The Entrepreneurial State by Mariana Mazzucato

This is not new since Mariana Mazzucato’s breezy pamphlet, The Entrepreneurial State, was published a year ago, but it was new to me. I’ve just finishing reading it, having snagged one of the copies that she brought to June’s fascinating Science Question Time on economic growth.

The Entrepreneurial State

The Entrepreneurial State is a welcome addition to the debate on the value of public investment in science as a factor in economic growth because it opens up what was for this reader at least a relatively uncharted dimension of the argument.

The case for public spending on basic R&D is taken as read. Rather what Mazzucato is keen to address is the role of the state in enabling research discoveries to be developed into new products and even, in the most influential cases, new markets. Rather than simply charting the well-known anecdotes of blue-skies research leading to successful businesses (admirably covered in the 2010 Royal Society Report, The Scientific Century), this short book aims to dissect how that process happens most effectively.

In particular, drawing largely on examples from the US, it addresses head-on the claim that the vitality of private companies and venture capitalists is largely responsible for the successful commercialisation of scientific research. Instead, contends Mazzucato, it takes a visionary, risk-taking state to make the long-term investments needed to join up science with enterprise.

I won’t rehearse the arguments; it is easier and quicker to quote the conclusion:

A core lesson of this pamphlet is the need to develop a new industrial policy which learns from the past experiences in which the state has played a leading, entrepreneurial, role in achieving innovation-led growth. State-funded organisations (mainly decentralised ones such as DARPA*, SBIR* and so on) have been fundamentally involved in generating radically new products and processes, which have changed the way that businesses operate and citizens live—transforming economies forever, from the internet revolution to the biotech revolution to what (it is hoped) will be the greentech revolution. It has also been argued that a core way to tackle smart and inclusive growth together is to ensure that the gains from innovation are just as collective as the risk-taking underlying it is.

In seeking innovation-led growth, it is fundamental to understand the important roles that both the public and private sector can play. This requires not only understanding the different ecologies between the public and private sector, but especially rethinking what it is that the public is bringing to that ecology. The assumption that the public sector can at best incentivise private sector led innovation (through subsidies, tax reductions, carbon pricing, green investment banks and so on) — a claim being propagated heavily in the UK, especially but not only in the face of the recent crisis and ensuing deficits — fails to account for the many examples in which the leading entrepreneurial force came from the state rather than from the private sector.

Or you can read a synopsis that Mazzucato wrote for the New Statesman.

I found it an engaging read, but the thesis advanced in The Entrepreneurial State may be uncomfortable for some scientists since it emphasises the role of mission-oriented direction of funding (albeit in a decentralised form via agencies at arms length from government). Science Minister David Willetts has clearly read the pamphlet because he referred to it in his policy speech from Jan 2012. At the time — without realising its source — I noted a shift in thinking towards a more directed policy where government would target technologies for investment.

That may sound a bit too much like the impact agenda writ large. For now, it is not clear whether the message has really been taken on board; it still seems as if Osborne’s austerity plan trumps any grander vision for the future (a view shared by the Science Question Time panel). But the scientific community has to be smart enough to engage with the technicalities of this debate, especially in the run-up to the next Comprehensive Spending Review when the case will have to be made once again for the science budget.

In preparation for that, you could do worse than read The Entrepreneurial State, which you can download it as a free PDF. You might also want to consider coming along to the Science is Vital AGM in September, where the funding challenges that lie ahead will be discussed.


*DARPA – Defense Advanced Research Projects Agency; SBIR – Small Business Innovation Research. Both are US government agencies with broad remits to foster the development and commercialisation of new technologies.

Also well worth reading on the topic of innovation and government policy is Richard Jones’ Soft Machines blog.

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6 Responses to The Entrepreneurial State by Mariana Mazzucato

  1. I understand the attempt to eliminate bias from scientific inquiry…but it seems childish to disparage an organization, public or private, for pursuing “mission-oriented” projects. That is the very thing that bridges science to entrepreneurial innovation…In order to be more involved in tech-transfer, scientists need to get more comfortable with the idea..

    • Stephen says:

      It’s not childish but rather reflects an almost inevitable tension between academic freedom and the needs of the state. To my mind there should be room for both curiosity-driven work (the fount of discovery) and efforts that are more directed (mission-oriented) towards national goals. There have been plenty of arguments about this (particularly in relation to the impact agendas of UK research councils); in part it is sustained by a rather superficial understanding (among some participants) of how science and innovation work. I think Mazzucato’s book fills an important gap in understanding.

      • Hrvoje Zorc says:

        I found the text very interesting because it is more a critical analysis of the current public system of innovation financing. Not only that it is interesting but I have to say that it is a fresh approach that I like! Speaking about curiosity vs. mission driven research, a good balance should be found, but unfortunately we can not expect most of the public officials to understand that. I spent some time as the Deputy Minister of Science and it was my experience. On the other hand the social conditions are more and more complex and the science impact to the welfare of citizens is being more and more requested, so in favor to finance more mission oriented research. EU is still doing not enough to reach the Lisbon targets, for the good of its own survival on the World market!

  2. Stephenemoss says:

    Stephen – thanks for this great post, and for alerting me to Mazzucato’s book – I will download and read it this weekend. I have also noted the shift in the way in which government is targeting funding towards specific areas. Following the last CSR, at which Science is Vital did such an important job, the response from many scientists (including myself) was fairly muted. Spending on science would be “ring-fenced in cash terms” as Willetts has somewhat disingenuously reminded us in several of his speeches, while in the real world of inflation we could all see the UK falling ever further behind our competitors as the proportion of GDP spent on science dwindled.

    What wasn’t clear at the time was that BIS would embark on a series of funding initiatives of its own, often vectored through the Research Councils, but with highly targeted and invariably mission-oriented goals. Several £100M has since been earmarked for specific projects in this way. I cannot recall any previous government doling out cash for science in this way. It’s almost as if BIS doesn’t really trust the Research Councils to use such funds wisely, specifying their intended use before handing them over.

    I have a particular interest in this topic having been made Vice-Dean for Enterprise earlier this year. My objectives in this role are focused on enabling academics with potentially commercialisable research to develop their findings or skills in an entrepreneurial direction. In pursuing these objectives I have not yet encountered any tension between academic freedoms and mission-oriented goals. Most academics appear keen to see their findings patented and (hopefully) commercialized, or their skills utilized by industrial partners. Those who have no interest in such matters are under no pressure to follow this course, though even the most puritanical blue-skies researcher (as I once was myself) will gall at the thought of some competitor lab using their findings to e.g., start a spin-out company, raise $Millions of venture capital and float on the stock market.

    Blue-skies research has a crucial role to play in this process. It was a chance discovery from a microarray analysis performed in the clearest of blue skies that led me into patenting, therapeutic and diagnostic development, and the D part of R&D.

    I have my ticket for the SiV AGM (but yet to pay my sub).

    • Stephen says:

      Part of me things the subsequent announcement of funding are part of a ploy to generate some positive PR for the government. They’re also a bit piecemeal and don’t appear to be part of a long-term or holistic strategy.

      Look forward to seeing you at the AGM – will be interested to hear of your experiences as Vice-Dean for Enterprise.

      • Stephenemoss says:

        I think it’s more than just a PR exercise. I think govt really wants to have more control over where at least part of the science budget ends up. But I agree it’s piecemeal, which may be a consequence of politicians rather than scientists making the decisions.

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