch-screen display and the voice-activated Siri. Mazzucato also controversially argues that in the history of modern capitalism the State has not only fixed market failures, but has also shaped and created markets, paving the way for new technologies and sectors that the private sector only ventures into once the initial risk has been assumed. And yet by not admitting the State's role we are socializing only the risks, while privatizing the rewards in fewer hands. This, she argues, hurts both future innovation and equity in modern-day capitalism. Named one of the '2013 Books of the Yea' by the 'Financial Times' and recommended by 'Forbes' in its 2013 'creative leaders' list, this book is a must-read for those interested in a refreshing and long-awaited take on the public vs. private sector debate.

'[H]ands down the most refreshing treatment of the innovation issue to have emerged in a long time.'—Science and Public Policy

'"The Entrepreneurial State: Debunking Public vs. Private Sector Myths" is a meticulously argued treatise that shows how unwise our conventional wisdom has become.'—Christopher Dickey, Newsweek

'Mazzucato argues that long-term, patient government funding is an absolute prerequisite for breakthrough innovation. Even if you disagree with Mazzucato's argument, you should read her book. It will challenge your thinking.'—Bruce Upbin, Forbes

'This is a book whose time has come. Mariana Mazzucato documents how the state played a crucial role behind some of the landmark innovations of our time. For many, the "entrepreneurial state" is a contradiction in terms. For Mazzucato, it is both a reality and a requirement for future prosperity.'—Dani Rodrik, Rafiq Hariri Professor of International Political Economy, John F. Kennedy School of Government, Harvard University

'The principal entrepreneurial drive that has given us many of today's most important technologies has come from the state. Most thinking and arguing regarding how to energize our sluggish economies is blind to this fact. Mariana Mazzucato's book aims to get us to understand better the sources of entrepreneurship, and to reflect more positively on the role aggressive technology policies can play in getting our economies moving again.'—Richard Nelson, George Blumenthal Professor of International and Public Affairs, Columbia University

'[A] skillful combination of the history of technology, empirical evidence, and policy analysis — the book contains a critical reading of data and arguments that run counter to established views while never falling short of offering constructive solutions.'—Davide Consoli, Science

'[P]rovides persuasive evidence that governments deserve more credit than private companies for the development of most important modern technologies.'—Edward Hadas, Reuters

Mariana Mazzucato is RM Phillips Professor in the Economics of Innovation, SPRU, University of Sussex. Named one of the 'three most important thinkers about innovation' by the 'New Republic', she lectures widely and advises the UK government and the European Commission on innovation-led growth.

www.marianamazzucato.com

http://www.marianamazzucato.com/projects/entrepreneurial-state/

@mazzucatom

'"The Entrepreneurial State" delivers a well-researched and elegantly (even entertainingly) written knock-out to the belief across most of the political spectrum and the economics profession that (with some qualifications) "the market knows best". As many governments wonder how to boost the productivity and innovativeness of their industrial sectors, this book provides guidelines — based on successful and unsuccessful cases — on how to do industrial policy well. Above all, it shows why the common presumption that the state "crowds out" the private sector — as though the private sector is a lion caged by a smothering state — is contradicted by what governments of economies from the United States to Brazil and China actually do to "crowd in" innovations in the private sector.'—Robert Wade, Professor of Political Economy and Development, London School of Economics

'It is one of the most incisive economic books in years.'—Jeffery Madrick, New York Review of Books

'In this trailblazing book on the role of government as both a risk-taking funder of innovation and a market creator, Mariana Mazzucato persuasively argues that the government is a key enabler of technological innovations that drive economic growth. This important book should be read by policymakers, opinion leaders, and others with a stake in funding economic growth.'—Arnold T. Davis, CFA Institute book review

'Conventional economics offers abstract models; conventional wisdom insists that the answer lies with private entrepreneurship. In this brilliant book, Mariana Mazzucato, argues that the former is useless and the latter incomplete.'—Martin Wolf, Financial Times

'Makes and engaging, persuasive case in favor of the state, and suggests one recommend it not just as an instrument of market repair but also as a prerequisite for future prosperity.'—J. Bhattacharya, Choice

'[A] meticulously argued treatise that shows how unwise our conventional wisdom has become.'—Christopher Dickey, Newsweek